Like I said last week…

by JDH on July 7, 2018

Last week I said to buy gold and short Tesla.  That was good advice.  You’re welcome.

I bought some Tesla puts on Monday, sold them on Tuesday (at a profit), and then took another position on Friday.  It’s not a big position, but enough for fun.  I bought the $300 strike price, expiring in September.

My thesis is simple: Tesla is a gigantic con, bigger than Theranos, bigger than Enron.  They build fancy cars, but the cars aren’t that good, and they lose a lot of money on every car they build, and there is no path to profitability.


They needed to raise more capital a few months ago, and didn’t, even though they were riding high with a stock price, then, of around $350.  Why didn’t they?  Because when you raise capital you have to disclose stuff, like, you know, facts, and they didn’t want to do that, because the facts are bad.

Executives are leaving, and they are leaving with a lot of options on the table.  Why would you walk away from a potential multi-million dollar payday?  Because you know that payday will never be there, so you want to leave long before it goes bust, so you can say “I was gone long before it happened”.

If the price pops up, I will buy more puts.  And I’ll enjoy it.

As for gold, it appears to be slowly waking up from the doldrums, which is good, so I will hold.

Again, the weather is fantastic here in Southern Ontario, so off I go to enjoy it.

See you next week.