2017 Investor Roundtable: TSLA Market Action

[TrendTrader007]

You make an interesting point. For most investors, a single-stock strategy is just too volatile and risky, which leaves to sleepless nights, etc. On the other hand, how many of you have the time to pour the same amount of time into researching each of 4 other stocks as you spend researching TSLA? In a perfect world, we have some diversification, but how many of you know of 4 other stocks that currently look as promising as TSLA? Personally, I think it's good to have some diversification so that you always have available "dry powder" when TSLA makes an unexpected dip, but I can appreciate TrendTrader's approach. We only have so much time during a day to watch our investment choices, and with each choice we add we take time away from the others.

Papa fox, what you stated above is very true. there is of course an opportunity cost for every decision and a single stock strategy does have its downsides: for example when TSLA is going sideways or down then i have wished that my money was in a better performing stock like NVDA (which by the way my son bought at $35 last April and sold at $91 in December, and now it is too late, i believe NVDA is going down big time in 2017) etc. also, i would be scared to be in a loser like VRX. all in all, TSLA is the single best opportunity in the market right now and i feel really good about the whole set up

 

[1kEE]

Be careful with options, really careful. I have stamina to stay through dips, but being on the wrong side of time decay could hurt you (it did me) badly

I have been pretty careful and still am mostly in stock.

You have no idea how tempted I was to go all-in with 2019 LEAPS when the stock was around 180. And I know how profitable that would have been, but was too risky for my taste.

I have one friend that loves risk, trades forex, and finds stocks too boring. He would do all options on margin given the opportunity!

I tried to do a "dead cat bounce" trade on NVDA after Andrew Left announced he was shorting it, using medium term options. Well I was up a few thousand, got greedy and waited a day too long, now I'm 4K under on this and looking for an exit at a cost of like hundreds a day in time decay while the stock bounces around mostly sideways. Oops, had to learn the lesson somehow, better this way than with a few more zeros behind the number.

 

[TrendTrader007]

Yeah, but do you have an outside source of income or wealth outside the portfolio?

I have to be more cautious than that because the bulk of my income has to come out of my portfolio. If I were even 100% invested, a temporary downturn could leave me unable to pay my bills, which is no good.

well stated. i can only execute this strategy since i rely exclusively on my outside source of income and seldom ever draw any money from my portfolio except for eating taxes. if i were a full time trader or investor then i would be doing exactly what you are doing

 

[TrendTrader007]

I'm slowly migrating towards the "trade one thing that you understand well" strategy. Trading something without truly understanding it is pointless, and I only have the time/mental capacity to understand and follow one stock really well.

As to magnitude of position, I was as much as 150% of trading account and 75% of net worth into the stock at our recent bottom (for about 15 days, and it was not comfortable hahah but well worth it) and thinned it down to half that in stock and enough options to achieve a similar effect as that much stock.

TrendTrader, do you prefer stock on margin to options? I'm still new to options and am getting a feel of the advantages and disadvantages of using them vs stock on margin.

120 % of my portfolio is in stock and about 4 to 5% in options. Options work beautifully when you are on the right side of the trade like right now i am Up anywhere from 60 to 80% on all my TSLA call options that i bought in Dec 2016 when TSLA was at $202.50 but still down - 40 to 50% on calls i bought in 2015 and early 2016
options are to be taken extremely cautiously. several times i have lost my entire investment in options but on balance i have made tons of money trading options. both options and margin can be extremely dangerous or extremely rewarding. i will expand on the topic later this evening

 

[Sudre]

Do any of these post today have anything to do with market action?
Now we have two general trade threads.

 

[LargeHamCollider]

Do any of these post today have anything to do with market action?
Now we have two general trade threads.

What market action?

 

[vgrinshpun]

What market action?

Today it is holding remarkably steady so far

 

[phigment]

Today it is holding remarkably steady so far

Up 1.2% in frankfurt.

 

[Lessmog]

Horizontal march day!

 

[Bgarret]

Up 1.2% in frankfurt.

Careful on Frankfurt, price is actually a little lower than Friday's close of 237.75 (223.47 Euro is a little less than 237 USD/share). Frankfurt is up 1.2% the level from when it closed on Friday, prior to the close of US markets, but down slightly from final US print.

But we're supposed to be relaxing today.

 

[dennis]

Trump threats from his bully pulpit (twitter) should really stop. I'm beginning to wonder if he can compose a sentence longer than 160 characters.

That's 20 more than allowed.

