2017 Investor Roundtable: TSLA Market Action

[Skryll]

What do I make of these after hours drops, is that a short lived

buying opportunity?

 

[Bet TSLA]

What do I make of these after hours drops, is that a short lived buying opportunity?

No, just late reports of trades made earlier in the day. Meaningless.

 

[Mich]

Volume 9.1M today, 165K in the last minute.

Is there any indicator how many distinct shares there were traded within a timeframe (today, this week, this minute, etc.)?
Is it a bot trading all day 1k of shared trying to manipulate the stock price or are there nearly 9M of different shares traded today?

(I don't think the volume today is something special, but I think about this quiet often)

Usually you can pull up the individual trade data (if you use Nasdaq, it's to the bottom left in the "Real Time Quote" screen). Other programs will allow you to be granular on the chart (minute I think may be one of the smallest periods).

No..I know... I mean DISTINCT count of shares of a given periode. So no share counted twice.

 

[GoTslaGo]

No..I know... I mean DISTINCT count of shares of a given periode. So no share counted twice.

Don't know...Sorry!

 

[neroden]

Don't expect the SP to have any major corrections for next several weeks
$700 coming by year end

I'm debating whether I'm at my maximum comfortable position size, but at this point I'm suspicious you might be right. Except I'd say January or February rather than year end, for two reasons: report of deliveries and earnings in Q4, and the known seasonal behavior of stocks (sales in Q4, purchases in Q1).

 

[neroden]

When I was about 20 I started to trt to figure out what I wanted to achieve in my life (over a couple of years):
1. I considered getting married, having kids, a job, a house and a couple of cars, a few weeks of vacation each year and I thought no, there has to be more than that!
2. I decided that everyone wants to be happy, even someone like mother Teresa who gets happiness from helping others. I decided that I wanted to be happy too.

3. I was fortunate that when I fell in love I'd feel intoxicated in that love. I decided that feeling came from inside of me and that it was possible to feel that all the time for everyone. I made that my life's goal. It's embarrassing how little progress I've made, but I feel extremely fortunate that I had that understanding, and that I have tried to do that. Even trying to accomplish that has been a huge blessing in my life because I've definitely made more progress than I would have if I hadn't tried.

So my opinion is that it doesn't make sense to our own hearts with ugly feelings because someone else " deserves it ".

I believe that most of us can do better than having bad feelings for shorts, if we understand the benefits of doing that. Just because someone else is foolish enough to pollute their hearts with ugly feelings doesn't mean that we have to fall into the trap of making the same mistake in response.

Well, different people enjoy different things.

Mongol General: Hao! Dai ye! We won again! This is good, but what is best in life?

Mongol: The open steppe, fleet horse, falcons at your wrist, and the wind in your hair.

Mongol General: Wrong! Conan! What is best in life?

Conan: Crush your enemies. See them driven before you. Hear the lamentations of their women.

Mongol General: That is good! That is good.

I take no pleasure in the suffering of others when it is not good for the world. But on the rare occasions when the suffering of others is good for the world because it sets an example or eliminates the power of evil, I figure, I might as well enjoy it! Since I do enjoy it. It's definitely great to feel schadenfreude. Apparently some people aren't wired for it. Perhaps you have to have a strong sense of justice. :shrug:

I've definitely made much more progress since I abandoned the fruitless path of being kind to bullies, and started indulging my pleasure in creating trouble for those who deserve it. It's important not to let it be contaminated with anger, though. You gotta have fun righting wrongs, and do it with calm joy.

 

[neroden]

This is so underrated, it's not even funny. Coca-Cola, the most valuable brand in the world, and who's business relies so heavily on its brand is valued at ~200B. I've yet to see a flood of fan made high quality Coke commercials. This is even before project Loveday.

This is my favorite of the Tesla specific fan commercials:

My favorite EV commercial overall is this one:

 

[neroden]

But you still want to renew the brake fluid every other year or more often, since it is hydrophilic and also corrosive. Change the coolant at the same time. Maybe check AC? Still, low maintenance.

4 years is the Tesla brake fluid replacement schedule, FYI

 

[neroden]

It's not a moat because Tesla doesn't intend to use it as a moat. They have said that they are willing to share it with other companies.

It's a moat for two reasons. (1) No other company has been willing to share it! (2) Tesla gets fees and free advertisting from any other company which shares it.

I f someone with deep pockets wants to develop their own they could probably roll out a similar network within a couple of years.

I think they can't. It actually took Tesla a couple of years (and apparently a prime contractor who has never been named in public) to get the rollout going at reasonable speed. Everyone else would have the same teething issues with the paperwork, even if the hardware was working right and they had the funding.

