2/ Regarding A. I'm long $TSLA, believe it isn't a bubble and the naysayers are shortsighted and wrong.

Only time will tell about A, but B we already know - $TSLA joined at an ATH of $695 then fell - but it's now at $763, so it ADDED value, not detracted.

BUT..
3/ But the question of whether $TSLA brings risk to the S&P is WRONG by itself. The whole idea of an INDEX FUND like S&P500 is to be passive, and it's THE ACTIVE MANAGER DECISIONS that introduce risk

Being profitable and large TSLA should have been added ON Q2 EARNINGS.
..
4/ Before we analyze implications, consider this:

DataTrek Research estimates that if on Jan 1 2020 an investor had put $5 of every $100 invested in an S&P 500 ETF into $TSLA, their return by Dec 11 2020 would've increased by roughly 31%!
(more by EOY)
https://t.co/nWSFLFFnte
5/ But that's hypothetical bc $TSLA didn't qualify for S&P at Jan 2020, and 5% is more than its share today.

Tesla DID qualify on Q2 earnings but was admitted after Q3. Comparing 12/21 price ($695) to 9/21 price ($449) is wrong bc by 9/21 price fell after news of not including.
6/ So let's take compare the last day b4 the bad news and compare with 3months forward. 9/4 price was $418, while 11/30 price was $599

I other words, S&P Managers deciding to postpone inclusion despite Tesla meeting requirements, robbed Granny of ~43% rise on every $TSLA dollar
7/ Percentages are misleading. Let's assume just the $181 diff - as if buying $TSLA at $514 instead of $695, then reaping that $181 rise.
at $695 $TSLA was 1.65% of S&P, so at $514 it would've been 1.22% of S&P size, and 1.22% of the shares were robbed of 35% gain
8/ Grandma was robbed by the ACTIVE decision of delaying inclusion. But what next?

Since inclusion, $TSLA rose 10% ON RESULTS, NOT VOLATILITY, in <10 trading days - so S&P gained from inclusion

By me ($TSLA LONG, not investment advice) the future looks even more promising!
9/ S&P should be a passive index and act like one

Manager intervention robbed fund holders of profits, but now that fixed $TSLA is set to be one of the engines pulling the index upwards

MSM POV has shifted accordingly - can't wait to see 01/2021's growth engines do their thing
10/ PS While writing this thread shifted from just charting the "what if"s into a somewhat ideological rant. Sorry, lol, but realizing how the "robbing granny" argument was in fact what robbed grannies, gramps and other honest hardworking people - that got to me. Chill now!
11/ @jpr007 @garyblack00 @stekkerauto @TilmanWinkler @stevenmarkryan @heydave7 @Kristennetten @28delayslater @Cosmicstrenght3 @KaleyGoode @TeslaBest @EvaFoxU @wendishen99 @billhuang688 @TeslaPodcast @LimitingThe @elonmusk

@threadreaderapp unroll please

More from Finance

THREAD: Who are the rising stars of Chinese elite politics in the central Party-State bureaucracy?

For @MacroPoloChina I analyzed last year's ministerial-level promotions to posts in Beijing

TLDR: Ties to Xi Jinping—or a Xi ally—are very helpful! (1/14)

https://t.co/kO2A0Efyq2


Seven politicians were promoted to ministerial-level positions in central Party agencies last year

All are likely to feature on the next Central Committee selected at the 2022 Party Congress

Some could make the CCP's elite 25-person Politburo (2/14)

https://t.co/kO2A0Efyq2


Likeliest for the Politburo is Meng Xiangfeng, new Executive Deputy Director of the CCP General Office

He would replace Xi ally Ding Xuexiang as CCP chief-of-staff if Ding is promoted further in 2022

Meng worked under Xi allies Cai Qi in Hangzhou and Chen Xi in Liaoning (3/14)


Less likely for the Politburo but still important is Jiang Jinquan, new Director of the CCP Policy Research Office

He replaces 5th-ranked leader Wang Huning who led the Party's brains trust for 18 years

Wang remains prominent and will be <68 in 2022, so he'll stay around (4/14)


Other notable central Party promotions include Li Shulei and Liang Yanshun, who both assisted Xi when he led the Central Party School from 2007-2012

Li is a political conservative who is said to be quite close with Xi, even drafting his 2014 speech on culture and art (5/14)

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I will keep sharing such learning thread 🧵 for you 🙏💞🙏

Keep learning / keep sharing 🙏
@AdityaTodmal
My top 10 tweets of the year

A thread 👇

https://t.co/xj4js6shhy


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https://t.co/A7XCU5fC2m