TESLA - a new paradigm

Bullish analyst Dan Ives has a story around TESLA. A new paradigm shift.

Here is the video where he's selling his bullshit: Yahoo Finance

What is the new paradigm?

I think there is a misperception on retail investors and institutions [on Tesla]. I have talked to more institutional investors the last six months on Tesla than the last six years because the story has changed fundamentally, and profitability wise.

You need to start focusing on the market [electric vehicle] and on the indexing of the S&P 500. It has changed the game a bit. Of course there is retail [investor] momentum, no doubt. I think there is a bit of a misperception that it’s all retail. I believe there is a strong institutional support there because there has been a change in the fundamental story of Tesla.

 
Meanwhile, Tesla’s top five institutional shareholders is a who’s who of credibility (according to Bloomberg data): Ballie Gifford, Capital Group, Vanguard, BlackRock and FMR. Smaller institutions such as ARK Invest Management, Legal & General Group and Northern Trust have all added to their Tesla holdings since June 30, according to regulatory filings.

OK so what's the paradigm? Well, none! Except there are institutional and retailers invested in the stock. Ok, thanks for the info, we already know that.

You see one heck of of an institutional bull cited: Ark Investment. I did already post a video on the blog where these analysts have a crazy price target for the stock: 15.000$ a share.

PS: As anticipated, the TESLA stock split did nothing to the stock; it did what it does every day: go up 10%. What about tomorrow? I can tell you what will happen: the stock will go up 10%. And after tomorrow? Again, 10%.

See you next time

TESLA stock split - an update

Tomorrow TESLA stock will be split in 5-for-1 move (you will get 5 shares for 1 share you hold).

Companies often do these splits to attract more investors in (greed?)

What does this mean for TESLA stock? This article speculates around the topic:

Stock splits come with some serious caveats. This is particularly true of excessive splits, such as Apple's 4-for-1 decision, or Tesla's pending 5-for-1 split. Tesla's split also takes effect on Monday.

Stock splits typically come in the 2-for-1 or 3-for-2 variety. William O'Neil, founder of Investor's Business Daily and author of "How to Make Money in Stocks," considers anything beyond those typical categories excessive. "Oversize splits create substantially larger supply," he explains in his bestseller. The result, he warns, "may put a company in the more lethargic, big-cap status sooner."

 In prior decades, Companies have often enacted multiple stock splits over a period of two to three years. This also amounts to excessive splitting. One of the most famous examples is Qualcomm (QCOM), which executed three stock splits from late 1998 to the end of 1999. During that period the stock ran up more than 2,500%.

The third stock split, a 4-for-1 division, took place in December, 1999. The following month, Qualcomm rolled over into a 20-month decline that would reduce the stock's value by 88%.

The example on Qualcomm the article talks about came at the end of the 2000s bubble. The 88% decline in Qualcomm is dues to the bubble popping rather than a stock split effect. Probably TESLA stock bubble will go the same path; I have no idea whether it is tomorrow or in 5 years. A 90% decline in TESLA stock (and maybe company bankrupcy) is guaranteed when the bubble pops. And it will!

In the meantime, the split itself will have no impact whatsover in the TESLA stock bubble.

BTW, Elon boy wealth tipped 100$ billions on Friday!

Common sense indicator discarded

 A common sense indicator is a basket of high quality earning vs low quality earning stocks.

For decades, high quality earning stocks have won over low quality earning stocks. That's ABC logic you will tell... Agree, but for the last months lows quality beats high quality; and not for a low margin, but there is quite an important gap between the low quality stocks leading the way.

Why's that? Well, as this article explains there are 2 culprits (I think there is more to the story):

One explanation is that this price action is being driven by the sudden influx of retail money into the market. Empowered by zero-fee brokerage accounts and starved for entertainment as they shelter in place, retail traders are buying like it’s 1999.

Ok, we know that idiots are buying TESLA stocks these days; money from idiots is still money, right?

Here is another reason:

In response to the COVID-19 crisis, governments and central banks have opened the floodgates of liquidity. Asset purchases of every stripe by the Federal Reserve continue to set record highs. In such an environment, actual corporate earnings hardly matter, let alone the quality of those earnings.

There you go: central bankers putting gas on the fire. 

Does that mean something? What do you think?

