2017 Investor Roundtable: TSLA Market Action

[austinEV]

I am having a bed time brownie.
NOT an advice

 

[kenliles]

What was the maturity date on this note? Did Musk have it convert early?

The Notes mature 1Dec2020;
They are (were) Excercisable as of 21Nov2016

2017 Investor Roundtable:General Discussion

 

[Zhelko Dimic]

well to be very honest i did manage to overcome my own recurrent trepidations and plunked in a sizable $ amount in TSLA common as well as leaps which is now paying off in spades. over the years i have learned that i need to bet against my own emotions. no one is infallible in the markets and i am acutely aware of my own shortcomings. The only edge i have over 99% of traders is that i force myself to act despite my own worst fears. i am not a blind cheerleader of any stock and the kind of money i bet on a single trade puts me at a real risk of gambler's ruin. and i have no desire to be in the poorhouse anymore than the next guy. i will admit that i rarely lose sleep over losing positions because the sheer terror of being massively wrong on a trade forces me to liquidate sooner than later, it is the winning positions which keep me up at night because i have to literally stop myself from raising the size of my bets. i often bet so much that it scares the hell out of me and often it is at an automatic subconscious level.
all in all i must be doing something right because i have increased my net worth approximately 75 times since 2001 and 16 times since 2005 which is 31% and 26% annualized respectively. and this is despite numerous serious missteps. still it is not satisfactory to my own standards and therefore i am intrigued that EM is projecting an annualized return of 25 to 60 % in TSLA shares depending on 10 fold return in 10 vs 5 years. i wonder if i can get 60 % plus returns over next 5 years in TSLA either simply buy and hold or trade it. either ways 60% plus returns over next 5 years might just convince me to ditch my Honda Civic for a Model 3. JK!

Oh man, 31% yearly only!? and here I though you were betting big

Please don't be defensive, I'm joking, impressive numbers in a long run...
Full disclosure: that's my best performing account, funnily enough, was always the least aggressive one...

 

[TrendTrader007]

Oh man, 31% yearly only!? and here I though you were betting big
View attachment 224462
Please don't be defensive, I'm joking, impressive numbers in a long run...

more glory to you, bro!

 

[Waiting4M3]

I remember the virtual eye rolling on this thread when TT007 said he was "forcing" himself to buy more shares at 280. It seemed ludicrous at the time. Ah, what I would give for a few more shares of TSLA at 280 right now.

I'm glad I filled the truck at $260 and didn't wait for the proverbial "pull-back". I've learned to not try to time the market, especially on a stock that seems poised for an extended bull run.

 

[TrendTrader007]

$TSLA single best SP guess i can come up with is $700+ later this year maybe $1000 if Porsche Volkswagen like squeeze
Not an advice
bye!

 

[neroden]

Exactly. And combined with the fact that TSLA is likely the most undervalued company ever in stock market history,

OK, that is a slight exaggeration. Perhaps the most undervalued *large-cap* ever.

 

[neroden]

There are more than 2M shares available for shorting at Fidelity, and interest rate plummeted to 0.25%. Something is going on. I am wondering if the glut of displayed available shares and lowered interest rate is an indication that Fidelity increased their TSLA position and now have more shares that they are eager to lend. Pure speculation on my part, but I am perplexed at the situation, particularly such a low interest rate.

View attachment 224359

This would not surprise me. Both Fidelity Contrafund and Fidelity OTC are *huge* Tesla owners who just keep buying and buying, and unless there's a corporate action coming up (like the SolarCity merger) I would expect them to lend their shares out, and I'd expect them to lend those shares out through Fidelity (for obvious reasons).

 

[neroden]

I would love to understand why Fidelity, which owns a lot of Tesla shares, is willing to lend them out for 0.25% (basically free). Are they setting a bear trap for a bigger short squeeze? Are they trying to force the SP down because they have sold some of their shares with the intention of buying in again at a lower price?

Fidelity is not one actor. The fund managers act independently in deciding what to buy and sell. However, I believe (I may be mistaken) that they are basically coerced into lending their shares to FMR Inc. who then lends them to the brokerage clients. I read something once by a former fund manager who pulled his shares of a stock out of his company's lending program, and he got *so much flak for it* within the company... the fund managers wouldn't do that unless they were sure it was worth it.

 

[neroden]

As a fifty year customer of BoA/ML, I have had enough... Any recommendations.

Merrill Lynch has sucked for over 50 years, and BoA has sucked for at least 30 years.

My suggestions include Schwab, Fidelity, and Interactive Brokers, though there are plenty of other discount brokers which are fairly reputable.

If you absolutely need a "full service investment bank" in order to have *access* (for instance, Schwab didn't get any TSLA IPO shares) these are the top 8 accoridng to Wiki:

• 1 - JPMorgan Chase.
• 2 - Goldman Sachs.
• 3 - Bank of America Merrill Lynch.
• 4 - Morgan Stanley.
• 5 - Citigroup.
• 6 - Barclays Investment Bank.
• 7 - Credit Suisse.
• 8 - Deutsche Bank.
  
  Of those, I personally wouldn't touch JPMorgan Chase or Bank of America Merrill Lynch with a ten foot pole because they're both well-known for cheating their customers. So is Goldman Sachs, but apparently they cheat in a more genteel fashion -- they write sharp contracts rather than simply breaking the law -- so if you're sharp you can avoid getting cheated. Citigroup isn't much better. Obviously, #6-8 cater to people in the UK, Switzerland, and Germany respectively, not people in the US.... which means that if I were absolutely forced to use a big full service investment bank, I'd probably go with Morgan Stanley, which has a shorter list of cheating-their-customers scandals than the others.
  
