I'm not entirely sure why only now I have joined Value Investing Club (as an observer). I must have read about that before, but for some reason did not take a closer look.
I started to correct this error, by reading through earlier ideas.
I have heard about Peloton some time ago already, perhaps via the hilarious tweets. It seemed like a bubble, but I was not paying much attention. After reading VIC short pitch I put a few sell orders between 31.99 and 34.79. We'll see how it goes.
The other idea I read through and decided to act on was National Vision Holdings (EYE). While the short pitch was focused on potentially losing the Walmart business, I decided to put sell orders based on valuation and poor margins. Starting from 33.20, couple of them executed and I initiated a small short position.
This makes it my fourth potential and third actual short, with SPY and TSLA being the other ones.
The size of my SPY has grown larger than I expected (to 21% of net account value) and paying out the dividend is mentally painful, this and the TSLA short allowed me to almost completely go into neutral position, with only 12% margin left. I continue to expect a market-wide correction that will allow me to close this short, but if the market will continue flat or up, I won't complain, since I'm still 112% long.
My TSLA short is quite a different story, as it grew to 44% of my net account value and has 31% paper loss attached to it today after averaging up, so represents a 11% paper loss on the account and goes well beyond my previous wins on TSLA.
Since I started shorting a bit over $200, my average price is $323, so I need 24% decrease to break even on this leg.
TSLA volatility of course makes it crazy to try to predict the near term, but after possibly a decent read of Q4 deliveries and maybe also Q4 financials, I think the Q1 is set to disappoint everywhere but in China. Europe will see a wave of mandated EVs from ICE makers and US will hit the usual demand cliff after Q4 incentive expiration. Given the demand, capital and manufacturing constraints, I see model Y being almost a zero sum game with model 3, with Fremont gradually switching to the former as model 3 demand dries up.
It's hard to predict if/what the catalyst would be for TSLA to eventually drop, but apart from the short squeeze I see no good reasons for further advancements from current levels.
One catalyst I'd hope for in 2020 is GM/Cruise to actually deploy AVs at noticeable scale, and therefore for the TSLA FSD narrative to break down. But hope is not a strategy, so my large GM bet (57% of net account value!) is based on the valuation of the core business. An interesting write-up focused on GM's truck business was published 1 year ago at VIC, and it's as bullish as I am.
I started to correct this error, by reading through earlier ideas.
I have heard about Peloton some time ago already, perhaps via the hilarious tweets. It seemed like a bubble, but I was not paying much attention. After reading VIC short pitch I put a few sell orders between 31.99 and 34.79. We'll see how it goes.
The other idea I read through and decided to act on was National Vision Holdings (EYE). While the short pitch was focused on potentially losing the Walmart business, I decided to put sell orders based on valuation and poor margins. Starting from 33.20, couple of them executed and I initiated a small short position.
This makes it my fourth potential and third actual short, with SPY and TSLA being the other ones.
The size of my SPY has grown larger than I expected (to 21% of net account value) and paying out the dividend is mentally painful, this and the TSLA short allowed me to almost completely go into neutral position, with only 12% margin left. I continue to expect a market-wide correction that will allow me to close this short, but if the market will continue flat or up, I won't complain, since I'm still 112% long.
My TSLA short is quite a different story, as it grew to 44% of my net account value and has 31% paper loss attached to it today after averaging up, so represents a 11% paper loss on the account and goes well beyond my previous wins on TSLA.
Since I started shorting a bit over $200, my average price is $323, so I need 24% decrease to break even on this leg.
TSLA volatility of course makes it crazy to try to predict the near term, but after possibly a decent read of Q4 deliveries and maybe also Q4 financials, I think the Q1 is set to disappoint everywhere but in China. Europe will see a wave of mandated EVs from ICE makers and US will hit the usual demand cliff after Q4 incentive expiration. Given the demand, capital and manufacturing constraints, I see model Y being almost a zero sum game with model 3, with Fremont gradually switching to the former as model 3 demand dries up.
It's hard to predict if/what the catalyst would be for TSLA to eventually drop, but apart from the short squeeze I see no good reasons for further advancements from current levels.
One catalyst I'd hope for in 2020 is GM/Cruise to actually deploy AVs at noticeable scale, and therefore for the TSLA FSD narrative to break down. But hope is not a strategy, so my large GM bet (57% of net account value!) is based on the valuation of the core business. An interesting write-up focused on GM's truck business was published 1 year ago at VIC, and it's as bullish as I am.
