Why Tesla Stock Is Dangerous... - Investing Shortcuts

Why Tesla Stock Is Dangerous…

By August 29, 2018Stocks
tesla is dangerous

Transcript: Why Tesla Stock is Dangerous

I’m sure everyone has heard about Tesla wanting to be taken private now, at least according to the CEO Elon Musk. 

And so, I want to give you a couple words around that situation. So, the title of this video today was that, “Tesla is Dangerous.” Let me contextualize that before we get any crazy hate mails about this.

I actually think Tesla is a decent long-term company. So, for long-term holders in the stock here, and if you’re willing to play the game whether this company gets taken private or not and just kind of stick it out, this may not be important. But what I have seen, a lot of people and a lot of discussions that we’re seeing people having finding this current situation which has tremendous amount of uncertainty be something that they want to speculate on in the near term.

I can tell you there’s so much uncertainty around this whether there’s even any funding at all for this deal. I would expect there is some considering the fact that they tweeted about it, or the CEO did. But there’s so much speculation and so much volatility here that from a swing trading perspective, meaning a few days to maybe a few weeks, I think you are going to have a very difficult time psychologically of holding onto this, unless you literally just want to do a coin flip, but that’s not really trading.

That is just pure gambling. Right?

There’s a lot of uncertainty around a company like this getting funding… period, a company that’s not even profitable. If they were to get funded for this and basically convert equity into debt, all of a sudden then they’re picking to pay like six and a half, seven percent on that as opposed dividend-free stock. So it doesn’t make a lot of sense.

Again, that’s not to say that there’s not a buyer who’s willing to fund this. It’s entirely possible. But I think that’s exactly the point, it’s just extremely volatile. So you can see shares of Tesla here always volatile but the volatility, at least on a day or day basis, has been added quite a bit. And so, a lot of the news flow is either happening in the afternoon sessions or after the close.

So anyway, the point is here, I don’t want to make this too long a thing. I just think the stock from a swing trading perspective … Again, a few days to a few weeks, is really, really difficult at this point, at this juncture. I don’t think it’s worth making a bet in here. Again long term investors, that’s a different situation. But I kind of wanted to just let you know about that.

Also, I wanted to invite you to our next workshop. It’s going to take place in Denver, Colorado. Make sure to join us there. The link is down below or in the email that you might have received this in. But these workshops are tremendously valuable. Two and a half day workshops is what they are.

We go through anything you need to know to finally become a profitable market participant. And really make sure you can start making money in all the different market environments. So, I hope this is helpful folks. Again, I would suggest one stays away from Tesla, even from a swing trading perspective, for the time being. And, see you guys next time.

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Serge Berger

Author Serge Berger

Serge Berger is the Head Trader and Investment Strategist at The Steady Trader. He has been an active trader since 1998. During his career he’s been a financial analyst, dealt in fixed income instruments at JP Morgan, and was a proprietary trader in equities, equity options and futures. Having had exposure to a range of different asset classes allowed him to identify which asset classes and strategies best fit his goal of achieving consistent profits. Over the years Serge created a trading methodology that divides markets into different time-frames and characters, allowing him to more clearly and without emotions determine which strategies to apply in which situations. His account and those of his clients continue to grow during all different market environments because they focus only on the highest probability setups and follow strict rules. In the markets, everyday provides new opportunities and a different environment for traders to navigate through. He is certain that with the help of they’re daily insights, analysis and commentary you will find the path to become a consistently profitable trader, all the while enjoying the journey

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