Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
In numerous columns, and years before that, I have been beating one drum. The stock market is forward looking. It attempts to figure out which firms will control the future, Amazon for instance, and which companies have dropped the ball, IBM for instance. There are numerous examples of this dichotomy, but one I have been harping on in numerous columns is the relation between Tesla and the auto industry. It is time for a retrospective.
Checklist For A Successful Electric Car
Back in December of 2019, I wrote, A successful electric car must check four boxes: design (modern tech look), price, range and availability in quantity. Only the Tesla Model 3 (and potentially the forthcoming Model Y) checks all four boxes. The Bolt is boring. The Leaf is ugly. The Polestar is not available in quantity. The i3 is getting long in the tooth and still lacks the range. The Taycan is way too expensive.
The Jaguar and the Audi are large expensive SUVs comparable to Tesla’s Model X. There are other competitors like Fisker, but they produce a few high-priced exotics. Is it any surprise that in the United States the Tesla Model 3 outsells all other electric cars combined?
I was asked an interesting question yesterday in our monthly free public Chart Chat at theartofchart.net, and I’d like to talk a bit about that before I start looking at markets today. The question was whether, given that market prices reflect everything that is currently known at the moment about that market, then how can that price be mistaken? My reply was that if that was truly the case then the price of tulips in January 1637 (just before that bubble burst) would have been equally justifiable and that, further, if that was really true there would be no speculative bubbles, which clearly there are on a regular basis.
Something I didn’t add, and should have, is that while statements like this are often thought of as economic rules or even laws, what they are in truth is just working assumptions that contain enough truth that economic models can be built using them that will have some relevance in modelling the behavior of a market that is infinitely more complex than that model.
Late in May, I put together a post called The DMC Challenge in which I put together two hypothetical portfolios: one had nothing but my favorite short ideas, and another had nothing but my favorite long ideas.
It’s been quite interesting to watch. As of today, the short portfolio had suffered a hit of about 8.1%. However, the long portfolio was up 25%. In other words, in the face of this ascending market, my long ideas outperformed my short ideas 3-to-1. One could have taken positions in every single long and short idea and still be ahead by about 17% over the past five weeks or so.
Here are the top three worst performers in the short portfolio (for instance, NLS has gone up 64%, which would be very bad for a short position):