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This will be a short article.

As some of you know, I have written three previous long articles on Tesla (NASDAQ:TSLA). In each article, the board co-operated in deriving useful information and opinions about the company. Although I took neither a long nor a short position in the stock as a result of the articles, I did buy a model S, and I am still delighted with the car.

I have now taken a small short position in the stock. My reason is two of the three recent fires which all occurred with six weeks. I am ignoring the fire that happened in Mexico. The driver crashed the car through a wall and into a tree. An ICE car might have ruptured its gasoline tank and caught fire also. So I discounted this fire to zero significance.

Telsa and the pro-Tesla press have tried to discount the other two fires by comparing them statistically to fires per mile driven in ICE vehicles. They conveniently ignore the fact that two of Tesla's 21,000 outstanding model S's have caught fire within six weeks. If you want to play with statistics, try one fire in 10,000 vehicles every 42 days. Statistics, dammed lies, and more statistics.

The interesting point has little to do with frequency. It has to do with the nature of the accident. The model S's which caught fire ran over some road debris. That is a frequent event in driving. You're on a highway and, all of a sudden, there's something in the middle of the lane in front of you. You don't swerve to avoid it since you might hit the car on your side in the other lane. Instead, you take your lumps and drive over it.

OK, so you get a little damage. A fender bender, if that. But your car does not go up in flames. It happened to me driving my Camry hybrid. I went off the exit ramp at speed and hit the curb. I damaged the undercarriage of the car which is where a lot of the hybrid electronics reside. The car was still drivable but the repair bill was quite high. But at no time was I in any danger. My car did not catch on fire.

I don't think you can compare running over something in the road and piercing the undercarriage with piercing the gasoline tank. The gasoline tank is smaller, more out-of-the-way and more easily, inexpensively and effectively protected.

So now The National Highway Transportation Safety Administration is investigating the situation. It might do nothing, in which case the stock might go up a bit. It might order Tesla to buttress its battery pack guards, in which case the stock might go down a bit. It might order a rebuild of the battery pack which costs money and range, in which case the stock will get hurt. Or it might order a recall, in which case questions will arise about Tesla's continued viability.

I don't like the risk/reward ratio from the long side. I do like the risk/reward ratio from the short side. So I took a small short position and I may cover it or add to it at any time.

Your mileage may vary.

Disclosure: I am short TSLA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. I may cover or add to my short at any time.