Other groups, like managed-care stocks, which were going down because of fears of price wars and because of a lack of new business formation, are now just levitating up.

To me, it is best right now to stick with catalyst stocks, as these halcyon moments don't tend to last too long. Of course, the issue is that we can't figure out what happens that knocks it all down, but at this point I would rather raise cash and not apply it. But then again, we've been doing that recently and it really hurts!

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Tesla Defies Both Logic and Gravity

Posted at 1:08 p.m. EST on Monday, Feb. 10, 2014

I never, ever slam Tesla Motors (TSLA). In fact, I totally get the thesis of why you should buy it. The stock is simply one of the best cult stocks ever, backed up by the political power of pretty much every government in the world and shot at by pretty much every hedge fund that likes to get against stocks.

In short, Tesla is too easy. It makes me jealous. You can do all of the homework in the world on an Eaton (ETN) or an American Airlines (AAL) or a Noble Energy (NBL), and if it stumbles, you are the doghouse. If cheap stocks like General Motors (GM) and Apple (AAPL) get a whisper of negativity, it's game over, or at least it feels like it.

And then there's Tesla. On Feb. 10, we heard that China is going to extend subsidies for electric vehicles. Even though Tesla is in no position to mass-produce Chinese cars, it just doesn't matter. The thesis is simply too positive not to buy Tesla. Next thing you know, the stock takes out its high, and you have a technical reason to own Tesla. I am sure that right now, Elon Musk has a half-dozen reasons to propel Tesla further into the stratosphere. There is no negative story now that the fire issue has been cleared up. There's only valuation.

And that, of course, is what makes things so hard. At my hedge fund I had iron-clad rules, and one of them was not to waste time thinking about valuation for a small part of my portfolio. There was always room for a Tesla. Now, running a public portfolio, Stephanie Link and I at least like to have some valuation underpinning, any at all, because it is charitable trust money.

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But we can't design one. Yes, we bought Facebook (FB), because we thought it was about to have an earnings breakout. Which it did. We own Google (GOOG), but that's because Google is actually ridiculously cheap on 2015 earnings.

But Tesla? It makes no sense on earnings whatsoever.

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