Short blip on not Tesla

With Amazon’s market share of cloud storage service dropping from ~50% in 2017 to ~39% a lot of people are worried about the equity’s health going into 2020. Well, I for one welcome our new cloud overlords (Microsoft ~20%) and will cast libations and victuals to the earth in honor of, and in support of their coming hundred year reign.

It’s a curious time to see people in this environment concerned about micro trends within a line of business. Even an octopus like Amazon gets a cross eyed stare when a tentacle gets swatted away for squeezing too tight. But again, consider the environment, if companies were sea-creatures (keeping with the octopus) the market would currently be a vast (almost too empty) ocean. The sea is currently so expansive that even a cursory walk down financial podcasts for the last week would leave the listener feeling a bit more anxious than usual at the commentary of dizzying price heights.

There’s really no better illustration of this than Tesla stock performance during 2019 Q4 and 2020 Q1(?). Even the WSJ had to eat crow with respect to Tesla. The incredible feat of hitting their estimates on car production, the rapid construction of the Shanghai Gigafactory, and the security doubling price in less than a year was an incredible coup to short sellers everywhere (who still stubbornly retain ~26% shares short).

Really speaks to the traders confidence when Tesla just broke ground in Germany on their new Gigafactory. Though, to be fair, Chinese manufacturing is known for it’s celerity, we’ll have to wait and see if electricity strikes twice.

All that said, this short post isn’t about Tesla, it’s about the environment. We are inundated with the seas, very different from the environment prior to August 2019 when the tides pulled a bit too far away. How long this could go is uncertain, but absent some catastrophic event. It appears to be getting along quite well.

Everything in this environment gets money, and I mean everything. Though some private equity firms are a bit more cautious than others, thoughtful parsimony is not the norm. I’m not sure how far and long these markets can continue running. It’s pretty exceptional. As long as the global monetary system managers are satisfied with the path we’re on, which they don’t appear to be… us little people will just have to strap in, buy a new mattress, flip on our three favorite streaming services simultaneously, and get confidently rested.