Play TSLA, PLUG Like the NCAA

 | Mar 18, 2014 | 11:23 AM EDT  | Comments
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Stock quotes in this article:

tsla

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plug

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fcel

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bldp

Had a chance this morning to pull up with John Gasaway, ESPN's resident bracketologist for the NCAA tournament. I wanted to know the biggest mistakes people make in filling in brackets for the tourney.

One word: emotion.

Whether it be rooting for your alma mater or betting on a hometown team, it's just the easiest way to lose. Warren Buffett is not going to pay you $1 billion if you get all the picks right in your bracket. I immediately felt badly. I have been rooting for Villanova for years and went nuts in 1985. Debated having Harvard go to the Sweet 16 before I realized my emotions were ruling me and I would be a fool to do so.

Which brings me to Plug Power (PLUG), FuelCell Energy (FCEL), Ballard Power (BLDP) and the marijuana stocks that have captured speculators fantasies and caused a huge amount of froth in their own right. I recently did the deep dive on these three and actually ventured to say some critical words on air about them. No sooner did I do that, then the haters broke out of their fools' lair and came after me with everything they had. These were their stocks and how dare I criticize them? Didn't I know how much money was made in them? Did I really think I knew them?

Well, yes and yes. These 16-seeded teams have, indeed, gotten to the sweet sixteen and I congratulate all who bet on them. But that's not the point. I have followed these companies for years and watched them lose money year after year after year. Sure, fuel cells now are closer to some sort of commercial application. But let's remember that these companies have all disappointed, just like every 16th seed has from time immemorial.

What bugs me is that people can't see that their cheerleading and promoting of these stocks is the same as my picking Harvard to go all the way simply because I went that and the team had a good season? You have to be coolly rational and unemotional in stocks, just like in March Madness, and you can't hate the messenger who tells you, like ESPN's Gasoway told me, that you have to be careful because there's way too much sizzle and not enough steak with these three (and don't call me a vegan).

Congratulate yourselves that you rode the froth wave for hundreds of percentage points in gains and move on.

Now, the natural question that follows is "does Tesla (TSLA) come under the too-emotional-to-judge rubric?" This is a tough one. I didn't like Tesla until it reported that remarkable quarter a year ago and despite the endless attacks that I have heard about me and Tesla, that was the very right call. You've caught a gigantic move. I think that a lot of that is excellent surfing of the froth wave. But it is also possible that, as Goldman Sachs said in its thoughtful piece this morning, that perhaps Elon Musk really is Steve Jobs or Henry Ford and a further doubling or thereabouts awaits.

I don't like betting on one man's vision, even as you sure should have bet on Jobs or Ford. Which is why I say that I have NEVER discouraged anyone from taking a position in Tesla. It's not emotional. Tesla's a fourth- or fifth-seed wild card because it's got plenty of money, a coach with vision and a plan that, if executed, gets it to the finals. That's a lot of things that have to go right. That's Nova in 1985.

I just want people to know the difference between emotional rooting on a team with a checkered past vs. a rational bet that the long shot comes in. When in doubt, think like you would when you fill out your brackets. You'd never pick Ballard, FuelCell or Plug Power unless you can't rein in your emotions. I say save your cheering for your home team and cut the jeering. All I am doing is trying to be the equivalent of the ESPN expert, Gasaway. That's the best I can do.

Random musings: Stay tuned for the two videos I did with Gasaway and don't forget to fill out your bracket at www.thestreet.com/espn to play head to head against me and others at the Beat TheStreet Bracket Challenge.

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