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larmor
Active Member
Electrek shows AP V8 detecting humans, (does not detect trolls):
Tesla Autopilot significantly improved pedestrian detection in v8 update tests show, now renders humans
Tesla Autopilot significantly improved pedestrian detection in v8 update tests show, now renders humans
I still can't believe how hard some people came against me arguing that it wasn't possible that large investors reduced their holdings in Q3. If I have time, I'll post the conversation here.
Please don't waste your time Dave. We all know you.
racer26
Active Member
I don't really understand the logic of the institutional holders selling though - their whole MO is to make money on an investment, and Tesla's grand plan since day one is on the cusp of becoming reality. Model 3 launch in 2-4 quarter's time represents the point at which the company was supposed to start actually making real bank. Why sell now?
Because some of them are limited by their bylaws to having no more than xx percentage of one company in their portfolio.
There's the risk of merging with SCTY could precisely put that grand plan at risk, pushing that 2-4 quarters further down.
I seriously doubt someone said to you with a straight face "there is no possible way institutional selling is causing a stock price decline." No, that's not an invitation for you to produce evidence or whatever--I don't care and I'm certainly not one of the people you are talking about since I haven't attempted to attribute the decline to any one factor.
Just a general observation that isn't directed at you specifically, especially as you are a good contributor here - but there's way too many forms of dishonest argumentation on this thread (I've probably been guilty of this at times too). Mainly people attributing extreme, simple-minded views to people they disagree with so they themselves can appear to be the nuanced deep thinker. Example:
- Poster 1: wow, the SP sucks today, what's up?
- Poster 2: Well, macros are weak, there's election uncertainty and looks like there was heavy shorting going on at 10PM to keep the downtrend in place.
- Snide Guy 1: This guy thinks shorts are 100% to blame!
- Snide Guy 2: Yep, always those evil shorts. Nothing else could ever make the SP decline, right?
- Snide Guy 3: Why do we always talk about shorts in here? There's other factors at play! Papafox, stop posting about shorts.
It goes the other way too:
- Poster 3: Institutions have been selling off, look at the decline.
- Poster 4: Not necessarily. Could be spooked retail traders getting out of tech.
- Poster 5: Yep. Could be increased shorting or something else. No way to tell.
- Data comes out showing institutions sold off on a net basis
- Snide Guy 4: Look at all those posters claiming institutions never could have possibly sold off!
- Snide Guy 5: Unbelievable. Posters 4 and 5 need to lay off the kool aid.
I know this is to be expected on an internet forum, but it's not constructive at all. In the future, Posters 4 and 5 will be less likely to offer competing suggestions and alternative explanations which very well could have been right in this case. No one knew or had reason to know that institutions sold off before the data was out. It just as easily could have been proven the other way by showing a net 0 effect from institutions and 4 million increased shares sold short, or whatever.
So, I want to hear all reasonable explanations for events without people labeling the other side shortsighted or naive or whatever. Usually the person has better critical thinking skills than is attributed to them when this happens.
Obviously, my point above has a big caveat - reasonable explanations. My point is taken way too far when something is 99% obvious to just about everyone but someone with a 1% viewpoint comes in and dominates the discussion based on their low probability theories. The only fix here is the ignore button, I've found. Overall, it's hard to draw that line as to where ridiculous speech should be suppressed but it just seems like we are way off that mark currently - with valid theories getting laughed off the thread and ridiculous bear theories given far too much credence due to a desire to appear "open-minded" - sometimes ideas are simply too dumb garner more than 2-3 posts worth of attention, yet we give them 2-3 pages. Rant over.
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Mutual funds ("funds" in general) do not only receive funds from investors, but the reverse can occur: they can have redemptions. That forces the managers' hands two ways. First, it brings the limitations bylaws that ZenMan just mentioned; second, they have to provide that cash from somewhere. You may not sell your TSLA, I may not sell my TSLA, but that fund manager over there might.
Other forces: Fund Manager A may be favorably disposed toward the TSLA she has in the basket she manages, but the particular investment company she works for might have a Senior Equities Strategist, or a Market Strategist, whose allocations must be followed. So if he or they say "re-weight your portfolios from 10% cash to 20%", or "increase Financial stocks to 15%", or "drop USA exposure from 60% to 50%", and so on, then Portfolio Manager must comply. These internal company managements scenarios do not occur across all fund companies or even amongst each equity portfolio manager but it represents the kind of Black Cygnet that can happen.
Another example: one of the houses we use for our investments has an analyst who hates Tesla. Always has. I use a specific broker there to place my trades; he putatively "manages" our investments but he may never, ever trade for me. Anyway, he is bound by company policy to tell me every time his in-house analyst comes up with yet another negative article regarding TSLA. More to the point, I believe that, amongst the portfolios for which he is able to trade, he is bound by house rules not to buy TSLA...or, if the Strategist changes his mind, he needs to sell.
