Tesla thoughts - $600 achieved, what's next? 3/6/21
Hey I said I'm not gonna talk about shorts on this Spudstack not that I'm not going to muse about Tesla into the void
First, dear reader, I promise that this is not going to be a Tesla-focused blog (and I can say with almost near certainty that there will never be a Tesla trade idea that qualifies as good enough to be a paid post). But y’all know Tesla took up far too much of my sanity for some time (and still provides plenty of entertainment) so since I still talk about it on Twitter, I’ll occasionally provide some longer-form thoughts here.
I’m not going to rehash My Tesla Journey but in case you’re somehow new here, back in the day (lets say through the 2019 capital raise) I was a TSLAQ truther, after which time I swore off betting against Elon and have since made some money riding the wavey pumps.
So fast forward to a month or two ago - after generally being bullish (or at least trying and to some degree succeeding in riding the momentum) on much of the way up from $400 to nearly $1000, when things stalled there, I had been looking for the possibility of a reversal, as shown in a few reference tweets below.
Things since went right for the bears (simply due to some air coming out of the markets overall) and here we are at $600.
This was not due to any Tesla specific news, and to the extent I have a hot take on Tesla these days (and this take isn’t even a lukewarm level of hot), it is:
Don’t lose sight of the forest because of the Telsa tree (I’m not sure if that’s the exact idiom, please excuse my Appalachian education). While the 30% decline in Tesla is a great f’ing start and a long overdue reprieve for any remaining bears, it was not out of line with the general Cathie momo portfolio and other sectors that quickly picked from euphoria to panic (e.g. SPACs - and gotta use this chance to plug one SPAC idea I do like).
Here’s an example chart picking the first high-flying names that popped into my head. As shown, sure, Tesla is still a relative high flyer at ~+300% over the past year (after tasting 500% and it was like 1000% off of the true bottom) but that pales in comparison to NIO (which had been discounted to near bankruptcy) and FVRR (which all of a sudden decided it deserved to trade at 70 times sales and then 50 time sales for a slow-growth, uninteresting, non-novel business). And while the argument could be made that some of these businesses do deserve to trade at higher multiples of [anything] than Tesla (Tesla is a car company bro they trade at like 0.5x sales), this chart below is just to demonstrate that 1) Tesla’s run-up wasn’t that wacky compared to other stocks and 2) Tesla’s recent decline isn’t that out of line with other high flyers.
So to wrap things up, here are my two primary thoughts on Tesla as of this moment:
Firstly, let it be known that of course I still think that Tesla is still a trash company. My current prevailing view is just that it is a fool’s errand to get mired in the details of not-great sales in Europe in a particular month or another new competitor coming to market in 2024 or another price cut or another quality issue. In my opinion those will still be forgiven until Tesla has fallen 90% from where it has today (if that ever happens) - when Tesla is worth $500b, the only thing that matters is general euphoria, flows, etc. in the market. To a lesser extent there is some Tesla specific risk/opportunity (e.g. Elon meltdowns / FSD finally getting solved) but in general I think you just gotta think of trading TSLA as trading TQQQ rather that getting lost in the minutia of the day-to-day.
Secondly, to share any current view on Tesla I have beyond the general one above (since I broke my arm patting myself on the back about the $600 call, now I need to make another call) - if the market remains weak I think we’ll see $400 in the not too distant future, perhaps even by March options expiration (March 19th). If the market stabilizes I see $600-700 (I for one really saw the only area of support below $800 as $600, hence my prediction, but some more more experienced technical eyes pointed out ~$690, which indeed proved a key level on this drop, so perhaps we can retrace up there), but I think the chances of some mega rally to new ATHs are likely fairly minimal at this time (unless Elon really does just turn on FSD one night).
I for one won’t be putting on any new positions Monday, but if we get a churn here for a few days or weeks to take some IV out of the stock, there will likely be (potentially) lucrative bets to be made on the next leg down to $400.
Yours truly
Elmo
Fuck you, Elmo. Your calls are trash, you have no principles and you're a faithless un-American Croat Goat. See you in Twitter hell when your 5,099th follower reports you for harassment.