I think that Tesla's loved from afar, but not Netflix. In a week, Breaking Bad starts its last season. I heard Vince Gilligan, its amazing creator, speak on another network about why his show is a success. He said it was simple: "Netflix." Before Netflix it was impossible to get into a new drama. Not anymore. That, more than original content, drives people to Netflix.
Amazon's so loved it's obvious. Amazon Prime is like Costco ( COST), a membership, and it gives you automatic two day shipping, something that's getting cheaper and cheaper for Amazon to do with the addition of all-new warehouses. That cuts the vig to United Parcel (UPS) and is a huge win for both the customers and the cult.
So, the unstoppability of all three is extraordinary.
Second, you need to see insider selling of the massive variety. To sustain the cult you need the managers of it to believe, too. When they sell you are in greater-fool territory. We just haven't seen that happen. It's something that I think a lot of the analysts thought would happen, particularly with Tesla, but it hasn't occurred.Third, we need to see financing dry up. Unless a company's about to be shot and left for dead these days, there is financing, and that's the case for all three of these. Tesla could easily get a state loan to build a plant. We heard from CBS (CBS) on its call how much it needs Netflix and will pay. Amazon could issue $3 billion in bonds of different tranches and I think they would all be lapped up. Now, here's the tricky part. You need all three of these to occur. Any one of them won't kill the cult. Without them you could see ridiculous price targets be set: "Tesla goes to $400!" And who is going to argue with that, especially in an up tape? Now when Tesla started its remarkable run there were tons of bears out there, many of whom believed that the fated last conference call, which was a total game changer, was a total fraud. But ask Bill Ackman about total frauds. Until you get the Securities and Exchange Commission involved, those calling fraud don't have a leg to stand on. And given that these are all cults, valuation means nothing.
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