  The next 12 largest full-service investment banks include a bunch more organizations with criminal reputations, including Wells Fargo and BNP Paribas. HSBC actually does not cheat its customers, perhaps because it's the primary banker / money-launderer for a lot of drug dealers, and it may be somewhat more dangerous to cheat them...
  
  As you can see I don't think much of the full-service investment banking world...

 

[neroden]

The interest rate at Fidelity went back to 1%, about 652K shares were borrowed at a bargain rate of 0.25% (based on the sample of Fidelity trading screen included below).

Here's the thing, though -- margin rates reset regularly. Was this a "teaser rate"? Those guys who paid 0.25% will be paying more two weeks later...

 

[neroden]

What was the maturity date on this note?

2020

Did Musk have it convert early?

Yes. This was a nice simple convertible, conversion price $300. He could have waited until the day before expiration, but I think he wanted the extra voting power. Also it was zero coupon so not much benefit from waiting.

I will be interested to see whether the other two holders (Lyndon Rive and Silver Lake Kraftwerk) converted.

 

[neroden]

I'm glad I filled the truck at $260 and didn't wait for the proverbial "pull-back". I've learned to not try to time the market, especially on a stock that seems poised for an extended bull run.

Frustratingly I had to wait until after April 15 to figure out how much cash I actually had available to invest; turned out to be more than I thought.

 

[vgrinshpun]

Here's the thing, though -- margin rates reset regularly. Was this a "teaser rate"? Those guys who paid 0.25% will be paying more two weeks later...

Agreed, but investing often is not a rational exercise, and I think that this 0.25% could have worked for "impulse" short sellers...

 

[TradingInvest]

Oh man, 31% yearly only!? and here I though you were betting big
View attachment 224462
Please don't be defensive, I'm joking, impressive numbers in a long run...
Full disclosure: that's my best performing account, funnily enough, was always the least aggressive one...

Good performance. The reduced return on overly aggressive accounts is common. If you know how to tell the bottom turning point, only get aggressive at that time. I have a thread (so far one post) explaining how I handle it. I maintain a 90% permanent long, plus 20% for trading. The trading portion is used only at the best time, adding shares and options at the bottom.

Sometimes I sell Puts at the bottom and use the proceeds to buy Calls. Then I use the trading profit to buy more permanent shares. I do this to defeat the shorts and the AI trading programs. I view it as a sin if I buy high sell low, it would be helping the shorts.

 

[Intl Professor]

Which two of us?

There's a super funny Eskimo comedian lurking about, and I don't mean fallen one.

 

[Lump]

Tesla Model S Loses Top Ratings Spot

Consumer Reports is lowering the ratings of two Tesla vehicles because the automaker has not enabled the new models with the automatic emergency braking safety feature it said would come as standard.

The maker of electric vehicles continues to say it is working through software problems, but that has left owners without the promised feature, some for as long as six months. The previous Model S and Model X came with functioning AEB as standard. Models produced between late October 2016 and now do not.

Consumer Reports encourages companies to offer the technology as a standard feature, without requiring consumers to pay thousands more for a higher option package.

“When we purchased our latest test car, we were assured automatic emergency braking would be enabled by the end of 2016,” says Jake Fisher, director of Consumer Reports’ Auto Test Center in Colchester, Conn. “We’ve been waiting for this important safety feature, which is standard equipment on much cheaper cars.”


A prospective Tesla buyer late last year might have considered a short delay a minor inconvenience. But now someone who bought a Tesla with advanced hardware after October has been driving without the safety feature for roughly half a year.

 

[Bgarret]

Tesla Model S Loses Top Ratings Spot

Consumer Reports is lowering the ratings of two Tesla vehicles because the automaker has not enabled the new models with the automatic emergency braking safety feature it said would come as standard.

The maker of electric vehicles continues to say it is working through software problems, but that has left owners without the promised feature, some for as long as six months. The previous Model S and Model X came with functioning AEB as standard. Models produced between late October 2016 and now do not.

Consumer Reports encourages companies to offer the technology as a standard feature, without requiring consumers to pay thousands more for a higher option package.

“When we purchased our latest test car, we were assured automatic emergency braking would be enabled by the end of 2016,” says Jake Fisher, director of Consumer Reports’ Auto Test Center in Colchester, Conn. “We’ve been waiting for this important safety feature, which is standard equipment on much cheaper cars.”


A prospective Tesla buyer late last year might have considered a short delay a minor inconvenience. But now someone who bought a Tesla with advanced hardware after October has been driving without the safety feature for roughly half a year.

I find the timing of this somewhat curious. Tesla says they will roll out the automatic breaking this week and NOW Consumer Reports decides to ding them? Why not last week....why not next week? It's like this was the last chance for a downgrade, they saw the shot, there was no danger, so they took it.

Tesla will release ‘Automatic Emergency Braking’ feature on cars with Autopilot 2.0 hardware this week

 

[Lump]

AEB should have been functioning in Dec,, don't you think?

 

[Yggdrasill]

I find the timing of this somewhat curious. Tesla says they will roll out the automatic breaking this week and NOW Consumer Reports decides to ding them? Why not last week....why not next week? It's like this was the last chance for a downgrade, they saw the shot, there was no danger, so they took it.

Tesla will release ‘Automatic Emergency Braking’ feature on cars with Autopilot 2.0 hardware this week

I don't think it's a coincidence. But I think the more likely scenario is that Consumer Reports complained to Tesla about the lack of AEB, and said they would ding them, and then Tesla fast tracked the rollout to mitigate the damage.