I love modeling. The quant strategy in Exodus is based off a model I discovered. Members are more than welcomed to create their own models. Tonight I was reading Elon Musk talking EXTREME shit on Twitter, warning shorts of a terrible carnage.
This is ridiculous.
Looks like sooner than expected. The sheer magnitude of short carnage will be unreal. If you’re short, I suggest tiptoeing quietly to the exit … https://t.co/A0Q90pSLKA
— Elon Musk (@elonmusk) May 5, 2018
So I started to run some cursory short screens, coupled with our new Sharpe ratio tool and found that stocks that are heavily shorted, with market caps larger than $5b, outperforms that market — bigly. You can dial down the market cap and fiddle with different metrics to find the best combination. While all of this is backwards looking, in my experience trending markets following a neatly knit narrative most of the time, which is why using a quantitative strategy makes so much sense.
I actually find shorting stocks easier than going long. It just seems easier to spot something that is overpriced then a bargain. I can justify a stock no one wants but i cant justify hype. Tesla is a superb short here. I could care less what Elon thinks.
It’s a superb short here at $294? Puts or stock? There is record short interest and imo, there is no way there won’t be a shake-out short-squeeze of epic proportions before any significant decline from here. Most won’t be able to take the pain. If TSLA actually goes cash-flow positive as he says, it will be the next AMZN, if not, the next Enron. Most likely cash-flow positive is pushed back in time, buying him more time.
Place yer bets.
Its a short. Enron before amazon. there is simply too much competition. If he cant make cars he cant make money. Its that simple. His best bet would be to license his battery technology if its that good. Guess what its not.
It’s a long. And in time a short. But 2-3x if not moar from here, easy.
Why a long ?
Nobody has an answer to that besides just trust Elon.