2017 Investor Roundtable: TSLA Market Action

[MitchJi]

Deliveries could have been higher, but for the fact that many of the produced cars were sent to service centers as loaners and to stores for test drives. It does appear that some of those who ordered 100 kWh battery packs will be experiencing delays.

Probably combined with the fact that quite a few cars were completed too late for delivery to customers and were used as loaners and test cars.

 

[schonelucht]

Probably combined with the fact that quite a few cars were completed too late for delivery to customers and were used as loaners and test cars.

If that were significantly the case, it would have been mentioned on the release.

 

[ValueAnalyst]

Anyone else loading up on stock and/or options on Wednesday? Today seems like a gift to maximize on a potential SP re-launch in the next few days. Or am I missing something?

I added some shares today. I do believe the valuation is too low given all the positives news. Short-term volatility may continue if Nasdaq doesn't get its act together but I'm not waiting for that.

 

[Waiting4M3]

If that were significantly the case, it would have been mentioned on the release.

There was mention of loaner and test drive cars, just not specifically that they were only allocated at the end of June, but the mismatch between production (25K) and delivery (22K) in Q2 shows a significant number of cars being loaners and test drive cars, from Tesla's release

Q2 production totaled 25,708 vehicles, bringing first half 2017 production to 51,126.

We always want our customers to experience the newest versions of Model S and X while their cars are in service, so we added fully loaded, newly built cars to our service loaner fleet. We always want the service loaner Tesla to be *better* than the customer car being serviced. The customer should never suffer for something that is our fault.

We also finally added a sufficient number of Model X cars to our test drive and display fleet because our stores had been operating with far short of what was needed and, in some cases, none at all.

Edit: note the wording "fully loaded, newly built cars" as loaner, and usually test drive cars are also fully loaded to maximize the sales pitch

 

[MitchJi]

I added some shares today. I do believe the valuation is too low given all the positives news. Short-term volatility may continue if Nasdaq doesn't get its act together but I'm not waiting for that.

I believe that the question is, is the Nasdaq sinking a short term problem?

 

[Waiting4M3]

I believe that the question is, is the Nasdaq sinking a short term problem?

I hope it wouldn't last more than 6 months, I would like to sell a few shares to buy my M3. It's possible that TSLA can remain undervalued until Tesla shows the gross margin at high volume, which could be after Q4'17 or even Q1'18, I can wait until then to sell. Losing $7500 tax credit is a possibility, but holding on to the $35K for a quarter or two more can easily net that $7500 back.

 

[geneclean55]

I hope it wouldn't last more than 6 months, I would like to sell a few shares to buy my M3. It's possible that TSLA can remain undervalued until Tesla shows the gross margin at high volume, which could be after Q4'17 or even Q1'18, I can wait until then to sell. Losing $7500 tax credit is a possibility, but holding on to the $35K for a quarter or two more can easily net that $7500 back.

I can handle a 1-2 month 10% market-wide summer correction. 6 months of the Nasdaq sinking sounds close to a recession

 

[neroden]

Model 3 handover will happen at Fremont Factory. I'm looking forward to the optics of line workers driving away with their own Teslas. This is an opportunity to show to the world that the Model 3 is within reach of working people.

I really hope that no billionaire, board member, or executive drives away with one of the first 30. The focus needs to be on Tesla employees. They've worked hard and deserve this moment. We need to break through the elitism that has been associated with this brand.

I think Musk should wait for the 400,001st Model 3 to come out before claiming one as his own. This would send a powerful symbolic message to all reservation holders that they are the reason Tesla is committed to building out 400k Model 3 so quickly.

I like the way you think. FWIW, I suspect after production is in full swing, the board members and execs will walk off with some of the release candidates we've seen driving around. It's a way to get the billionaires their cars relatively early, a way to unload the release candidates which aren't really production cars, have oddities, may be non-repairable and are difficult to explain through the normal sales channel, etc. It'll happen quietly like all release candidate sales

 

[AlMc]

Why wouldn't it be a buying opportunity? Do you really think TSLA is going to continue to plummet? Are you selling? So yes I see it as a buying opportunity.