For now nobody else appears to have the vision to either develop their own or partner with Tesla, so I think their moat is vision/commitment.

Honestly, that's a good way to put it. But also, while some other company could develop that vision and commitment... they'd be 3 years behind minimum.

 

[neroden]

If trump gets impeached will the market go up or down or stay about the same?

Yes, definitely.

 

[neroden]

Its an unpopular idea for the other automakers because think about the optics - i sell a car to my customer that uses charging at chargers branded by my competitor? Whose products are demonstrably superior to mine?

I think there are several small luxury carmakers who would be able to do this, by saying "well, you know we don't make enough volume to build our own Superchargers". Bentley. Rolls Royce. Aston Martin.

They haven't made electric cars yet though.

Perhaps odder is that Rimac hasn't contracted with Tesla.

 

[neroden]

When might we expect the stock to split?

Around the time when small investors who have already bought Tesla products and want to buy stock start complaining to the company that they can't afford even one share. I think like BRK, GOOG, and AMZN, they won't split until it starts actually preventing their biggest supporters from buying stock.

So, the cheapest significant Tesla product is the Powerwall at ~$5500. We might guess that anyone who can afford a Powerwall should be able to afford $5000 of stock. So maybe they will split when the price goes over $5000.

 

[neroden]

I thought about driving a modified Tesla semi as a personal car. It has some advantages.

Hmm. I wonder how hard it would be to convert it to a mobile home (build the home out of a modified shipping container...)

 

[Tslynk67]

I'm not sure about how mentally stable. Have you seen the talk he gave that evolution is complete bunk? Although, compared to trump, I guess so.

Trump is an incompetent imbecile, unfit for office. Pence on the other hand is very competent, but has some crazy-ass beliefs - most of which are being pushed into Trump's agenda anyway.

So I personally think that when Trump gets removed it will be good for the markets.

 

[neroden]

Conversion at par on 2019 and 2021 notes is $359.87. Arbitrage opportunities above that level.

We've blown past that once already, and I doubt it'll have much effect.

I read somewhere some time back that most convertible bond buyers immediately strip them. They treat them as a bond + a call option. Many write calls on day one; they then ignore the price movements. Others keep the call option and sell the bond income stream.

For the market makers who are long the call options, they hedged by short-selling. But delta rises as the option gets closer to being in the money, so they have to short more to hedge. After it's sufficiently in the money, they stop. This does provide a bit of a speed bump for the stock rise, but only to the extent that the calls and convertibles aren't held by people who are genuinely holding them for bullish speculative reasons.

 

[neroden]

Any thoughts on the increase in Finished Goods Inventory?

Nine months ago, at 9/30/16, it was $791.6 MM, including 5,500 cars in-transit to customers at quarter end.

As of 6/30/17, it was $1,470.4 MM, including 3,500 cars in-transit to customers at quarter end.

That's an increase of $678.8 MM in Inventory plus 2,000 car less in the delivery channels. If the COGs of Ss & Xs averages about $85k (?), that's an extra ~10,000 unsold cars more in Finished Goods Inventory. Floor models and service loaners have increased in both volume and value but is that sufficient to account for the increase?

Yes. They've been really extensively increasing the number of floor models. I think this is in preparation for the *news avalanche* related to Model 3 -- when people walk into a store to reserve a Model 3 they want to make an upsell to an S or X easy.

 

[Lessmog]

Lessmog said: ↑
But you still want to renew the brake fluid every other year or more often, since it is hydrophilic and also corrosive. Change the coolant at the same time. Maybe check AC? Still, low maintenance.

4 years is the Tesla brake fluid replacement schedule, FYI

Thanks for the fyi. I'll check back on Tuesday; my 2 yo S is in for service Monday morning @ 20k miles. And this is not Calif.

 

[ValueAnalyst]

Upon popular request:

Are y'all still doubting my dividend call?

Vote with Like or Funny.

Finally one person agreed with me. One out of ~30.

Exactly the position I love to be in as a contrarian value investor.

 

[mongo]

Hmm. I wonder how hard it would be to convert it to a mobile home (build the home out of a modified shipping container...)

Tesla RV/ motor home would be great! Lots of battery room, just need the 3 to be flat towable (or under hung roadster).

 

[MitchJi]

I believe this is an advantage that we should have compared to many analysts and other investors. Because I believe that most of us know that there is zero possibility of Tesla not hitting their 10k per week goal based on Elon's statement below:

But Musk is extremely confident that this "production hell" is only temporary. "So -- but what people should absolutely have zero concern about, zero, is that Tesla will achieve a 10,000-unit production week by the end of next year," Musk said.