Tesla Motors Inc. (NASDAQ:TSLA)

CAPS Rating: 2 out of 5


Player Avatar pavlos1971 (99.43) Submitted: 10/5/2012 7:51:25 PM : Underperform Start Price: $28.86 TSLA Score: -618.00

A water-cooler stock. Advertises with celebrities and pays money in NYC to attract attention in the Street. They also have a considerable debt and no earnings in the foreseable future. How can this be a good omen?!

Member Avatar pavlos1971 (99.43) Submitted: 7/10/2013 12:06:30 AM
Recs: 0

I am amazed at how wrong I was in this pick. Also in my Solar City pick, and probably in evaluating any company that Elon Musk leads... I fell for an ad hominem attack that my brain somehow constructed against Elon Musk as a technology leader. I now realize that this is perhaps a sign of jealousy, an emotion that I didn't know I could have, and that I recommend that all speculators avoid. I will keep these 2 caps picks open even if I bleed several thousand caps points, as a humble reminder to my emotional errors of judgment.

I didn't do much research before my caps pick, which is OK, but even after I read the usual forms before I started a real life protected call, I failed to understand the enormity of the stock-price wave that would be coming for $TLSA. My early bearish sentiments were formed due to the rather unproven technology (batteries; electric grid), the low barriers to entry, and the competitive landscape. The branding of Tesla via the stock's recent history and via Elon Musk himself (which was nicely timed to coincide with all the Iron Man and Tony Stark hype) already alleviates some parts of the last 2 concerns. With a little luck, some adequate batteries will materialize within the next 5 years, and then Tesla can really take off for good.

My critical mistake, however, which led me to start wasting time in real-life trades of TSLA (mostly short stock/long calls, or, more recently, straddles of calls/puts), was completely personal and inexcusable. I was very much emotionally predisposed against anything related to Elon Musk, even though I believe that I very well understand the special constitution of physicists, of geek technologists, and of parts of the technology itself. My reservation started after reading a Wikipedia entry mentioning that Elon Musk recommended MS servers for running Paypal's backend operations, back more than 12 years ago---this particular choice would have sounded incredibly wrong to me at any time in the past, and it is one of the decisions that eventually made many other businesses fail. I was also taken aback with some of Elon's jokes or comments on twitter and during interviews, especially when he used ad hominem attacks himself, simply dismissing his debaters by saying that "they don't understand technology" (which, on one occasion, was actually true). I recall now, in retrospect, that making a business is so much more than getting the technology right, and as I write this post I realize that Elon Musk has a knack for making businesses work. Even though he could have made Paypal fail on a mere technical error, he probably also helped it succeed by getting it right on many different business decisions that eventually proved just as critical as a robust and safe backend technology. Elon's story (distinct from the neat story by Max Levchin in Founders at Work) is here:


At this point, I still have 2 straddles for Sep20'13@125, and Jan17'14@120, and 200 shares short with protective calls at Sep20'13@120. It was been an interesting ride, and I'll wait out these trades, though I don't expect to make or lose much money. I don't plan to buy the car either, which is useless in Manhattan, or spend much more time on this adventure. Good luck to Tesla, the company, and good luck to Elon, the entrepreneur! I humbly acknowledge your awesome leadership.

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