Actually, I do not know right now. I have a day or so plus to see how we do on Wednesday/Thursday. I have no trouble selling some shares if I believe I can take profit and reenter at an even lower SP at a later time. Some here joke about one of the bears using a $270 SP prediction. I don't see it, but I don't joke about it. It is *possible*. It may not be due to Tesla but to macro events.

Over the years I have been totally 'out' of TSLA once. I was new to the forums and Tesla/TSLA and took the advice of several long term members when the first fire was reported and got 'out', then bought back in once the titanium shield fix was developed.

My strategy is to hold three buckets relating to TSLA: The first, core shares that I would only sell in the event (like the fires) that would impact TSLA hard (we can all have our definition of what is hard). The second, 'trading shares/ LEAPS' that will be bought/sold when medium term circumstances might dictate buying/selling (this *may* be one of those times to trim those 50%), The final, mostly cash that could be used for bucket #1 or #2 or short term movements ( this also *may* be one of those) when short term calls/puts might be protective (puts) or garner cash (calls). Allocation: Bucket #1 50%; #2 35-40%; #3 10-15%

I don't pretend my strategy is a great one or for anyone else. And, I don't pretend it always is successful with the timing from bucket #2 or #3.



Sorry for the detailed answer: Simply answer: I might. It won't be 'all out' but I might consider taking some profit.

*disclaimer: I have most of bucket #2 and #3 in a non taxable account. Most of bucket #1 in a taxable account. That influences some of my posts and decision.

If your strategy is a long term buy and hold then buying last Friday or this Wednesday will matter little in the long run.
AGAIN: Not advice.

 

[neroden]

So we are looking at round 130-140,000 vehicles this year with S,3,X.

I'd caution that coming out of December at a 20,000 Model 3 per month *rate* may have us as low as 120,000 vehicles this year.

 

[neroden]

I can't explain why and it's somewhat frustrating for me but TSLA is trading almost exactly the same as other tech and QQQ with different degrees of volatility. The timing of the ups and downs are almost identical. Tesla has only done good in the last week and we're down 10%. Last week setup looked great with spaceX landing two rockets in a weekend and a model 3 delivery date incoming. S and X upgrades etc etc.

Today we almost bucked the trend in the a.m. on the news but the general market direction is too strong.
View attachment 233924 View attachment 233925

Stock Correlation Calculator Results


Just ran a correlation calculation, and indeed, TSLA has something like 90% correlation to QQQ over the last year. The correlation seems to have really only started last November though.

 

[neroden]

I don't pretend my strategy is a great one or for anyone else. And, I don't pretend it always is successful with the timing from bucket #2 or #3.

One part of my strategy: I follow the principle of never betting against my long-term thesis. If my long-term thesis is still saying "buy", I either make bullish trades or sit on the sidelines; I use short-term analysis solely to decide between these two. If my long-term thesis is saying "sell", I either make bearish trades or sit on the sidelines. I attempt to look at short-term stuff in order to tell me when to wait it out (find a better entrance or exit point). I am still a long-term buy on TSLA.

Also not advice.

 

[neroden]

Maybe Alient Dreadnaught don't take X-mas off?

It's only 0.5, meaning there are still humans on the line. They take Christmas off. Now, Model Y...

 

[ValueAnalyst]

I believe that the question is, is the Nasdaq sinking a short term problem?

Everything, except for the company's fundamentals, is short-term.

 

[Waiting4M3]

It's only 0.5, meaning there are still humans on the line. They take Christmas off. Now, Model Y...

Or they can pay overtime. AD0.5 still cuts down the # of human you need. If you've invested heavily so the line is sufficiently automated, it will cost more to have the line sitting idle, than to pay some overtime to keep it running

 

[Zhelko Dimic]

Production ramp "S-curve" as Elon described many times over the years.

I'm not defending this, just describing what a Elon says about it

My view is mixed... Model 3 was designed for "ease of manufacture" according to Elon. Buy, apparently, the first few months still proceed very slow.

We will see how it goes. Maybe August goes better than expected.
MX was delayed for years (supplier related not production-line related)

I guess it's nice that Elon has described the ramp thru year end.
Hopefully this means there's no big supplier issue currently.