TESLA stock will split Friday 28/08

 The TESLA stock will be split 5 to 1 (that is for 1 stock you will receive 5 after Friday session close).

What does it mean for the stock? I have no idea, we will see on Monday; it will probably go higher as I did write on the blog: the TESLA stock will never go down!

You lucky boy!

😄

Lucid Air - TESLA competitor - will offer the fastest recharching technology

 As I wrote here a couple of times, competition on the EV market is coming; this is not a surprise as this market is growing and more and more companies want a piece of the pie. So TESLA is not alone on the EV planet (contrary to what the stock suggests).

And not only competition is coming, but it might come with technological challenges for TESLA. I have no idea whether Lucid Air will deliver on its promises, but it says that it will have the fastest recharge technology for EVs.

• Lucid Motors announced that its new luxury sedan, the Air, will be the "fastest charging electric vehicle," with the ability to charge 20 miles of range per minute.
• The claim smashes the standard set by Tesla, whose V3 Supercharger can add about 15 miles per minute. 
• The announcement follows Lucid's claim that the Air will have a range of 517 miles, another bid for best-in-industry specs. 

Lucid Air CEO did work on TESLA model S; the guy did work for Elon. He wants to beat TESLA in terms of luxury and EV technology. 

We're creating a car which is going to be the best car in the world. People are going to want it.

 

Believe what you can (I pesonally dont believe this thing will be the best in the world; nor the most luxurios. For that, have a look at a Bentley for instance).

Source: Business Insider

 

 

Analyst has a target of 87$ per share for TESLA

Gordon Johnson has a low target for TESLA stock compared to where the stock is trading currently. He values the stock at 87$ per share.

He does not believe in

• TESLA car production and sales (core business losing money)
• Technology (they dont own battery production technology, no self-driving technology, etc)

He's basing his projection for price for 2021 on sales and production figures:

• 11.400 cars sold in China (versus 12.000 or so produced)
• 370.000 cars sold this year (and 500.000 projected to produce this year)
• He takes out the credit selling (because of green business) to other car companies (that is not sustainable because the other car manufacturers are starting to produce and sell EV cars); we did cover that here on the blog.

So here you have it on Yahoo Finance.

Everyone wants to leave the party seconds before midnight

Is Warrent Buffet warning in 2000 true today?

They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.

This is what the wise man from Omaha told Berkshire investors in its letter 2 decades ago.

The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money.

MarketWatch explains it very well in this article 

Today’s investor knows a thing or two about effortless money, as the disconnect between the market highs and the reality of the devastated economy has never been more pronounced, thanks in large part to the Federal Reserve’s commitment to pumping cash into the system.

Enjoy speculation (while it lasts)

 

 

I told you so!

 OK that's not very serious right?

In the mirror everyone is a hero 😁. TESLA stock wont go down, it will look like a bargain in a couple of years (what am I saying, in few months).

When a single share will be worth 15.000$ in 4 years, 2000$ per share will look like real bargain. And even more so when my price targer of 100.000$ per share will be touched.

Analyst is suprised by the 2000$ number, but he thinks it will go up even more.

It’s shocking [to see Tesla’s stock at $2,000], and it can probably continue to go up. I mean I am surprised by the number. It makes it tough to be a new investor in that stock to think whether or not you will get the returns from a price perspective. But it’s a great company, an amazing company.

Buy more, never stop!

 

            

TESLA stock valuation

Here is a podcast from BARRON'S where an investor tries to value TESLA.

He kind of recognizes he doesnt really understand it, Elon is making it more difficult because of wild cards he throws in the mix; but he has a value of 6XX$ per share (a bit less than 700$).

It is quite far from what we have today in price. Btw, today looks kind of boring with a 4% jump; I'm sorry, but where is the fun? Where are the days when we enjoyed 15% and 20% per day?

Speculate on!

TESLA stock clears 2000$. Where from here?

TESLA stock touched 2000$. No resistance, no news, the same idiots chasing prices higher. That's ok in fact!

Now the question is where from here? As I said I see no reason for the stock to stop before 3000$, than 5000$ than 100.000$. I mean my analysis is not better or worse than professionals.

Here is one from BARRON'S. Gary Black, a TESLA bull analyst, raised his price target to 2700$ per share. That's peanuts; I just raised mine to 5$ millions per share.

The article from Barron's concludes that history indicates more upside coming; after a brief pause.

