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Actually if you adjust the chart a bit and have the capitulation/despair point not as low, then we've actually several of these cycles.
chickensevil
Active Member
Right, I believe those would be considered "healthy corrections"... vice "bubble"... or am I missing something? Your classic bubble is something that explodes up by like 500% or something crazy and then crashes back down to be something closer to like 10% overall...
I look at it more like there are always exuberance/depression cycles that get amplified in assets/companies where it's difficult to calculate present value due to future growth.
If the company doesn't live up to their growth trajectory/promise, then the stock will tank and the highest place of past exuberance will be called a "bubble". But I look at it more as that "bubble" was just an exuberant place in the cycle (although there are various degrees of exuberance), and if the company would have lived up to their growth trajectory/promise then the stock would have eventually risen higher than that point.
I know this is probably mostly about defining terms, but it helps me to focus on the long-term quality of the asset/company over time and to realize a "bubble" is more about the quality of the asset/company not living up to exuberant expectations.
pz1975
Active Member
The Blue Owl
Endangerous Herbivore
CNBC just had a fund manager on who talked at first about why he is shorting GoPro, and then argued the case for shorting TSLA. He was convinced that Tesla is not demand constrained, because how can you be demand constrained when your deliveries are down QoQ? He then said that Tesla will not meet its Q4 guidance, because how can they almost double deliveries over Q3 when obviously the demand is not there? He ended with "and that will be the time to short it", meaning Q4.
It's baffling to me how people, even today, continue to ignore the evidence on Tesla, at their own expense. Nobody on the CNBC panel offered a counterpoint.
So it seems to me that Q4 is shaping up to be another epic disaster for shorts, as there is still no shortage of them apparently. If this guy is representative for fund managers out there, there will be plenty of rocket fuel loaded up before Q4 earnings. For those who want to entertain a short term trade, how would you play this?
It's baffling to me how people, even today, continue to ignore the evidence on Tesla, at their own expense. Nobody on the CNBC panel offered a counterpoint.
So it seems to me that Q4 is shaping up to be another epic disaster for shorts, as there is still no shortage of them apparently. If this guy is representative for fund managers out there, there will be plenty of rocket fuel loaded up before Q4 earnings. For those who want to entertain a short term trade, how would you play this?
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
The Blue Owl
Endangerous Herbivore
That's the wording he used, at least that's how it stuck in my mind. He obviously meant "production constrained."
Even if I got the wording wrong, the gist of his argument was that Tesla will not meet guidance and it will be time to short it.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Gotcha. What a fool. Has Tesla's management ever said anything that has turned out untrue, except for constantly adjusting time lines??? If he wants to call Elon's "bluff" I say go ahead, by all means, go all in on the short side. TSLA at an all time high must be the perfect time.
jhm
Well-Known Member
See vomit. Lap it up. Good boy! Now go buy more puts. Buy puts, go buy puts. Good boy!
Chicken, perhaps I am the last person on earth to have realized this, but it is only in reading your post No. 6356 that I finally noticed that delicious, ironic double entendre that is "short-sighted".
The Blue Owl
Endangerous Herbivore
The video is up. He does use the expression "demand constrained environment." His name is John Fichthorn, of Dialectic Capital Management.
Causalien
Prime 8 ball Oracle
If Tesla couldn't double deliveries, it implies Elon have started lying. As a trader, this is a simple bet by looking at who lied more often statistically. I wager my money on Elon being more honest, even after counting instances where he reached the goal but at a pater date as a lie.
The Blue Owl
Endangerous Herbivore
Obviously, me too. I'm curious about what others think would be the best way to exploit this information asymmetry. Concretely: what options would you trade and when?
Wow this is awesome. I'd love to take their money and quite frankly they deserve it.
The Blue Owl
Endangerous Herbivore
He asked why finished goods inventory is up. Are you serious? So you think they are lying about filling the pipeline and sticking all the cars in a warehouse somewhere?
Every time I see such managers Im always baffled, either they are flat out lying or are incredibly incompetent (read: stupid)
Just his argument about that deliveries being down Q over Q in different markets: Shouldn't it be obvious that those numbers are down since Tesla entered so many markets in the last four Qs alone and in the same time only increased supply by 60% to full capacity.
Also such unimportant details that the Model X, that no customer ever testdrove or even saw the final version of or even saw the final Price. Has around 19000 reservations with 39 reservation per day adding to that.
Such managers really show that the actual skill of an Fund Manager is not the performance of their assets, its the skill to get capital for your fund in the first place.
His firm manages 1 billion USD in AUM
IAPD - Information About Your Advisory Business Section
According to this SEC filing their Hedge Fund is a substantial portion of the 1bn USD and is primed with Goldman Sachs primarily.
As far as today's price action...I think there aren't many longs selling today (most weak longs would have sold over the past few days prior to today). I believe a lot of today's high volume is from vengeful short-seller like this Fund manager who has lost money and for the past several months wished they had doubled-down at the ATH 6 months ago...now that we are back to ATH they want redemption on that regret and are shorting a ton more TSLA stock in the 260-265 price range.
Unfortunately I probably won't have a very good NASDAQ data point to confirm this theory because the next short interest to be published on Aug 26th is based off of settled trades on Aug 15th (which means trades up to the end of day yesterday as it takes 3 business days to settle USD stocks from trade date)
The Blue Owl
Endangerous Herbivore
Wow, this guy really doesn't learn. @jhm, your comparison is unfair to dogs.
Here he is in April 2014, explaining why he was short TSLA and again talking about "the art of short-selling and knowing when to get out of the way." His prediction was that demand in China would not materialize.
Oops.
Here he is in April 2014, explaining why he was short TSLA and again talking about "the art of short-selling and knowing when to get out of the way." His prediction was that demand in China would not materialize.
Oops.
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