2017 Investor Roundtable: TSLA Market Action

[racer26]

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

I still find it fascinating how Tesla has made no secrets about exactly how they're going to take over the industry, and the industry still just stands idly by and watches them do it.

SMP1 (scheduled to be complete any day now) was published 4 or so years before Tesla even owned Fremont. It was a long road to get here, but Tesla did almost exactly what they said they would over a decade ago.

 

[Navin]

Guys - I’m taking some time away from this day to day board. Assuming no major economic issues - i see us going to all time highs by end of month - approaching tesla event Trade em well. Not an advice, do your own dd.


One final point - tweets like the one Elon just made about PR are potentially explosive for tesla and market’s understanding that tesla is really not just a car company.

 

[jbcarioca]

...
I could certainly see dozens of companies fighting for the scraps in the $19k-25k range, but I fully expect Tesla to max out at lower total volumes (maybe 10-15m a year) then most think but they will dominate the $30k-$150k price range and will more importantly dominate the margins at those levels. I keep using the iphone as the example and hope people understand that I am not comparing to the iphone in terms of how revolutionary or how innovative, but more about how the iphone stays up market for a very good reason. That's where all the margins are. Apple could dominate various levels by releasing smaller and cheaper phones, but they would never make any real money from them, so they focus on owning the top 30%, which also makes it very hard for competitors to come into that market. Google has been trying for years with the Pixel brand, with little or no traction. I personally use 1 year old Chinese Android phones and never pay more then a few hundred bucks to own it outright for 1-2 years.

When we think about smartphones, desktops and minicomputers (remember them?) it's certainly a better analogy than is traditional cars. After all BEV's are more closely related to computers than they are to traditional autos, even though they look much like traditional cars.

In this context I think there will be three broad markets:
1. advanced technology autos- Tesla wins (iPhone, iPad analogy really does work)
2. price competitive not-so-spectacular technology- Chinese win (less obvious analogies, but photovoltaics, chips and componetry are all relevant)
3. Industrial equipment- both Tesla and Chinese are highly successful with difference niches

Much of the difference will be in positioning, some will be in customer service, some will be in user-controlled features. As this all shakes out rapid evolution will leave slow movers in the same position as were Locomobile, Stanley Steamer, Studebaker and Humber not to exclude Wang, DEC, TI, and (of course) Osborne.

The question for us is whether TSLA will end out being Apple/Microsoft/Amazon or will end out as the departed one-time innovators.

FWIW, I'm committed to both TSLA and BYD.

 

[ValueAnalyst]

ESV capping at $6 seems to be getting more violent.

This may resemble the future of TSLA in the "near-term."

 

[everman]

I forgot to note that this is not an advice.

I just like to explore and plan for all options available to me, and set the conditions that would lead to a decision ahead of time.

I'm planning something similar in November when the '20s come out. Please keep us up to date, as I'm sure we'd all like to make the most informed strike price choice. Thanks in advance!

 

[ValueAnalyst]

I'm planning something similar in November when the '20s come out. Please keep us up to date, as I'm sure we'd all like to make the most informed strike price choice. Thanks in advance!

It seems that a lot of TMC members are in the same boat as you and me... and since we know that more than just the usual TMC bulls read these threads (which is one reason why I would not advertise my strike price, but I'll send it to you if I choose to go that route), I wouldn't be surprised if SP rises until November 13, which is when 2020 LEAPs come out. This would diminish my appetite for LEAPs as I'm a value investor.

Alternatively, one can buy the next monthly options to "lock in" a price for their 2020 LEAPs, but this is a bit complicated and I would not recommend it to anyone who is not already experienced in options.

Finally, I currently expect a recession to start near the end of 2018 (my timeline estimate is data dependent). If that happens, Jan19 options, of which I already have a bunch to supplement my core position in shares, may pay out better than Jan20 anyway.

In short, there is a lot going on in my head right now...