I say no pause, 3000$ will be touched in less than a month.

Good luck!

Warren Buffet stock market valuation indicator - all time high

The fact that the stock markets are in a huge bubble is a secret for nobody.

But where do we stand exactly in terms of valuations? 

One indicator I aften see cited is the Warren Buffet indicator. What is this indicator? It is the total market capitalisation relative to GDP.

Here is how it goes:

All right, so the question is where do we stand today?

Here is the curve showing where this ratio is today (August 2020):

As you can see, the indicator stands at 178%. Does that mean stock will go down? Absolutely no; as I said here and here, they can only go up.

Buy more, they are cheap!

Cathie Wood - Ark Investments CEO - predicts TESLA stock going to 15.000$ a share

And yes, this is a "I told you so" message.

Look, I'm not smarter than the average of you. I'm having quite a poor track record in trading (but working on it 😁 to improve).

But here is a much smarter analyst from Wall Street. Cathie Wood; do you know her? Because I dont.

She anaylized all kind of scenarios for TESLA - including bankrupcy - and she is very confident the stock will reach 15.000$ over 4 years. That prediction was made back in February 2020. At that time, the stock was around 900$ I think before suffering a steep correction due to COVID shock.

An increase fom 900$ to 15.000$ means around 2000% over 4 years (or 500% a year on average). 

At 15.000$ per share, the market cap will be 7x today's, at around 2.5$ trilion dollars. I'll tell you a secret: I think that is peanuts; TESLA will reach 100$ trillion market cap 😎. What do you think about me?

Here she is explaining her crap to you

Buy more as you will make 2000% on your money!

Can you stomach a 50% down day in TESLA stock?

 I did write here that TESLA stock will never go down. In the name of speculation!

What if a 50% down day is coming? Do you think that is possible? If coming, can you stomach that kind of a drawdown? Warren Buffet once said that if you cant sleep at night because a stock you hold is 50% down, you should not be owning that stock at all.

Of course that if you buy the stock at 2000$ stratospheric level, a 50% down is quite hard to sustain. But be prepared for it just in case...

In 10 trading days, the TESLA stock added 40% to its price. This is not that absurd, giving that in stupid bubbles like the one we're experiencing today we see those kind of advancements.

TESLA is approaching 400$ billions market capitalisation; its no surprise to you as we did talk about that here on the blog. Its the most expensive car manufacturer in the world selling very few cars compared to competition.

WSJ has an article on its unbelievable rise and concludes it has nothing to do with fundamentals.

Tesla’s stock has more than tripled since the start of the year, giving it a market capitalization larger than many behemoths of American industry. But its rise wasn’t necessarily driven by fundamentals. 

No shit!

 

2000$ per share touched. 3000$ a piece of cake. Within a month

Its not a "I told you so post", its another reminder how stupid this market goes.

Here it is, right in your face:

Please note the stock is more than 100% away from its 200 day moving average.

Buy more!

Are investors idiots in regard to TESLA stock? In a word: YES!

Everyone knows TESLA stock is a huge bubble. 

Its market cap is more than 6000 times 2019 earnings. Beautiful!

Its PE ratio is 1031. Source: Yahoo finance.

Yet investors keep bidding the stock anyway. Why is that? Why are they paying that much for so little value? TESLA pays no dividends, it has no leadership or competitive technology, it is not a very experienced car company, it is in a business which is capital intensive, it does not sell that many cars compared to other manufacturers, and on and on. Are the investors idiots? I say YES, they are stupid! 

TESLA is a reflection of the frenzy speculation we see these days on the markets overall. Apple, Amazon, NVIDIA, and many many others.

Here is an opinion on why, despite all these stupid valuations, investors keep piling into the stock.

It’s only a matter of time before the Tesla bubble bursts. Forget its “story”; the hard data all points towards its stock being ridiculously overpriced.

Nothing rational explains the dizzying rise of Tesla stock in recent months. Aside from over-exuberance and widespread desperation for the next big thing, there’s no reasonable justification for TSLA suddenly becoming the world’s most valuable carmaker.

Why are people paying so much for such modest earnings?

Two words: Elon Musk. The Tesla founder isn’t just the face of the company. He is the company. He’s outspoken, brash, and a supposed visionary. He attracts investors.

