Consider the thesis that other lenders are withdrawing supply of shares faster than shorts are covering, while Fidelity is increasing supply. So that more and more short-sellers are borrowing from Fidelity. Which just happens to have one of the largest long positions in TSLA of anyone. Commodore Vanderbilt's Short Squeeze starts to come to mind.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
- Status
I started at $24.35 back in 2010, with a mere 100 shares. My cheapest purchase was 200 shares for $24.04, a year later... which goes to show that you have to have some persistence when investing. TSLA was actually down after a year, but I knew my timeframe was longer than that -- my minimum timeframe was Model 3 and I won't sell anything until it's on the roads. My worst timing was purchasing 280 shares at $283 back in 2015. But again I just sat on them, because my minimum timeframe was Model 3. I knew I wasn't maintaining pricing discipline at the time (but I was kicking myself for not buying more earlier) and I've tried to be more disciplined since then.
I finally have enough TSLA that I won't be kicking myself for not buying more if it never drops again, which removes the psychological risk of buying at a high due to Fear of Missing Out.
Agree. Much of the Tech stocks were forming a bullish reversal pattern on the candles. IMHO, TSLA formed the best candle pattern of them all (it didn't gap down from friday, and opened a smidgen above Friday's close)... but I'm biased.
FWIW, I believe it is roughly 500K, based on various comments at the tour (someone said "almost 500K") and the annual meeting (Musk said if you reserve now you'll get your car either end of 2018 or 2019), which matches up with my estimate from the last quarterly report reservation-deposit total (after backing out an estimate for S/X and Powerwall reservation amounts).
"The market can remain irrational longer than you can remain solvent."
Perhaps, consider deleveraging as TSLA goes up. Down to 100% of your life savings, perhaps. If you have income coming in you can deleverage simply by depositing it as it comes in to pay down your margin loans (i.e. increasing your life savings but not increasing your investment).
Or if you want to stay leveraged, you can switch out of margin loans into long-dated deep-in-the-money LEAPS, as GoTslaGo described. Basically you can put "half down" and be 200% invested without paying much in the way of interest (though effectively you pay some interest upfront), and you're more protected in case of crazy downside possibilities like Musk dying in a rocket explosion. With margin loans, if the stock goes south, you can end up owing more than your savings and having to sell your house and car and declare bankruptcy, which is a scenario I don't even want a tiny risk of.
I see from another comment that you don't want to sell the stock because you don't want to pay the short-term CG taxes... OK then! Have you done your best to minimize the interest rate you're paying by shopping around for different sources of loans? You can move the stock directly from one broker to another (one might offer better margin loan rates), you can see if you can refinance the margin loan using some other sort of loan which is cheaper (though that's unlikely... maybe you have a house you can get a mortgage on?), etc...
It should.
Last edited:
OK, we now seem to have multiple sources of evidence confirming this. Short interest in dollars seems to max out around 10 billion dollars -- above that, shorts cover until it goes back under that level.
This means we're in a short-covering rally right now.
(I always make the distinction between a true short squeeze and a short-covering rally.)
So here's a theory I've been kicking around. My theory is that the market CAPE will decline due to *some* sectors seeing their stock prices completely collapse to nothing, while *other* sectors remain high-flyers. The great energy transition will cause this sectoral shift. For a while CAPE will go up as earnings in the "bad" sectors collapse, but eventually P/Es in those sectors will collapse (look at ICE automotive) and the prices will collapse. Eventually they'll be removed from the market indices. Meanwhile, the "good" sectors will see earnings go up. P/E ratios will recede to more reasonable levels but in a context of rising prices.Shiller CAPE PE Ratio
I would not want to be in a market average type index fund right now, particularly not a cap-weighted fund, and particularly not one like the S&P which excludes companies in the startup ("money losing") phase. Unfortunately record amounts of money is pouring into exactly that type of fund; it could be very bad for those who are doing so.
Perhaps the best analogy for what I'm thinking is the 1900-1920 bear market, where fortunes were made by those who picked the right companies in the right sectors.... but most people didn't.
Yes, with one caveat.
If you're moving large blocks of shares -- enough to move the market -- it may make sense to accumulate over several days, or at least several hours, or vice versa to sell out over several days or several hours.
This gets you something approximating the average price across that period. It helps avoid the "oh, look, a big order, let's move the market against it" high-speed-trader / market maker effect.
How big is "too big to do in one trade" varies by stock, though, and depends on how much the stock trades. With BRK.A, $250,000 is insignificant, whereas with some thinly traded stocks even $5000 worth may move the price. I was comfortable selling all my Exxon in one block order, but when I sold Bombardier -- much more thinly traded -- I spent hours dribbling it onto the market to try to avoid moving the market against me.
The exception to this rule is if you're trading on extremely recent news -- i.e. you read the news, but you think the guys on Wall Street haven't read it yet and will read the news in about 30 minutes. In which case you just throw the block trades out and try to get everything executed as fast as possible. I actually purchased some SCTY calls *after* the merger was officially consummated and before the market makers adjusted their prices to match TSLA call prices -- those orders I just threw out there as fast as possible.
Ameliorate
Member
So what you're really trying to say is - If Autopilot were it's own entity that alone would be worth billions more than the Entirety of Tesla and all of it's imaginary products and prospects?
I too feel about 500/share is...well getting closer to fair value at least.
