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Tesla bubble is about to pop?

We are only halfway through it, but 2021 is already a year of extremes: stock markets are hitting record highs every week together with commodities and inflation. Investors should be extremely careful in taking more risks in equities these days. We see clear signs of exuberance that remind us of past periods of excess.

After all, Tesla is just another car company

Tesla’s market capitalization is up a whopping 1,000% over the last few years. 1,000%! Just like Dogecoin in January. Sounds similar?

You’ve probably read reports that Tesla was more valuable than Facebook or Toyota, or more valuable than Ford and General Motors or all the three major German car producers combined. But these days are over. Tesla is valued at more than 230 times Ebit. Remember – it’s still just a car company.

The stock market clearly doesn’t care about runaway inflation or fears over the Delta virus variant. Not yet. Only the stocks from the energy sector start to signal the deep recession we’re getting in. But momentum stocks like Amazon, Tesla, Facebook, Microsoft, Apple or Google are on fire. The Fed hopium works. Retail investors bet that future cash flow of today’s growth stocks will just keep on rising and rising. They are panic buying like it’s 1999 again. There is no doubt: Tesla is the biggest tech bubble of our times. And that will end in tears. And to make it more stupid, Elon added the volatile Bitcoin on Tesla’s balance sheet. Now Elon claims that Tesla stopped accepting Bitcoin and that Tesla has sold only 10% of Bitcoin holdings to test the liquidity. Why? Elon put Tesla into a bull trap on a mad Bitcoin bounce.

“You never know who’s swimming naked until the tide goes out.”

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