There seems to be one thing holding me from huge gains on the TSLA options, and that is the presence of short sellers in the stock. Various elements on Twitter have already summed up this, and I agree with them.
For TSLA to sell off to where it should be, short sellers have to die.
For the moment, the ever rising pain threshold in the stock keeps a steady stream of buyers from bailing shorts, trying to salvage what’s left of their dignity. These buyers are replaced, not by a massive spike higher, but rather by more short sellers, trying their hand (and probably coy longs slyly selling out, even as they pitch that next “Elon Musk Is The Second Coming” post).
I don’t understand how difficult it is to stay away from shorting a stock that’s trading at (what is it even now? 270X EPS?) such elevated levels. Anyone crazy enough to pay $100 for TSLA, or $130, would surely pay $200. Why not? What stops them? They’ve already crossed a line.
What TSLA really needs, for me going forward (and preferably before September), is to have the short position in TSLA drop to 0%. Then, TSLA longs will be left holding a company at >270X Annualized EPS that no one in their right minds will buy.
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Everybody I talk to LOVES the Tesla. None of them own it. They do want it.
When I mention that it’s about $90k and used ones go for $65k.. the reply is …
“yeah true.”
Even the middle class $100k a year guy thinks he can own one.
Nice summary today Cain.
Short position drop to 0%? That’s not going to happen.
I know I was exhibiting hyperbole. I do it often.
But shorts do need to take a hammer to set up for a no demand drop
I bought TSLA soon before you shorted it via Puts. I am not as educated or experienced as you, but the chart just looked good for a long. I am now up 30%. My natural tendency would be to raise my stop but stay long. Do you have a good argument for an inflection point? Would you recommend a guy like me sell – or even go short?
I definitely would not recommend you short.
As for timing an inflection point, no. I’m guessing some time over the next two years, hence my option expiration timeline.
I would never have encouraged you to buy the stock, and accordingly I don’t know when you should sell.
What I will warn you is this – when the stock rolls over, stops won’t save you. The down move will be fast and vicious as the buy orders simply stop coming. You need to be out before that happens; and my expectation is it will happen. TSLA is a $30-50 stock, and that’s optimistic, with lots of benefit of the doubt being passed around.
Or it could literally happen right now
I know you don’t/can’t make recommendations to anyone. Just speaking hypothetically. Is there more technical basis to your thesis besides the fundamental stance you write of?
Hypothetically speaking, I can’t make recommendations to you.
But, I did post my thoughts on trying to time this stock above. I’m hoping this plays out over the next two years – ideally before the end of this one would make me the most money.
Well stated Mr. Cain.
I was willing to flip it from 120-125…because I knew there was clearly a buyer. TSLA is a symptom is what’s wrong with this whole rally. Parabolic moves in shorts. Give me your money, but no way am I holding anything I didn’t get for free.
You did it.
Well done.
The Vampire Squid is in my corner now, buddy
Us Mich peep like those gas guzzling vehicles..just a fact.
Of course TSLA is adored in the state of CA..environmentally speaking.
I, like Mr. Cain Thaler, have never seen a charge station and have not heard of any station around these parts that are jumping on the battery bandwagon. Nor have I seen any in my summer travels while beating the hwy’s and freeways and tolls to eastern coastline.
Here in ‘Swankville’ they just replaced the whole fleet of BHam police vehicles with some big azz Fords(0~100mph in sec..for those every so often speed chases).
Sorta like having solar panels..nay..good for only 5mths out of the year…maybe if you’re lucky.
Nice move here, Cain.
http://youtu.be/UA7v0zknMCo
😉