2017 Investor Roundtable: TSLA Market Action

[Bet TSLA]

I'm not at all sure I understand what this means or why he said it.

Elon's superpower is reasoning from first principles. Reasoning by analogy is one reason others don't see the solutions that Elon sees. Feynman was the same -- he figured things out from first principles.

Apparently TrendTrader thinks that stock trading has no first principles so Elon's approach doesn't apply, but I guess that's how TA guys roll. Me, I think saying one chart looks like another is nonsensical as a basis for anything. As is the claim that trading is all psychology. I'm not in TSLA because of anybody's psychology, I'm in it because long term Tesla will rule the energy world. And a guy way smarter than me is going to lead that effort. Smarter, cheaper, faster, better will win in the long run. It's obvious.

By the way, if you haven't looked at the spurious correlation site I link above, do so! Truly hilarious!

 

[SBenson]

I did end up buying quite a bit this AM
was successfully able to pull the trigger right at the open
as well as at $352 or so

So you are at what like 44?

 

[everman]

So you are at what like 44?

And converting my holdings by multiplying by the TT007 constant, I get holdings of 2.7 common and 0.5 options to his 44 & 80+...

 

[RobStark]

Bloomberg offers a different view
Investors Are Betting on GM, Ford and Tesla. They Can't All Win.
"<
However, investors are divided at this moment, driving up the valuations of both legacy automakers and their rival Tesla. It's a zero-sum game, but investors are betting as though everyone can win.
>"

Sure they can.If they hit the accelerator pedal to the medal.

By taking Toyota,FCA, Honda,Subaru and Mazda market share.

 

[Chickenlittle]

I think we pull back tomorrow or Fri, it's been 4 green days in a row. This still feels like late August, after dropping down from $360 in mid Aug, then bouncing back to $355, we dipped again into $340s in early Sep. Since there will be no news for another 3 weeks or more (Semi in 3 weeks, ER in 4+ weeks), I think we will repeat the same patter, dip a little in the next 1 week or so, then start running up anticipating good news.

Are you sure no news for 3 weeks? You mean scheduled news perhaps. Tweets, opening design studio for no employees all seem possible.

 

[jbcarioca]

... No one, not even Chinese want a Chinese EV, because they suck, just like non-Tesla US EVs.

I may be one of a tiny number who actually enjoy driving a BYD E-6. I rent them, on purpose.

 

[RobStark]

Al that has nothing much to do with the USA, after all Tesla is the only real player in the US BEV market, and the US government is absent on the subject. It does have to do with Germany, China and all the other countries that have made 2030 anti-ICE declarations. California might join them, which will be big ones if it happens.

Anti-Ice declarations by chancellors and ministers are worthless without legislation to back it up.


California's anti-ICE legislation is much stronger than Germany's. So is the US's $7500 Federal Credit vs the temporary German government's €2,000 credit.

Chinese anti-ICE legislation is based on California's. And so is Quebec's.

Norway, The Netherlands, and recently France have good legislation.

The UK's £5,000 incentive is also good but for some reason hasn't been as effective as EV advocates would like. But that seems to be gaining traction.

 

[Reciprocity]

I may be one of a tiny number who actually enjoy driving a BYD E-6. I rent them, on purpose.

Is that car electric? I have always wondered about Chinese cars but never seen one in person so I guess I am a bit dismissive. At one point there were not any Japanese cars here in America either. Didn't take long for them to be everywhere and actually better, not just cheaper.

 

[RobStark]

I believe Tesla is an anomaly because they are probably more efficient at building the rest of the vehicle than the incumbents.

I highly doubt this is true if for no other reason than economies of scale.

When Alien Dreadnaught happens that is a non-issue.

 

[RobStark]

Is that car electric? I have always wondered about Chinese cars but never seen one in person so I guess I am a bit dismissive. At one point there were not any Japanese cars here in America either. Didn't take long for them to be everywhere and actually better, not just cheaper.

E6 is electric with a 75 kWh LiFePO4 battery pack and an alleged 186 mile range.

Neither the Japanese nor Hyundai were handicapped by being partnered with an American or European automaker to learn their three versions ago technology.

 

[ValueAnalyst]

@jhm at which percentile is your model putting TSLA at $355 today, assuming minimal dilution going forward?

 

[zdriver]

Capcapcap $356 capcapcap

Tesla will have to show unequivocal GAAP net income profit before this manipulation ends... how this is legal is beyond me.

