Slope of Hope Blog Posts

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.

So Here We Are

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Firstly my apologies for the wait since my last post. I’m currently getting divorced, which isn’t much fun, and the presidential election was so polarising in the US that I was getting the impression that if I mentioned that the weather was getting chillier as the season changed, then some would feel that was a comment on the election and get offended. The election is finally over….ish, and I think it’s safe to start writing again about markets.

So in my last post I was writing about the bull flags that would likely deliver retests of the all time high as and when they broke up. Those evolved into larger bullish patterns, a bull pennant on SPX, a bull flag on INDU, a possibly still forming bullish pattern on NDX, and on Monday those broke up into new all time highs on SPX, Dow 30 and RUT, but not so far on NDX. Equity indices are still retracing from those Monday highs, so what should we expect next?

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No China Growth Story For Tesla

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We remain short the biggest bubble in modern stock market history, Tesla Inc. (TSLA), which currently has a fully diluted market cap of approximately $429 billion, which is nearly 90% of those of Toyota, VW, GM, Daimler, BMW and Ford combined despite unprofitably selling fewer than 500,000 cars a year to their nearly 40 million. The core points of our Tesla short thesis are:

  • Tesla has no “moat” of any kind; i.e., nothing meaningfully proprietary in terms of electric car technology, while existing automakers—unlike Tesla­—have a decades-long “experience moat” of knowing how to mass-produce, distribute and service high-quality cars consistently and profitably, as well as the ability to subsidize losses on electric cars with profits from their conventional cars.
  • Excluding sunsetting emission credit sales, in 2020 Tesla will again lose money, as it has every year in its 17-year existence.
  • Unit demand for Tesla’s cars is only maintained via continual price cutting.
  • Elon Musk is a pathological liar who under the terms of his SEC settlement cannot deny having committed securities fraud.
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