Fallacy Alarm
@fallacyalarm
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Blending single stock, macro and thematic research into differentiated bull and bear cases | 15y Corporate Finance & Equity Research | CFA
British Columbia, Canada
Joined February 2020
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How to create the 2025-2027 stock market bubble in four simple steps:
1. Manipulate rates to zero to allow people to lock in cheap debt for decades and make them immune to rate hikes.
2. Run monstrous primary deficits to flood people with savings.
3. Manipulate rates back up
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@jamesdouma
it is impressive, no doubt. however, the existence of this will destroy the last bit of writing creativity of millions of students. makes me quite sad.
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$TSLA's option chain is DEAD! Implied volatility is 43%, easily 10-20% lower than it has been historically and what would be consistent with realized volatility.
There is NO manic and delusional call buying. No bubble. Stock is simply grinding higher in a very healthy manner.
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$AAPL 10xed from 2009-2012. The iPhone conquered the world during those formative years for the 3rd iteration of the company that made it what it is today.
But then the stock dropped 30% out of nowhere, while broader markets continued marching along.
2 major reasons:
1)
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The Tesla Transformation 2030
$TSLA is a hardware business. Every quarter, we worry about how much metal are they shipping in the shape of vehicles and energy products and how much revenue and margin they generate doing so.
Therefore, when investors value the stock, they are
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When this guy tweets, I'm always torn between being entertained and fearing for my life savings.
For the Tesla FSD test drive in Palo Alto tonight, I will ask the car to drive to
@finkd
’s house.
Will also test latest X livestream video, so you can monitor our adventure in real-time!
If we get lucky and Zuck my 👅 actually answers the door, the fight is on!
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@RubinReport
@elonmusk
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
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I believe $TSLA Insurance can contribute $1-2 EPS 4-5 years down the road. Standalone it would then be worth $40-$80bn.
Here is why.
$PRG $ALL $BRO
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$TSLA doesn't have dealerships as a supply-demand-buffer. That's why they need to use pricing action to balance production & deliveries. Eventually this will be as dynamic as hotel/flight prices.
We'll learn to live with it w/o freaking out & it being breaking news everytime.
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Nov 18, 2020 was the last time Jonas did a big upgrade on $TSLA. The stock popped 10% that day. Obviously that was right after the S&P inclusion announcement that had popped the stock 8% the day before. But still, he is the most influential Tesla analyst and he is willing to
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@SawyerMerritt
IMO $TSLA doesn't talk about it bc its benefits from the IRA will be so enormous that it risks being politically scrutinized. They own 60% of the domestic EV market and 50% of energy storage. IRA will cost $1tn and they will get a lion share of that.
1/I'm sure you have heard about the
#InflationReductionAct
. But have you ever visualized how massive its financial implications are? It provides huge investment incentives. The beneficiaries will be the shareholders of those companies at the right place at the right time. 🧵
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@SawyerMerritt
@elonmusk
Elon hosting foreign leaders back to back like he's the true president. 😎
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$TSLA's FSD program is probably one of the most controversial ventures ever. Some see trillions of $$$ via robotaxis around the corner. For others, it's criminal vaporware.
But is it really that binary? Is there a way to value it w/o Cathie-style fantasies?
Let's find out. 🧵
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I believe $TSLA can hit $1.15 non-GAAP EPS for 1Q23 as volume increases offset price cuts vs. last year. It would be a substantial beat vs. $0.85 consensus.
I will be wrong. But I'd have to be very wrong for them to miss.
More details below.
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Here's why $TSLA is neither a tech company, nor a car company. And why it has a path to a $5tn valuation by 2030.
Instead of thinking in old categories, I view them as the first instance of a new type of company that I call battery refiners.
The decarbonization of our economy
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1/X From generation heads-down to generation heads-up. How $META will dethrone $AAPL. 🧵
Since the digital revolution started, most value was created at the gatekeeper who connects ppl with cyberspace, the human machine interface (HMI), going regularly through paradigm shifts.
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Happy new year!
I used the first hours of 2023 to nerd out on $TSLA's P/E ratio.
