2017 Investor Roundtable: TSLA Market Action

[Runarbt]

Coal cant compete without heavy subsidies. I dont think that will happen

 

[Waiting4M3]

We will surely find out how near we are to the next Model 3 reveal event, and what the imminent factory stoppage is, Gigafactory progress and the first TE figures..

Please never ever use the word "imminent" regarding Tesla, for karma sake

 

[MitchJi]

What is your definition of something positive about the M3?

IMO the break-even point is if they announce M3 Pt3 date around March end or early Apr. More details on a sizable pre-production build or earlier pt3 date would be positives that canget us past ATH. Less than impressive # of pre-production build, or slightly later pt3 date (May?) will be a negative, I think we go back to $240-250s. If no word on M3, or word of significant delays (multiple months), then a significant negative, we dive down toward $200s. I personally don't think the last scenario will happen, but am fully preparing myself for the $240-250 scenario.

I think (I could be incorrect ) the date of the part 3 reveal is completely irrelevant. I don't expect negative M3 news, but I agree that negative or positive news would have a substantial impact. I expect positive news if anything because suppliers are a big potential source of inside information that I believe is a likely reason for some of the recent price spike.

TE is negligible to be priced in now. As I laid out a few weeks ago, even the largest, most visible project TE so far had, the SCE project, is bringing no more than something like 50 Model S/X in terms of gross profit. No more than a rounding error to this ER.

I don't believe that Tesla needs to produce very much TE income to produce a substantial SP bump. This is a quote about the M3 production ramp, which I believe also applies to the TE ramp:

Another thing I really want to emphasize is the production ramp tends to look like -- is exponential. Ultimately it is an S-curve. An exponential goes to linear then goes to log. And it's very difficult to predict exactly where that beginning part of the exponential and the S-curve fits in between quarterly reporting.

A shift of even a few weeks one way or the other can have quite a dramatic effect on what it looks like in that quarter, but that's not indicative of the future. So we're telling you what we -- we're giving you the best assessment we have short of having a crystal ball.

I believe that if they produce anything at all, but state in their guidance that in Q4 they have begun the exponential part of the TE ramp that will be sufficient to cause a bump in the SP. I think that's happened with the Gigafactory cell production. They not only have cell production, but they can guide for increased profit margins as well. The only problem with that is that some idiots probably still think that the Gigafactory is a Potemkin village.

 

[Fallenone]

I think (I could be incorrect ) the date of the part 3 reveal is completely irrelevant. I don't expect negative M3 news, but I agree that negative or positive news would have a substantial impact. I expect positive news if anything because suppliers are a big potential source of inside information that I believe is a likely reason for some of the recent price spike.

I don't believe that Tesla needs to produce very much TE income to produce a substantial SP bump. This is a quote about the M3 production ramp, which I believe also applies to the TE ramp:

Another thing I really want to emphasize is the production ramp tends to look like -- is exponential. Ultimately it is an S-curve. An exponential goes to linear then goes to log. And it's very difficult to predict exactly where that beginning part of the exponential and the S-curve fits in between quarterly reporting.

A shift of even a few weeks one way or the other can have quite a dramatic effect on what it looks like in that quarter, but that's not indicative of the future. So we're telling you what we -- we're giving you the best assessment we have short of having a crystal ball.

I believe that if they produce anything at all, but state in their guidance that in Q4 they have begun the exponential part of the TE ramp that will be sufficient to cause a bump in the SP. I think that's happened with the Gigafactory cell production. They not only have cell production, but they can guide for increased profit margins as well. The only problem with that is that some idiots probably still think that the Gigafactory is a Potemkin village.

I kinda disagree with the first part because I still think market needs to see the exponential, not hear it. But your second part has a good point. With scaling of production, nice margins on TE should be achieved and management should say so.

 

[Zhelko Dimic]

tl;dr: I deleveraged completely. You all shell expect unbelievable price gains in coming weeks.

After 2 years of being 300% to 600% leveraged in TSLA, I have broken down in November of 2016. Problems with Model X ramp, SCTY acquisition, many trips to $180 and below, and finally, drop after MS downgrade and failed recovery after Q3, made me move into capital preservation mode with _only_ 200% TSLA leverage. That has obviously lead to this tremendous rally from $180 to $280; where I have fueled fire by continuing deleveraging to around 150%-160%.

