To guarantee a complete market crash i flipped sides and now have 9/18 calls on spxl (3x spy etf).
Can you short oil cos please?
I think i like your side of that bet so you might be in trouble.
A true EMH zealot could rationalize this. If the market is assuming that Tesla is such a sure thing that’s there’s no much risk associated with it’s future cash-flows, then that would mean that the discount rate is mostly tied to investors’ underlying time preferences. If Tesla is shut out of the S&P500, then that limits the universe of investors who will hold the stock (both because of no index funds and also because big institutions may use the index to allocate their investments. That could increase the expected return to investors required to clear the market, which implies a lower price. As we’ve discussed before, the sensitive of values to discount rates gets higher and higher as rates get lower and lower, so the prevailing low interest rate environment could magnify the impact of a change.
I don’t really buy that story, but a real EMH true-believer might talk themselves into it. Of course, to the extent that’s true at all, it would suggest that blackballing Tesla from the index for unspecified reasons is destroying real value on a massive scale.
I think its pretty obvious they’re being excluded because their core business is not profitable, even by their own admission?
They probably want to see them profitable without govt handouts before they start counting the profitable quarters required for inclusion.
According to their GAAP financials, the automotive segment produces a significant profit. I think you mean to say that you can construct a non-GAAP measure that backs out a bunch of revenue and call it “core operating income” or whatever. But that’s not really a defensible measure, because what is the cost of that revenue? Taken to its logical extreme, if Tesla has a separate regulatory credits segment that produces a billion dollars of revenue every year at 100% profit margin, isn’t that the core business? That business is more valuable than the marginal SP500 company, even if you adjust for the fact that the company is saddled with underwhelming automotive and energy divisions.
I’m only in trouble if you actually make the bet. I’d prefer you don’t make the bet and end up regretting it.
I mean i go long for the first time during Covid and the vaccine news drops within 2 hours.
Oh fuck now we’re doing vaccine DUMPS
What do you mean? (Got it)
Doesn’t mean that the trial won’t start again and that it won’t ultimately be successful. Holds for SUSAR/SAE are relatively common, at least in oncology trials.
SPY immediately dropped $2 on the news, futures dumping, not looking good
So the market is about to blast up enough to warrant spxl fees?
But yeah, shorting is often a pretty damn grim operation .
Ehh I’m just betting the market can’t go red in this environment 4 or 5 days in a row. I will probably be wrong but maybe not. That’s why it’s gambling.
VOO up about 1% pre-market. Looks like you’re going to be right, at least at the open. (VOO = an S&P 500 ETF if anyone doesn’t know that, I’m never sure if it’s as universally known as like SPY.)
I’m probably dumping it at open assuming this holds and going back cash gang. I would love to get back into spxs calls closer to ATHs.
So, uh, stonks?
Stonks.
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Price of oil went super positive, so of course Exxon went from up to down. STONKS
stonks