Check it out here:
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WHAT'S THE VALUE OF $TSLA'S FSD PROGRAM?
Teslas are becoming robots, hidden in plain sight. It offers tremendous upside for the stock. Here is my take WITHOUT robotaxis.
Article is for free. XLS Model included for paid subs.
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I'm confused. In Dec $TSLA said they sold FSD 285k times. If they can recall 360k vehicles in Feb'23, does that mean they sold 80k units within the last couple of months?
Built the chart below with
@TroyTeslike
take rates adjusted for the 285k comment. Can't be possibly right?
- Continued to ramp vehicle production at Giga Texas & Giga Berlin, with both building 3k Model Y/week in mid-December
- Reached 500k+ Solar Panel & Solar Roof installations 🏘⚡️
- Enabled anyone in North America who has purchased FSD to request FSD Beta, reaching 285k cars total
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$TSLA's 2023 EPS, what is it? 🧵
In the article below, I argued that the stock will trade on 50-60x P/E once the carnage ends. In this thread I am going to build an EPS bridge from LTM (4Q21-3Q22) to 2023. I will do this based on 6 parameters.
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I have quit my job yesterday and will be writing and investing full time from now on. If you don't want me to sell $TSLA shares to fund my extravagant lifestyle, you better sign up and help me grow. 😜
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Today, $TSLA is about maximizing the # of 🚗 on the road.
In the future, it'll be about maximizing the $ EARNED per 🚗 on the road.
Insurance will be a way to do that. It's about acquiring policies cheap & not losing money on them.
Here's why they are destined to succeed. 🧵
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@elonmusk
Elon, I used to be a big fan, but you are an endless disappointment.
This individual suggests that foreign born workers are taking native born workers' jobs at large scale. Usually, if a claim doesn't make sense, it's wrong. But let's verify.
The number of employed people in a certain demographic group (in this case native born vs. foreign born)
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Here's my case for No Landing in 2024. (1/2)
Firstly, can we please agree that the consensus is not 'soft landing'? It's just 'landing'. 94% of fund managers expect that there will be some form of landing in 2024.
But what is a soft/hard/no landing? The thing they want to land
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am I the ONLY guy on the 🐦 app who thinks that a failing bank is very likely a HUGELY bullish catalyst for what has to happen eventually anyway?
I'm either really dumb or really not dumb.
I feel so bullish today, I want to run onto a pasture to chew grass 🐮
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@DillonLoomis22
I like $TSLA, but these companies are not the investment alternatives to benchmark Tesla against.
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1/I'm sure you have heard about the
#InflationReductionAct
. But have you ever visualized how massive its financial implications are? It provides huge investment incentives. The beneficiaries will be the shareholders of those companies at the right place at the right time. 🧵
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Probably no research from me next week. Pretty bad 🔥 in my hometown Kelowna. We left the city. Not sure when I'll be back at my desk,🤞 it'll still be there.
Thoughts & prayers for everyone at risk and thank you to the firemen risking their life to fight this freak of nature!
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Is $AMZN the best opportunity in Big Tech? $META $GOOG $MSFT $AAPL
@amazonholder1
@NayutSitachitt
@jaminball
@NestBetter
@UPHOLDINGS
@EricMarkowitz
@SteadyCompound
@thespencerwalsh
@ashwinibirla
@PMack1224
@heydave7
@RonMadison11
@borrowed_ideas
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1/At the end of last year, I wrote a deep dive on $META (🧵👇). Since then it has been nothing but a super slow motion car crash. 3Q22 is a great opportunity to revisit my investment case.
Is there hope for the most hated stock on Wall St? 🧵
1/X From generation heads-down to generation heads-up. How $META will dethrone $AAPL. 🧵
Since the digital revolution started, most value was created at the gatekeeper who connects ppl with cyberspace, the human machine interface (HMI), going regularly through paradigm shifts.
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Interest rates correlate with economic growth.
Economic growth needs either more productivity, more people or more debt. Not much to be expected from the latter two.
And last 10Y avg. productivity growth is chilling at all time lows.
