this is definitely not investing advice and very likely to be proven wrong. i am putting it here because i study charts and historical precedents and right now i am comparing tesla to apple, amazon and nvidia in various time frames like 2008, 2018 etc and over 50% drops in 12 to 13 months timeframes. Unless we are in a 1999 to 2002 time period, most drops of similar magnitude have been followed by 9X to 11X stock price appreciations over next 3 years.
this is a very crude back of envelope working hypothesis but i am struck by fact that we have 3 very symmetric drawdowns over 13 months in current downturn which started in november 2021. last 4 months down for tesla and amazon only. pretty unusual to get 4 months down months in a row.
this is very big picture on monthly and weekly charts and not intended as any prognostication. In any case it has zero to little effect on short term market trends but more psychological benefit of serving as light at end of tunnel. Of course, if this bear run happens to be an exception and we end up in a 2014 through 2019 timeframe then we probably wouldn’t know it until after the fact (like everything else in markets) but even in that time frame , we had significant rallies and great trading opportunities. I understand the futures are down and China Covid deal is looking bad, but I have a really hard time understanding how we will keep on going down and down in face of Tesla‘s extremely strong fundamentals and the fact we have had a textbook 60% downturn over 13 months
i assume i will be constantly wrong but will continue to refine my research
very interesting stuff especially for those of us who believe Tesla stock in short term is extremely manipulated. So, why so much symmetry. I don’t know but historical perspective seems to be a fairly decent way to place long term bets
At the risk of making this post long, if I look at all this from psychiatric standpoint, then you have external Bipolar like psychopathology in face of strong fundamentals. That combination is unlikely to persist forever. Either you have a very sick patient with multiple relapses or here in case of Tesla a very strong growth story with Bipolar traders who appear to make it look worse than it actually may be. There is a certain degree of utility in applying psychiatric principles to stock market, because traders behave in a very bipolar fashion which can be used to one’s advantage provided you can successfully monitor and control your own emotional responses. So from a practical standpoint, those of us who are holding onto Tesla long term with or without trading are not really fazed because it is a matter of time before the stock recovers but still it’s not fun to be in the very last part of a severe 13 month melancholic depressive episode with only temporary relief. Like all mood disorders, this is bound to end, because bipolar traders cannot help, but become eventually manic with very little reason
This is all Sunday night armchair speculation, tbh
