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  1. lvmoda

    TSLA – I'd be careful shorting this stock.   Full disclosure:  I have been quite long since last year, in fact having paid for my tesla with long calls.  However, I also thought the stock had run too far ahead of earnings and closed most positions leaving only a Jan15 42C/May 75 spread open.  So I've also been shocked and awed by the move, fortunately not to the point of any losses (yet).
     
    There are so many intangible and unpredictable factors to valuing TSLA, and there have been many articles arguing both sides, but I'll share my things to consider:
     
    1.  This car has the simplicity of design that very rarely comes along.   It really is simply a battery, a 4G-connected computer (with a 17" display – and yes I've already been caught reading emails and PSW while driving, lol) and a big inductor motor with a few servos, fuses and pc boards.  That's it….almost no moving parts to break or wear out.  Take a look at a the chassis in one of their stores and you'll see what I mean.
     
    What this really means is that this car and the platform was designed to be very easy to build and support.  This means scaling should not be compared to traditional auto company scaling business models.  The ecosystem/supply chain is very different.  The hard part (design) of the platform is done, the moat (patents) is cast and the fortress (factory) template is being optimized right now.  Yes, the supply chain will need more work, but this is more like scaling an iphone – all the value add is in the design, not production.   Does anyone really think TSLA will have a problem raising capital to build more assembly centers?  I think not.
     
    2.  The traditional auto companies have been burned on every effort to change their propulsion model, whether it be hybrids, electrics, etc.  A lot of money spent, but not well and one can argue they did not have the commitment to succeed – only to satisfy regulators.   Look at the Chevy Volt, the money spent, the time involved in design, the price of the car, the 'intelligence' of the car and the resulting sales: fail.  Even Toyota has not been able to grow Prius sales beyond the niche of greenies.  
     
    This is why telsa IS disruptive, and now has broken into a clear run for the goal line.   They have the design instincts, human capital and nimbleness of a classic silicon valley start-up.   Kind of what GM wanted with the acquisition of EDS a long time ago, but how did that work out for them?   Even Toyota does not have the culture to drive this transition to electric cars conceived as a mobile, digital platform – the more they spend the more they will lose and the more validated the disruptor becomes.  Classic Christensen disruptive innovation…google it.
     
    3. Sales will accelerate beyond expectations outside of US.   Europeans have much more to like about Tesla cars than Americans – higher fuel prices and shorter travel distance requirements and more supportive governments/regulators.  Of course, not everyone can afford a Model S (although one can argue an affordable luxury @about $570/mo in the US on lease and about $400/mo in Europe). If you think this will be the last car TSLA makes then go ahead and short the stock.  However, the Model X SUV is already designed (with cool gull-wings) and the Gen III design is active ($40K sedan with 500 mile range).  Umm….short if you don't think they know what they are doing, or if someone won't buy the vision or fund the capital, or if you don't think they will be the first movers on this innovation.
     
    4. Elon Musk is in the process of becoming the new age Edison.  He's already made the money and is motivated by solving the worlds' big problems.  Do you think the CEO's of Ford, GM or Toyota are wired or motivated that way?  He may be a little loose, not unlike the old Steve Jobs, but you really have to ask yourself a couple of questions:   Are electric cars a fluke or fad?  If you think yes, then stick to your bikes and zip cars and I can't help you.  If no, then what horse are you going to bet on?   My bet is on the one with no legacy costs, unions, cultural and competence impediments and vested interests within their firm who do not want to lose their position and power by encouraging the demise of the ICE.
     
    These points are for those who are shorting out in 2015.  I do think and actually hope that TSLA comes in from 80 after the current shorts cover.  I have May 75 covers that I'm managing and would love to see the stock get back to the 60's.  But this has become a cult stock and now the general public has latched onto it.  What other car has achieved Motor Trend Car of the Year, and Consumer Report's 99/100 score?  None.   They will be many trying to play the 'buy the car, pay with stock gains' game, which I can't put down because it did work for me, but I wouldn't try it now.   I'm just making the point that there will be many drivers of stock demand – rational and irrational.  And I don't think this will be the last wave of short covering (especially seeing the comments on the board).   Just remember that irrational is indeed irrational, but it is also real and can last for a long time.
     
    I've seen this movie before, namely AMZN in the early 2000's when no one could believe the stock valuation based on traditional valuation metrics.  Even still to this day.   It still surprises me that people buy the vision story without regard to valuation, but it happens over and over again.   Looking at the long-term AMZN chart from 1998 until now is evidence that scalable digital business models can defy gravity for a very long time.   Things happen much faster now, so AMZN's chart performance curve for 10 years may only take 3 years for TSLA.    In fact, I think a good pair trade would be Long TSLA/Short AMZN LEAPS, playing the momo's against each other.
     
    I've had my share of covers and hedges blow up on me and the only repair left is to roll way out and say a prayer.  And of course, with unlimited time and margin, selling premium can fix most surprise gaps up and down.   I'm just saying that TSLA in 2015 is a very uncertain and risky play, mainly due to the irrational factors that defy gravity – witness AMZN.



