MrRenev
Short

The 2 major differences between 2020 TESLA and 2000 ENRON

NASDAQ:TSLA   TESLA INC
"Jul 14, 1999 Enron Reports 53% Rise in Net Income"
https://www.nytimes.com/1999/07/14/busin...

"Enron one of the best companies to work for in america"
https://www.csrwire.com/press_releases/2...

"Enron Fortune magazine America's Most innovative company for 6 years"

"Enron transforming the energy industry"

"As of 2000, Enron had 19,000 employees. Per employee, Enron says it generated $5.3 million in revenues."

Enron the mighty! Enron the new paradigm! Enron to change the world! Enron multi trillion company! Enron the incredible revolution!
All hail Enron! No one can stand in its way!

"Tesla one of the most innovative companies"
https://www.teslarati.com/tesla-most-inn...

"Tesla innovations are transforming the auto industry"
https://www.forbes.com/sites/innovatorsd...

"Why Tesla could become the world's first $US10 trillion company"
https://thedriven.io/2020/02/05/why-tesl...

"How Google Could Acquire Tesla For $1,500 Per Share On Its Way To $2 Trillion Stock"
https://www.forbes.com/sites/greatspecul...

"Ron Baron: Tesla to hit $1 trillion in revenue in 10 years"
https://www.cnbc.com/2020/02/04/ron-baro...

Tesla the mighty! Tesla the new paradigm! Tesla to change the world! Tesla multi trillion company! Tesla the incredible revolution!
All hail Tesla! No one can stand in its way!


In many ways, Tesla & Enron are similar.
But there are 2 major differences I will show you.


Difference 1

According to this article which quotes NYSE data, less than 2% of Enron shares were shorted even as it entered a clear downtrend that lasted 2 years.
https://www.latimes.com/archives/la-xpm-...

No one was short Enron. We never heard bears talk about it.

Tesla thought... wow.

In mid 2019, up to 44 million of Tesla shares were sold short. Over 30% of the total shares.
Even as it soared 150% above the previous high, there are still (31 01 2020) 22.7 millions shares sold short. 16%.
They just don't give up.
The company may be making 200 years old tech electric cars, and not make sense and not profitable, but investors do not care.

Buying a cheap company worth something like Warren Buffet does will almost always work. But selling short something... Delusions can last a long time...


Difference 2






Stock market trending up strongly, Tesla trending up strongly.

Enron went from $90 to $0.21 between August 2000 (at a time where every one was ultra euphoric about to dot com bubble) and December 2001 & from $80 between decembers.

Enron had a clear multi month distribution pattern at the top of a decade long uptrend that ended parabolic.

80 to 0.21 is a 99.74% drop in 12 months.
90 to 0.21 is 99.77% drop in 16 months.

Eager to short the very top? For an added 0.03%? FOMO.



Tesla will be a short when it enters a distribution phase.
And when bears will have been "proven wrong".
When it will be common knowledge that the bears were wrong and Tesla is a big success.
When less than 10% - or less than 5% preferably - of the share will be shorted.
Tesla will be a short when bears will be seen as extravagant weirdos.


Look at Tesla last distribution phase.
You could have made up to 50% even with all the FUD & ~25% of outstanding shares sold short.

And the one before that:

Again up to 50% was possible.


There are tiny Tesla youtube channels with a handful of suscribers getting hundreds of thousands of views on videos making fun of bears and celebrating "this didn't age well".
Tesla bulls are euphoric. 1k could certainly be the top. IF the price enters distribution phase it could be a very interesting short *rubbing my hands irl right now*.
Can go up, can go straight down in which case I'd miss it but I don't care. It's about taking high probability bets not chasing every thing that moves because of fomo.


For now, patience.
There are other stocks or markets to look at.

I am sure there are famous quotes about choosing your battles wisely.

A speculator gets used to waiting years for certain opportunities.

It is not about all the trades you took and moves you didn't miss. It is about the ones you filtered out. Keeping only the high probability bets.

Less is more.
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

Comments

I have some low risk put debit spreads that are way otm for 4/20

rather risk a little to gain a lot on the shortside via options. for <1/10 of a share I could gain a >950/ contract if tsla begins to fall by april... it's a matter of risk reward imho
Reply
tb142 420snoop
@420snoop, good luck with that...TBC
Reply
ROFL
Reply
Home Stock Screener Forex Screener Crypto Screener Economic Calendar How It Works Chart Features Pricing Refer a friend House Rules Help Center Website & Broker Solutions Widgets Charting Solutions Lightweight Charting Library Blog & News Twitter
Profile Profile Settings Account and Billing Refer a friend My Support Tickets Help Center Ideas Published Followers Following Private Messages Chat Sign Out