Tag Archives: negative rebates

don’t cry for us short sellers, but please save your hatred for someone who deserves it

Last week, I wrote a bearish article on Tesla for Seeking Alpha–not the company, the stock. As I said in the piece (and an earlier blog post), I admire Elon Musk and I think Teslas are neat cars. I’ve even considered buying one. But the company’s stock is another story. The logic of paying more than $200 a share for a barely cash positive business with all sorts of very large challenges ahead of it seems, well, stretched to me. And yet, people keep on buying. The article came out Monday morning, West Coast time. By the end of the day, Tesla was up another eight bucks. A few days later, Tesla beat on its Q2 earnings and the stock started pushing against its all time highs again. Correction? What correction?

Even though I clearly stated in my piece that I have no positions in the company, long or short, and no plans to initiate any positions in the future, several commenters accused me of secretly shorting Tesla and trying to drag its share price down. Unfortunately, this sort of vitriol is common. Short sellers are about as popular as personal injury lawyers and IRS agents these days. In the eyes of most investors, we’re little more than greedy vultures looking to smear good companies so we can profit on their fall. This simplistic, black hat-versus-white hat understanding of the financial world might be comforting, but it’s a dangerous fantasy.

In reality, the people waving the white hats and whipping this bull market higher are the ones investors should really be fearing–or at least questioning.

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is wall street as bad everyone says it is? no. it’s far, far worse.

It’s been five full years since the financial meltdown of 2008 and it’s still fashionable to bash Wall Street. People who know nothing about finance or investing routinely blame everything from the real estate bust to the financial crisis to our crappy economy and high unemployment on Goldman Sachs and other dominant investment banks. A lot of folks in my business reflexively defend Big Finance against these attacks. But the truth of the matter is, Wall Street hasn’t gotten enough blame for the way it operates, and even though a couple of firms paid fines for their behavior during the housing mania, The Street is still reaping massive profits by screwing its own clients.

Including guys like me.

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