2017 Investor Roundtable: TSLA Market Action

[bdy0627]

You're conflating two disparate styles of management and leadership- albeit both successful. The difference is public exposure of the goal (Elon) vs reveal only at completion of the goal (Jobs). There wasn't a single Apple product completed on time, but the public and investors weren't allowed participation in that disclosure.

Musk (uniquely) operates differently. He hasn't exceeded expectations because they WERE divulged prior to accomplishment.

When did any Apple expectation reveal such from a Jobs declaration? Never- but internally, they NEVER exceeded those same expectations. That was precisely the strategic deployment required to develop the moat for the markets they were addressing.

This is not the case for Tesla and Elon knows it and has always known it. Tesla is most (and only) successful if they disrupt and catalyze the entire transportation, energy, and manufacturing industries of the world.

The two men are different leaders against different objectives with different methods of achievement.

The interesting thing is that Musk has stated that "a win should feel like a win." Jobs nailed that almost every time by generally keeping expectations at a vague and mysterious level until his product reveals. The public knew something special was coming but didn't know the details. Musk has tried to deliver that but because he simply can't keep himself from intentionally creating virtually impossible expectations, particularly with timelines, a win rarely feels like a win. The market has often responded to his expectations at first, with the stock rising only to fall once reality sets in. It's almost a mirror image of what Musk's own perception must be. He probably initially believes his timelines and then later realizes they were simply not possible from the getgo. That's actually part of his appeal. He is manipulative in a seemingly-innocent way vs Jobs' sophisticated approach.

 

[bdy0627]

The only way I see for explosive up is.....three big IFs: ZEV credits gives close to positive ER (unlikely), ER is actually better than we think (unlikely) or CC (possible) where EM announces GF 3/4 and announces ramp is ahead of schedule.

Now, it could be bad (not explosive) to the downside as well. In this scenario we get buy the rumor (handover) and a double sell the news: handover and poor ER/CC. I realize everything medium term is about the model 3 ramp and long term about having actual earnings on an ER. I am talking short term here.

I will ponder this going into mid next week and may add protective puts if we get a spike up to say $345-350 before the handover looking at late August/Sept expiry for them. (300-320 strikes)

**Note: I have notoriously called greater than 50% of the ERs incorrectly from late 2015 thru 2016.**. So this is definitely Not advice

I'm certainly invested and leveraged enough to have no problem with a short term bump but I would not appreciate a 10%+ drop from the ER. I'm not sure what the answer is for me. Perhaps doing absolutely nothing. It seems like the more I try to adjust my TSLA investment on anticipation of the market's response in the short and even intermediate term, the worse off I am. I have not done protective puts in the past but I might look at that. I may just reduce leverage a little bit on Friday.

 

[Krugerrand]

The interesting thing is that Musk has stated that "a win should feel like a win." Jobs nailed that almost every time by generally keeping expectations at a vague and mysterious level until his product reveals. The public knew something special was coming but didn't know the details. Musk has tried to deliver that but because he simply can't keep himself from intentionally creating virtually impossible expectations, particularly with timelines, a win rarely feels like a win.

That comment had nothing to do with the public and their perception of a win. That comment was for himself and his employees.

 

[bdy0627]

Yes, agreed.

However, the discussion was wether Musk will surprise us on the stage next Friday. Answer to that, based on history, is no.

I'm curious about what Musk will be telling us about M3 that he didn't already tell us. He made comments over the last year about keeping some things close to the vest. Based upon the M3 photos and info so far, it doesn't seem like there is anything that would be a big surprise, just arguably small details - battery and range options, premium options, performance details. If there is a big jump in range, that would be a big surprise, but it seems unlikely. Perhaps a very positive update on FSD progress could be a decent surprise, but this seems like another example of Musk creating some big expectations of the M3 that we don't know yet. Won't the absence of some big new details be at least a bit disappointing?

 

[Navin]

I'm certainly invested and leveraged enough to have no problem with a short term bump but I would not appreciate a 10%+ drop from the ER. I'm not sure what the answer is for me. Perhaps doing absolutely nothing. It seems like the more I try to adjust my TSLA investment on anticipation of the market's response in the short and even intermediate term, the worse off I am. I have not done protective puts in the past but I might look at that. I may just reduce leverage a little bit on Friday.

FUD

 

[AlMc]

FUD

How about expanding on what you believe what will happen in the time frame (short term) that @bdy0627 is describing?

 

[Krugerrand]

How about expanding on what you believe what will happen in the time frame (short term) that @bdy0627 is describing?

