1/ Having experienced the Principal Strategies group at a a bulge bracket bank and both buy / sell side of several large Hedge Funds, I do find there is a little too much “gut feel” of financial markets commentators trying to explain market dynamics

2/ For example, Hedge Funds are not just a giant pool of speculative capital chasing every short term opportunity. The institutional HFs have specific mandates, strategies and investment processes.

3/ The large Special Situations funds e.g. Goldman SSG or Davidson Kempner [$30bn each] deal in direct lending and credit arbitrage opportunities. And not index rebalancing trades such as $TSLA.

4/ If this was the case, a group of HFs could buy up the entire free float of much smaller index inclusions than $TSLA, and then sell to the indexers at any price. We don’t see that, because this is not what large HFs do.

5/ As for $TSLA, active fund manager buying will remain unabated for some time, coupled with supportive strategic investors[Tencent, Baillie Gifford et al] and business fundamentals.