The way I'm reading it, line will not be operational until September, which aligns with number of astute observations from factory visit.
So 30 and 100 July/Aug will be manually built units, while using production tooling

 

[dmckinstry]

I really hope that no billionaire, board member, or executive drives away with one of the first 30. The focus needs to be on Tesla employees. They've worked hard and deserve this moment. We need to break through the elitism that has been associated with this brand.

I doubt any of those would be satisfied with the base model.

 

[madodel]

Actually, I do not know right now. I have a day or so plus to see how we do on Wednesday/Thursday. I have no trouble selling some shares if I believe I can take profit and reenter at an even lower SP at a later time. Some here joke about one of the bears using a $270 SP prediction. I don't see it, but I don't joke about it. It is *possible*. It may not be due to Tesla but to macro events.

Over the years I have been totally 'out' of TSLA once. I was new to the forums and Tesla/TSLA and took the advice of several long term members when the first fire was reported and got 'out', then bought back in once the titanium shield fix was developed.

My strategy is to hold three buckets relating to TSLA: The first, core shares that I would only sell in the event (like the fires) that would impact TSLA hard (we can all have our definition of what is hard). The second, 'trading shares/ LEAPS' that will be bought/sold when medium term circumstances might dictate buying/selling (this *may* be one of those times to trim those 50%), The final, mostly cash that could be used for bucket #1 or #2 or short term movements ( this also *may* be one of those) when short term calls/puts might be protective (puts) or garner cash (calls). Allocation: Bucket #1 50%; #2 35-40%; #3 10-15%

I don't pretend my strategy is a great one or for anyone else. And, I don't pretend it always is successful with the timing from bucket #2 or #3.



Sorry for the detailed answer: Simply answer: I might. It won't be 'all out' but I might consider taking some profit.

*disclaimer: I have most of bucket #2 and #3 in a non taxable account. Most of bucket #1 in a taxable account. That influences some of my posts and decision.

If your strategy is a long term buy and hold then buying last Friday or this Wednesday will matter little in the long run.
AGAIN: Not advice.

First off I never add "Not advise" because no one should be making any decisions based on an anonymous Internet posting. But people do act on ideas they read here all the time, but they have to make their own decisions.

I agree we may see the entire market tank as we did in 2008. As I have stated before unless I get out near the top I don't see the point to exit at some point on the ride down. Everyone is screwed and there really isn't a good place to park cash. It kills me that I have a fairly large cash cushion getting almost nothing as it is. But can anyone predict close to the bottom? When do you decide to buy back in? For me a lot of it also depends on the amount of taxes I'd have to pay. Even with capital gains rate, it would be a substantial amount for me for some of my positions like TSLA. Believe it or not I see that as a great position to be in. Hell the taxes alone would be more money than I ever imagined I'd ever have when I was a kid. On occasion I have cashed out portions of positions and then bought back in but that is not my usual strategy. I unloaded my Nintendo stock at one point even though I believed the stock had a real potential for future gains but it was tanking, with the idea of watching it go down and buy back in later, and that worked out well for me but stocks like TSLA and AAPL are so unfathomable at times that I can't see myself doing what you suggest. I am a buy and hold person, but I understand that many here are not, so they play the short term fluctuations.

I just don't see TSLA as being a bad bet at this point with what we know right now. People arguing that they may only have a run rate of 20,000 going out of 2017 and that is a bad thing strikes me as "who cares". Yes the average investor will probably panic because they aren't going to actually make 20k cars in a month until January 2018 so to them the entire year is a big fat loss so we may see another drop now or in December. But Tesla is going to build a sugarload of cars in 2018 so I won't sell.

Many years ago my broker used to call me a lot telling me that I had too much AAPL and it was more than 70% of my holdings which violated some market risk guidelines and I should rebalance. I took his advise and regretted it ever since. He no longer advises me about my holdings. I make those decisions for myself, good or bad. So for me I don't usually sell unless I am forced because of needing cash (which I don't see happening any time soon) or because I no longer have faith in a company. Were you able to time the 2008 crash? Selling near the peak and then what did you do with those funds until you felt it was ok to buy back in? To be honest if I knew the market was in fact going to slide downward for a year I would wholeheartedly agree with you and sell at the top, but I never saw it coming and kept expecting it to reverse. Cost me over a million dollars, but I just kept thinking it would reverse. I'm an idiot as I have said many times before. I just never understand the market herd mentality so I can't do that. I do understand that some here can discern the enigmatic workings of the market, but I think most of us can't do it successfully. So for me if I see TSLA down I see it as a buying opportunity. Yes some here are dangerous bulls who take the risk of buying on margin, but I hope they understand the risk they are taking on. My long term trading may not work for you and maybe TSLA or the Market in general is about to fall off a cliff but I'm not bright enough to play that dynamic. Everyone has to make their own decision on what they can risk. I don't do margin and I never bet anything I can't afford to lose. It has worked out well for me but everyone's situation is different and no one should blindly do what I do. But if TSLA is still in the low 350's on Wednesday I'm thinking I'm going to pickup another 100 shares.

