The Religious Investor

Just how HIGH can it go?”

You’ve probably heard something along those lines in market-based articles. After all, greed and overconfidence are the virtues of constantly churning stock wheels.  It should never stop.

Over the last few years, we have witnessed a rather new phenomenon: the Religious Investor. In this case, it is a person who has no regard for reality or the underlying principles of value. Any outcome, regardless of nature, is an affirmation of their stock’s worth, and skepticism? We simply won’t have it!

The Religious Investor operates much like the Chant Warrior where psychological tropes are concerned. Anything Bad is Good, and anything Good is good. Low polling? That’s because the polls are wrong! Not getting positive attention? Only because of media bias! There is zero possibility of an alternative, because that contradicts the religious narrative.

You probably recognize by now that my target here is Tesla. To be clear, it applies to shareholders in other stocks as well, like Buttondown notes:

One January 29^th, 2020, they released a fresh earnings report showcasing the following:

Q4 Non-GAAP EPS of $2.14 beats by $0.38

GAAP EPS of $0.58 misses by $0.26.

Revenue estimate was $7.05 billion, actual was $7.38 billion, beating by $330 million

In reaction, the stock rose from around $570 to $644, roughly 11 percent. This despite relatively poor results in the second half of the year, and a weak track record. 

Look at how Tesla bulls respond to skepticism:

Comparatively, Apple released the following results not long ago:

Q1 GAAP EPS of $4.99 beats by $0.45.

Revenue of $91.82B (+8.9% Y/Y) beats by $3.41 billion.

Apple’s uptick? About 2 percent. And even in that case, after a long run of success, calling for a sell gets you shredded by the true believers.

So should we all go to cash, or stop being haters and buy?