If some of the folks here are right, that will cost 4 shares of TSLA by the end of the year.
Anyway, I understand, I haven't gone completely electric yet myself. You'll do it when it make sense financially.
everman
Member
You and I have _very_ similar stories, although I started at $37.97. Buy, hold, buy some more, until I reached a number I knew would set me up. The persistent price I've had to pay is that I've not yet been able to become an owner. That time is rapidly coming to an end.
I don't think that individual understands how investing in growth stocks works.What TSLA did as of today doesn't justify the valuation. If you hate the potential so much, you need to short.
I bought a 56V self propelled Ego mower. It's fantastic. Yard is nowhere near 1 acre though.If some of the folks here are right, that will cost 4 shares of TSLA by the end of the year.
Anyway, I understand, I haven't gone completely electric yet myself. You'll do it when it make sense financially.
erthquake
Active Member
Because putting on Mark BS is doing a public service?
Can you tell me where my thinking is wrong. I'm pretty new to this compared to pretty much everyone here. According to my math, I'll be hit with a margin call if the SP hits 321. That means, as of writing this, the only thing on my mind right now is whether the stock will drop another 38 points or not. If that happens, I still walk out green at about 1/5 of the gains I have made in the last 6 months. Sucks, but that's life. If it doesn't, my profits will literally double from here on out, until my next large batch purchase. As long as we never see 321 again, logically, I don't see any reason for me to worry, since I actually buy into all that talk that TSLA can hit 400-500 next year and potentially be worth as much as APPL in 10 years.
As far as margin rates go, I'm currently paying 5%. A quick google search tells me that, with the exception of Interactive Broker, the interest rate ranges from 5.5 to 7.5%, so my 5% is decent. I believe TT07 says he's paying 4%, but he has a much bigger portfolio than I do. If I am to change brokers right now, it will be to IB, but we'll cross that bridge when we get there.
And I don't currently own a home, nor do I expect to own one anytime soon. I am currently living well below my means, saving nearly half of my paycheck before taxes. How well TSLA does 10~ years from now will just determine how nice of a house(and where) I can afford when I do decide to buy one. I have no intention of cashing out and going on a shopping spree anytime before that.
Side note: If TSLA does end up being as big as APPL (800B market value), doesn't that put Elon Musk at a net worth of 187B? That's pretty absurd.
So you're prepared to bail if TSLA does drop back to 300, before you end up owing more than you have? Good.
Because it's quite possible. I believe TSLA would go back up again after that, but the stock is highly volatile -- remember the February 2016 dip? Which happened for no reason at all! You could lose piles of money simply *because* you get margin calls and are unable to stay fuly invested, where if you were merely 100% or 110% invested, you'd just ride through it.
Have you calculated how much stock you'd have to sell for margin calls at different TSLA prices? How close are you to your broker's maximum margin limit? The broker can arbitrarily reduce your margin limit at their discretion, too, so be aware of that...
That's very good.
--- on second viewing ---
How are you even investing this much? Maybe we were confused and you meant 280% of your initial investment? Because if you have 280% of your net assets invested in TSLA, then you only have equity of 100% / 280% == 35%. The *Federal minimum maintenance margin* is 25%. But the *Federal minimum initial margin* to open the position is 50%, so I don't see how you managed to get this leveraged in the first place. The broker can set a higher requirement at any time at their sole discretion.
If the stock drops you'll be forced to liquidate on the way down. If the broker decides to screw you they can liquidate your TSLA position without even *notifying* you. I prefer, personally, to be able to ride out dips like the Februrary 2016 dip without worrying about them.
Last edited:
Robinhood is pretty flexible. From all the reading I've done on them, I haven't come across anything regarding a maximum margin limit, so I'm not sure they have one. I believe that once your deposit hits 50k, they'll allow you to borrow 50k plus whatever your deposit is, which is why I have the amount that I have. And as far as I can tell, once I approach margin call, I can just sell a couple of shares until I get back in the green. It doesn't even look like I'll need to sell all of my shares as I approach and hit 321.
I keep a spreadsheet that contains all data regarding my stock, as well as built-in what-if scenarios and future projections. Assuming TSLA hits 800B in 10 years, this move adds a full extra million dollars to my earnings before taxes. Betting 20k now sounds like too good of a bet. Maybe we'll have another massive Feb2016 dip in the future, but we'll get there when we get there. As I continue to add shares, and as the SP grows, the margin portion of my portfolio will shrink overtime. I don't see myself keeping it over 150% once my portfolio gets massive in size.
Also, I'm not exactly sure how I bypassed the 50% initial margin. My Robinhood app does say 50% initial and it lists me an amount that's much higher than my total portfolio, but I just made the order and it went through, so meh. Frankly, a lot of this is still a mystery to me. Yesterday, I checked and had 80 dollars worth of buying power. Right now, it jumped to 13k for no reason. Maybe because the stock went up, the amount loaned to me also went up. But yes, I'll hold off on buying more, for now.
Sid....On-topic note: Pre-market just opened and it's looking pretty healthy, so I'll have a good night sleep tonight.
ValueAnalyst
Closed
I am staying away from premarket action this week.
Absent fundamental news, premarket action may be misleading, and used for manipulation before large swings during normal hours.
Absent fundamental news, premarket action may be misleading, and used for manipulation before large swings during normal hours.
Last edited:
- Status
Similar threads
- Locked
- Locked
- Article
