Tesla and the shorts

News outlets, papers, websites, and so forth have discovered that by running the picture of Tesla’s shorts, the red garment variety, they can show an attractive woman’s bum/crotch in the rather staid financial news pages.

This is not a surprise. No one is shocked.

But aside from that, Musk’s ongoing combative interactions with short sellers is something I take with a bit of salt.

To be fair, Occam’s Razor says Musk is just being weird, too connected, and probably unwise. In all likelihood, there is no meaning behind it.

However one should examine the effect of short sellers in the market, and that is almost purely good for Tesla.

A) Short-sellers must cover their shorts, so they’re another buyer in the market. That increases liquidity.

B) They must borrow their shares from someone. That increases liquidity. (The same effect happens via options, due to risk mitigation by the option seller)

C) They publish papers and coverage about Tesla. If one maintains that there’s no such thing as bad publicity, and that’s somewhat true for celebrities if not for companies, the additional news coverage, research, and attention devoted to Tesla will do nothing but strengthen the cult of Musk.

D) They give the followers of Musk a feeling of persecution, which further strengthens the bond between faceless company and individuals.

E) So much free PR.

F) And they really haven’t found anything useful. What do they discuss? Tesla hasn’t turned a profit yet? Everyone knows that. What they’re really doing is proving, again and again and again, that Tesla doesn’t have any dirty laundry beyond the obvious. Electric cars are a speculative play, but Tesla itself doesn’t cook its books. It isn’t committing fraud except in the most generic, Matt Levine style “Everything is Securities Fraud” interpretation, which most of the smaller investors just ignore. Most large investors ignore that too. What those shorts are doing is reminding every Tesla investor and Cult-of-Musk follower that Tesla has no secrets. It is what it is: a bet on rapid technological revolution.

G) Aside, they’re also reminding people that the new Teslas are pretty good cars.

SHORT SELLERS ARE GREAT FOR MUSK. Liquidity, free PR, constant affirmation, there is nothing that Tesla could want more than short interest. And Musk is making it personal. Every one of those shorts is, at some level, feeling like they’re betting against Musk, and that draws them in.

If I was Musk, I would be all in on battling the shorts. I would be doing EXACTLY what he is in the pure attempt at keeping their attention. I’d make it personal, I’d make it emotional, and I’d bang that drum day in and day out. I would want all the attention on them I could make, and I would certainly have some model’s bum on the financial pages with S3XY written in gold.

Of course, Musk is probably just doing this because he likes the attention and doesn’t know when to stop.

But if by witlessness one could succeed, it would be by doing exactly what he’s doing right now.

Australia and the UK

Are doing the right thing by opening their doors to Hong Kong residents. They’re both establishing pathways of immigration for the people of Hong Kong. I hope the US follows their lead.

Rules

I don’t live by your rules. I do double carriage returns and indents between paragraphs. Welcome to the future!

Editorials

Bloomberg just ran an editorial called A Lower Covid 19 Death Rate is Nothing to Celebrate.

Dear God.

Of course it is! Are you really so consumed with malice that you’re unhappy fewer people are dying in a pandemic? Are your politics so bitter, your views so vile, your attitudes so drenched in gall and bile that the death rate going down isn’t good news for you? Let this be your sign; reevaluate your life choices if fewer people dying of a pandemic is something that makes you angry.

7/5

I noticed one source of my migraines is when I work out heavily while over-caffeinated.

This presents serious lifestyle problems.

7/4

Happy 4th of July.

Stay safe. This too shall pass.

Edited because wow, that did not read the way I meant it.

Masks

As a committed mask wearer, I recognize that problems with masks exist. However that doesn’t mean they’re fake or nonexistent problems, and much Twitter science debunking them is itself bunk.

Masks make breathing more difficult. This is a simple fact. This is why workout masks exist. A workout mask intentionally makes breathing difficult so that the wearer’s lungs have to work harder. In theory this increases cardiovascular fitness, but there’s not a whole lot of science behind this. That which is is consumed by arguments regarding effectiveness and practicality. Anecdotally, I can tell you my workouts are much more difficult wearing a mask. It’s harder to breathe in a mask because the mask is filtering air, reducing the air throughput.

I’ve seen videos and memes of people wearing masks and measuring their blood oxygen levels.

1: All of the videos/memes regarding this I’ve seen have been medical professionals (because who else has a mask, a blood oxygen monitor, and strong opinions either way?). These professionals wear masks all the time. But this means that they’re trained for it, so it’s a bit different for them and someone who rarely wears a mask.

2: Not only are they physically conditioned, but they’re mentally conditioned. I wore a lot of environmental suits in the Army, and the mental aspects of breathing through a suit are not to be underestimated.

3: Mask wearing reduces communication, both verbal and non-verbal. I was just at a grocery store asking where the bread was, and that took some shouting and difficulty. It’s hard to hear someone in a mask, it’s hard to make yourself heard, and with the isolation striking people particularly strongly in quarantine, that’s a real problem. In masked military operations, we were all talking about the same thing, but even then there was a lot of miscommunication. On the street or talking with strangers with none of that, it’s hard.

These aren’t made up problems.

And the general answer is extremely combative. For every hint of empathy and understanding, there are ten people shouting about death rates. The shouters never seem to understand why telling someone they’re wrong and stupid doesn’t convince the someone they’re wrong.

So I get it. I understand. It’s not made up nonsense. I still wear the mask.

Value

Value investing works when downturns weed out the nonviable growth companies.

The Fed, ECB,BoJ, and many other CBs are making sure that downturn doesn’t come. Their actions aren’t pure successes, but in the financial markets, they are kings.

This results in value lagging growth, and will continue to do so until the CBs stop their adventurism, the negative consequences of their actions outweigh the good, or the tidal wave they’re holding at bay builds until it cannot be resisted. Make no mistake, it is building. WeWork was a classic example of froth. Softbank’s Vision Fund would be right at home in 1995. The rise in economic inequality induced by CB adventurism is probably what will get them in the end, for the relentless pumping of leverage works at economies of scale that make the rich richer. It doesn’t make the poor poorer except in comparison, but other things do that. People will begin to wonder why they’re paying taxes and interest to make the rich richer if they don’t get any benefits themselves.

However calling time is a fool’s errand and I won’t do it. The CBs are powerful, and they’ve defied every prediction of limitation so far.

Until they stop putting their oar in the markets, their oar breaks, or the wave sweeps them aside, they will ensure the failure of value vs growth.