Back at the end of May, I wrote in these pages that it was time to reverse positions in Tesla (TSLA). Prior to that, I had been bearish on the stock for a while but suggested then that proximity to a previous low of $178 made for a good level at which to take a profit and initiate a long position. That call worked out well. TSLA hit a low of $176.99 a few days later, then bounced more than 40% over the next couple of months. Now, after a disastrous Q2 earnings report, the opposite is true. If you haven’t already taken a profit and/or reversed to a short position again, now looks like a good time to do so.
Normally I would not make a call like that after a massive drop such as that which followed those earnings, but normal rules don’t apply to TSLA. It is, in that regard and many others, the Donald Trump of stocks.
When Trump was elected in 2016, there was a common theme to most of the political commentary, regardless of whether it came from the left or the right. “Just wait,” everybody said, “before too long, Trump will pivot and become presidential. He may have said some controversial and even shocking things during the campaign, but the weight of the office will change him.” We are still waiting.
Similarly, when Tesla said that they would transition from a niche producer of what most saw as a quirky, futuristic car to a mass producer, supporters of the company told us all it was only a matter of time before they…
