2017 Investor Roundtable: TSLA Market Action

[DaveT]

Dave,

This is my last post on this topic.

Your offer to bet me for money, and when I say I don't bet for money, your offer to do it for the winner's choice of charity is exactly, to the t, what MontanaSkeptic offered me last year. What does that tell you?

Your continued personal attacks, despite the patience I've shown over the weekend and the last several weeks, is exactly what dozens of FUDsters do on a daily basis. What does that tell you?

As I have repeatedly said before, I very highly appreciate what you have done for Tesla, its investors, the TMC community, and for me. Your Google Hangouts were eye opening for me to subjects, in which I had no experience, but that are critical to Tesla investors.

For this, I am thankful beyond imagination.

Having said that, however, I don't think it's in the best interest of the TMC community for me to respond to your posts any longer. I hope that one day we can get over this hump, and maybe even grab a drink or two next time I visit San Diego, but I understand that it will take some time for us to get to that point, if at all possible.

Sincerely,
ValueAnalyst

Let me share some thoughts in the interest of being helpful.

It's tough to discuss certain things with you because of how you're presenting them. When you say "your model" shows 80% chance of TSLA being over 420 by year's end, there's no way for people to say anything to that because they've never seen "your model" and you've never shown it to them. And when asked, people are required to subscribe to your paid service, which 99+% of the people here won't. So you're really pushing your paid service here, which is against the rules here and can get you banned. And you do this regularly... talk about your "model" but won't share it.

I'm just trying to be constructive here... the only reason I'm offering a bet is because there's no way I can discuss what I think are your unrealistic probabilities of TSLA price targets. And since there's no way I or others can really discuss them with you because we can't even see what you're talking about (i.e, your model), then I've tried to discourage you from posting about your model. But you continue to do so, and you do so often... and a lot of people have confronted you and discouraged you against his behavior, but you continue to do so.

 

[LoveTSLA]

Here is my observation of the TSLA trade today. In the morning hour, I guess some "nervous" ones put some sort of stop loss due to lack of M3 ramp up news. Those stop loss trade could be triggered by some short seller trades. That's why we saw the drops. Now seems things back to normal. I really hope we are green today or at least we will be above 350.

 

[AudubonB]

MODERATOR ALERT:

I have countenanced - barely - discussions of individuals' "bettings" on the Investor threads...so far.

From this post forward, however, ALL posts that in my own severe opinion are anything other than what classically is known as a "gentleman bet", more specifically, that mention dollar (or any other currency) figures, will be excised with extreme prejudice. If your predilection is toward such shenanigans, you must resrict those solely to Private Conversations.

===>WORD TO THE WISE<====

 

[Reciprocity]

Wait, the Internets told me that Tesla was laying everyone off and going out of business.. nice little recovery over the last half hour or so. Maybe some investors actually realized that its common to fire 400-700 people (of 10,000 factory workers) for under performing and the timing with the Model 3 ramp is just a coincidence. Its actually best to do it this way because people who know they are on their way out can do damage (Wrench "accidentally" dropped into the machinery) while waiting for the Turk. I am sure that all position where already being filled as people where walking out, new people where walking in is my best guess.

 

[geneclean55]

Speaking of new factories.. this seems relevant.

Tesla Might Team With Magna For Model 3 Production In Europe

 

[Snapdragon III]

Speaking of new factories.. this seems relevant.

Tesla Might Team With Magna For Model 3 Production In Europe

I really hope this is not true. If they make a deal with Magna to build cars in Europe, that smells to me like a clear indication that "the machine, that builds the machine," and the "Factory as a product" are not working out the way they hoped they would, and are definitely no where near being ready to be duplicated for European or Asian markets.

 

[MitchJi]

of this will matter in a quarter. However, I have options so I will continue to obsess. I suspect leverage is the root of the Hyper Bull Vs Bull war of '17.

What expirations and strike prices are you holding that cause you concern with the M3 ramp? My strategy was to only buy options that were insulated from the potential bad effects of the M3 ramp. J19's and J20's although I have been thinking about April (unlikely) and July (seriously).

