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Tesla Running Out of Juice, Analysis Shows

For many, temporary and difficult-to-replicate accounting sleight of hand is just as valuable in creating profit as is profit from the actual manufacture of products. Fortunately for them (and not so much for investors), bubbles tend to persist long after they reasonably should pop. I guess that's why we have bubbles in the first place, because reason and logic get tossed out the window and replaced with passion.

Emotionally, Tesla is a stylish car that is stunning to look at, and based on reviews, fun to drive. Emotionally, you may pay more for a Tesla because people often use emotion to drive their purchasing decisions and subsequently justify it with (any) logic.

Using emotion to buy a car is acceptable, if you're comfortable with the depreciation and costs of the purchase. But if your objective is to make money by investing, leave your emotion in the garage and allocate your capital using logic and historical odds. If you still want to buy Tesla, just put your order in for $75 and let it sit.

By the time (and it likely will be within a few months) the stock reaches $75, the emotional attraction should diminish enough that you will want to pull that order and wait for a lower price, which it likely will reach also.

DISCLOSURE: Author does not hold a position in any stock mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Robert Weinstein currently blogs, mentors traders, and writes several weekly columns in Rocco Pendola's Option Investing newsletter from his home in northern Wisconsin. Robert tends to focus on the psychological importance of goals, risk mitigation, emotion, and relatively short term market exposure. With nearly 30 years of studying and investing experience, Robert has experienced the many ups and downs in the financial markets and uses the knowledge gained to maintain balance. Robert believes the best way to make money investing is to avoid losing it. The best way to avoid losing is to know what emotional traps lay in the path of investors and learning how to avoid them. Robert is a voracious reader of financial related books often completing more than one book a week while not trading or writing. Robert contributes to his blog at paid2trade.com on a regular basis with an emphasis on studying behavior finance.
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