 

[A4KTT]

For the other "small fish" around here, relax, you're not alone. I own 90 shares. All my available cash is in TSLA. I don't have time to research others in depth. I'm not doing anything fancy. Just owning the stocks and tracking what's going on with the company. If things start to look bad, I'll sell and move on with life. From my wife's experience (a bunch bad) I learned that I will not spend a single $ on a stock I don't fully understand. So if you like TSLA, research, research, research and when you feel comfortable that you have somewhat of a pulse on things, buy in. Do NOT buy on peaks. Wait, it will come back down. Lastly, thanks to all the very knowledgable people here (bulls and bears) for helping me make educated decisions about my $.

 

[Lessmog]

That's 20 more than allowed.

And such a stickler with rules!
Why, he even ...

 

[Lessmog]

... splits tweets into disjointed ...

 

[kenliles]

... splits tweets into disjointed ...

Twit Tweets

 

[MitchJi]

Papa fox, what you stated above is very true. there is of course an opportunity cost for every decision and a single stock strategy does have its downsides: for example when TSLA is going sideways or down then i have wished that my money was in a better performing stock like NVDA (which by the way my son bought at $35 last April and sold at $91 in December, and now it is too late, i believe NVDA is going down big time in 2017) etc. also, i would be scared to be in a loser like VRX. all in all, TSLA is the single best opportunity in the market right now and i feel really good about the whole set up

Cuban On Investing: Diversification Is For Idiots


Mark Cuban gives some great advice in an interview with the Journal's Alan Muray, including "buy and hold is a crock of *sugar*" and "diversification, that's for idiots."

"When I started trading stocks in the early nineties after I sold my first company, you could understand elements of the market better than the professionals. I could understand new technology -- Wellfleet, Synoptics and all these old technology companies -- better than the traders. Today there's so much money in these huge hedge funds and they have such professional research and in-depth research, there really aren't any advantages for the individual traders. My approach has always been unless I know something specific, put it in cash."

Recently Cuban has bought up crushed mortgage-backed securities and Aussie bonds as a way to play China.

"All that asset management, diversification, that's for idiots.You can't diversify enough to know what you're doing. I did my homework on Australia, I did my homework on [mortgage backed securities] and I knew their pricing had gotten crushed."

This week Cuban has a lot of money in cash. He also bet on volatility by buying index calls when the market tanked and puts when the market surged.

In the actual interview he said that he believes that you should limit your investments to 2-3 investments because that's the limit of of what you can understand really well.

 

[1kEE]

I'm starting to think about predicting tomorrow morning's and rest of the week's SP movements... here's the drivers I'm seeing:

Marco:
Worldwide markets down today:

Trump day Friday and jitters associated with that.
Earnings season starting, I don't have a read on that either way. Due to recent run-up expectations maybe high?

Micro:
Overall uptrend
Spacex launch successful
EM twitter "HW2 Autopilot now downloading to all HW2 cars"
Friday multiple options closing with MaxPain of 220, well under current SP, but a flat-ish curve.

Summary, macro shakey to negative, micro positive with Fri a macro and max-pain risk. Whatcha all think?

 

[racer26]

I'm starting to think about predicting tomorrow morning's and rest of the week's SP movements... here's the drivers I'm seeing:

Marco:
Worldwide markets down today:
View attachment 210909
Trump day Friday and jitters associated with that.
Earnings season starting, I don't have a read on that either way. Due to recent run-up expectations maybe high?

Micro:
Overall uptrend
Spacex launch successful
EM twitter "HW2 Autopilot now downloading to all HW2 cars"
Friday multiple options closing with MaxPain of 220, well under current SP, but a flat-ish curve.

Summary, macro shakey to negative, micro positive with Fri a macro and max-pain risk. Whatcha all think?

I think until proven otherwise - in staircase we trust. Nothing we've seen so far has seemed to shake the resolve of the force behind the staircase since early December.

The flatish max pain curve means that the MMs aren't going to try too hard to pull it down. Maybe they'd try to keep it under 245 or so.

I think most of the Trump effect is priced in at this point.

At some point in the relatively immediate future we should be expecting the 4Q16 ER. Anybody got a model for what to expect there? My gut says pretty good - even though we were short of target, we sold 22k cars - and discontinued X60, raised prices, made AP more expensive, sold tons of P100D, and continued ramping production rates - I'm thinking those are all good for margin.

 

[woof]

Marco:

@rolosrevenge where are you?

 

[ricardocabesa]

Or maybe Trump just enjoys making threats.

Gee,'ya think?