Author Archives: Mr. Cain Thaler
Try not to overthink the selloff. Watching players try to justify this move is like watching someone trying to reason out every little technicality of time travel in a Back To The Future movie. It ruins it, so just let it go. Grab some popcorn and enjoy the classic.
The market was way overextended, trumped on seasonal data and hope that housing/Japan would usher in a new global gilded era. Bears picked this moment to raid the camp because it had the maximal effect of taking the wind out of your sails.
My expectation is for a broad, 7-8% selloff, taking us to around SP 1540. Will I get it?
I guess we’ll find out shortly.
I’m just up late reading the steady stream of wild conjecture being published on the important subject of how unstoppable Tesla is.
You know what the difference is between AAPL and TSLA groupies?
AAPL groupies can afford iPhones…
I let go of the RGR shares I bought for $45.95 on Thursday for $48.73.
Other than that, I am waiting patiently. If a reversal is to happen, I think it materializes shortly. I’m looking for something small at first; a 7-8% retracement. Nothing spectacular. Then I want to look deep into the end of the year and get a glimpse of 2014.
I just threw a couple percent into some TSLA puts, betting on the end times for TSLA shareholders developing sometime in the next 7 months. If the stock can dip below 35, I’ll make a fat payoff. If not, I lost a couple percent (my account deviates by more than I’m betting).
I’ll start by giving a little bit of good news to you TSLA owners. As it turns out, I know one of the guys who helped build their assembly line. That took some hunting, but he mostly had good things to say about TSLA manufacturing.
1) The line is clean, finished, and should be good for up to 35,000 vehicles per year
2) The line is state of the art and not vehicle specific – retooling is easy for new products, unlike at the big automotive companies
3) Building the line was a clusterfuck and TSLA lost its ass; but it made a good move and fired every supplier, then rehired who was needed. TSLA also started scalping their suppliers of their workers – so the company has built up some good internal manufacturing experience by stealing from their contractors.
My friend is rather proud of the TSLA line, and had nothing but good things to say about it. There shouldn’t be any unforseen calamity coming from their production abilities, unless projections start calling for more than 35,000 vehicles per year in the immediate future (assuming they don’t have time to start up another assembly line).
Now for the bad news. My friends are all engineering car junkies (every conversation inevitably turns to auto…ugh) and we held a little pow wow this weekend. There’s a good bit of doubt that TSLA can continue meeting their sales. Even the guy who helped build the line cracked a joke about them just needing to sell cars now.
One of the bigger car guys pointed out that TSLA is trying to outsell several of the luxury/performance car makers “combined”.
Mind you I started the conversation by bashing TSLA a little. Back in ’08/’09, I told this same crowd of friends that GM was going bankrupt and they almost stoned me. Insulting coveted and beloved automotives in this circle is generally met with outright hostility.
When I trashed TSLA, nobody defended them. I was surprised.
The general feel of the group was that TSLA’s product is beautiful, but they don’t stand a chance of edging out other luxury/performance vehicles at the Model S’ price tag.
Now for the worse news.
AutoData is reporting that TSLA sales dropped 15% in May. TSLA shareholders had better pray that’s a one off, and not demand for their vehicles being satisfied. Because at $104 with sky high price to earnings and intrinsic value near to $10 (after the issuance), any disruption of the dream will disembowel the stock. And since Musk just raised a billion, half from new shares, sentiment against him could turn pretty rapidly if people start to get the idea that he duped them.
I for one have had more than enough of the Great Tragedy that is Detroit. Back in the days of Billy Durant, JP Morgan, and Rockefeller, Detroit was a beacon of the Industrial Revolution. The New Paris, it was a destination of distinguished and refined people the world over. Wealth flowed up and down the lakes of Michigan, and Her pride could not be measured.
Today, Detroit is a shit heap.
That last sentence is both succinct and proper – dilapidation deserves few words. Detroit is a terrible place because her residents are stupid people. Every bad judgement that can be exercised has been exercised in Detroit. If you can come up with a horrible idea, Detroit has tried that idea, sometimes multiple times in a row.
Today, the first steps towards the revitalization of this historical city have been made.
Kevin Orr, hand picked general of Rick Snyder (may his pimp hand always be strong), destroyed the gates of the city and entered her walls. The terror of the unwashed masses was great, as any man foolish enough to have lent Detroit money was lead into the public square for prompt execution.
Less the populace think they would get off unscathed for their part in Detroit’s dishonorable rot, Orr then turned his war machine on the cushy public sector jobs and retiree benefits, battering them to ashes. A clear message was sent shivering through the public body: if you are going to choke out a city…nay, a culture…in an attempt to grant yourself her treasury, your claims will not be honored, and you will be left by the wayside.
The entire structure of public unions, city workers, and culture of corruption has been put on notice in a single, fell swipe.
To summarize the exact actions taken today:
If you are owed money by Detroit, you are done
If you are owed benefits by Detroit, you are done
If you receive an excessive salary from Detroit, you are done
If you held any amount of power or sway in Detroit, you are done
If you are keeping Detroit from revitalizing her public services and spaces, you are done
If you are the source of the sprawling blight in Detroit, you are done
If you are a voice keeping taxes high in Detroit, you are done
If you are one of the people generally creating racial tensions to the detriment of the city, you are done
If you are an obstacle to Detroit, you are done
The deal Orr put forward was so byzantine…I positively love it. It’s time to clean out the dead wood, by purging fire. A lesson must be taught: when you let yourself fall sucker to lies and deceit and false promises, no one will be coming to save you. Anyone who let themselves be tricked into thinking those empty promises of pensions, benefits and payments from a defunct body were subject to protections or guarantees by the rest of the state has felt the first shot across the bow today.
Rick Snyder (may his pimp hand always be strong) has heard the demands from those who elected him clear and distinctly. Anyone tangled in Detroit’s corruption is to be cut down at the knees.
Michigan has had quite enough of the Renaissance City’s oxymoron for one lifetime.
I added to AEC today for $15.66 and RGR for $45.95, bringing my cash position down a few percent.
Other than that I’m holding put and filled with unbending hatred for anyone long oil.