I'll take a stab: it might go up or it might go down. I think that covers it.

 

[Navin]

It's hard to predict short term - but to guess - and it's really just that. assuming market doesn't take a dive - tesla should go up here materially short term. Earnings won't be that great but I believe guidance and the ramp up in the "s" curve will be reiterated.

 

[AlMc]

I'll take a stab: it might go up or it might go down. I think that covers it.

Totally agree. That is the point of the discussion. @bdy0627's point is not FUD. He is trying to read the 'tea leaves' about short term direction of the SP and plan accordingly.

I am trying to do the same and admit to being not so successful ion the recent past predicting SP change around ERs.

Now, IF all your TSLA money is in a long term hold (years) then I agree that there is little to worry about.

 

[AlMc]

It's hard to predict short term - but to guess - and it's really just that. assuming market doesn't take a dive - tesla should go up here materially short term. Earnings won't be that great but I believe guidance and the ramp up in the "s" curve will be reiterated.

OK, so what is your Short term price target, say on Friday, August 4th or 11th?

Not trying be be confrontational as we all have our own predictions but as you called one person's thoughts/worries FUD just thought I would solicit your, or other's, ideas on the ER/CC and how it will affect SP.

 

[Krugerrand]

Totally agree. That is the point of the discussion. @bdy0627's point is not FUD. He is trying to read the 'tea leaves' about short term direction of the SP and plan accordingly.

I am trying to do the same and admit to being not so successful ion the recent past predicting SP change around ERs.

Now, IF all your TSLA money is in a long term hold (years) then I agree that there is little to worry about.

Considering how volatile and unpredictable TSLA often is and has been for most of its life, why does anyone think they can actually predict it?

 

[MitchJi]

I'm curious about what Musk will be telling us about M3 that he didn't already tell us. He made comments over the last year about keeping some things close to the vest. Based upon the M3 photos and info so far, it doesn't seem like there is anything that would be a big surprise, just arguably small details - battery and range options, premium options, performance details. If there is a big jump in range, that would be a big surprise, but it seems unlikely. Perhaps a very positive update on FSD progress could be a decent surprise, but this seems like another example of Musk creating some big expectations of the M3 that we don't know yet. Won't the absence of some big new details be at least a bit disappointing?

No.

Prices of options. EAP and FSD and pack upgrade,prices will be a positive surprise (except for Nissan, GM etc. ).

 

[geneclean55]

A specific GF site announcement during the CC seems unlikely to me. Wouldn't the relevant local officials want to be in on the announcement? Like the SA premier during the recent battery contract announcement.

 

[MitchJi]

OK, so what is your Short term price target, say on Friday, August 4th or 11th?

Not trying be be confrontational as we all have our own predictions but as you called one person's thoughts/worries FUD just thought I would solicit your, or other's, ideas on the ER/CC and how it will affect SP.

I'm willing to take a shot.

Not an advice !
My guess is $380-$410 in the first week of August. I also think a big dip willl happen between mid August and October. SP about $330.

I think the reveal will have enough of a positive surprise on prices to trigger a bump, if they are also positive on production. If they have produced ~30-40 I think that will be considered a win.

I also have a pretty poor track record for ER's effect on the SP.

 

[Krugerrand]

I also have a pretty poor track record for ER's effect on the SP.

It seems for those with this 'poor track record', you should make your usual predictions and then bet against them to improve your odds.

 

[AlMc]

Considering how volatile and unpredictable TSLA often is and has been for most of its life, why does anyone think they can actually predict it?

Agreed. But it is *fun*, and sometimes profitable (for me usually not) to try.

 

[Krugerrand]

Agreed. But it is *fun*, and sometimes profitable (for me usually not) to try.

We have a different definition of 'fun'. Seems more a lesson in futility to me.

 

[AlMc]

We have a different definition of 'fun'. Seems more a lesson in futility to me.

Well, sometimes one hits an investment homerun, 2013 ERs, for example, which can make up for a lot of 'strike outs' and allow one to accumulate more stock.
Is it gambling? Of course. Not trying to say it is not.
If one likes less drama then just accumulate shares.

 

[geneclean55]

Regarding news on the 28th, is it possible that the main-stream media don't realize/haven't yet made much comment that the larger battery could give around 300 mile range?

 

[Ameliorate]

Regarding news on the 28th, is it possible that the main-stream media don't realize/haven't yet made much comment that the larger battery could give around 300 mile range?

Expectations are widely communicated as 215 miles. Articles posting otherwise are few are far between, that is indeed one potential surprise.

Anybody think the new directors could have anything to do with exposure on this event?