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Zero Hedge

Joe Scarborough: 'Hillary Clinton Cost Hillary Clinton the Election,' Not Fake News

Courtesy of ZeroHedge. View original post here.

Joe Scarborough dropped an epic dose of truth on Hillary and her disaffected, snowflake supporters this morning after Clinton herself took to the stage yesterday to blame "fake news" for her stunning loss.  Apparently not a buyer of the "fake news" excuse, Scarborough blasted Hillary, and democrats in general, saying that "Hillary Clinton cost Hillary Clinton the election."

“When you look at this ‘fake news,’ and you see what happened up at Harvard and you hear ever...



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Phil's Favorites

Hillary Backer, Republican Senator Lindsey Graham, Heads Obama's Witch Hunt on Russia

Courtesy of Mish.

Earlier today, president Obama ordered a Russia Hacking Claim Probe.

Republican Senator Lindsey Graham, a friend and backer of Hillary Clinton, heads up Obama’s witch hunt.

Barack Obama has ordered US intelligence agencies to conduct a “full review” of alleged Russian hacking into this year’s election and to issue a report before he leaves office next month.

Lisa Monaco, White House counter-terrorism adviser, said that the review, which would be sent to Congress but which might not be made public, would look at both what happened during the election and would consider “some after-action”.

The review ...



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ValueWalk

FRMO Corporation 2016 Annual Meeting Of Shareholders Transcript

By VWArticles. Originally published at ValueWalk.

FRMO Corporation ‘s transcript of the 2016 annual meeting of shareholders.

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Therese Byars - Corporate Secretary

Welcome to the 2016 FRMO Annual Meeting of Shareholders. My name is Therese Byars, and I’m the corporate secretary of FRMO Corp. (the “Company”). Joining me are Murray Stahl, Chairman and Chief Executive Officer, and Steven Bregman, President and Chief Financial Officer.

...



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Biotech

The Medicines Company: Insider Buying

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

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Kimble Charting Solutions

Stocks & Bonds testing 20-year inflection points, says Joe Friday!

Courtesy of Chris Kimble.

Below looks at the patterns on the S&P 500 and the Yield on the 10-year note (Inverted to look like bond prices), since the late 1980’s. A rare test of support and resistance by stocks and bonds, is in play right now!

CLICK ON CHART TO ENLARGE

The S&P 500, has remained inside of rising channel (1), for the majority of the past 20-years.

The 10-year yield (Inverted) has remained inside of rising channel (2), for the major...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Uncertainty Looms as Triple-Leveraged Oil Bets Go Dark (The Wall Street Journal)

Thursday is the final day of ordinary trading for a pair of popular exchange-traded products that deliver turbo-charged returns on the price of crude oil.

China warns WTO members not to use non-market economy clause after December 11 (Reuters)

China's Commerce Ministry said on Friday it would take "necessary measures" if World Trade Organization members continue to use a non-market economy clause in its to WTO deal to assess dumping duties against it after Dec. 11.

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Members' Corner

How To Poop At A Party?

Courtesy of Nattering Naybob.

Once again, it's "Toilet Thursday" or "Thursday in the Loo", so we follow up on Second Hand Stink with How to Poop At A Party. 

This hilarious video demonstrates how to control the Shituation when needing to Poopulate at a gathering, in no uncertain terms. 

We hope this recurring bathroom humor theme "shits" well with our readers. So please do relax, drop the cursor below, click and enjoy.

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Chart School

Dow Jones Gann Angle Update

Courtesy of Read the Ticker.

When the Dow Jones moves the media must have an explanation for it. However the insiders have the nod to what is going on.

The media story so far is that since the TRUMP win, managers have been rotating their portfolios to represent TRUMP trends (lower taxes, go easy on the 'too big to fail' Wall Street banks, more jobs for Americans). Prior the election the stock market was set up for a HILLARY win, due to more of the same, status quo, FED support. But....

Using Richard Ney logic, the short answer is, stocks were always going up and the election results do not matter nor would a higher 10 yr bond or lackluster fundamentals. The real story is the marke...

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Promotions

Phil's Stock World's Las Vegas Conference!

 

Come join us for the Phil's Stock World's Conference in Las Vegas!

Date:  Sunday, Feb 12, 2017 and Monday Feb 13, 2017.            

Beginning Time:  8:00 am Sunday morning

Location: Caesar's Palace in Las Vegas

Notes

Caesar's has tentatively offered us rooms for $189 on Saturday night and $129 for Sunday night. However, we have to sign the contract ASAP. We need at least 10 people to pay me via Paypal or we may lose the best rate for the rooms. (Once we are guaranteed ten attendees, I will put up instructions to call the hotel for individual rooms.)

The more people who sign up,...



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OpTrader

Swing trading portfolio - week of December 5th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Digital Currencies

Largest US Bitcoin Exchange Is "Extremely Concerned" With IRS Crackdown Targeting Its Users

Courtesy of ZeroHedge. View original post here.

Last Thursday we reported that in a startling development seeking to breach the privacy veil of users of America's largest bitcoin exchange, the IRS filed court papers seeking a judicial order to serve a so-called “John Doe” summons on the San Francisco-based Bitcoin platform Coinbase.

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Mapping The Market

The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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