Earlier this week, Ford decided to be more like Tesla by dropping prices and Wall Street responded by handing the company a big L. I suppose we shouldn’t be surprised then that Wall Street seems to be shrugging off Tesla’s second quarter earnings which, actually, were pretty good.
While we’re at it, let’s talk about the market’s surprising new darling, GM’s persistent supply issues, and a little preview of what’s to come with the UAW-Big Three showdown. We’re calling it our Morning Dump.
Tesla’s Second Quarter Performance Not Good Enough For Wall Street
It’s safe to say that most, if not all, automotive executives would trade their quarterly performance for Tesla’s. While not as large as a Volkswagen or a Toyota, the Austin-based EV automaker is profitable, has a huge market cap, and makes great margins.
And the second quarter, mostly, was good news. You can look at the company’s investor relations deck right here. The company beat most expectations.
From Investor’s Business Daily:
Tesla reported Q2 profits growing 20% to 91 cents per share while revenue increased 47% to $24.93 billion. Analysts expected profits to edge up around 4% to 80 cents per share with revenue totaling $24.22 billion, up 43% compared with last year.
So why did the company’s share price drop this morning? Similar to Ford, investors seem worried that Tesla’s margins (i.e., the amount the company makes in profit compared to what it spends) are dropping too much and maybe there’s some softness in the EV market. The company’s gross margins are now at 18.1%, down from the magic 20% number that some investors look as the floor. Those margins are further down from 18.3% in Q1.
Obviously, Tesla may be more efficient in its production, but it can’t keep cutting prices forever and expect to make bigger profits. And Musk doesn’t seem to be stopping. From Reuters:
“I think it makes it does make sense to sacrifice margins in favor of making more vehicles,” adding that if macroeconomic conditions were not stable, Tesla would have to lower prices.
And.
“One day it seems like the world economy is falling apart, next day it’s fine. I don’t know what the hell is going on,” Musk told analysts on a conference call. “We’re in, I would call it, turbulent times.”
Hey, Musk and I agree! On both points. Tesla should keep building more cars. It has an enormous price, brand, first-mover advantage and it won’t last forever, but it’s sure lasting now. Second, I also don’t completely know what the hell is going on (I tend to agree with Team Transitory and see us in a position very similar to post WWII, where the world is reshuffling itself but inflation won’t last and America is in a great position to grow wages while keeping unemployment low).
I didn’t listen to the earnings call, but Tesla watcher/stan Sawyer Merritt had this interesting tidbit from Musk:
Elon Musk on auto gross margin: The short term variance in GM and profitability are minor relative to longer term picture. Autonomy will make all of these numbers look silly. I recommend looking at ARK Invest, their analysis is good.
— Sawyer Merritt (@SawyerMerritt) July 19, 2023
This is where we don’t agree. I don’t think autonomy will make all of the numbers look silly. Sorry. I might be wrong. I might be a FUD. I might be missing out on the investment of a century. I hear the jury’s still out on science.
I also think this is where Wall Street, as fickle as it is, might have it right. Tesla is an extremely valuable car company. Its stock price, in many ways, is justified. But until something else breaks, it’s still a car company, and in lieu of a huge autonomy or other product breakthrough, it eventually will have to be judged by car company standards.
But Investors Like Carvana
I wanted to subhed this as “but Wall Street likes Carvana” but that’s not entirely fair. This is going to be another one of those “the future is stupid” moments. Carvana, the online used car retailer with the big vending machines, clearly expanded too fast and cut too many corners to get explosive growth in a market gone crazy from inventory shortages. Its business also involved securitizing subprime car loans, a practice with some obvious shortcomings.
Things started to look real bad for the company last year. Now the stock is way, way up. What’s going on?
Carvana has become the latest ‘meme stock‘ like GameStop or AMC. It’s not one-size-fits-all, but a big pattern with these types of companies is that their stock prices reach historical lows for pretty reasonable structural reasons and then people with reddit accounts sweep in and buy a ton of shares, driving the price up.
I’m not going to get into all the minutia, but one reason why this works really well as a strategy is that other investors (often hedge funds) have ‘shorted’ these stocks. Shorting a stock is making a bet on that price going lower than it is at a point in time. At some point, those shorts have to be covered and the shorts get ‘squeezed.’ That seems to be happening with Carvana to some degree.
