Silly Season

by JDH on July 4, 2020

Sell in May and Go Away used to be a thing.

This year it’s “Just Keep Buying”

Tesla, a company that has never made an annual profit, was trading around $400 at the start of the year, and around $400 again after the crash in March, and is now trading at $1,208.  Does it make sense to you that a company making a product that has shrinking demand (no-one is buying a car in the age of work from home), that has serious quality issues, that has issues with the SEC, and has no reasonable expectation of making a profit, has tripled in value in three months, and is worth more than Toyota?

That’s crazy.

The price of gold makes somewhat more sense, trading at an 8 year high.  Massive money printing devalues the currency, so it’s logical to want to hold something tangible.  That makes sense.  In contrast to Tesla, gold is up about 17% on the year.  Gold stocks, due to leverage, have done much better, but they aren’t up 3 times this year.

So what does it mean?

I have no idea, other than that we are in silly season.

I’ve had some stocks in my portfolio experience crazy gains, and I’m happy, but I’m also prudent, so where I have a profit, I’m pulling cash off the table, because moonshots can’t go up forever.

That’s my take.

More next week.