Shorts want the market to "figure it out quickly" on par with children's tolerance for long trips strapped in a device suitable for space exploration. If Musk sells the long-term dream, the trip may feel like sitting in the back of a 1971 Oldsmobile station wagon traveling along at 55 MPH before the days of DVD players wondering "are we there yet"?
Absent Musk's ability to cultivate a solid decade-long investor mentality, which is rare on Wall Street, shorts will receive a "yes," and likely before 2014. For new investors, the only reason to buy is if you think the potential price appreciation outweighs the risk. With the stock now at around $118, that seems unlikely unless you're an active day trader.
Bottom line: Tesla is trading at a nose-bleed valuation while its chart appears to be extended and close to exhaustion. Investors should fasten their seat-belts and use caution or risk leaving their portfolios in the dust.
At the time of publication the author had no position in any of the stocks mentioned.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.