Moshkelgosha

Greater Fool Theory

Short
NASDAQ:TSLA   Tesla, Inc
Bar chart: Monthly trading value estimation(Close price*TradeVolume)
Orange line: Average of the last 12 Months trading value estimation

December 2019:
Closing above the previous range, and 65% increase in monthly trading value compared to the average of the last 12 months.

February 2021:
Closing 15% below the previous high, 25% decrease in monthly trading value compared to the average of the last 12 months, and 59% decrease in trading value in the first 2 months of 2021..!

Money is the true drive behind any price movements in any market. When money influx increases, prices will go up unless supply increases more than demand.
Since January 2021, money outflux started in most EV companies, and their bubble burst in February 2021.
Now you see why I insist Tesla is bearish since mid-February 2021.

What Is the Greater Fool Theory?
The greater fool theory argues that prices go up because people are able to sell overpriced securities to a "greater fool," whether or not they are overvalued. That is, of course, until there are no greater fools left.
Investing, according to the greater fool theory, means ignoring valuations, earnings reports, and all the other data. Ignoring the fundamentals is, of course, risky; and so people subscribing to the greater fool theory could be left holding the bag after a correction.

Institutional investors and mutual fund companies are labeled “the smart money," while retail (individual) investors are called "dumb money."
Because the “dumb money” group doesn't have access to teams of analysts or carefully compiled data, they often make trades based on instinct—and to buy and sell investments at the worst possible time.
Moshkelgosha
February 17th, 2021:
Educational Articles:
1- https://www.investopedia.com/terms/g/greaterfooltheory.asp
2- https://www.investopedia.com/investing/s...
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Comments

Good call during the past couple of months!!! Like your awesome analysis!!!
Reply
I got some pretty bad heat for saying this when TSLA's P/E hit something like 1900. For there to be sellers there must be buyers and one would have to be pretty foolish to pay the price for TSLA's earnings.
Reply
You make a good point. Personally i see it as a very long term consolidation
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