As the dragonhead of the Electrical Automobile companies, Tesla has persuaded many people that it is a new “Apple” of the coming decade and all other petrol-fuel mechanical car companies are just like “Nokia”.

There you have it. Put it simply, investors are waiting for Mesiah; and Elon delivered, these believers see him as the waited God.

Good luck!

 

 

TESLA stock will never stop going up

I mean why it will stop? It will go to 5000$ than 10.000$ than 50.000$ than 100.000$ per share.

There is basically no reason for this stock to NOT go up; every single day til the end of days.

Look how beautiful this is going; dont you like it?

I know I am! 

Speculation is life!

2$ trillions market cap

In case you missed the news, Apple is the 1st company to top 2$ trillions market cap.

Its capitalisation basically doubled in less than 2 years. 10$ trillions coming by the end of the year I believe...

Source: Yahoo Finance

Speculate again & again!

Too much economic (and political?) power in the hands of only 12 people?

This is the question this article on Marketwatch raises.

I did write a few days ago myself about the club of bilionaires here (as our big boss Elon makes it into the top thanks to stupid speculators 😁): The largest compensation package ever.

The biggest winner of the crazy stock buying these days is Elon as the Marketwatch recognizes it.

Tesla’s TSLA, 3.50% Elon Musk has been the biggest beneficiary, with his wealth, as of August 13, tripling to $73 billion. 

The 12 reachest people on planet Earth have a combined wealth surpassing the GDP of Belgium and Austria combined. That's mind boggling!

So than, should the companies they run be dismantled in the name of "democracy protection" (whatever that mean?! I personally dont know what the Marketwatch means by that).

This is simply too much economic and political power in the hands of twelve people. From the point of view of a democratic self-governing society, this represents an Oligarchic Dozen.

The total wealth of the Oligarchic Dozen is greater than the GDP of Belgium and Austria combined. Meanwhile, tens of millions of Americans are unemployed or living paycheck to paycheck, and 170,000 people have died from COVID-19 in the United States.

This is more political than stock talk, I wont discuss it in depth as the blog does not deal with these.

My opinion is around this idea: as far as their wealth has been built legally, I see no problem. The democratic menace is non-existent imo. If however there are legal problems (accounting, monopoly on prices, ilegal business conduct, etc.) than the law should be applied like for anyone else. What people cannot understand is how these wealthy individuals make it by surpassing the law (avoiding taxes, get away from unscratched from legal disputes, etc.)

Happy speculation and dont forget: you can help these people get even richer if you buy their stock!

 

 

 

Rookie traders

I have no idea if this guy is trading TESLA or not. I dont care.

His account on RobinHood application went from 15.000$ to 1$ million than back to 6.000$ or so. That is not very pretty.

This is just to say these milenial speculators have no clue what they're doing. Playing casino...

Dobatse explained in the interview that he’d been drawn into the app’s bells and whistles, which made flipping stocks and dabbling in more complex investments feel like a game.

He started out by funding his account with $15,000 in credit card advances and then took out another two $30,000 home-equity loans as he continued to lose money early. His luck changed this year, and his account value skyrocketed about $1 million in a matter of months.

Then it all fell apart — his account value this week: $6,956.

 These idiots think they have things in control. Like the article puts it, gaining among this group is the exception not the rule. And the market did not even correct; it only goes up. Every day!

I already wrote here about dramatic situations that can happen to these young people thinking they will get rich over night (free money, no work, wonderful life!) See here: Robinhood traders and TESLA speculation.

Happy profits!

2000$ per share this week?

We are close my friends.

Keep pushing, dont let go!

Viva la TESLA!

New highs for the TESLA stock bubble

And while you were eating breakfast, our darling stock bubble is making new highs.

Well done robing hooders!

 It is not only the TESLA stock which is advancing at an unbelieveble speed these days. Other high cap stocks do the same. Here are 2 I'm watching closely.

Amazon; in a span of a year (even less), it did double in value. That is not without importance as this is a very large market cap stock (> 1$ trillion). This is a huge bubble (oh, it can triple again, that is not impossible).

While I can read that Amazon is a "stay-home" stock (a sort of crap story by WallStreet so you buy the stock no matter the price), I see NVIDIA stock doubling in 5 months. Probably stay home stock as well as people get free money from the government to not work and play video games. Oh, I know NVIDIA is not only video games, it is also artifical intelligence disruptive bullshit! Those words can make one look intelligent right? I'm going to tell you a secret; this stock is a huge bubble. Then again, it can go to 100.000$ a share, perfectly possible because it's AI.