The company, to its credit, has engaged in cost cutting and debt restructuring, leading to improved financial results. That’s been bad news for the shorts.
Here’s a look at the scoreboard from Yahoo! Finance:
“The CVNA short squeeze is going to tighten even more with [Wednesday’s] upward price action,” Ihor Dusaniwsky, managing partner at S3 Partners, told Yahoo Finance on Wednesday morning.
“Expect more short covering today and over the next few days as short sellers look for exit points to trim their exposure in a very unprofitable trade.”
Short sellers lost approximately $646 million in Wednesday’s rally. Their mark-to-market losses since the start of 2023 are approximately $2.18 billion, according to S3’s data.
Yikes. Upgraded to: Don’t Buy Bluth.
BrightDrop Production Pausing Due To Delays
There’s a big question mark regarding how many Ultium vehicles that General Motors can actually produce in the short term to make up for the ending of production of the Bolt and Bolt EUV. I remain skeptical given the company’s recent deliveries.
That’s why this little tiny note from The Detroit News has me intrigued:
Production of BrightDrop electric vans will resume July 31 after two weeks of downtime due to parts availability. The plant had a planned shutdown the first and second weeks of July.
The BrightDrop vans are cool. I think it’s a good business. The GM-owned company seems to have plenty of orders. This could be a one-off, of course, but also maybe not? These are things to consider if you’re a buy, or maybe just buy curious.
Shawn Fain Meets With Biden Ahead Of Big Three Fight
We’ve already covered how new UAW President Shawn Fain is set to brawl with the Detroit Big Three (er… Big 2.5?) ahead of extremely pivotal negotiations. Well, now he got to meet with President Biden, and the details of how that meeting happened are important.
Here’s a report from The Hill:
The UAW leadership had asked for an opportunity to brief White House senior staff on their analysis and positions related to the negotiations with the top U.S. automakers, known as the Big Three.
When Biden learned about that meeting in the West Wing, he asked to also talk directly with Fain and the two of them had a short meeting, a White House official said.
It’s worth noting, as The Hill does, that the UAW has not yet agreed to endorse President Biden as they wait to see how he resolves their biggest future issue: EVs require less labor to make. It’s also worth noting that the UAW explicitly said it wasn’t going to endorse former President Trump and, frankly, it’s questionable how much the average UAW member casts their vote solely on that endorsement. Still, the UAW normally does endorse in these races.
My bias is pro-labor, I’m a WGAE member, so let’s here from someone else. This is John McElroy representing the industry perspective in a piece on Wards Auto:
I don’t have a problem with the union wanting to get more money for its people. I’m all for UAW workers getting good raises this fall. I’m all for reducing the time it takes for new temporary hires to transition to full-time status and get top wages. I’m even in favor of them getting more profit sharing, and I think they should be protected from inflation. Yet that should be achieved through creative but hard-nosed collective bargaining, not with attacks on the automakers in ways that can hurt them in the marketplace.
Look, I get what the union is doing. You get elected to union leadership, not appointed. Fain and his slate are politicians, just like any Democrat or Republican running for office. They need to convince their members that they elected the right leaders. And their members may not be so sure about that. Remember, Fain won the presidency by the slimmest of margins, only 0.4%. Worse, 86% of UAW membership did not even bother to vote in the election, based on the returns that the union publicly posted. So, Fain really doesn’t have a mandate, and that’s one reason why I think he’s staking out such a belligerent strategy to rally his membership.
I sorta disagree on both of his main points. First, Fain’s reform ticket overcame an extremely entrenched leadership that had been there for years, which I think does give him a very specific mandate to not roll over to the companies and be buddy-buddy with them. Second, I don’t think you should cut off your nose to spite for your face, but what other lever does the UAW really have to pull?
Either way, McElroy and I both agree that a strike is probably coming. We’ll see if Shawn Fain has made a huge mistake.
The Big Question
Let’s say, in a purely fictional and hypothetical way, that I’m giving you $10,000 to invest, but it has to be invested today and you have to do one of the following:
- A: Buy Tesla stock.
- B: Short Tesla stock (we’ll assume you have another $5k to cover your short position)
- C: Buy Carvana stock.
- D: Short Carvana stock (same assumption as above).
- E: I don’t understand the question and I won’t respond to it.