Friendly reminder that we can hope for 2% *nominal* GDP growth due to demographics and debt burden, while fiscal policy aims for 6% deficits.
Fed is the *only* realistic buyer for the coming debt tsunami.
$10 trillion incremental QE by 2030. Wanna bet?
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Product launches are the most important stock catalysts for $TSLA.
The first Model S deliveries happened in June 2012.
The stock tripled over the next 12 months.
The first Model Y deliveries happened in March 2020.
The stock did a 6x over the next 12 months.
Model 3 and
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Couple of years ago, during one of my long runs through 🇨🇦 forests, I realized something important:
QE wasn't a failed 2010s experiment. It's in fact endemic to our demographic debt trap.
It'll be back in XXL format bc of what we 'can', what we 'want' and the gap in between 🧵
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IMO we are kind of in a win-win situation for equities.
If economic growth comes down (and corporate earnings with it), we will see a bull steepening, i.e. ST rates down quicker than LT rates. A huge amount of of liquidity in the money market will then search for return
Here is why I believe that the 2021/22 Bear Flattening will be succeeded by the 2023/24 Bull Steepening.
100% for free to read. Paywalled in 4 weeks like all my free articles. It pays off to subscribe to retain them in your inbox indefinitely. 😉
$TLT
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$NVDA sells the shovels for others to dig for gold. $TSLA is digging for gold themselves.
In a sense, the former is a bet on the interest in AI, the latter is a bet on AI itself.
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BREAKING: This indicator has correctly predicted all three recession in the past 40 years. And it's flashing....NO RECESSION.
The US consumer is the most important private sector business cycle driver. When US households deplete their savings, they will stop buying junk, thereby
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I have updated my LTM to 2023 EPS bridge based on $TSLA's 4Q22 earnings.
With my admittedly rather simple extrapolations, I arrive at $5.99, which is 50% ahead of analyst consensus.
Article is free, Excel model is included for paid subscribers.
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TEN TRILLION DOLLARS
I believe 2022/23 will prove to be an outlier in an ongoing trend, not a trend reversal. A massive bear trap that will inflict pain once it unwinds. QE will return. In XXL format.
Here is Why and How.
$SPX
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@GerberKawasaki
@WR4NYGov
can't wait for you sell your remaining shares so that the whining finally stops.
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$TSLA is not a car company. And it is also not a tech company. It does not share defining attributes with members of those categories.
Instead, they are the most prominent instance of a new category: Battery Refiners.
As long as that is not widely understood, there is upside.
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some people really seem to think that the fed can influence *next month's* cpi with a rate hike today.
it's the equivalent of flooding your garden bc the seeds are not growing the day after you plant them.
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$AAPL's margins peaked in 2012. Since then the stock is up 10x.
Good luck if your $TSLA bear case rests on the margin story after this delivery beat. It's a secondary KPI.
$AAPL 10xed from 2009-2012. The iPhone conquered the world during those formative years for the 3rd iteration of the company that made it what it is today.
But then the stock dropped 30% out of nowhere, while broader markets continued marching along.
2 major reasons:
1)
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I might be missing out on a lot of income, but I'm not selling $TSLA covered calls. I didn't go through all of this to sell what I HODLed for cheap to someone buying weekly or monthly lotto tickets.
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Very exciting for $TSLA. I unpaywalled my recent article on Dojo, Cerebras and Meta RSC if you'd like to read more about the relevance of this moment.
Tomorrow,
@Tesla
will turn on a massive and very expensive 10,000 unit NVIDIA H100 GPU cluster to help it train FSD. But that got me wondering, what is the difference between these new H100 GPUs and the older A100 graphics processing units (GPUs) Tesla has been using for the last
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Big $TSLA news yesterday. Finally tangible information on progress with Dojo. Here is my take and how its fits into the broader AI theme that is currently unfolding.
Also touches on $META RSC and Cerebras Andromeda.
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The Fed does not create liquidity.
When they expand their balance sheet (for example by lending to a bank or by buying assets), they create bank reserves. If the bank does not do anything with that cash, absolutely nothing happens in the economy. All it does is manipulating
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Dear fellow $TSLA bagholders,
We got bailed out by
@elonmusk
and the Tesla team.
