8 Tesla stock hits 500 as global asset bubble hysteria intensifies

Cover for Tesla stock hits 500 as global asset bubble hysteria intensifies

Less than a year ago it seemed that Tesla is doomed. Every headline, every news report was telling us how this company is on brink of bankruptcy, how Elon Musk is immature, impulsive Twitter troll who needs an "adult in the room" and how competition from China and Germany will soon make Tesla obsolete and nothing more than a chapter in history books, much like the General Motors EV1.

Pundits were telling us how often the first product in the market is not the one which ultimately moves the needle and becomes widespread success, much like how Apple wasn't the the maker of first MP3 player or first smartphone, Tesla was first, but wasn't going to be the Apple of electric cars.

7 months ago Tesla stock was trading at $185, today it is about to hit $500, and many of the rational, independent-thinking and irrational crowd-following short sellers have liquidated their positions.

From doom and gloom to Elon Musk dancing on stage in China in span of just little over half a year. What happened?

The sad reality is that nothing happened. Nothing of substance and nothing in the real world. Action which moved sentiment happened in the financial markets.

It is not the spotty faced gen-Z teenagers buying Tesla in their Robinhood accounts, who move the market and force experienced hedge fund managers to book big losses, both financial and losses in reputation - it is the central banks.

Nothing else matters, but the money printing which is feeding inflation across all assets since 2008, and even since 1970s, if you look hard enough.

Modern Monetary Theory (MMT) proponents will tell you how money supply is not growing out of control and how government debt is your surplus. The rest of us who are not lunatics understand that government debt (or "surplus", if you like) and Quantitative Easing are just obfuscated terms for the same old money printing. Call it what you want.

Most of the bearish talking points are just as true now as they were 7 months ago, and there is nothing particular about the performance of Tesla Motors during this time. It is just a part of global buyout of assets with freshly printed money, and it doesn't matter if it is Tesla, Nio, Wework or BitConnect.

While understanding this, we must also not fail to recognize how Tesla is different from other financially upside-down "Grand Unicorns". Unlike WeWork, Uber, Peleton, Netflix, Snapchat, Beyond Meat, Lyft and all the other "trash", Tesla is actually producing real, physical products and has physical assets. It is rare that in USA any company, much less a stock market darling, is producing anything real. Most are software companies or financial/services "nothing" companies.

In fact the entire United States economy is a "nothing" economy by large, with the largest export being the US dollar itself - again a "nothing" product, printed on nothing and backed by nothing.

I have never owned or short-sold Tesla stock and I would have recommended against doing either at almost any stage, especially today. However, I do have lots of respect for Tesla Motors and I recognize that it is world leader in several important areas.

Tesla have the biggest archive of driving footage ready for machine learning use, they have custom silicon performing very fast self-driving neural network inference, they have dedicated large scale battery factories, car factories and proven electric car designs. They also have fantastic global network of fast charging stations and, of course, very strong brand presence.

If there was one Unicorn I wish could survive the coming financial markets crash, it would be Tesla. Even if they do not survive, Elon Musk's Tesla will always be remembered as the one electric car company which forced the rest of the industry to electrify. And electrification is coming with or without the money printing.

2w ago by FastestLaps
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SpeedKing  4h ago

This is for all EV lovers urgh... On Friday Ionity, a joint venture between BMW, Mercedes-Benz, Ford and Volkswagen including Audi and Porsche, announced a new pricing structure that's gonna make it really expensive to use one of their charging stations. Apparently one is going to be paying 0.79 euros/kWh. I'm guessing there'll be fewer peeps taking long trips in their new beaut P100D's. If there's money to be made you can always rely on the Germans lol

https://thedriven.io/2020/01/20/norway-horrified-as-new-rates-make-ev-charging-prices-higher-than-petrol/


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SpeedKing  1d ago

Apparently Tesla's are possessed given that there are many complaints that they accelerate without warning causing crashes. I'm gonna have to start calling Musk "Christine":P

https://www.washingtonpost.com/local/trafficandcommuting/tesla-faces-federal-review-of-complaints-its-cars-accelerate-without-warning/2020/01/17/fda9ca76-3960-11ea-bb7b-265f4554af6d_story.html


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SpeedKing  2d ago

Forget about Tesla, apparently Musk plans to send 1 million people to Mars by 2050 by using a fleet of 1,000 Starships? yeah keep dreaming lol


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FastestLaps  1w ago

It's interesting that GM has decided (reportedly) to make electric Hammer. I am sure that has absolutely nothing to do with the publicity and reception (preorders) of Cybertruck... Just a coincidence :D

I think the Tesla Triangle Truck will outhummer any Hummer. You can't make a more robust looking thing even if you tried.

https://finance.yahoo.com/news/gms-electric-hummer-is-a-great-idea-204336527.html


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Cocobe  2w ago

First off, no it didn't hit 500.
Tesla stock has been the most stressful stock to hold over the last few years. I had a lot of shares pre "420 private buyer" incident. Held through all the way down to $250 and then sold all of it around $360.

Bought back a bunch from between $180-200, then sold all of it at $260. I called it quits. Swings were just too big and not worth the stress for me.

In Tesla's defence. Sure they aren't making anywhere near the profits of legacy manufacturers. But they always said that when mainstream guys start making electric cars, Tesla will be toast. Well, lets see now.
Jaguar I-pace
Audi Etron
Mercedes EQC
BMW I3
Nissan Leaf
Kia Niro
Hyundai Kona
VW e-golf
Chevy Bolt

All these cars are out and nobody I know who wants an electric car, wants anything else but a Tesla.

 

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FastestLaps  1w ago

You did very well. Considering that you did multiple moves and all were in profit every time, and you had less risk than just buy & hold, because you didn't hold it all the time.

By the way, it went another 10% up today. And did hit 500 and well beyond :)

Who needs Bitcoin bubble when you have Tesla bubble and all the other "Weworks" of the silicon valley?

Full disclosure: I never owned Tesla stock and never shorted it either. I am, however, super enthusiastic about hard money (Bitcoin, gold) ha ha :D

We all have our favorite bubbles. As long as we do recognize them as bubbles, it's all good.

Tesla is great company (minus the debts). The market is insane, that's the problem.


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manone  2w ago

the bubble may be ready to burst just like in 1999. and the funny thing is that Europe, and in particular countries easily speculated against like Italy, will pay most of the US bubble bill...lol


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dr. cosimo  2w ago

typical tesla driver.....