When I was a young boy, I did what other males my age did, at least the cool ones: take karate lessons. Though it may seem comical now, I learned the foundations of honor, commitment, and discipline. These are the attributes that drive companies like Toyota (NYSE:TM). But upstart Nikola (NASDAQ:NKLA) is a completely different animal. And this is exactly why Nikola stock is so fascinating to speculators.
Not too far removed from my karate days, I had the distinct privilege of attending a one-day ninja class. Taught by a then-popular Hollywood stuntman, a ninja’s warcraft is wildly dissimilar from traditional martial arts. As you probably know, ninjas are assassins. They kill quickly and brutally for a profit, a perfect analogy for electric vehicle maker Tesla (NASDAQ:TSLA).
In my adult years, I came across a discipline called Krav Maga. More self-defense than martial art, Krav Maga is undoubtedly the most ruthless and violent system I have ever learned. Its key hallmark is what I would term holistic or three-dimensional fighting. Anything – your hands, your feet, a broken pipe on the road – is a weapon. Use it to destroy your opponent.
If you want to know the underlying ethos of Nikola stock, this is it.
Within this holistic system, Krav Maga teaches early on to kick men in the groin. Yes, we do learn some of the crazy, flying spinning kicks that you see in UFC matches. But to execute properly requires flexibility and skill. Like developing a mechanically sound combustion-based powertrain, these components take time to perfect.
But if you need to take someone out right now, you kick ‘em in the balls. That’s why Nikola stock is up.
Nikola Stock Is Both the Hunter and the Hunted
Here’s the thing – Krav Maga is a downright dirty system that you use to save your life. That’s it. But the temptation is that attacks down low are instantly effective. Thus, whether you’re facing off against Robert Downey Jr. or Robert Wadlow, all Roberts (to my understanding) have the same particular vulnerability.
Underlining Tesla’s incredible success is that they changed the rules completely. If they engaged in a boxing match with Ford (NYSE:F), as in combustion cars versus combustion cars, Tesla would lose. Instead, they went no-holds-barred with an electric platform; hence, Ford and other traditional automakers are keeled over, writhing in unbelievable agony.
Personally, I never kicked a man down there because if I did, I would break an unspoken contract among all men. If I go there, so will everyone else.
Initially, it’s no surprise that Nikola is doing what it’s doing. From a mechanical and engineering standpoint, EVs are easier to manufacturer. Utilizing the same “dirty” blueprint, NKLA built a remarkably compelling EV pickup truck. Just like that, sentiment soared for Nikola stock.
But precisely because EVs are easier and quicker to develop, Nikola stock will soon face mass competition. It’s the same reason why Krav Maga is a worldwide phenomenon now. Like EVs, the self-defense system distills centuries of hand-to-hand combat tactics to the most effective solutions for specific purposes.
Therefore, a grandma with a walking stick can be an effective practitioner. But in the business world, of course, that low of a barrier to entry is a headwind.
Should You Buy NKLA?
Among the stocks I own, I have the least conviction toward NKLA. Certainly, the company has many positives. First, I love the moxie that Nikola is flaunting against Tesla. It’s like President Theodore Roosevelt calling out President Donald Trump. There’s just something incredibly satisfying about a boastful man getting knocked down a few pegs by his own medicine.
Second, did you see the Nikola Badger? That’s a truck even a Harley-Davidson (NYSE:HOG) man would be proud to own. It’s a far cry from the M.C. Escher experiment gone wrong that is the Tesla Cybertruck. I don’t like to make investments based off one product. But for what it’s worth, I did buy Nikola stock.
However, some negatives exist too. Most worryingly, everybody is angling for each other’s sensitive parts. That’s why I always wore a protective cup after one harrowingly close call.
But that also begs the question: what is the equivalent of a cup in the EV market? In the traditional market, that’s easy to answer. For instance, a Ferrari (NYSE:RACE) is unmistakable, even if you’re blind. Inherent in the exhaust note is the soul of an Italian opera.
But what is branding in an EV? I’m willing to bet that our tech-cultural shift toward sleek sameness will drive Nikola stock higher in the long run. But in a world of testicular copycats, I’m not 100% sure who will remain standing upright.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he owns NKLA.