Anyhow Thursday's drop combined with years of pain, and very poor execution around trade-in/delivery of my Model S60 yesterday, led me to drop last parts of my leverage yesterday. I started selling from $267 to $271 which is obvious explanation for Tesla rallying up in the afternoon. I apologize that I didn't sell anything around $280, that obviously stunted our rally

Well, I am now only 102.5% TSLA (in leaps strike $100, $150) with boatloads of cash on the sideline, so we should expect massive gains going forward. I will both enjoy them, and sulk that after holding strong 10 quarterly results, numerous events, and two years, I succumbed and sold at the right rally.

BTW, if anyone sees an implicit critique of Tesla in how they handled trade-in/sale of Model S to me, yup, there is one here. That experience made me drop 1/3 of my Tesla position.

But here is an encouraging thought: if they do as well with such a poor execution, imagine how good it can get? These things tend to get fixed in capable organizations as they mature. Everyone else better watch out...

Oh, and I love the car. It's lowly S60, entry level model, but in most situations it feels as quick as my 2004 911 Turbo which was top of the line Porsche in 2004

BTW, 2 years of playing with TSLA finished at around 2% gain, due to all time-value lost, which is still a great success, considering harrowing places I've been, with at some point ~90% unrealized loss

 

[MitchJi]

I kinda disagree with the first part because I still think market needs to see the exponential, not hear it. But your second part has a good point. With scaling of production, nice margins on TE should be achieved and management should say so.

I believe, that in the current climate, that if the guidance is credible, which I believe it is due to the Gigafactory ramp, that that will be sufficient.

 

[TrendTrader007]

tl;dr: I deleveraged completely. You all shell expect unbelievable price gains in coming weeks.

After 2 years of being 300% to 600% leveraged in TSLA, I have broken down in November of 2016. Problems with Model X ramp, SCTY acquisition, many trips to $180 and below, and finally, drop after MS downgrade and failed recovery after Q3, made me move into capital preservation mode with _only_ 200% TSLA leverage. That has obviously lead to this tremendous rally from $180 to $280; where I have fueled fire by continuing deleveraging to around 150%-160%.

Anyhow Thursday's drop combined with years of pain, and very poor execution around trade-in/delivery of Model S60 yesterday, led me drop last parts of my leverage yesterday. I started selling from $267 to $271 which is obvious explanation for Tesla rallying up in the afternoon. I apologize that I didn't sell anything around $280, that obviously stunted our rally

Well, I am now only 102.5% TSLA (in leaps strike $100, $150) with boatloads of cash on the sideline, so we should expect massive gains going forward. I will both enjoy them, and sulk that after holding strong 10 quarterly results, numerous events, and two years, I succumbed and sold at the right rally.

BTW, if anyone sees an implicit critique of Tesla in how they handled trade-in/sale of Model S to me, yup, there is one here. That experience made me drop 1/3 of my Tesla position.

But here is an encouraging thought: if they do as well with such a poor execution, imagine how good it can get? These things tend to get fixed in capable organizations as they mature. Everyone else better watch out...

Oh, and I love the car. It's lowly S60, entry level model, but in most situations it feels as quick as my 2004 911 Turbo which was top of the line Porsche in 2004
View attachment 215383

Zhelko, love your sense of humor!
I really enjoy reading all your posts and I appreciate the candid description of your strategy with TSLA
Enjoy your car!

 

[TrendTrader007]

Here are

weekly charts showing inverse head and shoulders and long 3 year channel being broken to upside
Upside target at least $380 IF it works

 

[TrendTrader007]

Okay here is another from Marketsmith

 

[TrendTrader007]

So if you look at the above charts that I posted it is really a matter of time before Tesla breaks to the upside and makes a huge run
the pattern is in place we just need a catalyst and it may come as early as next week with earnings report

 

[TrendTrader007]

The emphasis is on the word IF although in my opinion it is not a matter of if it is a matter of when and probably much sooner than most anticipate

 

[TrendTrader007]

$TSLA short squeeze is coming

 

[TrendTrader007]

$TSLA worst case scenario stock breaks out in 2 to 3 months
Best case scenario( most likely) breaks out this month and any day now

 

[dmckinstry]

$TSLA short squeeze is coming

I've heard that many times already. I don't believe it, but hope you're right.

