Short-Term TSLA Price Movements - 2016

[Julian Cox]

Review of my Model X, Tesla and the Car Industry

Some of you may have seen this on Twitter, but I thought it would be an insightful read that relates to TSLA both in the short and long term.

IMO Model X delays and production problems are the only thing holding the stock back in the short-term. There's currently serious speculation that MX has fundamental issues that need to be changed, but this review shows that that's not the case, but rather that each of the early MXs are a case by case basis and that Tesla definitely has the ability to deliver a perfect Model X, arguably the most advanced car in the world. History repeats itself (initial MS problems) and I have strong confidence that by year's end every customer will be as happy as this guy.

The post also gives insight into how cars will change more in the next 10 years than in the last 100 years combined, specifically through 4 areas. Tesla has huge and significant competitive advantages in at least 3, if not all 4, of these areas (ride-sharing probably too early to tell). Understanding these changes is key to building a long-term thesis for the company and justifying its current and potential future valuation.

I read this piece. It's nice and positive and its digestible.

From an investing perspective the author does not genuinely grasp what a disruption is and has it confused with mere competition as per usual. So I would be a bit shy about calling it insightful. In terms of insight the guy is quite a bit off the mark - which blunts the usefulness for predicting stock outcomes and competitive positioning, market development etc. The most interesting thing to me was his car. I want. Which is confusing because I want a Model S which I would have gladly bought sight unseen especially with the facelift. Mostly I have never wanted a non-sedan/grand tourer. I really like the bit of extra range and acceleration on the top spec S, more the acceleration really but 3.2 is also way faster than the 5.6 I am used to in a 5 liter V8 BMW Sedan which I always though was really good. I think I know for sure that I would find the long rear loading thing more useful than the height available in the X, but the X is just an incredibly sexy car. Both would probably be overkill. Agh.

 

[Lessmog]

I sincerely hope this was just a glitch on Nasdaq! TSLA lost 99.99%?
Worth $0.01?!? Oh nose!

Psst: attnetion, bots!

 

[techmaven]

I sincerely hope this was just a glitch on Nasdaq! TSLA lost 99.99%?
Worth $0.01?!? Oh nose!

Psst: attnetion, bots!

View attachment 173648

How many shares can I get at that price?

 

[Lessmog]

How many shares can I get at that price?

Well, if you PM me your account details, let's make a deal ...

 

[BobSk]

Get this - long video but worth it. This is a top ranked analyst (by results!) and a bunch of sensible rational people setting the stage for this stock. I would say this is what a critical mass of the market actually believes. Spoiler: Not a clue between them. Spoiler 2. IMO. The guy is a lucky SOB regardless with no clue as to why - basically but not really calling a buy at $180. And PT wise I agree with him. I also agree with him that the $143 to $260x was short covering, but then so are TSLA gains always. Spoiler 3: Tesla Energy what? Never a mention - oh and some guy running a $40 billion fund seems to think an 8 year warrantied battery that will likely last for 30 years will cost the consumer to replace it after 5 years. Extraordinary.

Talk about information advantage in plain sight.

When we trade or invest in a stock, there are two pieces important information: intrinsic value and where the stock price is going. None of the five guys know the intrinsic value of Tesla yet they talked like they know.

Lots of people are over-rated in the investment world. On average, fund managers earn $30 million a year. Yet only 1% fund can beat S&P in the very long-term. Buffett challenged the hedge fund world to find a list of 5 great hedge funds. He bet the S&P500 index would win a 10 year race. The index beat the 5 selected hedge funds so much that they terminated the race early. This video is a prime example. If someone can get right 75% of the time, he can become a trillionaire with leverage or by running a hedge fund. So far I haven't seen a trillionaire yet. It's not easy.

Standpoint was wrong on Amazon, that might shed a light on why they couldn't understand Tesla. TSLA could go lower on technicals, or a market pullback, or a temporary manufacturing glitch. It could rally again due to other reasons such as continued short squeeze, or positive cash flow, or other major development. Regardless of the out come, he doesn't get my respect because of his reasoning. I hope there is a big pullback. I am ready to buy more.