How nice isnt it?

The ENRON scandal - part 2

I did write a post about TESLA citing a report which says the company might use accounting fakes when reporting to investors and was wondering whether we will see an ENRON like event for TESLA.

Those kind of articles need to be considered with some skepticism, which is healthy imo.

First of all, I dont know who the guy publishing that is, but I did look around a bit.

Aaron Greenspan, the author of the analysis on TESLA, has a history of similar allegations regarding Facebook and Mark Zuckergberg you can find here. The guy had a dispute with Facebook creator regarding the creation of the social portal by Aaron himself during his university years when he and Mark were colleagues.

In January this year, Aaron published a 75-page report, in which he states that fake accounts made up more than half of Facebook’s 2.2 billion users. He has also testified the same, in front of the UK Parliamentary Committee. He minced no words when he said Mark Zuckerberg is a liar, fraudster and unfit to be the CEO of Facebook.

See here for some information on the subject:

Mark Zuckerberg, founder and CEO of Facebook, said “Aaron and I studied together at Harvard and I’ve always admired his entrepreneurial spirit and love of building things. I appreciate his hard work and innovation that led to building houseSYSTEM, including the Universal Face Book feature. At school, I was even a member of houseSYSTEM. We are pleased that we’ve been able to amicably resolve our differences.”

They are friends now (with money we sort out all sort of things 😁).

Given those statements, for sure the TESLA report I did point in my previous post must be considered carefully.

What's in it btw? All sorts of things:

• A bit of TESLA history
• A chapter on Elon the boss (who the guy is, what's his entrepreneur profile, risk, etc.?)
• Other companies Elon owns and how they have been created or aquired (SolarCity, SpaceX but also a bunch of LLCs created in fiscal interesting places, etc.)
• TESLA earning reports (2018 & 2019)
• Misleading statements Elon made at various moments in media (or social media)
• TESLA cars defects
• The culture at TESLA
• Regulatory
• Subsidies

But there is a chapter on Accounting Fraud. I will try understand and make a blog post after going in detail over it. Of course some other chapters are intersting and I might touch one or two but I wont stop too much on those.

The report can be found here btw.

Is TESLA stock the new bitcoin?

I see articles around (like here on Medium.com) comparing TESLA stock with bitcoin bubble.

As a reminder, the bitcoin bubble is one of the craziest and idiotic speculation manias we did see lately; people were paying 18.000$ for a digital code on an exchange platform (no delivery, nothing. Just a a number on a digital online account; go figure!). All this in the hope that it will find a dumber person to whom sell later for even more dollars. And it did work for a few years if you can believe that; in 2017 the price for a single unit of the digital currency BTC went as high as 18.000$. Ok, you know that already...

There are a lot of believers in bitcoin; there were even more at the end of 2017.

As you can see, the parabola started to go vertical at the begining of 2017; it was trading sub 2000$ a unit. By the end of the year, it went up 9x to 18.000$.

I had an office colleague who explained to me how the currency cannot go down because of enthropy (I cant remember what the explanation was; something stupid for sure as I remember nothing of it and I did not understand what it means; probably nothing). He was a true believer in 2017. After the implosion, he lost some money and sweared he will never play BTC anymore. I dont know what he thinks today... maybe he's buying TESLA stock...

The same goes with TESLA; as you see the public acclaiming Elong the God every time he goes on stage talking about his next big project, you cant think of these as true believers. There is nothing wrong believing in some exciting project, the problem everybody is so euphoric they cant think clearly anymore. A bit of scepticism from time to time doesnt hurt anyone; its probably even healthy. And the TESLA stock? Lets have a look

Things started to move vertical on TESLA stock end of 2019 when it was trading around 200$; it suffered a correction because of the COVID pandemic at around 400$. But then it moved back higher to 1800$ in less than 4 months. That's a 9x increase since the end of 2019, similar to bitcoin prices. Amazing!

So there you have it, the same order for the price increase but TESLA stock moved even faster than bitcoin!

So to answer Medium's article question: Is TESLA the new bitcoin?