 

[Svetlin]

View attachment 251560

loyal, economically irrational customer base... that was a fun read, thanks!

I think a lot of people on TMC are in the same boat as you and me... and since we know more than just the usual TMC bulls read these threads (which is one reason why I would not advertise my strike price, but I'll send it to you if I choose to go that route), I wouldn't be surprised if SP rises until November 13, which is when 2020 LEAPs come out. This would diminish my appetite for LEAPs as I'm a value investor.

Alternatively, one can buy the next monthly options to "lock in" a price for their 2020 LEAPs, but this is a bit complicated and I would not recommend it to anyone who is not already experienced in options.

Finally, I currently expect a recession to start near the end of 2018 (my timeline estimate is data dependent). If that happens, Jan19 options, of which I already have a bunch, may pay out better than Jan20 anyway.

In short, there is a lot going on in my head right now...

The higher the stock price gets before 2020 LEAPs come out, the cheaper it gets to roll 2019 LEAPs forward. The lower the stock price stays, the cheaper it gets to buy 2020 LEAPs up front, and sell 2019 LEAPs at some higher stock price during 2018.

 

[EinSV]

That's fair. I did expect a short squeeze earlier this year, but I have also indicated $450-500 would be the price that would trigger it.

I think we'll get to that point earlier than your estimate.

I don't have an estimate for when we'll get to $450-500/share, but I would be content if we had no short squeeze and the stock just continued along the boring old path it's been on since the Spiegel bottom of a relatively steady increase at a >100% annual rate.

I thought I should add/clarify that I have a small percentage of my TSLA in J19 450s, including some I bought last week (Not advice — in fact I think OTM options like these are a bad idea for most people, including possibly me, since it is too easy to lose everything and the extreme volatility can lead to bad/emotional investing decisions). I think it is likely we will hit 450 by mid-2018 but don’t have a specific date in mind. Hopefully sooner.

 

[elasalle]

Paid respect to the Sloth ... added a few more calls

 

[Bobbyducati]

looking for a small miracle to not wipe out this weeks gains. win some, lose some i guess

 

[avoigt]

The sloth is the Model 3 production ramp. The message is that, by some divine miracle, they've now made it across hell (the road). The sequel video in the description then shows that it is now the bear who is in hell, and about to get run over.

Thats indeed hardcore tea leaves reading. Not sure if there is any good or intelligence by doing that.

However for the sake of the fun:

We likely all agree that he did not post that video because its such a great movie and he likes saving animals and the earth! So assuming that we could read it as you thought above or we could say that EM just wished he could fly but can't. In that view he just made clear that everything has its pace and we should take our time as knowbody will fly us over the challenges that appear .....

 

[FredTMC]

I like this. Makes sense.
I am sure he didn't like egg on his face with the #260. Has said very little about Tesla recently.

Yep. So, in a week or two should start seeing more "model 3 delivery posts" from Bay Area employee model 3 owners.

I figure it'll take up to 14 days for any production increase to be visible due to inspection time required fir these initial cars off the general assembly line.

I'm sure Tesla going to test/inspect these cars throughly for quality since these are the first volume of cars off the main assembly line.

 

[SBenson]

We got burnt before while reading tea leaves on the monty python clips.

SP dropped from 380s to 330s after the post.

Don't get carried away with the tea leaf reading.

@avoigt post above might actually be more correct reading just as 1134 wasn't a positive sign but actually a pretty negative sign.

 

[ValueAnalyst]

FYI - Oil prices are rising nicely today, which may support SP in the afternoon.

 

[Todd Burch]

looking for a small miracle to not wipe out this weeks gains. win some, lose some i guess

Why a small miracle? We opened this week around $336 and we're at $353 now. Seems no miracle is required, no?

 

[Waiting4M3]

Thats indeed hardcore tea leaves reading. Not sure if there is any good or intelligence by doing that.