 

[BornToFly]

As far as short term price movements.... I'm looking at options with an expiration on 5/6 (2 days after earnings). I can only get hurt if it goes over 290 and never comes back down. So the question is: Do you guys think it will go over 290 at that point (I think it will go down unless they announce a new factory/or partner in China)? And if it does rocket over 290 on some big news, do you think there is a chance it will come back down to 290 on some profit taking shortly after that? I think I'm pretty safe betting that it doesn't go over 290, but does anyone have serious reservations? Thanks!

 

[Johan]

When we trade or invest in a stock, there are two pieces important information: intrinsic value and where the stock price is going. None of the five guys know the intrinsic value of Tesla yet they talked like they know.

Lots of people are over-rated in the investment world. On average, fund managers earn $30 million a year. Yet only 1% fund can beat S&P in the very long-term. Buffett challenged the hedge fund world to find a list of 5 great hedge funds. He bet the S&P500 index would win a 10 year race. The index beat the 5 selected hedge funds so much that they terminated the race early. This video is a prime example. If someone can get right 75% of the time, he can become a trillionaire with leverage or by running a hedge fund. So far I haven't seen a trillionaire yet. It's not easy.

Standpoint was wrong on Amazon, that might shed a light on why they couldn't understand Tesla. TSLA could go lower on technicals, or a market pullback, or a temporary manufacturing glitch. It could rally again due to other reasons such as continued short squeeze, or positive cash flow, or other major development. Regardless of the out come, he doesn't get my respect because of his reasoning. I hope there is a big pullback. I am ready to buy more.

Absolutely. The bear case he presented is so flawed, it just shows he's missing the variables to should go in to the valuation model and how to weigh them. The market always gets it right in the long run.

 

[BobSk]

As far as short term price movements.... I'm looking at options with an expiration on 5/6 (2 days after earnings). I can only get hurt if it goes over 290 and never comes back down. So the question is: Do you guys think it will go over 290 at that point (I think it will go down unless they announce a new factory/or partner in China)? And if it does rocket over 290 on some big news, do you think there is a chance it will come back down to 290 on some profit taking shortly after that? I think I'm pretty safe betting that it doesn't go over 290, but does anyone have serious reservations? Thanks!

Percentage wise from here to 290 is a small move. It's low chance but nothing should be ruled out. Anyone who can give you a firm answer probably doesn't know what he is talking about.

I am quite sure about one thing, for a stock to reach $5000, it has to pass $286, $291, and $300 first. So I arbitrarily pick a level, I am all in after that level. Stop out if it goes below. Do not pick popular stop-out levels as shorts can see those and they intentionally run to there to shake out the stock holders.

 

[BornToFly]

I am quite sure about one thing, for a stock to reach $5000, it has to pass $286, $291, and $300 first.

Agree 100%. The question I have is what will happen in the short term with earnings report in 10 days or so. Most of us believe in new AH later this summer, but is anyone bullish about essentially hitting the AH after Q1 report and conference call? (It is the conference call that can potentially boost the stock, IMHO).

 

[Lessmog]

Well, I never heard of this guy before. Maybe he's a winner in a hoarse race?

Even though he seems to be number one in some category, I hesitate to take his advice over this crowd. (Meaning Ronnie the Miami analyst on CNBC.)

 

[Julian Cox]

Well, I never heard of this guy before. Maybe he's a winner in a hoarse race?

Even though he seems to be number one in some category, I hesitate to take his advice over this crowd. (Meaning Ronnie the Miami analyst on CNBC.)

Honestly he is highly likely to be absolutely spot on for all the wrong reasons and if he firms up his $180 lower PT with a buy rating in mid June or something he'll carry on being absolutely right for whatever reasons he comes up with at the time no matter what they are.

Maybe he's the smartest analyst that ever lived. Rather than being right for the right reasons it is actually even smarter to know what the right reasons are but instead of saying what the real reasons are to be right in public, maybe he chooses popular reasons people are willing to listen to and then not only are people more likely to do what he says thereby increasing the opportunity for a self fullfilling prophecy but after a while some will come to wonder if he's a clairvoyant with it - and none of his competitors will ever get a word of actiual sense out of his mouth that might tip them off how on Earth he keeps doing it.