Yes, that's about right. All the people talking about Tesla being more than three weeks behind just aren't paying attention. Or perhaps they don't understand what "exponential" means. Elon's prediction in June was for 30 in July, then 100 in August, then 1500 in September. They actually produced 260 by the end of September. If they had produced 130 they would be where they predicted at the end of August, but they produced twice that. So about what they should have done maybe ten days into September. That's about three weeks behind if they got the at the end of September.

But if they produce 1500 in October then they will be one month behind. This is obvious. Will we know? Only if they reveal more production information. I suspect they will do that only if the news is good.
<Snip>

That's incorrect. They actually gave that those figures as part of the dialogue that it's impossible to predict. They said that they would give out the number of parts that they were ordering from suppliers instead of production estimates because it is not possible to predict an exponential ramp.. So if they miss the 1500 they are only behind what they said that they were trying to produce not what they expected to produce.

They definitely will give some clarification on the ER/call. How could they avoid that?

Also, just FYI, 6200 in 2027 isn't going to be 1T market cap because there will be dilution over time even if Tesla does no more cap raises (due to stock composition of employees).

I understand how dilution negatively impacts the SP, but because the market cap is number of shares x SP I don't understand how that would have a negative impact on the market cap. Wouldn't the larger multiple of shares offset the lower SP?

 

[Causalien]

MODERATOR ALERT:

I have countenanced - barely - discussions of individuals' "bettings" on the Investor threads...so far.

From this post forward, however, ALL posts that in my own severe opinion are anything other than what classically is known as a "gentleman bet", more specifically, that mention dollar (or any other currency) figures, will be excised with extreme prejudice. If your predilection is toward such shenanigans, you must resrict those solely to Private Conversations.

===>WORD TO THE WISE<====

Yeah this is stupid and involves too much emotion. The "win against other" Or I beat you emotion screws with your ability to trade clearly.

I have a separate Ib account for bets. Whenever I need to bet someone, I clear the account to a round number. Then I buy the option of the price target that the stock I am betting to reach as well as the expiration time.

It is the only way we stock picker should use to make wagers.

 

[Off Shore]

MODERATOR ALERT:

I have countenanced - barely - discussions of individuals' "bettings" on the Investor threads...so far.

From this post forward, however, ALL posts that in my own severe opinion are anything other than what classically is known as a "gentleman bet", more specifically, that mention dollar (or any other currency) figures, will be excised with extreme prejudice. If your predilection is toward such shenanigans, you must resrict those solely to Private Conversations.

===>WORD TO THE WISE<====

Maybe we could just fedex each of them a ruler, settle it that way. Or do we need yard sticks?

 

[DaveT]

I understand how dilution negatively impacts the SP, but because the market cap is number of shares x SP I don't understand how that would have a negative impact on the market cap. Wouldn't the larger multiple of shares offset the lower SP?

Yeah I stand corrected. If Starno is predicting 1T market cap in 2027, then stock price would be lower than his 6200 target because there would be more shares than now. 6200 price with larger number of shares would make market cap significantly higher than 1T.

 

[DaveT]

Yeah this is stupid and involves too much emotion. The "win against other" Or I beat you emotion screws with your ability to trade clearly.

I have a separate Ib account for bets. Whenever I need to bet someone, I clear the account to a round number. Then I buy the option of the price target that the stock I am betting to reach as well as the expiration time.

It is the only way we stock picker should use to make wagers.

There are a lot of reasons people bet. Yes, some from emotion. But not all. For example, Warren Buffett’s wagers are far from emotional. They’re usually a small fun thing on the side to prove a point, ie, his SP500 vs managed funds bet, or his March madness wager. Usually Buffett wagers on the side of common sense probabilities and to bolster the case of investing for common sense probabilities. The amount he wagers is completely nonconsequential to his net worth.

 

[erthquake]

I really hope this is not true. If they make a deal with Magna to build cars in Europe, that smells to me like a clear indication that "the machine, that builds the machine," and the "Factory as a product" are not working out the way they hoped they would, and are definitely no where near being ready to be duplicated for European or Asian markets.

