2017 Investor Roundtable: TSLA Market Action

[madodel]

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

Market is closed Tuesday. It is the July 4th Holiday here in the US.

 

[LargeHamCollider]

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.

Thanks, this is great info, also a small nit. A correlation coefficient is not a percentage, you can turn it into a percentage by squaring it though.

 

[Zhelko Dimic]

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 think SP can go down from here, and is likely to go down. Not ready to bet on it though, I'm comfortably unleveraged, 100% TSLA, no action either way. I'm leaning towards theory that we've seen local top for the next couple months.
If SP goes through $350, there is an air pocket in terms of shares traded volume until $325.
Though, 50 days and lower Bollinger band are in the air pocket, this may slow down fall or even bounce of off it.

Consider this is disappointment compared to crazy optimists with 80-90K predictions - I don't remember who they are, I've blocked most of ppl. with that kind of numbers

 

[jhm]

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

Yeah, I don't care about release candidates, which may be a fine collector's item. Rather it is the optics of the first 30 that matter. The handover of Model X had very poor optics in my view. It was a big pat on the back to folks well connected to Tesla, and it was not clear that the vehicles were really in working order for the general public. This really set the wrong time for a difficult launch.

With Model 3 my hopes are much higher. The focus should be on ordinary hard working Tesla employees, and the cars really should be ready for daily use on public roads. If these 30 are really not ready for the public, then the whole thing is a sham. It would be better to wait a few more months if they really are not road worthy.

So I guess I want it all. I want the right optics and the right substance. If we have another elitist sham, it will not go well for the stock.

 

[jhm]

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.

Interesting. That would be about the time time the correlation with oil broke down.

 

[TrendTrader007]

I totally believe that SP is headed markedly higher over the next few months looking at the daily chart in a 25 year timeframe perspective. The only thing that counts is the steep ascending up curved slope of 200 day SMA rising up rapidly very similar to early 2013
Rest is conversation
And the long term bulls getting cautious are doing so way prematurely
but then they seem to pay more attention to day to day SP than I do
I stay super leveraged and am a dangerously margined bull based on a really long term bird's eye view chart perspective extrapolated over to the next few months

 

[TrendTrader007]

here is a "cleaner" version of above long term chart expressed in monthly
Pay special attention to SP vs bollinger and rising long term 20 and 50 month SMAs as well as extremely strong MACD crossover.... all highly bullish
So the longer term picture easily trumps any short term weakness and I would not hold my breath for lower prices for too long

 

[Ameliorate]

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.

Indeed. Transitioning from 2000-2400 cars/week to 7000-7400 seems like quite the feat to me. Only to be closer to a run rate of 13,000/week end of 2018.

 

[dennis]

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.

Which would be a nice 57% increase over the 76,230 vehicles Tesla delivered in 2016.

 

[dennis]

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

No indication that first deliveries are the "base model". Just won't have AWD or Performance package.

 

[dennis]

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

Totally agree. I also suspect their are some Tesla and supplier parts that need to be reworked based on what they found in the RC testing and there will be a lag time getting those reworked parts spun up to full production rates.

 

[RobStark]

Looking at the euro registrations already recorded, and insideev estimate, I would guess Tesla are down 1300-1500 sales combined US, and Europe.

Good call.

 

[22522]

I think SP can go down from here, and is likely to go down. Not ready to bet on it though, I'm comfortably unleveraged, 100% TSLA, no action either way. I'm leaning towards theory that we've seen local top for the next couple months.
If SP goes through $350, there is an air pocket in terms of shares traded volume until $325.
Though, 50 days and lower Bollinger band are in the air pocket, this may slow down fall or even bounce of off it.

Consider this is disappointment compared to crazy optimists with 80-90K predictions - I don't remember who they are, I've blocked most of ppl. with that kind of numbers

This blocking strategy seems like a good way to keep people from yelling in your ear as you try to slice a diamond.

Could be kin to confirmation bias and result in surprises, but I don't think so generally.

 

[MartinAustin]

Based on the German stock markets, which are still open on July 4th, we're seeing a stabilisation, i.e. the fall isn't continuing.

 

[WarpedOne]

German market doesn't mean anything. I knows how to follow USA, but has no predictive power what USA will do.

 

[22522]

Model 3 handover will happen at Fremont Factory. I'm looking forward to the optics of line workers driving away with their own Teslas.

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.

The 30 should be a "bring people together" 30.

A lot of stretch expenditures are aspirational. I would include a mix of customers and show a world that moms would aspire to for their children. The car is built to seat 4-5 rather than two. They made some subtle sexy sacrifices in the roofline to make the rear seat functional. I think it is really important to demonstrate that function as early as possible. Tesla uses product releases rather than ads to demonstrate functionality.

I think in home sales they call this staging. Make the house be a stage on which people can experience life goals.

Here is a straw man.

1. Show off the rear seat folded flat floor you can sleep on with the glass roof to look at the stars through.
2. Show off family oriented content streaming on a shared screen for a family of 4.
3. Show off the surfboard.
4. If there is a hitch rack that holds 4 bikes- show that.
5. Put grocery bag hooks around the perimeter of the frunk to show how a frunk is a perfect place to keep the reusable bags handy and groceries sorted.

Everyone knows it is sexy, but selling the half of the family that acquiesced on the $1K deposit by demonstrating aspirational utility is key.

 

[Willuknight]

Can people share their thoughts on why the share price dropped? I'm looking to understand why it's dropped and also possibly theories on whether it's going to go up or down

Here are what I've heard so far :

Buy the rumor, sell the news
/which seems dumb if news is good

Deliveries are down from what was predicted
/but still in range and if you consider total produced they nailed the target

Stock market in general is down
/ I guess, but seems $20 drop seems more wild than that

Short the trading day on July 3rd resulted in more of a swing

 

[WarpedOne]

Stock market is not rational,it is an intersection of countless rational but only partially informed plots.
You could understand why it did why it did only by know ALL the data that influenced the move.
Without that, you are left guessing.

 

[22522]

You could understand why it did why it did only by know ALL the data that influenced the move.
Without that, you are left guessing.

I could not understand even if I knew all the data that influenced...

This may be an endorsement of charts and pattern recognition.

 

[AlMc]

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.

I see no problem here.
Summary: Make your own decisions within your own plan parameters. To each their own.
If your plan is a basic buy and hold then buying on a day after a $10 increase or decrease in the SP will have little effect on your
long term earnings.
Any advice from all of us is skewed by our personal frame of reference and our individual plan/parameters