Thoughts on Tesla Motors (TSLA)

After my original article, I sold my Tesla speculation, with the intention of trading back into it within a few weeks. At about the same time I wrote my second article, I was looking for a pullback below the $100 mark, perhaps into the low – $90 range. I had expected that the pool of shorts that needed to cover their failed bets would diminish, and sellers would suddenly overwhelm buyers. I believed this would be a temporary phenomenon that would serve as a test of the Tesla momentum. In fact, I was so bold as to proclaim the winding down of the sale of certain credits that Tesla was profiting from would lead to this pullback “test” as early as the end of the 2nd quarter.

So much for predicting the future. Tesla has rallied well beyond my wildest expectations. To compound the matter, Goldman Sachs’ call for an $84 stock price did nothing to scuttle momentum. From a slower-moving reflexive boom, Tesla has now become a full-blown bubble.

What is gripping the stock can only be described as mass hysteria. Or, perhaps, mass delusion. There is no timetable for production that can justify these prices now. Every day I read more and more unrealistic assumptions written, by those who have been overjoyed at their profits, and who grow greedy for more.

 

Take them. Take your profits, and be happy. There is no playing this game at this point. To do so, is to play with fire.

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