This article is about how people reacted to a big change in the price of Tesla's shares after they announced their earnings. Some people threw away a famous book on investing, called "The Intelligent Investor", because they think it doesn't apply to Tesla's situation. The article says that sometimes the stock market acts like a voting machine, where everyone quickly votes for or against a company based on its recent news, and other times it acts like a weighing machine, where it looks at the long-term value of a company. The author also shares how they made some money from trading Tesla's shares by paying attention to the market's reaction. Read from source...
1. The author starts by mentioning a tweet that shows someone throwing away Ben Graham's classic book "The Intelligent Investor". This is an attempt to appeal to the reader's emotion and discredit any traditional value investing approach that might question Tesla's valuation or performance.
2. The author then quotes Benjamin Graham, but does not provide any context or explanation of what he meant by "In the short term, the market is a voting machine; in the long term, it's a weighing machine". This quote is used to create an impression that Tesla's stock price can be justified by its earnings and valuation metrics, but without elaborating on how or why.
3. The author mentions Warren Buffett as Graham's mentee, but does not mention any of his investment principles or methods that might differ from Tesla's business model or financial performance. This is another attempt to associate Tesla with a respected and successful investor, without providing any substance or analysis.
4. The author reveals that he traded Tesla's stock based on the market's reaction to its earnings report, which he attributes to luck. He admits that there was some uncertainty and risk involved in his decision, but does not explain how he evaluated or measured it. This is an example of irrational behavior, as he relies on external factors (like a soccer game) rather than internal analysis to make investment decisions.
5. The author does not provide any specific details about Tesla's earnings, valuation, or growth prospects. He does not compare them to other similar companies or industries, nor does he discuss any potential risks or challenges that might affect Tesla's future performance. This is a sign of bias and lack of thoroughness in his research and argument.
Neutral
Key points:
- The article discusses how to cash in on Tesla's post-earnings bounce and mentions Ben Graham's "The Intelligent Investor" as not being a useful guide for this strategy.
- The author suggests that the market is voting on Tesla's prospects in the short term, but will weigh them in the long term.
- The author shares a personal anecdote of how he traded Tesla based on watching a soccer match and remembering the earnings report.