#109: Tesla More Volatile than Bitcoin

Pinned Note: Over the next week or so, my focus will be on advancing the web portal development, so these letters will be done quicker than usual. The depth of analysis, therefore, might not be up to my usual standard.

S2N Spotlight

I compare the volatility of Tesla with Bitcoin and show you that it is currently slightly higher, but for the last year it has been considerably higher. I always like to look at volatility through a rolling window. What you can see is that volatility is not a constant. In other words, volatility itself is volatile. I take a 250-day (1-year) rolling window and step through time with that fixed window.

For the sh!ts and giggles, I have produced this volatility forecast. It uses 2 different approaches to how I use historic volatility to provide a probability-based forecast of the Tesla price over the next 20 days. I would never trade based on these forecasts, but they are a good way to find where to place stop losses.

For the sake of completing the picture, here is a look at Tesla. Yesterday, the stock tanked -12%. While I admire some things about Elon Musk, I am tired of his sales “shtick.” His company reported a 43% drop in earnings, so of course he was straight onto selling the vision of the future. I listened to one of his interviews yesterday and wasn’t fooled by his fighting talk, telling people to sell the stock if they didn’t understand its value.