If that article was an anti-Tesla FUD article, there's no way we'd be taking it seriously. There's no proof at all in that report to think that Tesla is thinking of "outsourcing" their manufacturing to Magna.

 

[vgrinshpun]

Oppenheimer is out with a new note today.

Oppenheimer met with Tesla executives last week.

The executives said that all production equipment for the Model 3 has been installed and “all vehicles were moving through the manufacturing line,” the analysts said.

“We understand the delayed ramp is due to a small number of suppliers failing to deliver on time. We also understand at least one of those suppliers has been fired replaced by insourcing,” the Oppenheimer analysts said.

 

[notsosure]

Another interesting Monday in the Tesla trading world. The FUDsters seem to be utilizing the weekends to rile up certain investors and shakeout the weak hands come Monday.

 

[madodel]

I'll do it for 9
no pride

I see his secret plan. We are in a bidding war to the bottom here. Before we know it people will be paying DaveT for themselves to stop posting here. He will become a billionaire, buy TSLA and take over the world.

 

[FredTMC]

Oppenheimer is out with a new note today.

Oppenheimer met with Tesla executives last week.

The critical piece of info we need is WHEN the bottleneck(s) will clear.

On a separate note, can someone explain to me how it's not illegal for analysts and investors to have these PRIVATE (non public) disclosures of info?
(I know it's common practice, but I dont understand why it's legal)

It seems like "non-public disclosure of material information".

 

[MitchJi]

Yeah, I'm not talking about his long-term goals. I'm talking about how Elon manages teams toward specific timeline goals. His timeline goals are almost always excessively aggressive and unrealistic, but that serves his interest to motivate his teams to work hard... and yes, he works hard too.

That description doesn't seem to match the facts of the M3 ramp.

When Elon announced the M3 ramp acceleration he said that they were getting all of their internal and external teams to commit to the beginning of July date. He said that "of course they would not produce cars by that date", not because those dates were unrealistic but because "they need thousands of unique parts and you always have a few late term papers". They worked hard on managing suppliers and realized at some point they thought they could hit what started out as an unrealistic goal. All of those goals might have been aggressive, but not unrealistic. If the note from Oppenheimer is accurate it seems like his estimate was incredibly accurate.

It might have been unrealistic to try to start deliveries of cars by July. We'll know soon.

M3 ramp current status:
When Elon was responding to Fred on twitter he said that it was still possible that they could hit their schedule:
"Bear in mind that the production ramp is an exponential curve. Late Oct is possible, but not certain. Literally every day makes a big difference."
When Fred continued to push him he said:
Assume the worst. Now I need to get back to work...
My interpretation is that he doesn't know how long it's going to take to resolve the problems. It was possible that they could solve a problems promptly but if he was highly confident he would have not have said "assume the worst". If you assume he's telling the truth I think we need to consider what's the reasonable worst case? I don't think he would have said that if he was confident that the problems would be resolved by the ER. OTOH he also said that it's possible that they could open the configuration tool to outside customers by the end of October.

With options it comes down to risk /reward. Betting on a solution by the ER is foolish if they haven't opened the configuration tool. Being confident that they will open the tool when Elon who knows a lot more about that than any of us clearly didn't know himself seems equally foolish to me. I might bet some small lottery ticket options on that, but not a major portion of our portfolio.
.

 

[Krugerrand]

If you pay me 10,000 dollars I will gladly not post here anymore

I’ll stop posting for $9,999.

 

[Krugerrand]

I'll do it for 9
no pride

Oh, crap you beet me to it. Fine!! I’ll do it for $8,999. (This is a takeoff of Name That Tune)

 

[DaveT]

The critical piece of info we need is WHEN the bottleneck(s) will clear.

On a separate note, can someone explain to me how it's not illegal for analysts and investors to have these PRIVATE (non public) disclosures of info?
(I know it's common practice, but I dont understand why it's legal)

It seems like "non-public disclosure of material information".

Yes, it’s very frustrating. I’ve contacted Tesla IR several times in the past regarding this and asked for fair disclosure (ie, all meetings with Tesla management where material info is discussed should be recorded and posted, etc) but to no avail.