If we refer to TESLA the company, the answer is of course not. Bitcoin as a currency serves no purpose (the technology behind it might be interesting) while TESLA produces cars which are useful for mobility. However, if we talk about the TESLA stock, than the answer is Yes, TESLA is the new bitcoin. Which means that a crash similar to bitcoin is not impossible.

And one last thing; similar to bitcoin in 2017 when I was reading that price of the currency will go up to 100.000$ per unit (and I remeber some were even sillier than that; towards a million $ or so...), we can hear 5000$ and 7000$ per stock for TESLA. Ok we dont hear yet 100.000$ but here you have it:

TESLA stock will go up to 100.000$! Do you believe me?

Medium article concludes the same thing

some models predicting Tesla’s share price for the next 5 years see it reaching $7,000 and possibly $15,000 at best in 2024.

If such predictions were to come true, Tesla’s performance would be between +1,000% and +2,000% in 5 years. We are still a long way off but this is a strong incentive to consider Tesla as an investment for the years to come.

Finally, in any case, remain cautious because as I have explained, we are not immune to the fact that all this is just a bubble around the price of Tesla that will explode in the coming months.

As silly as that sound, it is not impossible.

TESLA cybertruck

 You big fans are aware of it!

Its the famous EV pick-up TESLA unveiled the 21st November in Los Angeles. You can see in this video how the crowd (the big believers in Elon the God which cannot go wrong) reacts at every single statement (whether true or not) regarding different specs of the cybertruck.

It has a 400 km autonomy, of course 100% electric. It looks like it will have anti-bullets windows (or something like that); when asked why in the video below, Elon said because its cool. Ok...

I'm not going to say its ugly; I'm going to say its not beautiful 😁

Here is the video with Jay Leno driving the cybertruck with Elon boss in person.

It looks like pre-orders are there for this ugly machine. I need to say this is only the prototype version of the final cybertruck; the final version later this year.

Hear ya!

A decade of frenzy speculation in front of us

 Here is an interesting opinion from a known strategist at Yardeny Reasearch (global investing services).

These guys sell their crap to investors around the world, so you might say its normal to promote this kind of messages. I do understand and I think to a large extent its true. But what if their prediction will become reality?

That means we have a decade of huge speculation still to go. Where is it coming from? Robotics, EVs (read TESLA), medical research (COVID crisis allows researchers to understand and produce vaccines for more coronaviruses than just COVID-19), AI, etc.

For one thing I can tell all those advancements will come but not to the levels Wall Street expects them.  It might be they dont expect them really but want YOU to believe they are coming. Why am I telling this? I work myself in the biomedical sector; I can tell you that a lot of products are the same old thing from 20 years ago just rebranded with new cool names (its not devices connected to a central station but rather IoT; its not a computer algorithm but AI, etc.). 

Now that being said, I'm ok with rebranding. Just keep in mind its nothing really new under the sun.

Cars (be it electrical, hydrogen moved, thermic engine, hybrid etc) will be the same. And that includes TESLA.

Other thing is worth being mentioned; these WalStreeters are so much in loved with old sayings like that of Mark Twain History doesnt repeat itself, but it often rhymes. What does this mean to stocks? In my opinion: a bit NOTHING!

This guy from Yardeni believes that stock will go up until 2029 exactly like they did in 1920s. And a depression is coming next (this is what he's suggesting). And he compares the current pandemic situation with the 1918 flu; well, its all crap imo. When I told you WallStreet is looking far far ahead; maybe a decade ahead you did not believe me 😂. Here you have it from a smart guy, not me:

For instance, he compared the coronavirus pandemic to the 1918 Spanish Flu, which killed an estimated 50 million people and infected some 500 million around the world.

The good news is that the bad news during the previous precedent was followed by the Roaring 20s, Yardeni wrote. So far, the 2020s has started with the pandemic, but there are plenty of years left for the prosperous 1920s to become a precedent for the current decade.

The key to the next boom, as it was in the 1920, will be technology-enhanced productivity.

So the guy is betting on technology; if you take a look at the technology index, Nasdaq-100 which is the playground of world speculation , it looks like we already had a decade of pure speculation there.

It can go on for another decade, everything is possible.

