Shares have fallen more than 25% from the highs it reached last fall, despite the firm posting a record profit in its most recent quarter. Recent moves in Tesla’s stock may point to that sentiment shift already underway. “I think if you got rid of some of these pressures, as they've been supporting the stock, that maybe the stock wouldn't be where it is.” The minute sentiment shifts, you can see sentiment shift quickly,” he said.

Whatever it is, it all is believable to those who want to believe in the hill. we're going to Mars, and sending a car into Mars. We've got full self driving, we've got robo taxis, we've got solar zones, we've got batteries. “There's this visionary logic, which is, it's all in the future. CEO Elon Musk’s outsized influence in the company and his ability to sell potential investors on a 'fantastic new world' has fueled the stock higher, creating a disconnect between the firm’s fundamentals and the price with which investors value the company, he said. Mansharamani said valuations have been compounded by a fear of missing out, and the 'power of storytelling' by celebrity CEOs, singling out Tesla ( TSLA) as a prime example. And so those flows drove stocks to levels perhaps that they might not have had, had they not had this ESG style mania bubble, if you will, that was brewing on the side,” he said. “Those funds didn't have many places that they could park as much money as they were receiving. But Mansharamani, who is also a lecturer at Harvard University, argues the outsized influence of passive investing has led to price distortions in stocks, with the market increasingly driven by capital flows and momentum-driven algorithms. The funds have seen explosive growth in part because they charge much lower fees, by virtue of the way they are managed. publicly traded equity index funds, according to Bloomberg Intelligence. Passive investing, which tracks a market-weighted index or portfolio now accounts for more than half of all U.S. And part of that's being driven by just the massive amounts of money flowing into some of these indexes.” “We've had flows driving prices, more than fundamentals in many sectors. “I believe a passive investing bubble has been brewing and may, in fact, have started showing some signs of cracking and bursting here,” Mansharamani said, speaking on Yahoo Finance's Future of Finance. Now, the author who made a name spotting market bubbles in his book 'Boombustology: Spotting Financial Bubbles Before They Burst,' says another one may be about to pop. The explosive growth in passive trading, a fear of missing out, and a blind faith in 'celebrity CEOs' have contributed to froth in high growth tech names, according to Harvard lecturer and renowned writer Vikram Mansharamani.

Inflow 3 cracked