Tesla Becomes World's Only Auto Maker....

 .....stock is up 40 bucks trading at 800 a share with a nosebleed p/e of 1500. 

Tesla has become the world's only automaker. It's founder and CEO, Elon Musk, has become the world's richest man.

The old legacy auto makers, as well as those 20 or so electric auto makers in China, have all apparently quit making vehicles.They have thrown in the towel. Instead of making cars, the old auto makers have simply purchased Tesla stock and gape at their astonishing returns each day. 

"Simply buying Tesla stock, while shuttering our factories and reducing our overhead to zero, has enabled us to become wildly profitable" said an anonymous source.

Based on the outstanding float, Tesla stock holders have now valued every Tesla vehicle coming off the assembly line this year at approx. 1.3 million per vehicle. 

Elon Musk issued another 5 billion worth of shares recently and rather than dilute the existing price, the stock has risen another 20%. Many industry insiders think that Musk should just keep issuing shares until the value of Tesla stock hits 1000.

With one foot in the grave, I've lived through some unbelievable bubbles and crashes. It's always different each time- that's what they tell investors. The market crashes of 2000 and 2008 had insane valuations on companies that never came to fruition. Those bubbles were blown by internet merchandising and then real estate in 2008.

You could call this bubble- "the everything bubble." It's the nuclear button. Here's how it works.

The Federal Reserve sends lending rates to all time lows. I can get a 30 year mortgage today for 2.37%. As the cost of mortgage borrowing becomes cheaper, the value of homes rise because now you qualify for a bigger loan so sellers just raise the price. It's essentially a wash sale between buying and selling especially if you stay within the same zip code.

As people cash out investments and real estate, M1 (demand deposits) begins to soar because nobody is making anything in savings accounts or CD's. So capital just sits in those M1 holding pens until it is redeployed. Thus the only path for all this excess capital is back into equities, bonds, and other hybrid investments like index funds and exchange traded funds. Some excess capital flows into foreign markets, real estate, precious metals, and even crypto currencies as every investor chases some sort of return. Federal, state, and other retirement funds have the same dilemma. They must chase return where ever they can find it. Which brings us back to equities like Tesla and Amazon- wildly valued v any metric or yardstick I can find.

So here's the dilemma. Do you get out and watch markets rise another year and lose out on potential gains, do you short markets hoping to catch the cliff dive, or do you cash out and stay safe?

Currently I am cashed out and safe. 

Remember the tulip bulb craze in Holland? Everyone was speculating on tulip bulbs, driving prices to insane levels, hoping to get rich and dump the investments on greater fools. 

That's where I think Tesla is. I also think that's where bitcoin is. I don't know when prices finally collapse but a lot of warning signs are flashing. I'm not worried about missing a few more months of gains. I accept that I ain't Nostradamus.

Tesla be damned.