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Tesla Shorts are Getting Crushed, and I’m a Little Turned On

Don’t Bet Against Elon Musk

Written by Jeff Siegel
Posted August 2, 2018 at 4:15PM

Check out this recent headline …

Tesla short sellers are sitting on more than $1 billion paper loss after stock rally

I’ve said it before and I’ll say it again …

Don’t bet against Elon Musk.

Even as the guy fumbles his way through earnings calls and stupid tweets, the guy is simply building a company that just has more supporters than haters. Which, of course, you’d never be able to tell by reading all the finance articles bashing the stock.

But that’s the difference between investors and enthusiasts.

Investors look at the technicals and figure the stock isn’t worth anywhere near where it’s trading. Enthusiasts look at the company with wide eyes and salivate over anything Elon Musk does. Hell, the guy sold millions of dollars worth of hats, flame throwers, and surf boards because he knew people would buy them.

And therein lies the reality …

Say what you want about Tesla and all the problems the company has had trying to single-handedly force the evolution of personal transportation in a world where the outdated internal combustion engine is still taken seriously. But no matter how you slice it, there’s an army of Tesla supporters that’ll do just about anything to be a part of the Tesla movement. And make no mistake: This is a movement.

We saw the same thing with Apple (NASDAQ: AAPL) and we saw the same thing with Amazon (NASDAQ: AMZN). Hardcore believers in these companies enable their success. Even when the smartest investors in the room lay out the most valid and comprehensive arguments for these companies’ valuations to not make sense, the overriding seduction of these cult stocks trumps reality.

And understand, I don’t say this to criticize Tesla at all. In fact, I’ve been a fan of the company before it even went public. I invested in, and recommended the stock, many years ago, but sold when I saw the valuations just too out of control. That was back when the stock was trading for $240 a share. Today it’s trading at around $349 a share.

The bottom line is that despite so many folks rooting for Tesla to fail, the company simply makes a superior product. I’ve driven the Roadster, the Model X, and the Model S. All of these are vehicles that put everything else on the market to shame.

I also reserved my Model 3 on the first day reservations were being accepted. And like most Tesla enthusiasts, I’m not even remotely bothered by the delay. I actually expected it. But I love the company, and I love the vehicle. And I’m happy to wait patiently to give Elon Musk my money.

Whether or not Tesla investors should be buying the stock right now is not something I can comment on. I still don’t think it’s worth even $300 a share. But the market doesn’t agree. And really, that’s all that matters.

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