You know what I think? These WallStreet investors are loaded with crap to the guilts; they want dumb retail investors like you and me to buy from them. Its a money transfer mechanism in the end an its very simple; they get the money first from the FED; buy crap with it on the cheap for a few years, have PR people like Yardeni telling you how wonderful times we're living to get retail investors enthusiast about it; some of you will even make money, can you believe that? When the enthusiasm is well in place and you dont think rationally anymore, they dump the crap on you for a big profit and and get out. Than everything is going down and the world is not a beautiful place anymore. And the process repeats: get money from the FED, etc.

It worked very well for 3 decades, why it wont work this time? 

Viva la speculationes!

In the meantime...

 Back to TESLA stock; boring day today, just 4% upside...

Probably 15% tomorrow 😁

I did read that young chinese speculators are making a killing in TESLA stock. Money for free; no work; sit on the back and collect dollars!

When the coronavirus put a halt on people’s lives in China in February, Justin Jin’s old university classmates thought about selling face masks to make money. The 21-year-old suggested they instead try their luck with two stocks: Tesla Inc. and Tencent Holdings Ltd.

That’s when Jin’s two friends began using the Futubull app, one of the Chinese platforms that allow mainland investors to buy foreign equities. The decision paid off. Both stocks soared as part of a global rally that has enticed a wave of novice investors.

Working to produce masks or whathever products is much more energy (and time) consuming than speculating behind a screen; press 2-3 buttons written TSLA and you're done, money pour into your bank account; it's like magic!

 

The ENRON scandal

 I'm sure many of you did hear about the Enron company fraud back in 2001.

We are in the middle of a huge market bubble (similar to today), everybody is exuberant and dont really care about accounting manipulations during such times. You can find more about the Enron bankrupcy and fraud on wikipedia here:

The Enron scandal, publicized in October 2001, led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the de facto dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world. In addition to being the largest bankruptcy reorganization in American history at that time, Enron was cited as the biggest audit failure.

Enron was formed in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth. Several years later, when Jeffrey Skilling was hired, he developed a staff of executives that – by the use of accounting loopholes, special purpose entities, and poor financial reporting – were able to hide billions of dollars in debt from failed deals and projects. Chief Financial Officer Andrew Fastow and other executives misled Enron's board of directors and audit committee on high-risk accounting practices and pressured Arthur Andersen to ignore the issues.

These are complicated matters, its not the purpose of the blog here. The mechanism these gangsters used to fraud is accounting gimmicks. That's the element of interest for us.

What I find the most outrageous about these events is this:

By the time the ruling was overturned at the U.S. Supreme Court, the company had lost the majority of its customers and had ceased operating. Enron employees and shareholders received limited returns in lawsuits, despite losing billions in pensions and stock prices.

In simple terms, people who had hard-earned money invested in this fraud lost most of it. The federals were of course late to identify the fraud and when they arrived, the facts were consumed.

The question you have, is this related to TESLA stock? There is no link between TESLA and ENRON; however I did come over a document (somewhat obscure) which questions TESLA accounting practices. It dates back to January 2020, before the COVID crises and the actual fever surounding the stock.

These are serious statements and given TESLA stock is held by many pensions funds and individual investors, it would be really painful for those people to go through an event like ENRON scandal.

I'll go over this document and give you a feedback on what I think.

In the meantime, here is the raw document:   TESLA Inc, Reality Check

 

 

TESLA will have the monopoly forever on EV cars market

 The TESLA stock vomiting bubble assumes it has the monopoly of the EV cars forever. It looks like the germans aren't really decided to let it go and want a peace of it.

As of today, the german government offers up to 9000 euros subsidies for an EV car under 40.000 euros.

VW's EV Golf model did see an increase in sales of 39% in Europe (vs. TESLA's Model 3 which did sell 14% less in H1 2020).

Anyway, that is to say that TESLA and VW aren't even the no 1 seller of EV cars in Europe. Nissan-Renault is, with its EV Zoe model. Check this out.

I know Europe does not matter; China does, right? The future is there, Europe, US, etc. dont really count anymore... Check this article here, for now TESLA it looks like the number one seller of EV cars in China.

As a side note, I did went over this article which questions the "forever" monopolistic position of TESLA in the EV car market.

We did talk about the TESLA stratospheric market capitalization and the fact that it does not worth spending time to compare it with more traditional car companies but rather with other ego-sick led companies like Amazon (its older sister).

The idea is despite the bubble looking very impressive, it wont last forever; that might sound a bit dissapointing but except a guarantee from the Federal Reserve Bank that it will buy the stock at whatever price (which isnt impossible btw!), one day the stock will go down. When? I dont know and neither the others!

