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Tesla shares soar 40% in 2 days and short sellers get squeezed

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Re: Tesla shares soar 40% in 2 days and short sellers get squeezed

#21

Post by vikramkr »

Scoundreller wrote: post #8
valdiorn wrote: post #6

Earlier quoted context omitted.

you can have the greatest tech in the world, but that won't help you if you can't market your product properly. I've never even heard of any of these brands, yet I'm actually an avid fan of chinese breakthrough tech in many areas, and have absolutely no problem supporting the Chinese tech industry. But almost all of them have one flaw in common; they don't know how to build a brand and market to western consumers, wh…

Usually it takes a few decades. But there were times that Samsung and Toyota were unknowns. I think China’s problem is the Western belief that their tech products are built to spy first and perform second. And that primary functionality could just be removed for the western market.

They aren't doing very much to assuage fears about spying. The west doesn't fear that because they're chinese or asian (we have no problem trusting Japanese products for example) - the fear is because China has an authoritarian government with very close links with industry and state run businesses.

Re: Tesla shares soar 40% in 2 days and short sellers get squeezed

#22

Post by ta999999171 »

beatgammit wrote: post #16
MandieD wrote: post #2

No matter how confident you are in your belief that a stock or the market in general is overvalued, never forget what John Maynard Keynes said: "The market can stay irrational longer than you can remain solvent." I repeat this to myself any time I'm tempted to short what I think is a grossly over-valued tech stock.

I think the safer option is to buy a solid competitor that will benefit if the overvalued stock corrects. For example, if you think Ford or BMW will attract investors if Tesla deflates, buy that instead.

Or their top Chinese competitor.

Not that I would, but

Re: Tesla shares soar 40% in 2 days and short sellers get squeezed

#23

Post by ckastner »

wcoenen wrote: post #15
ckastner wrote: post #13

Earlier quoted context omitted.

An analyst firm, ARK research, on Jan 31st raised the forecast for Tesla to $7,000 by 2024, for a market cap of well above one trillion. Because "robotaxis". This confidence in Tesla was really odd, given that they apparently significantly reduced their investment in Q4 [1]. [1] https://www.barrons.com/articles/tesla-stock-7000-ark-invest...

It's not odd if you read the article that you linked. It explains that ARK does not allow more than 10% weight for any position, so they had to sell some Tesla shares to rebalance.

It says that it does not allow purchases beyond 10% weight (and in "rare and specific cases", exceptions are possible), not 10% per se.

Appreciation of an existing beyond 10% is at the discretion of the portfolio manager.

Re: Tesla shares soar 40% in 2 days and short sellers get squeezed

#24

Post by aeternum »

MandieD wrote: post #2

No matter how confident you are in your belief that a stock or the market in general is overvalued, never forget what John Maynard Keynes said: "The market can stay irrational longer than you can remain solvent." I repeat this to myself any time I'm tempted to short what I think is a grossly over-valued tech stock.

You can purchase puts instead of shorting the stock to eliminate the risk of insolvency.

If your time horizon is more than two years, then it's not much of a prediction anyway as most companies are likely to go to zero given enough time.

Re: Tesla shares soar 40% in 2 days and short sellers get squeezed

#25

Post by xkjkls »

MandieD wrote: post #2

No matter how confident you are in your belief that a stock or the market in general is overvalued, never forget what John Maynard Keynes said: "The market can stay irrational longer than you can remain solvent." I repeat this to myself any time I'm tempted to short what I think is a grossly over-valued tech stock.

It really depends on how you look at short positions. If you also have a long portfolio, and you would like your returns to be less market correlated, then short positions can be fine. I’d recommend almost every retail investor never short anything, but the math can be different if you are a large fund or institutional capital

Re: Tesla shares soar 40% in 2 days and short sellers get squeezed

#26

Post by xkjkls »

aeternum wrote: post #24
MandieD wrote: post #2

No matter how confident you are in your belief that a stock or the market in general is overvalued, never forget what John Maynard Keynes said: "The market can stay irrational longer than you can remain solvent." I repeat this to myself any time I'm tempted to short what I think is a grossly over-valued tech stock.

You can purchase puts instead of shorting the stock to eliminate the risk of insolvency. If your time horizon is more than two years, then it's not much of a prediction anyway as most companies are likely to go to zero given enough time.

Puts cap your losses, but they also are inherently more volatile than the stock itself.

Re: Tesla shares soar 40% in 2 days and short sellers get squeezed

#27

Post by xkjkls »

beatgammit wrote: post #16
MandieD wrote: post #2

No matter how confident you are in your belief that a stock or the market in general is overvalued, never forget what John Maynard Keynes said: "The market can stay irrational longer than you can remain solvent." I repeat this to myself any time I'm tempted to short what I think is a grossly over-valued tech stock.

I think the safer option is to buy a solid competitor that will benefit if the overvalued stock corrects. For example, if you think Ford or BMW will attract investors if Tesla deflates, buy that instead.

What if you think the entire car market is overvalued, but Tesla specifically so?

Re: Tesla shares soar 40% in 2 days and short sellers get squeezed

#28

Post by xkjkls »

ta999999171 wrote: post #22
beatgammit wrote: post #16

Earlier quoted context omitted.

I think the safer option is to buy a solid competitor that will benefit if the overvalued stock corrects. For example, if you think Ford or BMW will attract investors if Tesla deflates, buy that instead.

Or their top Chinese competitor. Not that I would, but

NIO hasn’t exactly been doing well

Re: Tesla shares soar 40% in 2 days and short sellers get squeezed

#29

Post by xkjkls »

SideburnsOfDoom wrote: post #9
Scoundreller wrote: post #7

Earlier quoted context omitted.

A great strategy when your industry is in a bubble is to trade your valuable pieces of paper for other productive/hard asset companies. Tesla Apartments anyone?

Tesla solar roofs, and Tesla home batteries work for full houses. You might be onto something with an apartment option! (only joking, well mostly joking)

Do Tesla Solar Roofs work? The number of installations three and a half years in have been pathetic

Re: Tesla shares soar 40% in 2 days and short sellers get squeezed

#30

Post by xkjkls »

ckastner wrote: post #23
wcoenen wrote: post #15

Earlier quoted context omitted.

It's not odd if you read the article that you linked. It explains that ARK does not allow more than 10% weight for any position, so they had to sell some Tesla shares to rebalance.

It says that it does not allow purchases beyond 10% weight (and in "rare and specific cases", exceptions are possible), not 10% per se. Appreciation of an existing beyond 10% is at the discretion of the portfolio manager.

That’s because their price target is complete BS meant to hype the stock they own.
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