 

[jhm]

Just to clarify what others have said, I think Elon is implying they'll try to exit Dec at a 20k per Month "run rate". In other words, Dec production total will be something less than 20k for the whole month of Dec

What difference does it really make? As a stepping stone to 400k M3 in 2018, December production needs to be quite strong for the whole month. The question won't be, did Tesla miss 20k by a few thousand? Rather it will be, is Tesla positioned to build 400k in 2018? At least, that's what matters to me.

 

[Willuknight]

First off I never add "Not advise" because no one should be making any decisions based on an anonymous Internet posting. But people do act on ideas they read here all the time, but they have to make their own decisions.

I agree we may see the entire market tank as we did in 2008. As I have stated before unless I get out near the top I don't see the point to exit at some point on the ride down. Everyone is screwed and there really isn't a good place to park cash. It kills me that I have a fairly large cash cushion getting almost nothing as it is. But can anyone predict close to the bottom? When do you decide to buy back in? For me a lot of it also depends on the amount of taxes I'd have to pay. Even with capital gains rate, it would be a substantial amount for me for some of my positions like TSLA. Believe it or not I see that as a great position to be in. Hell the taxes alone would be more money than I ever imagined I'd ever have when I was a kid. On occasion I have cashed out portions of positions and then bought back in but that is not my usual strategy. I unloaded my Nintendo stock at one point even though I believed the stock had a real potential for future gains but it was tanking, with the idea of watching it go down and buy back in later, and that worked out well for me but stocks like TSLA and AAPL are so unfathomable at times that I can't see myself doing what you suggest. I am a buy and hold person, but I understand that many here are not, so they play the short term fluctuations.

I just don't see TSLA as being a bad bet at this point with what we know right now. People arguing that they may only have a run rate of 20,000 going out of 2017 and that is a bad thing strikes me as "who cares". Yes the average investor will probably panic because they aren't going to actually make 20k cars in a month until January 2018 so to them the entire year is a big fat loss so we may see another drop now or in December. But Tesla is going to build a sugarload of cars in 2018 so I won't sell.

Many years ago my broker used to call me a lot telling me that I had too much AAPL and it was more than 70% of my holdings which violated some market risk guidelines and I should rebalance. I took his advise and regretted it ever since. He no longer advises me about my holdings. I make those decisions for myself, good or bad. So for me I don't usually sell unless I am forced because of needing cash (which I don't see happening any time soon) or because I no longer have faith in a company. Were you able to time the 2008 crash? Selling near the peak and then what did you do with those funds until you felt it was ok to buy back in? To be honest if I knew the market was in fact going to slide downward for a year I would wholeheartedly agree with you and sell at the top, but I never saw it coming and kept expecting it to reverse. Cost me over a million dollars, but I just kept thinking it would reverse. I'm an idiot as I have said many times before. I just never understand the market herd mentality so I can't do that. I do understand that some here can discern the enigmatic workings of the market, but I think most of us can't do it successfully. So for me if I see TSLA down I see it as a buying opportunity. Yes some here are dangerous bulls who take the risk of buying on margin, but I hope they understand the risk they are taking on. My long term trading may not work for you and maybe TSLA or the Market in general is about to fall off a cliff but I'm not bright enough to play that dynamic. Everyone has to make their own decision on what they can risk. I don't do margin and I never bet anything I can't afford to lose. It has worked out well for me but everyone's situation is different and no one should blindly do what I do. But if TSLA is still in the low 350's on Wednesday I'm thinking I'm going to pickup another 100 shares.

Why Wednesday, why not Tuesday? You think it's going to keep going down?