Tesla – Exploiting Cognitive Deficiencies

Of course, all of this has been pointed out to the Tesla proponents. But this is where their second cognitive failure comes in. Like with their politics, they are unable to imagine anyone could disagree with their messianic vision except due to evil or base motives. So, wade into the comments section of Seeking Alpha and dare to question the investment logic of Tesla. You will be met with a torrent of ad hominem abuse and attacks on your motives, intelligence and maternal parenting.  But the one thing that you will not be met with is a reasoned retort. You are so obviously unenlightened that this is not deserved.

At the current stock price, I am slightly in the money on my Tesla short. But I am maintaining the position until I make enough from shorting Tesla stock to buy a Tesla car. Or, more likely, to buy one of the better, cheaper and more reliable EVs that Tesla’s incumbent competitors will shortly be producing.

Footnotes:

[1] “Shorting” a stock is a way of betting that its price will fall.  To be precise, you short a stock by borrowing it from someone, promising to return it at a later date with interest; in this respect, it is just like any loan, except in this case the “principal” is the number of shares that you have borrowed and which you have to return.  After you borrow the shares, you sell them at the current market price for cash.  When it comes time to return the shares, you have to buy them back.  You profit if the price of the stock has fallen in the interim and you can buy back the shares for less than you received when you sold them.

Short sellers are often derided as a type of financial parasite living off the misery of others.  In fact, they should be strongly encouraged.  Imagine, for example, what would have happened if investors had more vigorously shorted sub-prime mortgages in the lead up to the financial crisis.  With much more shorting, the price of these loans would have fallen and it would have become unprofitable to create them.  A huge amount of bad investment and financial chaos could have been avoided.

[2] As always, this is not any kind of financial advice.

[3] I say “revived” because, in fact, EV is a very old technology.  Before being eclipsed by internal combustion engines (“ICE”) in the early 19th century, EV and ICE were neck and neck.

[4] Of course, we must never ask where the electricity comes from.  Or question the environmental impact of making the batteries.

 Chart by: StockCharts

Image captions by PT