Kirk Spano Blog | Time To Start Trimming Tesla | Talkmarkets
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I grew up in a middle class working family in Milwaukee. I remember long gas lines, the first home my parents bought and the recession of the early 1980s. My parents sacrificed to put me through Catholic Schools at a time that Milwaukee Public Schools were beginning to fail. I also ... more

Time To Start Trimming Tesla

Date: Saturday, December 21, 2019 1:57 PM EDT

Last November, I discussed "why I'm selling Tesla shares." It turned out to be a good spot to sell Tesla (TSLA) shares that we had purchased about a hundred dollars cheaper less than two months earlier. It would be about a half year before we returned to buying Tesla shares.

In April of this year, I asked members of Margin of Safety Investing "is Tesla About To Beat Estimates?" As it turns out, it was. Our strategy was to wait for TSLA to get under $200, near what we considered a "bottom fishing" price. More aggressive stock investors bought shares of Tesla in May around $190 per share.

My simple thesis on Tesla is this:

  • The company is driving change in the automotive space.
  • Elon Musk has generally been ahead of everybody.
  • Financing was never a problem given the major backers.
  • The company is exceeding expectations from a position of first mover advantage and as an aspirational brand.
  • The Tesla skeptics are generally uninformed or biased.
  • The TSLAQ crowd are traders driving a narrative to trade.
  • The stock becomes overvalued from time to time as chasers chase and fanboys refuse to sell regardless of valuation.

I held Tesla shares under $30 per share at one point and sold before the stock ever reached $100. That's my mistake. In the past several years, despite believing the company would do well over time, the valuations prevented me from investing. I have successfully traded it a few times though.

That brings us to today. The stock is approaching overvalued and overbought. It's time for prudent investors to start trimming to take profits. Most won't, so, if you would like to, you'll get some time. Here are my brief thoughts on trading Tesla.

Read the full article at Seeking Alpha:

Special half-price offer to my investment letter.

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