For Millennials who thought the valuation of EV, Lidar, hydrogen and other “disruptive” asset stocks were real, the law of value is kicking in. This means Cathy Wood’s beloved ARK Invest ETF as well. In the latest correction in the stock market any stock that went down more than 6.5 percent today is in that bubble category. Let’s list some them shall we:
- Tesla – down 8.5%, another 3.89% after hours.
- Nio – down 7.92%, another 1.34% after hours.
- FCEL – down 11.62%.
- PLUG – down 13.40%.
- Lucid (CCIV) – down 30% after hours.
- ARK Innovation ETF – down 5.79%.
- MVIS – down 11.85%.
- Luminar – down 7.42%.
- GEVO – down 7.56%.
- Velodyne Lidar – down 14.87%.
- SunHydrogen – down 15.88%.
- Invitae Corp – down 11.13%.
- Nano Dimension – down 10.25%.
- Blink Charging – down 8.5%.
In market corrections typically the overvalued stocks get the brunt of the correction. Given last week’s movement and the performance on Monday February 22nd, 2021 it appears that this correction is targeting overvalued technology stocks especially in the EV, LiDAR, hydrogen and hype sectors.
Many stocks are clearly tethered to Tesla’s irrational price. Even in a market bubble, the EV-hydrogen bubble (now LiDAR as well) has been froth in its own bubble inside a bubble. This isn’t surprising, this is the law of diminishing returns kicking in with an inevitable return to fundamentals. In fact, this is just the beginning.
Cathy Wood is a Kind of Fraud
Let’s remember, Tesla’s stock price was $872 no February 2nd, three weeks later it’s $710. This seems more significant than a simple correction. In a Bull market you have stocks tethered to others just as crypto is tethered to Bitcoin.
The sentiment runs have been beyond irrational, they have defied any sense of fundamental business values, P/E ratios or valuations realistic to real world sector adoption. Prophets like Cathy Wood or Elon Musk have distorted the reality of several sectors including EVs, hydrogen, genomics, etc…
Millennial investors have a lot to learn. You can game meme stocks, stonks and all but can you game the EV adoption market? Should Tesla be worth the entire business market value of the rest of the automobile car industry when in reality it will have so much competition it won’t even be able to stay ahead? When I get banned from stocktwits (on more than one occasion) for talking about fundamentals to the tribes of pump and dump stocks, it’s not just sentiment. The gamification of the EV movement will bankrupt a lot of new investors.
Let’s praise Cathy Wood and Elon Musk for deceiving you. You put 30-40% of your entire portfolio in the stocks that were the sentiment winners. That’s not investing bro. These aren’t disruptive companies. They are barely profitable, not profitable or pre-adoption.
The stock market is a general consensus of 6 months in the future, not more. When Millennials pump sentiment stocks all together on Robinhood it feels amazing when it’s on the pump phase, but how does it feel on the dump phase? Most of ARK’s ETFs are weighted poorly, with a few of the pump stocks with too much weight in their ETFs.
So what happens when there’s an actual correction? The value of the ETF completely disintegrates. Who gets to be the bag-holders for the carnage? Millennials.
When the FED decided to print money, buy bonds and pour $Trillions of liquidity into the market, it amounted to a one year pump and dump. Tesla was just the lucky kid that got the golden ticket of that. Tesla made more on their investment in Bitcoin than they have selling EVs.
SpaceX is many times a better company than Tesla. But go figure, we’ve always said Tesla’s stock has an actual value of closer to $150.
Hey idiots, how you like me now? MVIS isn’t just garbage, it did a $50 million offering on your tribe like stupidity. If you don’t understand fundamentals, you are maybe a little bit young for this world. You bought into a lot of Kool-Aid in a meme-zone where Reddit and YouTube qualify as due diligence, grow the fuck up.