What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing after increasing sevenfold in 2020. Tesla stock has continued its strong performance in 2021, with the share price up another 42 percent year-to-date. This makes it one of the best performing stocks in the s p 500 index. This has been a disaster for short-selling hedge fund managers, such as jim chanos and david einhorn, who have seen their capital evaporate to almost nothing over the past couple years.

Most of them have finally thrown in the towel by either closing their short positions, or at least reducing them substantially. But there's one tesla short seller, who hasn't been as wise mark spiegel, is the founder and ceo of stanfield capital, a tiny hedge fund based in new york, with less than 10 million dollars of assets under management. He has been short tesla since 2013 and, as you can imagine, the results have been disastrous since his fund's inception in 2011. He has underperformed the s p, 500 by almost 200 percent.

This number was as of february of 2021, and things have actually gotten even worse. Since then, in 2020 alone, spiegel's fund was down 11.5 percent, while the s p 500 was up 18.4 percent. His losses can more than entirely be attributed to his tesla short position, as his longs actually did pretty well around the beginning of 2020. He managed his risk by reducing his tesla short position to five percent of his portfolio from its previous weight of more than 20 percent.

This decision likely saved him from bankruptcy if he covered his tesla short, he may have been able to make a comeback. Unfortunately, for his clients he did the exact opposite. In 2021, he doubled down on his tesla short right before the stock shot up 60 to the upside. By this point, he's probably managing just a couple million dollars at most, his career as a hedge fund manager has been all but destroyed in this video we'll go over why he doubled down on his tesla short in 2021 and how this position blew up for him.

In spectacular fashion, if you haven't already make sure to check out our previous video about mark spiegel's history and his bear case for tesla, the link is in the description below spiegel has been posting articles on seeking alpha since 2010, with a substantial plurality of them. Being about his short thesis for tesla he's been making the same tired arguments as all the short sellers about the competition from the legacy automakers and tesla's cash burn. Of course, the latter argument is no longer valid, as the company has been recording net profit since 2019.. As tesla and other growth stocks skyrocketed in 2020, even spiegel knew that short positions were unsustainable.

In addition to reducing his tesla position, he completely exited all of his other short positions. Despite his belief that the market was in a giant bubble, he decided to take his hedge fund back to its roots of buying deep value, micro cap and nano cap stocks. If he had actually followed through with that there's a good chance, he could have made a comeback in 2020 and early 2021. He was long penny stocks, including aviat networks, which is up 400 since the beginning of 2020 and evolution systems, which is up almost 200 in the same period.

Finding penny stock long positions is pretty much. The only thing that spiegel is good at as the fed has pumped the economy with trillions of new dollars. The s p 500 has increased 40 over its pre-pandemic levels. This has led spiegel to think that we're in a massive stock market bubble, he thinks we're nearing the peak of the bubble and the tesla short, which he has maintained for the better part of the last decade, will finally pay off.

So last year must have been painful for you as a major tesla bear the stock rallied more than 740 from the start of 2020 until the start of 2021. talk to us about your positioning last year and how your position now right. Well, we've been short, tesla um, a hell of a lot longer than i ever thought. I'd have to be short, that's something we've been short it really since 2014 in reasonable size.

You know that you know and i put on a tiny position in 2013, but it wasn't meaningful um. So yeah we were short, we've been short tesla and it's hurt us because i had a lot of stocks that made a lot of money last year. But overall the fund was down a little bit last year, um entirely due to the tesla short now right now we're about as short in terms of size and largeness of size as a percentage of aun, as we've ever been, i mean i got us that way. Really really last week - and i i just i know this thing is about to collapse and i felt it for a while.

But when i'm wrong, i just stop it out and put it on a little bit higher and that's what i've been doing to sort of control the risk and be there when it finally happens. Spiegel is suffering the sunk cost. Fallacy he's been short tesla since 2014. During which time the stock price rose 20-fold, if he completely abandons the position now, he will have to admit that he was wrong this whole time, but he is still holding out in hopes that the bubble will finally burst and tesla will tank allowing him to.

Finally, recoup some of his losses by august of 2021 tesla stock was down about 22 percent spiegel viewed this as confirmation that the bubble was finally going to burst. So he brought his position to the largest in his fund's history as a percentage of assets under management. In 2019, he had 25 of his portfolio outright short tesla, plus a short options position, given that he increased it to the largest in his fund's history. It could have been even greater than 30 percent.

Okay, i'll tell you, i think, there's a really good chance that that tesla keeps melting down and it's it's 200, a share by the end of this year and and lower than that after you know, my target is maybe 30 40 now based on the 20 decline. In tesla shares at the time spiegel thought the market was finally turning against the ev maker and the share price would fall by another 70 to 200 by the end of the year. Up until recently, he had been saying that tesla would go to zero, but now even spiegel has to admit that the company will survive. His new price target is 30 dollars for about 95 downside.

As usual, spiegel was wrong after he initiated his maximum short position. Tesla continued to outperform expectations for his quarterly earnings reports. The stock price went up another 60 percent. If spiegel's short position was 30 of his portfolio, the losses in the past few months alone would have cost his clients close to 20 of their money to make matters.

Even worse, because he thinks the market as a whole is so overvalued. He also bought a lot of gold, which is massively underperformed my thoughts there i own a lot of gold. I'm short a lot of very, very high p e stocks. The reason for that is, if you look at what happened in the 1970s, when inflation really took off, you had massive pe multiple compression.

So you know: if we've got a market selling now in the 20s, i it could be wind up selling in the mid-teens or worse as a multiple and like the really crazy stuff i mean the arc stocks or or you know, i don't know what tesla is Anymore, it's not a it's, not as it's not a share in a company, but you know that kind of stuff. That's what's going to get slammed the worst um. So look, i'm always a value investor. I mean you know.

I mean that just means paying what i think is a cheap price for something it doesn't have to be a pe multiple of eight, although i just recently bought in the last month or two i bought general motors and volkswagen, there's obvious paired trades against my tesla Short, we can talk about them, they're just cheap um, but yeah, but there's very little value out there to buy. I mean those are the only two law, i'm my preference is to buy deep value micro cap and nano cap where there's very little competition from big funds, and i haven't been able to add one of those stocks. I don't think, maybe, since the since the crash in march of 20 - i don't know if i had. I bought a bunch of them then, and they were all home runs for us and i sold them.

But um spiegel thinks that stocks are in a bubble across the board because of this he closed out his deep value penny stock positions, as he thinks even these are overvalued now. Currently, his only meaningful long positions are general motors and volkswagen, and even these are not even real long positions. They're just hedges to offset his tesla short he's, basically, all in shorting, tesla and other high growth companies in long and gold and silver spiegel has basically been waiting for a market crash for the better part of the past five years, and it is true that the Stock market has high valuations compared to historical levels, and we could be due for a correction, but spiegel has lost so much money, shorting the market and waiting for a crash that, even if there is a 30 or even 40 crash within the next few years. This won't be nearly enough to make up for his 200 under performance of the s p 500.

Over the past decade. Mark spiegel's career is most likely doomed. He had less than 10 million dollars of assets under management before 2020 and based on his performance. It's probably less than half of that today.

The biggest mystery is why anyone is still investing anything with him, given how consistently wrong he has been. He will go down in history as one entry in the long list of hedge fund managers who lost it all bidding against elon musk, alright, guys that wraps it up for this video. What do you think about mark spiegel? Do you think his hedge fund has any chance of surviving? Let us know in the comments section below, as always. Thank you so much for watching and we'll see in the next one wall, street millennial signing out.