Just because it's not going up doesn't mean there's capping/manipulation involved. Today had very clear footprints of large institution accumulation. They're trying to buy as many shares as they can while pushing the price up as little as possible. $356 is a pre-existing support/resistance level (I even have it marked on my charts), so it's to be expected price will "pause" above or below it.
It also didn't help that buyers were a tad skiddish in the afternoon, given macro situation. (SPY peaked in a parabolic run, then failed miserably to hold the higher level)

curious what tomorrow has in store. positive macro would certainly be welcome

Historically, actually no. TSLA has a tendency to only run really hard when macro is flat to wandering down. It typically does poorly on big macro up days.

 

[ValueAnalyst]

Just because it's not going up doesn't mean there's capping/manipulation involved. Today had very clear footprints of large institution accumulation. They're trying to buy as many shares as they can while pushing the price up as little as possible. $356 is a pre-existing support/resistance level (I even have it marked on my charts), so it's to be expected price will "pause" above or below it.
It also didn't help that buyers were a tad skiddish in the afternoon, given macro situation. (SPY peaked in a parabolic run, then failed miserably to hold the higher level)



Historically, actually no. TSLA has a tendency to only run really hard when macro is flat to wandering down. It typically does poorly on big macro up days.

Thank you for that very informative reply. Could you please elaborate more on "very clear footprints of large institutional accumulation?"

 

[kbM3]

I highly doubt this is true if for no other reason than economies of scale.

When Alien Dreadnaught happens that is a non-issue.

I was thinking about Model 3. I’m assuming they are innovating in manufacturing also (even before AD). E.g. no instrument panel saving both in material costs and manufacturing time. Also vertical integration. It is just Elon’s m.o. Look at every aspect (not just the electric car bits).

 

[JRP3]

This was the genius of Tesla to go after the most expensive engines and transmissions first.

It's almost as if they had a secret master plan from the beginning.

 

[Zhelko Dimic]

I was thinking about Model 3. I’m assuming they are innovating in manufacturing also (even before AD). E.g. no instrument panel saving both in material costs and manufacturing time. Also vertical integration. It is just Elon’s m.o. Look at every aspect (not just the electric car bits).

I suspect that vertical integration cost him more at this point actually.
However, 1. it was necessity for some of the things he wanted and 2. he's investing in it as a part of the long term plan to develop such competency and create additional moat for later on

 

[Waiting4M3]

I suspect that vertical integration cost him more at this point actually.
However, 1. it was necessity for some of the things he wanted and 2. he's investing in it as a part of the long term plan to develop such competency and create additional moat for later on

A side effect is that it also can disrupt the auto-supply industry, which largely had no interest/faith in EV several years ago. They'll get theirs, just like the traditional auto industry will.

 

[TrendTrader007]

Okay for what it's worth
Here's my trading/investing philosophy
Fundamentals matter a whole lot
In fact in my 19 years of trading experience I've moved from purely TA to mostly FA
I'm in TSLA due to fundamentals
Technicals are the sort of headlights of our model X
They guide my path on a dark rainy road
But Fundamentals rule and FA is MX
TA merely headlights
However TA gives me added confidence
Possibly an edge
Allows me to hold hugely super leveraged position in a single stock
And sleep well at night
I'm not interested in any debate about First Principles and analogy etc
My method admittedly supremely flawed
And even pretentiously baseless and extremely dangerous
Has served me extremely profitably well over the years
In the end it's all a game
And the best players get their edge from the darkest corners of chaos inside their damned tortured souls
If you have to rationalise or justify your method
Then you're already a loser
Winners don't know what the hell they are doing
They just do it

 

[ValueAnalyst]

Ron Baron: Tesla could hit $1,000 by 2020

Does anyone agree with his SP projections?

I estimate $1,000 is more than likely, defined as more than 50% chance, by mid-18.

Looking for devil's advocates.

 

[TrendTrader007]

Does anyone agree with his SP projections?

I estimate $1,000 is more than likely, defined as more than 50% chance, by mid-18.

Looking for devil's advocates.

Ron Baron is a super smart guy
he's been totally right in numerous cases
For example WYNN which he bought at IPO
In case of TSLA he's being conservative
$1000 by mid 2018 is entirely possible
If the market goes crazy in a severe melt up as I strongly suspect
Then sky's the limit
And $2000+ by 2019 is possible
Sorry I'm not a devil's advocate
(I'm the devil)