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That´s a matter of definition - I would say sizzle is when Elon raises expectations by stating goals which he might not be able to realize in the given time. Steak to me is anything that is actually there. So if tesla misses target by 10%, yet growth was 50% yoy, the target was more sizzle than the actual growth is steak.
sundaymorning
Active Member
Apple may have the #1 phone and laptop, but let's face it, those things are easy to make. You can talk big, brand it "Titan" call it a Tesla competitor, but as of now, Apple is at the bottom of the food chain when it comes to cars, I would rate them behind GM by several dozen folds. Welcome to "starring into the abyss", Apple. If you're 2 years late this early into the game, it'll likely be at least a 4 years delay. The market doesn't even have a $140,000 roadster competitor, let alone a MS & MX competitor..
While everyone is talking big with a Tesla equivalent in 2019, 2021, 2025... Tesla is talking a Truck reveal by next year. Come to think of it, every manufacture seems to be talking a bit much, while Tesla quietly works. At least Tesla provides sizzle, while others provide smoke.
Menifeer
Member
I agree that the house always wins, but options traders can improve their chances by being the seller and not the buyer. I've been selling short- and long-term puts for a long time with favorable results. It's less of a crap-shoot when you're the one collecting the time premium, not paying it.
When the market goes against me, I roll the option to a new date and collect a new premium.
sundaymorning
Active Member
Buying options is a sucker's bet. Better to own shares and write.
It's important to have insight into the future when investing. Sizzle is just as important as steak. Without it, one may as well roll the dice and predict Volkswagon is making an electric flying car, anyone want to take that bet?
Krugerrand
Meow
I have an empty ignore list for a lot of reasons, but the unadulterated tossing around of this sizzle and steak metaphor by so many might just drive me to change my mind.
Thank you, though, for your perspective. I believe you've put it into the right context.
VanE
Member
Wow, I can't even count to 9..
But, yeah, the results will of course be released in October.I also don't think that the merger can lead to a raise in the short term, even if it goes through. (although, maybe just a bit, because after the vote a significant portion of uncertainty is gone, which is always good for any stock)
I think you're absolutely correct. Tesla has been doing great in my opinion, they're constantly improving their production capabilities and have (probably as only one in the industry) a very clear and ambitious plan for the future. But if you want to predict the stock movements for the short-term future you have to think as a 'regular' investor, and they look only 1-2 quarters in the future and prefer that Tesla puts all their energy in getting the Model 3 ready asap. As a regular investor H1 of this year has not been great for Tesla. As a Tesla 'fanboy' H1 has been a great revelation, the MX is in full production, the M3 is revealed and Musk has sketched the next 10 years of Tesla.
VanE
Member
I agree. But this is the TSLA short-term thread, if we want to maximize our profits we have to think about how the market will react to future events, not how we Tesla 'fanboys' react to those events. We all have a core of long-term holdings because we see the long-term potential of Tesla, but if want to capitalize on future events we should get out of our shell and think like the market does. Even if that means that we have to act illogical, because the market will react illogical.
For example, most of the people here on this forum liked the SMP2. But the TSLA went down 10 points on the day after the publication of it. We could very stubbornly say that the market is wrong and we are right, but as short-term investors we have to anticipate the market, if the market is gonna do stupid things, we should it first.
We have our long term holdings because we believe in the mission and vision of Tesla Motors. But we have our short-term capital because we think that because we are 'fanboys' we know what will happen in the future sooner than most and we think we can leverage that information to make money beside our core holdings.
MitchJi
Trying to learn kindness, patience & forgiveness
It's not using the metaphor that's the problem. The problem is making the metaphor a topic of conversation
.
Krugerrand
Meow
The market is almost always illogical where TSLA is concerned simply based on the immense difference of thought processes between the two. There's nothing left to figure out in this regard. If it's a short term benefit to the bottom line (like the cash flow positive of spring 2013) the market flips their lid. And anything longer term or that might mean more cash burn/affects the bottom line (possible recall/increased warranty costs/et al) in a negative way the market panics.
Okay, back up a bit here. It was a macro down day after the blog post so the 10 points wasn't entirely because of the blog. I'll also note that the media at large, while being generally dismissive, negative or nitpicky about the blog, printed far fewer articles about that negativity than the announcement of the Solar City merge. FAR LESS.
So let's not change the story to suit a point we're trying to make, k?
callmesam
Member
Small correction: The market wasn't down 10 "points" which would be 10%. It was down $10 or ~3%.
MitchJi
Trying to learn kindness, patience & forgiveness
I've been thinking more about the possibility of a squeeze induced by institutions calling in their shares to vote on the SCTY acquisition.
The SP could peak a little bit before that, but by that date all of the shares that are being recalled will have been recalled so at that point the maximum number of shares will have been recalled. The other dynamic is that some smart longs will probably not wait until I last day to start selling. I think right after that date four things will happen, it will be an obvious bubble:
1. The big institutions will loan out their shares again as quickly as possible because they'll want to start collecting interest again as soon as they can.
2. Smart shorts will pile on as soon as they can, because they will recognize that it's a bubble.
3. Smart longs will start dumping shares as fast as they can, maybe even a little sooner. If you think it's smart to hold until the SP reaches $1k or that ignoring the whole thing is smart think again. Selling near the peak of a big bubble and repurchasing a few days later and getting at least 20% more shares is clearly much smarter.