However for the sake of the fun:

We likely all agree that he did not post that video because its such a great movie and he likes saving animals and the earth! So assuming that we could read it as you thought above or we could say that EM just wished he could fly but can't. In that view he just made clear that everything has its pace and we should take our time as knowbody will fly us over the challenges that appear .....

I think it's also likely SpaceX related since this weekend they will land 2 Falcon9 rockets within 48 hours. Consider how slowly SpaceX started, this is a huge leap forward. To some degree I think many Tesla supporters suffer smilar tunnel vision as traditional automakers, to a lesser degree:

automakers: "we'll make 30% cars electric by 2025"
Tesla: "1 million EVs by 2020"
Elon: "see you on Mars, m*****f****s!"

 

[T3slaTulips]

Wait, is there an origin story to this VIN 1134 meme that actually involves Elon?
I was out sick for a week and I'm wondering if I missed something.

 

[schonelucht]

BTW, no changes to the NHTSA registered VINs today: spreadsheet

Thanks for doing this. I believe this will be earliest sign when M3 production resumes.

 

[SBenson]

Right I made $1 twice with single position in FB
Lost $0.6 in a single day back in 2008 January trading VMW on the wrong side (back then I thought that was a lot of money to lose in a single day) After I got a second mortgage on my house and put all the money in VMW common at $55 IPO back in August 2007 and SP went to $120 by November 2007
My $12K call options went to $60 K then back down to $8K
Played numerous single stock trades in EMLX 1999
NSOL 1999
CMG in March 2006 I bought at $32 and kept on buying like crazy for a whole year then sold at $135
Stock eventually went to $800+
Without me
Bought Googl on a whim in February 2005 when I put $100k at $215 only to see it trade down to $185 by March 2005 so I kept on buying the sucker for next 2 years and sold it at $650 or so with cost basis in $300s
They tell me it trades higher now (with a few splits)
Traded single stock positions in SOHU AMD FNM FRM C LNKD TWTR BABA and too many to remember
The worst mistake I ever made was to sell BIDU at $200 in October 08 and took a $0.5 loss when I was super confident that the Stock will bottom at $100
And that is exactly what happened
BIDU touched $100 in November 08 or so and never looked back
Went up 26 fold over next 5 to 6 years
I had 55 shares at $300 back then
I probably left a potential profit of $12 to $13 on the table
Never lost a night's sleep over it
Easy come easy go
It's all a game
Numbers don't matter
TSLA I got a feeling is the big one
This one will make BIDU look like a loser

That's helpful. I see that your model seems to be position heavily into winners (trend setters).

Hypothetically if Tesla weren't available today, which other stocks would you be considering for heavy positioning?

 

[Snapdragon III]

I think it's also likely SpaceX related since this weekend they will land 2 Falcon9 rockets within 48 hours. Consider how slowly SpaceX started, this is a huge leap forward. To some degree I think many Tesla supporters suffer smilar tunnel vision as traditional automakers, to a lesser degree:

automakers: "we'll make 30% cars electric by 2025"
Tesla: "1 million EVs by 2020"
Elon: "see you on Mars, m*****f****s!"

I disagree that the posting was Space X related. It appears that he was at the Giga factory yesterday night by his subsequent Instagram sunset post. As you said, he has 2 rocket launches scheduled this weekend, is trudging through production hell on the model 3, Scrambling to get ready for the semi event with extra surprise, trying to get self driving working, and the half dozen other super ambitious side projects in the background. He has probably been siting in meeting with his various managers, 19 hours a day for the last year figuring out how to work through seemingly impossible challenges. Do we really think he just took some time out in the middle of all of this to catch up on some 6 year old cute animal videos? And it was a total coincidence that there was a link to a video of a bear getting hit by a car in the title of the sloth video? I think he or someone else came up with this some time ago, pitched it to Elon, who thought it was funny, and has been sitting on it, ready to post it as soon as the production bottle neck was worked out. It is just too perfect to be random.

That being said, I am not changing my already aggressive investment positioning based on this tweet.