Other forces: Fund Manager A may be favorably disposed toward the TSLA she has in the basket she manages, but the particular investment company she works for might have a Senior Equities Strategist, or a Market Strategist, whose allocations must be followed. So if he or they say "re-weight your portfolios from 10% cash to 20%", or "increase Financial stocks to 15%", or "drop USA exposure from 60% to 50%", and so on, then Portfolio Manager must comply. These internal company managements scenarios do not occur across all fund companies or even amongst each equity portfolio manager but it represents the kind of Black Cygnet that can happen.
Another example: one of the houses we use for our investments has an analyst who hates Tesla. Always has. I use a specific broker there to place my trades; he putatively "manages" our investments but he may never, ever trade for me. Anyway, he is bound by company policy to tell me every time his in-house analyst comes up with yet another negative article regarding TSLA. More to the point, I believe that, amongst the portfolios for which he is able to trade, he is bound by house rules not to buy TSLA...or, if the Strategist changes his mind, he needs to sell.
racer26
Active Member
I also don't really understand why the arb gap is still as large as it is.
Every indication we've had is that the merger is all but a done deal. As of close of market today, you could:
Sell 100 shares TSLA for $18377
Buy 909 shares SCTY for $18016.38
Net +$360.62 (nearly 2% on the $18377) in cash right now. Assuming the merger goes through on thursday, and none of the other conditions are holding it up, by Tuesday you'll have the 100 TSLA you started with back. That's a 180% annualized return - ignoring any gains or losses on the value of the shares in the week.
Every indication we've had is that the merger is all but a done deal. As of close of market today, you could:
Sell 100 shares TSLA for $18377
Buy 909 shares SCTY for $18016.38
Net +$360.62 (nearly 2% on the $18377) in cash right now. Assuming the merger goes through on thursday, and none of the other conditions are holding it up, by Tuesday you'll have the 100 TSLA you started with back. That's a 180% annualized return - ignoring any gains or losses on the value of the shares in the week.
dmckinstry
Model X 2019
Yeh. Now you're scaring me.Yeah all the polls say the merger will pass
Eh, that's a tiny gap. There's always some gap to account for the possibility that the vote fails, even though I think it's very low risk right now. It's one of those low probability-high risk things. If the vote fails SCTY is likely to get absolutely pounded in the short term.
2% arb is nothing uncommon even for all cash deal. Even if there's no risk of the merger failing, there's still time-value for parking your money here waiting for the transaction to be completed. Literately the current arb is as gone as for any merger deals. And you can't annualized this to 180% because you can't trade this repeatedly.
All true and not to mention that it's quite possible that the day trading starts after the deal closes TSLA may open up 2% lower thus never giving you the opportunity to sell the arbitrage.
racer26
Active Member
Except that's not a real risk - its an imagined risk.
TSLA has enough cash in the bank right now to make Model 3 happen on time, so the only way that merging with SCTY could put that at risk is if doing so requires TSLA to take some of that money away from the Model 3 project and reallocate it to something SCTY needs.
SCTY has enough cash in the bank to keep their operations humming along, so it doesn't need anything.
Together they expect $150M in savings from synergies in the first year.
SCTY is expected to add $500M to TSLAs bottom line over the next 3 years.
SCTY was cash flow positive in 3Q16 and is expected to continue to be so in 4Q16.
How exactly does any of that put Model 3 at risk?
There is a giant misconception that SCTY is a financial black hole, that is patently, demonstrably untrue. I can understand retail investors trading on this misconception, but you'll never convince me that investment fund managers are foolish enough to make decisions like that without actually understanding the truth behind the numbers.
Disagree. SCTY's already trading so close to the intrinsic value of its assets its crazy. Going any lower means that buying it purely to close the doors starts to be a good idea.
On the subject of the merger, does anybody have insight into the risk of the merging failing now that Trump has been elected, or will funds have already made firm decisions before that? For example, the ISS recommendation came out before the election and I imagine that will not be updated, but I don't know if some of the bigger funds will have had time to change their minds.
racer26
Active Member
Hence why I started my hypothetical with a sell TSLA action - the starting condition was that you had 100 TSLA, and so is the finish condition, only you have 100 TSLA and $360 cash.
Also: this notion that TSLA would drop the 2% to close the gap instead of SCTY climbing to close the gap makes no sense. TSLA is 12x larger and has the more stable business.
Look, none of these are facts. They are company guidance or investor speculation. Some investors believe them, some don't. Even half of these (2, 4, 5) only became less speculative recently (TSLA, SCTY Q3 reports and the letter on merger), which means investors don't know it in Q3.
Then how are you going to get that 180% annualized return? You will be left with $360 cash suffering from time-value lost. This is where the 2% coming from.
Plus I now noticed you thought the SCTY will turn into TSLA on Thursday provided the vote went through. This is just wrong. The vote is followed by a number of different processes to close the transaction for the SCTY shares to turn into TSLA shares. It might happen this month, it might happen next month, it might happen next Jan, it might happen next Feb, etc. Time-value.
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