4. MitchJi will load up on puts, probably a little sooner.
My two main points are:
The absolute peak will be either the date that shareholders are required to have their shares or a few days earlier.
If you are a long term shareholder with no interest in short term trading if this happens it would be wise to make an exception in the case of a big spike, none of which was caused by a fundamental change in the company.
I believe that when the deal is finalized Tesla will announce a date for the vote, and in order to vote shareholders will need to own the shares on a particular day.
The SP could peak a little bit before that, but by that date all of the shares that are being recalled will have been recalled so at that point the maximum number of shares will have been recalled. The other dynamic is that some smart longs will probably not wait until I last day to start selling. I think right after that date four things will happen, it will be an obvious bubble:
1. The big institutions will loan out their shares again as quickly as possible because they'll want to start collecting interest again as soon as they can.
2. Smart shorts will pile on as soon as they can, because they will recognize that it's a bubble.
3. Smart longs will start dumping shares as fast as they can, maybe even a little sooner. If you think it's smart to hold until the SP reaches $1k or that ignoring the whole thing is smart think again. Selling near the peak of a big bubble and repurchasing a few days later and getting at least 20% more shares is clearly much smarter.
4. MitchJi will load up on puts, probably a little sooner.
My two main points are:
The absolute peak will be either the date that shareholders are required to have their shares or a few days earlier.
If you are a long term shareholder with no interest in short term trading if this happens it would be wise to make an exception in the case of a big spike, none of which was caused by a fundamental change in the company.
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Mario Kadastik
Active Member
Yes, after years of trading options on TSLA by buying calls and puts expecting events I was mostly on the losing side due to time premiums eating into it. Then decided to change strategy and started selling puts and that's been far more profitable.
One strategy now is to buy an ATM/ITM call and sell two OTM puts for the same expiry. This way the time premium is slightly in your favour, the whole play is net zero/positive as long as TSLA doesn't fall too far (i.e. beyond your put strikes) and starts to gain on any movement of TSLA. I've even liked to take ITM options, this way if the stock moves sideways you still gain money
An example trade for TSLA could be buy Sept 215 call and sell two Sept 200 puts. The trade gives you ~$90 credit in advance, but will lock up a bunch of margin (my guess around 6k$). Worst case if TSLA goes bankrupt is you're out $40k (200x @200$) though that would be extremely unlikely I think. Reality is that as long as TSLA remains above $200 you make money, if it starts to track downwards you could buy back the puts and move to Dec or Jan '17 or later for the same dollar value as they are trading on that day, this moves the strikes further down, reduces margin requirement etc. Once the stock starts to track back upwards you move back to earlier dates to gain on time decay and delta. If the stock moves up and they start to lose value you can also move them forward, pulling them to Aug options etc allowing them to expire worthless. Once they do the call is for free and you can realize it for any value at infinite % profit
A paragraph from an article by Julian Cox in Clean Technica (Technica (#TSLA (Tesla Motors Inc.) Short Sellers: Mind the GAAP) :
"From July 1, 2016, to September 30th, 2016, will be the first full quarter’s vehicle sales without GAAP Lease Accounting for RVGs. This is Tesla’s Q3 2016 ER. This marks the decommissioning of the #1 weapon of mass deception that has availed itself to the malicious TSLA short seller: headline-grabbing bogus and exaggerated GAAP loses. To the extent TSLA shorts and Tesla naysayers have pinned their flag to GAAP, such persons will find themselves in a world of hurt as the GAAP to Non-GAAP gap closes like the iron jaws of a proverbial bear trap."
Tesla has ended the Resale Value Guarantee (RVG) with important positive impacts on Q3 earnings. Another reason why Q3 is shaping up to be a watershed quarter for Tesla.
"From July 1, 2016, to September 30th, 2016, will be the first full quarter’s vehicle sales without GAAP Lease Accounting for RVGs. This is Tesla’s Q3 2016 ER. This marks the decommissioning of the #1 weapon of mass deception that has availed itself to the malicious TSLA short seller: headline-grabbing bogus and exaggerated GAAP loses. To the extent TSLA shorts and Tesla naysayers have pinned their flag to GAAP, such persons will find themselves in a world of hurt as the GAAP to Non-GAAP gap closes like the iron jaws of a proverbial bear trap."
Tesla has ended the Resale Value Guarantee (RVG) with important positive impacts on Q3 earnings. Another reason why Q3 is shaping up to be a watershed quarter for Tesla.
Krugerrand
Meow
The 10 points wasn't referencing the market but rather TSLA. And I was only repeating the poster. I don't actually know how much TSLA was down that day, only that the market as a whole was down and thusly it was erroneous to say the blog was the sole or major contributor to the decrease in SP.
We know the RVG for private persons is indeed retired, but Tesla underwrote minimal values for commercial leases organisations. Those might still be in effect.
racer26
Active Member
Reading that article, I can't help but also think:
Isn't Q3 2016 when we should start seeing the ridiculously broken GAAP accounting of those sales from 2013 drop the huge phantom liability to the customer that basically doesn't exist, and record the remainder of selling those cars as profit now?
Isn't Q3 2016 when we should start seeing the ridiculously broken GAAP accounting of those sales from 2013 drop the huge phantom liability to the customer that basically doesn't exist, and record the remainder of selling those cars as profit now?
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