In Jan'20 when the entire mania started, 2022 EPS consensus was at just $1 split adjusted. We're now on track to hit more than $4 this year. They outperformed expectations just 2y out by 300%.
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This individual suggests that foreign born workers are taking native born workers' jobs at large scale. Usually, if a claim doesn't make sense, it's wrong. But let's verify.
The number of employed people in a certain demographic group (in this case native born vs. foreign born)
Holy. Shit.
I thought this was a typo…
In just February, 1.2 million immigrants (legal and illegal) gained a job. Meanwhile, 500k native-born Americans LOST their job.
Since Covid, native-born workers have actually LOST 2 million jobs. All of the net job gains are immigrants.
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10 reasons why $AMRS = $TSLA:
1. Both ramped a promising new technology singlehandedly
Giga Nevada doubled global 🔋 production vs 2013 levels. Barra Bonita will ramp Global Precision Fermentation by ~30%.
Resulting scars gave them leads over competitors with less courage.
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Friends & family often give me advice:
Start a Youtube/Tiktok/IG channel
Make a podcast & interview ppl
Game up your branding
Put more effort into chart & text design
Write on Seeking Alpha
Write about this and that topic to get more interest
Write shorter/easier pieces
Reach
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Too busy pumping out research that I didn't notice an important milestone!
I've now published 110 articles over the past 579 days. More than 200k words, easily enough to fill 3-4 books.
Endorse me with a like/retweet if you enjoy my work.
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$TSLA is institutionally very underowned.
Imagine you're a PM and you read Jonas' note this morning. Even if you don't fully buy into the Dojo story, do you really want to risk being underweight in another $NVDA moment? Why not cover and protect your bonus?
Here is my take on Adam Jonas' note. This is a bold call from the most influential $TSLA analyst on the street. It obviously can't carry the stock alone, but it can certainly ignite the fuel that is already there.
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@Investor_NICK_
I read through some of his analysis. I don't really understand the point of dissecting charts like that. Get in the car and let it drive you. If you think this has a shot to be fully automatic soon, buy the stock. If you don't think so, don't buy it.
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Over the past 20 months, I have published 140 articles. At about 2k words apiece, that's close to 300k words, enough to fill about 5 books.
Each of these articles was motivated by one distinct question I felt an urgent wish to answer.
It's a pretty intense process. Sometimes I
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Might the reason why Powell is so stubborn. Probably scared that inevitable rate cuts will flush this into risk assets in a biblical short squeeze.
A bubble shouldn't be defined by the price of an asset, but by its aggregate share in investor portfolios.
This is a bond bubble.
US money-market assets have reached a new record of $5.5 trillion.
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$AMZN AWS +16% YoY, heading towards single digits.
$META core stagnant, RL moonshot a money furnace.
$MSFT killing it. But even Azure is 'only' growing by 26%.
$TSLA will grow total revenue by >40% this year.
Growth will become scarcer & it's valuation premium will rise.
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THE GREAT PANDEMIC ERA OPTION BUBBLE
Here is how it pumped stocks, how it crashed stocks, and why it is over now.
This angle on the last 3y might be new for you and implications are IMO profound.🧵
Check out the chart below, $SPX P/E vs. $VIX. Raises 3 questions:
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@Swordfishv44183
The comparison between money supply and asset prices does not work for export driven economies. Case in point Japan. I wrote about it here:
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$224 to $241. $60bn value created in a day. Mary led. For $TSLA shareholders.
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Have sold $AMRS & shared my reasons below. I still hope the company will succeed, but I do not have enough conviction to own it. Biggest defeat in investing for me. Would prefer to keep it to myself tbh, but I think I owe this transparency to readers.
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@SawyerMerritt
a 30% PT increase days before deliveries after years of bashing the company, but no conviction?
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Here's
@elonmusk
on $NVDA:
"We'll continue to use -- we'll actually take NVIDIA hardware as fast as NVIDIA will deliver it to us. Tremendous respect for Jensen and NVIDIA. They've done an incredible job.