Also tell me why.
All photos: Imagine Television or Tesla
Tesla is making a smart long term move with price cuts. They are making it harder for their competition to enter the marketplace. Tesla has known product and a big enough market share that it can afford to take a smaller profit, while Ford and GM et al cannot because they have huge start-up costs building EV factories. They also face the typical quality problems of any complex new product (add Hyundai’s stopping on the highway in here), and do not have trained service personnel in the field, both of which tend to show up as lower customer satisfaction scores. So, who ya gonna buy?
Carvanna? I don’t think so.
Given those options I’d potentially go with A, as I once did hold Tesla stock, but sold it on the emotions of it taking a dip way back in like 2015 or so. Right now I’m sitting on like 9 or so shares of Lucid and thinking I might also be dumb keeping those. I was really banking on the Chinese taking after them like electric Buicks, but that assumption like the OEMs were also making seems to have failed. I’ll give it another few quarters and see where they’re at. Maybe I’ll get something if they get bought out? Maybe they’ll just say congrats your shares are now worthless? (Was kind of my thought when I had the Tesla stock)
At this point in the ongoing shit storm re: Tesla and Carvana?
I would rather spend my cash on the return of ENRON…At least I know it will be money well wasted. Elon can sniff my dog’s butt for all I care.
E.
I understand, but I’d rather put the money into a boring-ass 3-fund portfolio.
D. They deserve to take it in the shorts with their shady business practices.
Or F. S&P 500 fund and let it ride.
Ok, I laughed. That was pretty good.
So, I have to be the one to point out how terrible the Cybertruck’s wiper is at doing wiper things?
Don’t worry, it’ll be replaced by lasers later this year [reread each year until true or the design is abandoned].
Actually, the CyberTruck won’t need a wiper or even windows because AP/FSD will handle everything. Well, next year, or maybe the year after, but probably just after that, someday soon, just around the corner, already in production hell…
Once they have FSD functioning, they will eliminate the passenger compartment. The vehicles can get around by themselves and nobody will have to go anywhere. People can just sit at home all day twattering. It’s hard to reduce battery weight without sacrificing range, but getting rid of meatbag weight will make a big difference.
Full self-wiping technology by eoy.
I heard it was really just a guy dressed in a wiper suit.
No, it was 3 children stacked on top of each other in a suit pretending to be a wiper.
Vincent Adultman! I haven’t seen him(s) around in ages. Always so busy at the business factory.
Yeah, I was wondering why it’s not like the Semi wipers.
If the human can’t see just think how bad it must look to the lane assist / parking assist cameras.
Option A. Tesla makes an actual product. They have factories that produce things. In general, I like that in a company.
Carvana on the other hand doesn’t actually make anything, other than crappy logarithmic offers on other people’s cars. Their recent rise does seem to be of the meme-stock (see also: crypto) variety. I did like the big vending machines though.
Shorting a stock just makes me nervous – it’s not quite as simple as just betting against it and I’m not terribly fond of the practice overall.
So you wouldn’t buy shares in say, a bank, because they don’t make things? Seems a weird criterion
Not an absolute by any means, just a reason to pick Tesla stock over the other hypotheticals since Matt asked us to explain our choice. IRL, I’m one of those boring mutual fund guys.
The Drama King of “zero cost” and not paying bills is going to cut his way to profitability. Literally cut! Pay no attention to the billions of potential liabilities across hundreds of lawsuits. Definitely ignore the NHTSA opening and re-opening multiple investigations. Especially the investigations that could result in having to recall every car made to replace the motor.
No. It isn’t. Period. It just is not, end of discussion. No cult is worth that much, except maybe the criminal organization known as Scientology. They have no novel IP, they have no particularly valuable skills or assets, and they certainly can’t sustain margins when lower middle-class and middle-class are being squeezed to death by <checks notes> car prices and interest rates.
Okay, let’s just be straight up honest here. Okay? Okay.
Securitizing subprime loans with bogus ratings is literally the whole fucking thing that caused 2008.
Carvana and it’s owners have always been a criminal enterprise. Not hyperbole. The owners were convicted of wire fraud and numerous other charges as part of the S&L schemes in the 1980’s.
GM can talk a good game, but the fact is, Mary Barra should have been fired along with every other executive long ago at this point. They certainly shouldn’t be getting paid more than a dollar a year, and forget stock grants.
