Everything Seems Normal To Me. This is fine!

2020년 8월 31일

The following is an excerpt from the middle of a recent conversation with a friend of mine who is a fundamental investor with a great track record, and I thought it might be useful here to explain the second attempt I've made to short this company.

Me: "Tesla trading with a 486 GAAP split adjusted forward PE. GM would need to earn 40 billion dollars in net income annually to have the same valuation, 10 billion less than AAPL. I get that it’s trading with a tech valuation but it’s still a car company at the end of the day, energy revenue has been cut in half since the SCTY acquisition, and even with autonomous rideshare the company still likely wouldn’t earn more than 15-20% net income margin, which still wouldn’t come close to explaining the current valuation and that’s if it’s even possible / happens years and years down the road. I shorted some post market today and I’m going to close my eyes for 2 weeks on it lol."

Him: "[My Name] lol I say that same statement everyday to people for the past 3 years, and it hasn't seemed to change anybody's opinions. Literally, almost word for word"

Me: "Well I think the difference now is that the company is making an actual profit, so it's earned its way into the "correct" valuation given that the prices in the 200's were always a "bet" that it would work out but holy s*** lol this seems like a tad bit of an overreaction. Guess it’s a case study on investing in the market leader / winner take all / strong brands. - Also I think the only way to short this is on a parabolic move up like today so I’m just crossing my fingers 😂"

So there you have it. I'm attempting another short on this name. I know that there are very few technical reasons for shorting this stock from a 'chart' perspective, but the valuation / price action, has, well and truly, gotten ridiculous. That, and the stock was trending on twitter today amongst people who are not investors. I tend to find that when the news is finally leaking out to 'regular people', we are near a top. Think about all the people talking about Bitcoin in late 2017 with their families at Thanksgiving.

Thus, my short in the postmarket action around 510.00. - a non split adjusted price of 2550.

Please save everyone the comments about me not understanding how revolutionary this company is, or how I just don't see the bigger picture. I do, and I know the risks of shorting. I very well may be wrong. I read zealous comments as people who are new investors or people who are wrapped up in the hype, neither of which are objective groups, or groups I'd like to hear from when informing a financial decision. In the short term the market is a voting machine, but in the long term it is a weighing machine. The 'weight' of this company is a lot lighter in the long term that the market has voted it to be right now. I'd like to exploit that. I just think the entry point here to the short side is too good to pass up, and similar to Wayfair and Overstock, the upside is huge in shorting these massively overvalued monsters. I crushed those, and I think TSLA has the potential to be a similarly huge winner to the downside.

Look out below.

2020년 9월 2일

거래청산: 타겟 닿음

I got out of the short this morning at 440. Worked out well! I think there's more downside, but the chance of this rocketing up is also pretty high. Thus, I'm flat. Cheers!