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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

Bitcoin Buyer Beware

Courtesy of ZeroHedge. View original post here.

Entrepreneurs have a new trick to raise money quickly, and it all takes place online, free from the constraints of banks and regulators. As Axios reports, since the beginning of 2017, 65 startups have raised $522 million using initial coin offerings — trading a digital coin (essentially an investment in their company) for a digital currency, like Bitcoin or Ether.

One recent example, as NYT reports, saw Bay Area coders earn $35...



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ValueWalk

Magic Quadrant In Picking Stocks And Sports Betting

By Jacob Wolinsky. Originally published at ValueWalk.

Picking stocks is a tricky game and so is sports betting. With the NFL and NCAA football seasons only a few months away, we can analyze the professional sports-betting industry to better understand the complexities behind making money in the stock market. Anybody who has traveled to Las Vegas, and bet on a sporting event, understands that simply choosing a game winner is not enough for a casino to pay you winnings. You also need to forecast how many points you think a certain team will win or lose by (i.e., the so-called “spread”) – see also What Happens in Vegas, Stays on Wall Street. In the world of stocks, winning/losing is not measured by spreads but rather equities ...



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Uber gets a backseat driver as Kalanick exits top job

 

Uber gets a backseat driver as Kalanick exits top job

Courtesy of John ColleyWarwick Business School, University of Warwick

TED Conference/Flickr, CC BY-NC ...



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Marveling At Multi-Factor ETFs

Courtesy of Benzinga.

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Bitcoin In Perspective: Bill Gates Worth More, Gold 200 Times More

Courtesy of Mike Shedlock, MishTalk

An interesting article on HowMuch puts the Bitcoin phenomenon into proper perspective.

Google founder Larry Page’s net worth beats bitcoin’s entire market cap. Microsoft founder Bill Gates’s net worth is double Bitcoin.

Please consider The Bitcoin Economy, in Perspective.

Last year, Bitcoin became more stable than gold, and earlier this year, the price of a Bitcoin surpassed that of an ounce of gold for the first time. Currently, all the bitcoin in the world is ...



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Russell 2000 at Rising Support

Courtesy of Declan.

There wasn't much to say about today, but the one index which caught my attention was the Russell 2000. The index caught a bounce in demand at the rising trendline and also did enough to recover the 20-day MA. Traders looking for pullback opportunity could take a look at the Russell 2000. Stops on a loss of 1,397.


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Biotech

Even though genetic information is available, doctors may be ignoring important clinical clues

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

Even though genetic information is available, doctors may be ignoring important clinical clues

Courtesy of Greg HallCase Western Reserve University

Digitized strand of DNA. Mathagraphics/From www.shutterstock.com

With the availability of home genetic testing kits from companies such as “23andMe” and “Ancestry DNA,” more peo...



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OpTrader

Swing trading portfolio - week of June 19th, 2017

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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Mapping The Market

Frontier laid off state Senate president after broadband vote it didn't like

Courtesy of Jean-Luc

Speaking of FTR – not nice people…

Frontier laid off state Senate president after broadband vote it didn’t like

By Arstechnica.com

Broadband provider Frontier Communications recently laid off the West Virginia state Senate president after a vote the company didn't like—and yes, you read that correctly.

West Virginia does not have a full-time legislature, and state lawmakers can supplement their part-time government salaries ($20,000 a year,&...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

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Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Robert Sapolsky: The biology of our best and worst selves

Interesting discussion of what affects our behavior. 

Description: "How can humans be so compassionate and altruistic — and also so brutal and violent? To understand why we do what we do, neuroscientist Robert Sapolsky looks at extreme context, examining actions on timescales from seconds to millions of years before they occurred. In this fascinating talk, he shares his cutting edge research into the biology that drives our worst and best behaviors."

Robert Sapolsky: The biology of our best and worst selves

Filmed April 2017 at TED 2017

 

p.s. Roger (on Facebook) saw this talk and recommends the book ...



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Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

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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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