All they do is say “we fixed supply chain,” switch to “but supply chain,” and see-saw back and forth. You literally cannot buy a car with GM SuperCruise or UltraCruise because “supply chain.” Half the features in your new car you paid for aren’t actually installed, and GM has greenlit dealers charging you for ‘retrofit.’ Planned shutdowns are a normal, regular thing – machines do need maintenance and repairs.
Not having parts coming out of a planned shutdown? Yeah, no.
“You should be hard-nosed! But won’t somebody think of the shareholders?!” You can’t have it both ways, you dumbass. The only languages corporations speak are violence and losing money. We have known this for decades.
People like John McElroy here? They should just admit they’re angling for a job in Ford’s “Service” Department.
Shorting Carvana.
Look, it simply is fact that the market is rigged, period. Because if it wasn’t, any of the houses of cards would have bankrupted billionaires, and they would have blown up the entire economy. The stock market is not a fair, honest, regulated, level playing field, and pretty much never has been.
It’s a ‘winner makes the rules’ system. The firms that are shorting Carvana? They’re not going to tolerate a VW short squeeze orchestrated by others. And this is not conspiracy theories or the like. The ‘independent regulators’ have changed the rules innumerable times at the behest of the winners. You can’t naked short GM, but hedge funds can. It’s criminal for you to coordinate mass buying or selling of stocks, but for hedge funds it’s just Monday. If you sell your shares because you know a new product launch is going to fail miserably, that’s criminal insider trading, and you end up going to prison. If a large investment firm does it, that’s just “smart timing” and there’s “no proof.”
“No. It isn’t. Period. It just is not, end of discussion. No cult is worth that much, except maybe the criminal organization known as Scientology. They have no novel IP, they have no particularly valuable skills or assets, and they certainly can’t sustain margins when lower middle-class and middle-class are being squeezed to death by <checks notes> car prices and interest rates.”
Everything you said in that paragraph is wrong. On the company value alone, the company’s value is clearly stated in their most recent income, cash flow and balance sheet statements.
It’s clear you haven’t done the most basic of basic homework on Tesla.
I know my understanding is very small, but I also don’t really see why stock shorting is allowed. If you don’t like a company, just don’t buy it. Being allowed to profit from a company doing poorly, and essentially putting pressure on them to do so, seems antithetical to what “investment” should be. But again I’m sure there’s a ton of knowledge I’m missing.
It’s a useful check and balance system for the market.
It has been useful in the past to uncover fraud (Enron being one of the more notable examples)
It can be a hedge in more complex trades against long positions.
Actually, it’s another vehicle for the Wall Street guys to make more money. The check and balance is just a happy coincidence.
You say this as if it’s a pejorative, and not the intended outcome of every trade made on Wall Street, and indeed the point of every economic activity.
Also, don’t people with pensions and a lot of other retirement accounts depend on “Wall Street guys” making profits in order to fund their retirements??
Nearly every individual as almost all of us at least have a 401K or IRA.
Shhhhhh, wouldn’t want to bring up inconvenient facts that imperil the revolution, comrade. Don’t you know this is “late-stage” capitalism?
My retirement depends on the market but I would not be surprised if the US collapses in my lifetime and the dollar is devalued to nil and it all goes poof
It’s hard to imagine any scenario short of full-scale nuclear war that would bring that about.
People want to flatter themselves by thinking they live in historic, epoch-shaking times, but the reality is that life in Western countries in the 21st century is about as drama free as any human beings have ever experienced.
This used to be my exact opinion of shorting as well. After doing some research, I’ve since come around to an opinion that more aligns with the points v10omous mentioned. Doesn’t mean I have to actually like the practice though – that feeling of cheering against a company has never sat well.
You aren’t always “cheering against a company” though. As an example, I used to work in B2B telecom sales (translated: no money) when Blackberry put all their eggs in the hail mary of the Storm phone. That thing was total dogshit (I got a first look/test of it) and basically ruined them in many ways. If I had money back then I woulda shorted the shit outta that stock. I wasn’t rooting against them, but I knew they were gonna be screwed with a quickness.
Also consider the fact that one of the things that prevents a well-run operation from doing well is a poorly-run operation sucking up market share cf. Tesla preventing Ford and GM (I threw up a little there) from making advances. So I’m actually all in favor of cheering for a company’s demise in such circumstances.
