Skip to main content

Is it time to short TESLA stock (Ticker: TSLA)

December 6, 2024

Is it time to short TESLA stock (Ticker: TSLA):

Tesla's stock has been on fire since Donald Trump won the elections. The financial markets are betting that Elon Musk and Tesla will profit greatly during the Second Coming of Trump. Most professionals believe (or are selling the belief) that Tesla's stock will continue rising forever. While it may be a little too to begin shoring Tesla, brave contrarian speculators may benefit from putting Tesla on their radars for shorting opportunities. Nothing lasts forever. What goes up, comes down. Neither Trump nor Musk are gods. Both Trump and Musk are simple primates and mortals. Both men are up today for sure, and both will come down eventually. Gravity is a bitch.

Trump Mania Won't Last Forever

What we are seeing is crazy and perhaps unprecedented in our history. The U.S. economy is doing amazingly well in all regards. Part of the reason is that our economy is a fully diversified and completely globalized economy with many significant free trade agreements and very porous--if not virtually open-- borders. The other part is science, technology, engineering, and math (STEM) prowess, with the most prominent of all new revolutionary technologies being artificial intelligence (AI).  

Along came a senior citizen, science-denier, demagogue populist promising to make America great again. However, the country is already great. The country is already great as it is. It's not perfect because perfection doesn't exist. And no, god doesn't exist either outside of our collective imagination. The country is great precisely because we have mastered pluralism and because we have walked away from what Trump reminisces from his old days. 

Elon Musk himself thought that Trump was too old. During the Republican primaries Musk endorsed DeSantis and was basically on the Anti-Trump Movement (ATM),  the Never Trump, and the Anyone But Trump camp. After Trump won the primaries, Musk gradually changed course and began buying Trump with donations and endorsements. The investment paid off super well.    

Tesla's stock price has more than doubled in price since Musk began to endorse Trump. Tesla's stock has gained an incredible 120% in the past 6 months. Elon Musk has more than doubled his net worth in 6 months since getting in bed metaphorically with Trump. Just today, Musk added $1I billion to his fortune, which is currently estimated at $355 billion. 

Trump's fortune is estimated at about $3 billion. With Musk gaining Trump's fortune every 8 hours, Trump should be asking for a commission really soon. Once Trump becomes President he will be essentially immune from criminal prosecution for bribery tied to official acts. Trump and his associates will surely look for ways for the South African oligarch to pay his dues. 

It will be interesting to see how the bromance between Trump and Musk evolves over the next months. Both men are difficult and of nonstandard mental health. With them, we're in crazy hands going for a crazy ride. Musk will be working for Trump and become a government bureaucrat in charge of a new government agency related to government efficiency. In the real world that would be seen as a significant distraction that would significantly jeopardize Tesla. However, in the Trump World that we are living for now in the United States of Trump that is seen as a positive for the Tesla stock.

Make no mistake. Tesla is a great company just like the United States is a great country. Elon Musk is a successful immigrant, the most successful immigrant in the world. Musk would run for President if he could. He cannot because he is not a natural born American. Elon Musk is a South African immigrant who became a U.S. citizen after moving to the United States from Canada. Anyways, Elon Musk is a great business leader, but is not immortal and is not immune to gravity. Elon will fall. Tesla will fall. 

Now you know it. 

 

Comments

Post a Comment

Popular posts from this blog

When will the Tesla bubble burst?

December 11, 2024 When will the Tesla bubble burst?  We don't know Fools rush in. It's impossible to know exactly when the Tesla bubble will finally burst. Unfortunately for us at Creatix, we began shorting Tesla too soon. We are down almost 40% on our position as of today. We are not fooling ourselves thinking that we were ever make money on the short position. We truly doubt that Tesla can go down 40% any time soon.  We would love to add to the short position, but it would exceed our $3,000 limit on the stupid bets that we do for fun. We're not Mr. Beast. We have a very limited budget for ridiculousness. We would love to short Tesla tomorrow morning at the ridiculous share price of $424. Tesla is trading at an incredible 116 times earnings, which gives Tesla a market capitalization of $1.32 Trillion. Elon Musk added today $13.4 billion to his fortune. Yes, $13 billion in one day. Yesterday, he had added $11 billion. Yes, that's $24 billion in 2 days.  Six months ago, ...
Post a Comment
Read more

Will prices go up or down during the Second Coming of Trump?

December 12, 2024 Will prices go up or down during the Second Coming of Trump? President-elect Donald Trump has acknowledged the difficulty of reducing grocery prices, stating, "It's hard to bring things down once they're up."  Lower Energy Costs and Better Logistics Trump hopes that lower energy costs and improved supply chains may prevent significant price increases on food. However, many economists believe that Trump's tariffs on foreign countries and massive deportation of illegal immigrants, which include millions of undocumented farm workers, will increase food prices.  Additionally, while Trump emphasizes the role that potentially lower energy prices may have in food costs, experts note that energy constitutes a relatively small portion of food production expenses. Energy prices may also increase despite experts forecasting that they will stay relatively low or go further down. After all, economists and financial experts are wrong often, almost all of the t...
Post a Comment
Read more

Is there a Tesla bubble?

December 10, 2024 Is there a Tesla bubble? You bet. As of December 10, 2024, Tesla (Ticker: TSLA) is approaching an all-time high valuation, with a current share price of $401. The record closing price stands at $410, achieved on November 4, 2021. This gives the American electric car maker a market capitalization of $1.26 Trillion.  Tesla is trading at 110 times earnings. The average price to earnings ratio in the "traditional" automotive industry (excluding Tesla, and also excluding Chinese car makers) is about 6.7. That is, while almost all car makers in the world trade at 7 times earnings in average, Tesla is trading at 110, which is 15 times the industry average.  Major Automakers (Excluding Tesla and Chinese car makers) ranked by P/E: Subaru Corporation (Ticker: 7270.T): 12.0 Suzuki Motor Corporation (Ticker: 7269.T): 10.0 Toyota Motor Corporation (Ticker: TM): 9.70 Isuzu Motors Limited (Ticker: 7202.T): 9.0 Honda Motor Co., Ltd. (Ticker: HMC): 8.0 Mazda Motor Corporatio...
Post a Comment
Read more