A Trillion Dollars in 10 Years?

Invest in the future, not the present...

Written by Jimmy Mengel
Posted February 6, 2020

$5.7 billion...

That’s how much money Tesla (NASDAQ: TSLA) short sellers lost in just two days.

To put that in perspective, that is more money than the Dallas Cowboys — America’s most valuable sports team — are worth.

On Monday, people betting against the electric car giant lost $3.1 billion. That same day, Elon Musk, the charismatic CEO of the company, made himself $4.4 billion.

Tuesday was like a late Groundhog Day: shorts lost another $2.58 billion while Mr. Musk gained another $3.65 billion. If I had to replay those days in my head forever, I might suffer the suicidal urges that plagued Bill Murray in the movie version.

You can’t deny how well Tesla has done recently. After sputtering around for the past few years, the stock is now up over 137% over the past year alone. Some investors even see it reaching $1 trillion in revenue in the next 10 years.

But that enthusiasm has already started to wane. Wednesday, the stock tumbled almost 20% — making it the worst drop since 2012.

And I believe that it may fall further...

I’m not the only one.

"Tesla has gone parabolic,” said Matt Maley, chief market strategist at Miller Tabak. “This is taking Tesla well above a level that would be supported by its current fundamentals. The stock is going to get absolutely clobbered at some point before long.”

Bespoke Investment Group also just came out with a bearish argument for where Tesla’s stock is headed.

“Tesla’s bubble looks a lot bigger than biotech, homebuilders, or the aggregate Tech sector’s bubble. We don’t know how high Tesla’s shares will get, but with the company valued at a premium to the vast majority of the largest stocks on the planet, it’s hard to take it seriously as something other than a combination of speculative excess and positioning.”

They are predicting a dramatic sell-off.

“Taking either side of this trade at this point is a dangerous game, so we’d keep any trades small or simply enjoy watching the drama from the sidelines.”

I can’t help but agree. They say that it’s dangerous to catch a falling knife, but I’d argue it’s far more perilous to jump to grab a rising one. At least when a stock is falling it can only go so far — chasing stocks like Tesla at this point is like trying to grab a spinning machete.

That's why I'm looking elsewhere...

Now, do I believe that Tesla will start delivering high-end electric vehicles to thousands of cult-like consumers?

Of course…

But my eyes are trained for the next big electric vehicle market that could make Tesla obsolete altogether.

One of the main issues with battery-operated cars like Tesla is the charging time. I just drove a car that charged quickly, was cleaner, more efficient, and was produced with a technology that nobody is talking about.

The cells powering this car convert hydrogen into usable electricity. Hydrogen is literally everywhere, all around us, and can be produced in tons of different ways. When it binds with oxygen, hydrogen generates a chemical reaction.

But unlike batteries... which degrade with each charging cycle...

These never lose their ability to charge!

They don’t need to recharge either. As long as there’s hydrogen in the tank...

Your car “recharges” as you drive.

You can watch me test it out right here:

Jimmy Fuel Cell

While everyone is focused on Tesla's rise and fall, I'm not toying with the present — I'm investing in the future. Investors who act quickly stand to make more gains than buying Tesla pre-IPO.

You've already missed the Tesla train.

Don't miss the next one...


Jimmy Mengel

follow basic @mengeled on Twitter

Jimmy is a managing editor for Outsider Club and the investment director of several personal finance advisories, The Crow's Nest, and The Adventure Capitalist For more on Jimmy, check out his editor's page.

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