 

[MP3Mike]

$TSLA short squeeze is coming

But what kind will it be? Gradual increase or more like VW/Dryship?

 

[larmor]

I've heard that many times already. I don't believe it, but hope you're right.

The story on tesla remains the same with continued growth, high expectations, and cult like following for high end products, like apple. However, short squeeze will likely be tied to bargain hunters in other equities, and sectors who are only finding that those areas are oversold. Market attention will shift to tesla with huge market projections on auto, and now energy, which will provide many more buyers who can't find any more tech or momentum bargains...

 

[sdtslafan]

Here are View attachment 215395 weekly charts showing inverse head and shoulders and long 3 year channel being broken to upside
Upside target at least $380 IF it works

Great to learn more about you on the recent Google chat!

Thinking about a share price of $380 like you mention above. That's a market cap of 60 ish billion and bigger than Ford and GM. Of course Tesla has stellar products, vision, and rapid growth which Ford and GM do not.

Do you think the market will find this valuation sustainable? Would we need to see a successful ramp of the model 3 before such a market cap would make sense or do you think Tesla could be worth 60 billion at the current time / production levels based on your experience with rapidly growing companies?

 

[Zhelko Dimic]

So if you look at the above charts that I posted it is really a matter of time before Tesla breaks to the upside and makes a huge run
the pattern is in place we just need a catalyst and it may come as early as next week with earnings report

I agree. There _is_ such thing as double top, but there are _no_ triple or quadruple tops. Those are signs that SP keeps revisiting level that will eventually be conquered.

I kept looking at that 3 year inverse head and shoulder, thinking that now _is_ time to stay leveraged. But my nerves are fried; I missed many opportunities in the past to deleverage when my account was doing better, and most importantly, timing is really bad for me. I'm in a new position where I need to focus, rather than be distracted. That last one was critical.

I am otherwise convinced this is the year we break $300, and convincingly, maybe into high $300, maybe $400

 

[Zhelko Dimic]

Great to learn more about you on the recent Google chat!

Thinking about a share price of $380 like you mention above. That's a market cap of 60 ish billion and bigger than Ford and GM. Of course Tesla has stellar products, vision, and rapid growth which Ford and GM do not.

Do you think the market will find this valuation sustainable? Would we need to see a successful ramp of the model 3 before such a market cap would make sense or do you think Tesla could be worth 60 billion at the current time / production levels based on your experience with rapidly growing companies?

Market is manic-depressive, right?

Once excited, it could convince itself Tesla is something else entirely (which it actually is), and Merc/BMW are but a small sliver of what Tesla could be. At that point, market will easily bid price that is more appropriate for 3-4 years into future. That's probably what happened in 2013/14. On a company that grows 50% a year, 1.5**3(years)=3.375 factor. Highest price in 2014 was around $290, so $290x3.375=$978.

Of course, this is most optimistic, highly unlikely scenario, if many catalysts happen this year: Model 3, TE, great success of self-driving effort, maybe roof. This is probably your upper price bound if market gets most manic it can get, and is _not_ something to use as an investment scenario. 100B would not be out of question if market gets really excited. I've seen (and profited from) this on FB, unfortunately when I was investment novice and to timid to play large hands

And, whatever it reaches, it doesn't mean it will stay there...

 

[TrendTrader007]

Great to learn more about you on the recent Google chat!

Thinking about a share price of $380 like you mention above. That's a market cap of 60 ish billion and bigger than Ford and GM. Of course Tesla has stellar products, vision, and rapid growth which Ford and GM do not.

Do you think the market will find this valuation sustainable? Would we need to see a successful ramp of the model 3 before such a market cap would make sense or do you think Tesla could be worth 60 billion at the current time / production levels based on your experience with rapidly growing companies?

Great questions. Based on my read of long term yearly, quarterly and monthly charts TSLA is likely to show price appreciation over a sustained period of time once it breaks out of $291 to $300 range. This period may well last into several quarters to years reason being it'll break out of a 3 year long consolidation
I'm not a valuation guy so I can't opine on fundamental justifications but seems to me that in the span of next two years you might be looking at a $100 to 150 billion market cap
OTH if stock goes parabolic due to short squeeze then follow the script of 2013 to 2014 and trade accordingly