It is only in big tech that there is any discernible bubble and, as Tesla makes clear, it does look very bubbly.

How dangerous is it? It is relatively localized for the time being, it has been funded primarily by an over-lenient central bank, and is centered in assets perceived to have scarcity value. Many big tech companies have true monopoly power at present, and their valuations assume they will keep it. (To apply this to Tesla, money is put to work on the assumption that the company will always and forever be the only electric vehicle manufacturer; if the technology takes off, that will prove wrong.) 

I would add that not only these companies will keep the monopoly forever, but there is no risk associated with their monopolistic positions; and another one, demand for their products will last forever!

No shit; speculators proved wrong? I dont buy that!

Boring days are long gone

 10% plus days are back! This is what I like about speculation around this broken stock; TESLA stock is dynamic, it sells no cars but the stock goes up 10% per day. That's awesome!

Well done, you speculator!

The future looks bright

Price of a security says little about its valuation (I hope you understand what that creap means because I dont).

Smart investors (not the ones like me), look in the future. Way way far in the future. Maybe a century ahead... They are not being bothered by recessions, crisis, competition, vomiting high prices, madness speculation and little details like so. No, they try to predict the future.

Its funny if I compare this with meteorolgy predictions. During July, the predictions over a duration of less than one week, I cant remember one which came to fruition. Raining tomorrow; lots of wind in the afternoon, etc. What do you do as a person who doesnt have the skills to master those math models predicting the weather over the next 3 days? Well, you read the predictions and plan accordingly; you say to yourself these guys must know something; its complicated stuff, you dont know it, so you have nothing to say about it.

Its probably the same with securities. These guys are having skills on future prediction you dont. So they tell what to do and why a stock is at a certain level. Its not because it sells products or makes money (or in case of TESLA because it makes not much and sells not that many cars). No, its about the future. Way way far in the future. Decades far...

I did came about 2 articles here and here talking Amazon blowout earnings (ok, this is not about TESLA stock but its about his older brother, Amazon, another huge stock bubble). Like TESLA, Amazon is not about today. I understand that. Its about the future. 

Similar to 2008, when US banks were about the future (and trading at high valuations despite the risky investments in the real estate market), some tech behemoths today, like Amazon or Shopify ecommerce web sites, are trading at rare oxygen stratospheric levels. I even do see analysts calling for 2$ trillions capitalisation being in the cards; and probably soon. Well, that is possible and I would go out and say 10$ trillions is possible as well; hack, 100$ trillions is not a problem as long as its about the future.

These guys are doing recommendations for you (they are experts serving crap to you).

I wouldn't say that Amazon is undervalued at current prices, but fairly valued is a reasonable assessment when considering the quality of the business. Buying a great company at a fair price can be a straightforward strategy for superior returns, and Amazon looks well-positioned to continue delivering market-beating returns in the years ahead.

Amazon remains cheaply valued, making this stock a worthy addition to most portfolios.

Here you are, the two stars of the planet Earth: Amazon and Tesla! What a wonderful world!

Speculate accordingly!

 

 

The largest compensation package ever

The deal between Elon Musk and TESLA's board of directors includes the largest compensation package ever between a CEO. Well done, Elon!

You already know by now that due to stratospheric TESLA stock price, Elon did see a tranch of almost 4$ billions being payed to him this year. If the capitalization  of the company stays above 200$ billions (which is no problem thanks to robinhood traders), Elon will see another 2$ billions in stock options released for him.

So how much is this compensation package Musk did negotiate with the board? It is a 50$ billion package over 12 tranches if all goals are met.

Musk is among the richest men in the world with a fortune of over 70$ billions. I think he did enter top 5 of the richest men in the world replacing Oracle founder Larry Ellison.

Top 5:

1. Jeff Bezos: thanks to speculation in Amazon stock (another huge bubble), Jeff is making tens of thousands per second; yes, per second!
2. Bill Gates founder of Microsoft; he's also investing a lot in stocks via his foundation.
3. Bernard Arnault who's running the luxury company LVMH
4. Warrend Buffet a very successful stock market investor
5. And our ex computer developer and TESLA founder, Elon Musk! Yeyyy!

In the picture below you can see the top 5 except that instead of having Elon, we see Ellison (first at the left)

Happy speculation