This goes all the way to the bottom. A crappy Dunkin Donuts franchise prevents a local artisan from making the best donuts anywhere. You’ve seen it.
It’s not cheering against a company, it’s realizing a gain against a company’s overpriced stock.
Maybe “cheering” isn’t the right word. It’s really just a personal preference. I’m admittedly at least a little bit greedy and in my little monkey brain, I instantly want the thing to happen which will make my money grow when I do something with it.
In the case of shorting stock, if I make that move I now want that company’s stock price to go down, a lot, quickly. I want their management to have a collective heart attack and for their headquarters to burn to the ground. Whatever products they sell need to now explode in people’s faces and create the kind of liability headaches that would delight Nadar protégés everywhere.
Let that stock crash and burn hotter than the fire of a hundred thousand punctured Pinto fuel tanks so that my carefully placed dollars can fucking grow. The tree of my greenbacks needs to be watered by the richly flowing blood of a failing publicly-held corporation. Die you miserable overpriced piece of shit company, die!
Or, I could throw the money into a Vanguard fund and let the more skillful/less risk-averse folks provide the type of checks-and-balances on the system that shorting a stock offers. For my own mental health, and the benefit of the public at large, this has become my preferred way of doing things.
That has to be the most brutal opinion of stock shorting ever.
I’ll take my $15k and ‘invest’ it in a second hand Miata.
This guy gets it.
You’ll definitely be able to sell it down the road for less. 😉
I’m shorting Carvana (more accurately buying put options for a few months out); meme stock movements are flashes in the pan generally, and the underlying business model seems to me to be unchanged.
I strongly suspect institutional traders bet the other way from r/wallstreetbets pretty regularly.
I also suspect that some of the influential wallstreetbets folks are institutional investors and play to the emotions of the reactive ones. It’s a good way to run something up for a quick buck or to short.
Spot on
They gotta be careful though. If an institutional player is found loudmouthing on wallstreetbets, they may quickly find themselves being investigated for pump and dump schemes.
Sure, but it’s not all that hard to look like just another one (or several) of the unwashed masses. And you just make sure to be subtle enough that no one can really pin any definitive statements to you (and just be sure not too seem informed enough anyone bothers to suspect you).
Elon Musk is childish and has gotten in trouble with the SEC before. Now with Twitter, he has spread himself too thin between Twitter, Tesla, and the other shit he does.
If Mary Barra also ran TikTok, if Carlos Tavares also ran Instagram, or if Jim Farley also ran Snapchat, you get the idea. Also, they actually behave like adults.
The UAW needs to drop the stupid childish parking policy, and unions need to act like a guild, not a mafia. Check out this comment on an earlier Autopian article covering the UAW:
https://www.theautopian.com/a-new-era-of-technology-is-driving-a-new-era-of-labor-fights/comment-page-1/#comment-182476
Tesla should open more “gas stations” and put stores in them, too
I’d short Tesla, the biggest reason being massive liabilities. You can see their sales growth is much larger than the growth in service centres(and superchargers which are now open to other companies). With sales climbing so much, you need to provide service. Read the TMC forums and you quickly see this is a major unsolved issue.
The other liability is what Musk just admitted to by offering an FSD transfer amnesty. “For Q3 only, and it won’t be happening again.” This is interesting for a few reasons. First, “amnesty” is a dumb choice of words, becuase it suggests buyers have done something wrong(technically correct, they paid for FSD). Second, it hints at a softening in sales, and this is to boost numbers in Q3.
But most importantly it’s an admission FSD has failed for those who purchased it, and he’s trying to head off lawsuits. I can guarantee there will be wording in the transfer to absolve them further than any previous text on purchase agreements have. This is to offload liability. Anyone who doesn’t take it is going to be a problem for Tesla in the future when they fail to deliver on FSD feature promises(and make no mistake, they are failing and will continue to fail unless they change hardware). Tesla vision is a fantasy that will never work without full, human capable AI.
For these reasons, I think Tesla stock is greatly overvalued, but I won’t touch it becuase the cult has to much sway on the price, and they are incredibly irrational. I don’t put money on irrationality.
