Don’t Play The Tesla Flop

The Tesla flop proved indelibly I needed to brush up on my facility in multiplying huge sums. On a trading session of 288 million shares the count was blah blah blah dollars. Trading pattern was half a necklace on the right side but nobody cares. 

Should anyone care that his stock sells over par or in Tesla’s case a snappy 300 to 500. I started looking for my old slide rule. It took my mentor about 2 minutes to teach me how to slip it, for its multiplication facility. 

I find Tesla’s 5-year chart an ugly trip, a roller coaster ride. Consider, it was as high as $400 back in 2021 and well under $100 yearend ‘22. The good ole days for Tesla’s stock took place back in 2020, early ‘21 when it zipped from pocket change to over par. Then it surged from 200 mid ‘24 to its recent peak over 500, but now a corrected 300 and change. 

Tesla Price Chart

I remember reading Tesla’s proxy statement years back when management (Musk) awarded himself a huge percentage of its equity. I felt he was overgenerous in this self award so I didn’t play. 

There's a lesson here. Avoid proxy statements. They are written by specialist lawyers who are paid to obfuscate all sensitive issues that favor management. 

My other argument is with the New York Stock Exchange which has allowed managements to accrete their stock prices (public willing) into hundreds of dollars per share. I like it when everyone’s share price is under $100. Make ‘em split their stocks. 

Berkshire Hathaway at $700 was is awarding management an unnecessary badge of honor. Anyway, sitting at $500 did nothing for Tesla which was torn apart by traders, overnight, as Musk and Trump traded shots to the kidney. 

Meantime, my attraction to under $10 ragamuffins is a reaction to allowing $500 paper to plaster the Board. Under $10 paper makes you think. Is Macy’s ever going to turn around? Do steel makers like Cleveland Cliffs lapse into bankruptcy? 

Over a decade ago, the market worried that major banks wouldn’t survive their lending stupidity in prime mortgages. Each cycle exposes lapses in our banking 

system which now again sells at high teen multipliers (without my participation).

When I thumb through my long term chart book, I see needless calamities that enveloped the western world. Nobody cares if some fly-by-night country sees its interest rates soar from 4% nearly to 35%. 

Actually, interest rates then traced a witch’s hat pattern. The western world went through a deep recession 15 years ago. Our biggest and best banks lost their minds writing tons of home mortgages with no backing. Lest we forget, Merrill Lynch was sucked up by Bank of America for a couple of bucks per share. 

It could be another 10-years before I buy banks. Yet, today, they’ve recovered to mid-teens multipliers.

Nobody ever forecasts deep recession or soaring market ratios. The western world plugs in standard 3% to 4% growth forecasts by its economists.  

My old friend, Henry Kaufman, was chief economist at Goldman Sachs for decades going back into the 1960’s. When I probed Henry whether Solly’s traders ever listened to him, he sheepishly replied. “ I don’t think so.”