And frankly, I don't know if they could deliver us enough GPUs, we might
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why does this guy think 'retail shareholders' are a homogeneous group with aligned interests? and even if they were, what does he think qualifies him to become their spokesman?
Retail shareholders deserve a voice on the Tesla BOD. $TSLA
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I closed my $TSLA Jun 2025 240 strike calls and put the money into shares. I'm still very bullish and I continue to believe the pain is to the upside, but with my PA being up 300% YTD, I feel like I've more to lose than to gain.
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MMs typically are long calls and short puts because investors want covered call income and long put protection.
High Gamma therefore likely means MMs have a lot of gamma in long ATM calls and very little gamma in short puts (bc there are all OTM). That signals complacency. Long
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I just learned the most absurd thing about Canadian shelter CPI measurement: It includes mortgage rates!
The
@bankofcanada
hikes to control inflation which DIRECTLY increases inflation.
What a 🤡 world. I can't believe it.
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@AndreasSteno
@TgMacro
i wished someone did this from the consumer perspective, not the producer perspective. if a german uses a 📱 made in china, is that chinese or german emission?
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🇩🇪 has revealed many issues recently. But one remains underappreciated: The bankrupt pension system.
Needs to be bailed out with €100bn tax money every single year. Total present value of the shortfall is likely >€2.5tn. With proper accounting, it doubles current govt debt. 🧵
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@alejandrobatiz6
In 2020/21 people bought calls like crazy as a momentum trade. That increased implied volatility a lot and there was a lot of leverage in the system. As evidenced in the drop in IV, there is not much call demand right now, which suggests that the leverage is gone (or at least
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rapid unscheduled disassembly. sounds like a great way to describe my investment account over the past year.
As if the flight test was not exciting enough, Starship experienced a rapid unscheduled disassembly before stage separation
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2020 bull market: "I am up 200%! YOLO! 💎 🙌! HODL!"
2023 bull market: "A core holding of mine has run 20%. Gonna trim here and sell some covered calls betting on a correction!"
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1/Over the past week, $AMRS ran +120%. If you are curious what this company is about, here are all the articles I have published on the stock since I found it and was mesmerized by it 8 months ago.
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When you use X, you have a choice. You can follow the large engagement bait accounts and they feed you what you want to hear.
Or you make the effort to find the smaller legit ones (like me😜).
Sources: … …
National median rent vs annual household income, per TheBeautyofData:
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TESLA FINANCE, a multi billion dollar business about to awaken? 🧵
Last year I came across this fantastic thread from
@madmanx89
that suggested $TSLA can make a lot of money financing their cars.
Zach said the plumbing is in place. How big can this be?
2a/ Tesla Financial?
As currently structured, one of the most profitable parts of US OEMs like Ford and GM are their financing arms.
Part of this is not possible for tesla. Much of the financing, is bridge financing to dealers for inventory. But there is customer financing.
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I want to add some support why I think we will likely see a bit of a stock market correction in the coming weeks.
When you think about monetary tightening, you think about Fed balance sheet contraction, i.e. the Fed sells securities and uses the proceeds to pay off liabilities
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@alex_avoigt
without large scale energy storage it's all worthless unfortunately. and 🇪🇺 regulation provides the wrong incentives.
2/A simple definition of garbage: Having to pay to get rid of it.
Look at how often electricity prices go subzero in 🇩🇪.
Will define 2 two key terms here:
Smart Energy:⚡️ available on demand.
Dumb Energy:⚡️ with erratic availability profile.
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@teslaeconomist
always liked your vids, but seems like you never really understood the investment case. sad to see this level of self immolation.
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@bankofcanada
lol. economy is in a recession, only propped up by an immigration surge.
this hiking disincentivizes home building more, laying the foundation for the next inflation surge.
absurd.
Real GDP/Capita in Canada is 1.0% lower in Mar'23 than it was in Mar'22.
Surely we need some more tightening to reign in the overheating economy, right?
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Not sure if you noticed, but my productivity (and with that happiness) has gone absolutely parabolic since this.
If you're on the edge with whether you should go all in on an idea, just go for it.