One counterpoint on Tesla though is that they’re now pretty well positioned to be able to collect hefty sums of money from the US government for charging infrastructure installation over the next few years and then on top of it, have an ongoing revenue stream from charging non-Teslas.
I’d have no confidence in being able to predict where their stock price is going to go over the next few years.
Yes, agreed, income from Superchargers could be a big profit centre in the future. They do have their hands in lots of baskets, which can be good and bad.
Tesla would probably be doing better if its leader didn’t keep shooting himself in the dick, working as hard as possible to alienate the people who actually buy electric cars.
I would invest the 10K in Carvana, then take it out the next day and then pay off a high interest credit card or maybe a student loan if I still had one.
You never said how long it has to be invested, just that is has to be invested today.
As of this moment, Carvana stock is down 12% today. You sure that is a good idea?
He’d still be up $8800.
Very creative with the pictures today LOL
I think I would go option A. But I don’t have $10k of Internet money as I bought the Datsun earlier.
You got the 510 wagon? Awesome, I wanted to go check that guy out. Maybe you can convince Mark Tucker to help with the pick-up. 🙂
As much as it pains me to say, option A. Carvana is a joke. The last car I sold they offered $200, the next offer was $5k.
I go for the long haul and sell off if things go badly.
Also, Tesla is a bit lower right now due to investor discomfort over the price decreases. Buy now, wait for the next (likely imaginary) product announcement that gets investors all excited again, then sell off at a profit.
> Also tell me why
Ain’t nothing but a heartache.
Ain’t nothing but a mistake.
I never want to hear you say I want it that way
I would buy an S&P 500 index fund, but since that isn’t an option I’ll buy Tesla. Of the four options, buying Tesla is the only one that strikes me as a non-terrible decision. I would never short a stock since the potential for loss is unlimited. I wouldn’t buy Carvana since I think they will be out of business in 10 years. I’m not sure investing in Tesla right now will make a lot of money, but I at least think they will be around in 10 years.
Yeah, there’s no option F on here which is to invest in something, anything other than automotive stocks.
Option F should be “buy a low fee diversified index fund.” That probably wouldn’t make for an interesting discussion, though. ETFs are boring. Of course, if investing is exciting, you are probably doing it wrong.
^This…this right here. All the people on r/wallstreetbets and other circle jerk forums treat it like Vegas. The simple question to ask someone who has a gambling addiction is the same to ask the robinhood/wallstreetbets crowd.
“Ok, so you made money on this one action/bet/investment/short/whatever…the question is, are you up or down in your whole lifetime experience in gambling or investing in the stock market/debt market/derivatives/etc..”
Not saying that certain individuals can’t make good money by self-taught day-trading. It’s that starting in 2020 the COVID lockdown made a lot of people think they were suddenly experts in the world of finance and investing. They saw some good short term gains and got WAY too much ego… and it crashed and burned later on for lots of them.
Even with a finance degree, interning at a stock exchange, and working at a large investment bank during the 2007-2009 recession….I still feel less confident managing a portfolio of short-term cap gains type investments vs. typical stonk bros with way less (or zero) experience.
I’m more of a “set it and forget it” type and look for long term investments (which certainly includes index funds, etc..) which are more boring but way less stressful.
I am always amazed at people who make investments that they do not understand (i.e. random people on Robinhood trading options) or those who buy individual stocks in companies that they don’t know anything about (I knew a guy who invested $10,000 in a stock and all he could tell me about the company was that they are somehow involved in “legal weed”). I like that there are options for everyday people to invest, but I find it concerning how little knowledge most of these people have. Many don’t understand the risk they are taking.
For me, I at least feel like I know what I do not know. Given that, I stay away from anything aside from very basic investments (I only buy ETFs at this point, and I buy and hold). I do not have the time or interest to learn about more complex investments. I am also very much the “set it and forget it” type of investor. It may not be exciting, but 8-9% returns over decades will make a lot of money. Getting rich quick sounds fun, but getting rich slowly sounds realistic.
I like the idea of the set it and forget it.
I was briefly tempted by the investing apps, then came to my senses. I know nothing about investing and lack the attention span to fall down that rabbit hole. I realized that was probably a great way to lose my money.
At this point, a high yield savings is probably the best bet for me, haha. Either that or invest in squarebody Chevy trucks.
