I will cite this example in the future of the fact that the market can stay irrational longer than you can stay solvent. I find it incredibly fascinating that almost all the "smart money" has done hedges and shorted TSLA, while the flood of casual pandemic investors has bought into it.<p>TSLA as a stock is a fascinating example of how price discovery can fail in times of irrational exuberance and that, in the short-to-medium term, markets aren't efficient nor rational.<p>In 2014, I saw the opportunity to short a broader sector of the economy, we wrote up a white paper and identified market targets etc that would correlate with my observed trend. But I did not pull the trigger as I lacked the necessary knowledge to understand and time the trades.<p>My prediction came true. But sadly I was unable to capitalize on it.<p>The TSLA situation is similar. It's clear that the valuation has become disconnected from reality. But how do you time the inevitable collapse of the bubble? How do you model something as bizarre as this form of irrational exuberance?<p>Do you induce it through a Pershing Square/Bill Ackman style campaign? Do you fund research into the flaws of the product, highlight it, and hope to induce the correction? Or, do you use other signals to time the purchase and mechanics of your short?<p>In other words, what do you do when the world around you has gone insane?
That's a lot of temptation to fulfill someone's own prophesy. I hope Elon takes his security as seriously as he does batteries and rocket nozzles. If he left the helm the intellectual and visionary capital of Tesla might not change much, but the social and financial capital would drop fast and far. I kind of hope he watches too many Bond movies and decides to seal himself in a hidden lair and run things from there.<p>But Apple is still Apple after Jobs. Hopefully the same is true for Tesla and Musk, and we don't find that out for decades.
I love HN. It’s probably my favourite news source. And usually I enjoy the comments just as much as the actual articles.<p>But I’m honestly wondering if the comments are generated by some version of GPT.<p>- quote comment
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The market is always right.<p>Everything makes sense if you have enough information. If something doesn't make sense that means you don't have enough information.