When we reach our end, we won't regret what we tried, only what we didn't.
I have quit my job yesterday and will be writing and investing full time from now on. If you don't want me to sell $TSLA shares to fund my extravagant lifestyle, you better sign up and help me grow. 😜
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I have no idea about $NVDA, but I have doubts that this is simply exuberance. It's pricing in something profound. We'll understand in a year or two. Until then, just fun to watch ppl losing their shirts betting against something with a half-baked valuation driven short thesis.
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$IONQ: I believe this thing is real.
Performing calculations by manipulating atoms that exist in more than one state at the same time and that communicate with each other magically over large distances. Quantum computing sounds like science fiction, but it is in fact real and
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I recently received feedback from unsubscribing premium subscribers that my content is not actionable and my single stock coverage ‘completely uninteresting’.
People are entitled to their opinion, but I can’t help but being very offended by that. Let’s revisit some of my
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2/2
...but it seems to me that this driver is losing steam. Look at the Global Supply Chain Pressure Index. It tracks transportation costs and manufacturing indicators and typically leads the CPI somewhat.
To the extent there is persistency in inflation, it might shine
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This is the moment of truth for the bull case. Have you done your homework or not?
The flywheel is sending a message to Powell & it doesn't matter whether he gets this message today or in a couple of months.
I'm willing to die on this hill. It's a screaming long equities.
So, as usual markets will have to force him. In my opinion, this will unfold via what I call The Double Flywheel for Treasury Yields.
It is happening already and it consists of two components, the Supply Wheel and the Demand Wheel.
You can see it in rising rates and strong USD.
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Absolutely incredible. GDPNow is forecasting 5.0% real growth this quarter annualized.
We're full on in the next business cycle.
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"The definition of insanity is doing the same thing over and over and expecting different results."
In 4Q21, US GDP was $24.7tn. Then the Fed started the steepest hiking cycle in history to reign in inflation. We went from ZIRP to 5% in warp speed.
2y later, in 4Q23, US GDP was
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@Geiger_Capital
whether they "lost their job" or simply retired cannot be inferred from this data. Both native and foreign born labor force have comparable employment shares.
This individual suggests that foreign born workers are taking native born workers' jobs at large scale. Usually, if a claim doesn't make sense, it's wrong. But let's verify.
The number of employed people in a certain demographic group (in this case native born vs. foreign born)
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I know it sounds odd, but it's true: Every 1% treasury yield increase raises corporate profits by 1%!
Here is how the logic flows:
Step 1: Deficits
The US treasury currently owes ~$20tn to the public. If their interest rate increases by 1%, their deficit grows by $200bn.
Step
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Every supply shortage carries the seeds for a glut.
No exception. Want to hear an example? Here are some comments on Lithium from the back half of 2022.
Oct'22, McKinsey: "the battery supply chain risks facing a situation similar to the current semiconductor chip shortage, where
AI GPUs demand far exceeds supply currently:
"I don’t think we’re going to catch up on supply this year. Not this year, and probably not next year." - NVDA CEO
"The overall demand (for AI chips) appears to be insatiable for several years into the future." - $INTC CEO
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The Ultimate Pain Trade
This market rally is not driven by an AI boom. It's just a surface narrative to make sense of it. Instead, it's a pain trade for misallocated investors. Once it's over, downside will be considerable.
At the surface, the current market rally is driven by
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@teslashanghai
elon said yesterday they will continue to sell every car they make, even with lower margins. it is pointless to worry about unsold inventory
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What is Liquidity?
It's all debt issued that is held by the private sector (including the foreign public and private sector). It's secondary whether the issuer is a central bank (bank notes and coins), a commercial bank (deposits), a government (Treasury securities) or whether
Money Supply ≠ Liquidity
When you think liquidity, think credit, not money. It's still bull market fuel because it keeps growing. But in the end, does it even matter?
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Of all US companies >$200bn mkt cap with meaningful 2022 & 2025 EPS, here is how they rank based on PEG ratio.
PEG normalizes PE for midterm growth. What's then left is mostly investor preference, (perceived) safety/resilience/existing moats that warrant a valuation premium.
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