I use one of the investing apps. They can be a great tool if used responsibly. Although, if you are someone who can’t resist actively trading and taking risky or uninformed bets, those apps are best avoided.
Investing in trucks sounds fun, though.
Haha you might be more accurate than you think! For years I wanted a Vanagon syncro (westy preferably) when they were worth not much, then boom $50k+ a piece. Then afterwards I wanted a 86/87 turbo buick when they were also relatively cheap… then boom again….learn from my mistakes on these. I never predicted square bodies to go up in value (even though I grew up in the back of one) but here we are! Same applies to older Broncos, etc…
To quote a large group of douche bags on Reddit
SQUARE BODIES TO THE MOON!
The most painful one for me personally has to be back in ~2001 there was a 1962 Maserati 3500gti (i indicated fuel injected) that was in beautiful shape in a classic car showroom in NJ. It was a beautiful silver color and looked about as close to a 60s Aston as you could get while being Italian. These old Maseratis weren’t worth much and it had a sticker price in the low $30k range and didn’t appear to need any real work.
Now? Same car sells in the $180k+ range….FML
Could have bought it, done almost nothing to it, and sold it for that much today. Kills me…..
Set it and forget it only works with mutual funds that mirror the DOW or S&P et al AND which are managed by someone with knowledge of market mechanics.
I am old and have seen many “Blue Chips” fade away. When I was a little kid my Grandfather died and left a portfolio of “Hold ’em forever” stocks:
Chrysler
U.S. Steel
General Electric
Xerox
IBM
Yeah, it’s safer (depending how you define the word) to buy put options if you want to bet against a stock.
As long as it’s not done on margin/credit of some kind, and you don’t put too much of your own cash in to it, then I totally agree, buying puts is perfectly fine, it’s like cheap lotto scratch-offs and can be fairly harmless.
Selling puts…. that is a very different beast. I’m not even sure if individual investors can really even do it, haven’t looked in to it for about a decade. Because if the market moves the wrong direction… you’re effed.
Selling options is like short-selling crossed with roulette. It’s possible to do (I think) but I’ve never dared.
I’m going A, just because I have been expecting TSLA to cap and start falling for real for many years now, I had a small position in them and sold it years ago and have regretted it ever since. I hate Musk with a passion, and think he is a terrible person, but so was Henry Ford, and I think both are people wired for success despite how awful they are, and Tesla isn’t going anywhere.
A. It’s not my money.
I’m just here to say I appreciate the Arrested Development content. There are dozens of us! DOZENS!
The Morning Dump: all these stock prices are dropping!
Me: Have these companies tried checking the banana stand? There’s always money in the banana stand.
NO TOUCHING!
Id also be wary of Tesla…unlike a Bluth home they do not appear to be solid as a rock
My risk-averse side says to avoid Tesla, but the man inside me says to go for it.
Says the man (inside) in the $3,000 suit!!!!
But not a single stair-car reference. You’re going to get hop-ons.
I loved the references too. My son just watched it (and I rewatched it for the 3rd time), so our current inside joke is to repeatedly yell “no touching” back and forth to each other.
F. Buy something else. I don’t trust Carvana to run up too much, but I don’t know how long before my short would pay off (and don’t know enough about shorting to make a profit). Tesla is overvalued, but it has been for a long time and that doesn’t seem to matter.
Right now, I have a few hundred shares of Canoo that I bought at 50 cents per share. Not enough to be hurt if it goes under, but it’ll be nice to make a few hundred bucks if it goes over a dollar (I just keep hoping that a buyout spikes the shares or something).
B. Carvana still seems to be a dumpster fire with all the litigation it’s dealing with in regards to untimely titles/registration paperwork. I don’t see it getting better unless a miracle happens. For the short term, Tesla has the advantage, they can pump out more EV’s than other traditional auto manufacturers and can keep lowering the price until other auto manufacturers catch up. Right now, they’re going to be able to leverage all the government incentives where their newer factories are being set up. So yeah, Tesla for the short term.
Shorting stock is not short-term. It’s selling shares you don’t have to then buy when it drops. Basically, betting on the value going down.
Otherwise, your plan is reasonable.
Their stock price has always been extremely high relative to their profit and I don’t think that has changed. What may be most likely is that the stock price just kind of stays flat for a while as the hype train continues to mellow out, so I don’t want to be long or short.