What we want to do in this video is not necessarily make fun of these Tesla shorts, but instead get to the core of why they feel the need to short Tesla’s stock in the first place. Hint — it has everything to do with ego. So we’ll discuss that and see how you can avoid the same pitfalls.
Everybody wants to short Tesla, and it’s understandable. The company is bleeding cash, has some shady accounting, barely keeps up with production, etc… but even so it’s a terrible short considering how much positive sentiment surrounds it. Elon Musk is constantly surprising the market, and will likely continue to do so. Every time he does, price rockets higher burning short sellers.
There are other short opportunities that are far better than Tesla. So why short it? Well it comes down to ego. A lot of investors want to be the “hero” who called it. They want to be the one of the few that were betting against Elon and actually made money on it.
We don’t only see this in retail traders, but in billionaires as well. Why did Bill Ackman hold onto his Herbalife (HLF) short for so long? Was it really for his P&L or was it his ego? And why do pundits constantly call market tops? They just want to be remembered as the ones who got it right…
We discuss all this and more in the video above. Make sure to watch!
And as always, stay Fallible out there investors!