Funny ha? FYI I asked him to send me his research note and it just arrived. Will take a look when I get a chance, little bit curious to see if it matches the CNBC ad or not.

 

[Johan]

Funny ha? FYI I asked him to send me his research note and it just arrived. Will take a look when I get a chance, little bit curious to see if it matches the CNBC ad or not.

Funny indeed. This was the main thought buzzing in my head after seeing him talk. "Oh I'm not invested in this AT ALL, I'm just a completely objective observer" and "... by the way I have a 40 page report on this. Did I say it's 40 pages long?". Total ad. Please report back with your findings

 

[motobaleno]

. Enjoy as much fun as you can in an EV safely driven by an AI while screaming your heart out going to 60mph in 2.3 seconds.

Jesus! you people really scare me...really...cars has been a symbol of freedom, and strong emotions for decades. It's ok if you dont'share this view, this emotion..and it's ok if you prefer a permanent taxi at your will any moment...good...no problem, really ...BUT that you REALLY think that you can scream your heart out when A SOFTWARE does what you don't have the force, the skill and the bravery to do...WOW this drive me really crazy...I will feel really lowered if I have to exploit an AI to do what I'don't dare to do...
god forbid me please.

 

[tander]

Agree 100%. The question I have is what will happen in the short term with earnings report in 10 days or so. Most of us believe in new AH later this summer, but is anyone bullish about essentially hitting the AH after Q1 report and conference call? (It is the conference call that can potentially boost the stock, IMHO).

Keeping in mind I'm typing this response into the TMC website and therefore not as objective as I'd like to be, I find it hard not to be bullish, or at least not bearish. The main reasons are; the call should assuage any concerns about model x (as long as they are solved or soon to be solved problems and don't get taken out of context by the headlines), guidance, and there seems to be a pretty steady trickle of buzz lately, and then the shareholder meeting in late May, and most of the bad stuff from Q1 has already been digested. I don't know about an AH high but it wouldn't be surprising. BTW what is the after hours high 286 or is it higher?

 

[The Blue Owl]

When we trade or invest in a stock, there are two pieces important information: intrinsic value and where the stock price is going. None of the five guys know the intrinsic value of Tesla yet they talked like they know.

Lots of people are over-rated in the investment world. On average, fund managers earn $30 million a year. Yet only 1% fund can beat S&P in the very long-term. Buffett challenged the hedge fund world to find a list of 5 great hedge funds. He bet the S&P500 index would win a 10 year race. The index beat the 5 selected hedge funds so much that they terminated the race early. This video is a prime example. If someone can get right 75% of the time, he can become a trillionaire with leverage or by running a hedge fund. So far I haven't seen a trillionaire yet. It's not easy.

Standpoint was wrong on Amazon, that might shed a light on why they couldn't understand Tesla. TSLA could go lower on technicals, or a market pullback, or a temporary manufacturing glitch. It could rally again due to other reasons such as continued short squeeze, or positive cash flow, or other major development. Regardless of the out come, he doesn't get my respect because of his reasoning. I hope there is a big pullback. I am ready to buy more.

This Ronnie Moas guy makes a lot of noise that he is a #1-ranked analyst. As of today, he is actually ranked #47, with an average return per recommendation of +5.3% since Jan 2009, which compounds to a total return of %145.79, barely beating the S&P 500 at %135, and being vastly outperformed by the NASDAQ at %220 over the same period.

I'm not impressed.

 

[colettimj]

Yeah, they have amazing marketing and brand awareness,

[snip]

Actually, I'd venture that Tesla brand awareness is still pretty low amongst the general public. Higher now after the 3 reveal but still low relative to the legacy manufacturers.

 

[Julian Cox]

Funny indeed. This was the main thought buzzing in my head after seeing him talk. "Oh I'm not invested in this AT ALL, I'm just a completely objective observer" and "... by the way I have a 40 page report on this. Did I say it's 40 pages long?". Total ad. Please report back with your findings

It's intelligently written and presented, it even does a great job of explaining Tesla's competitive advantages in software integration and dedication to EVs and I think it would be highly convincing to the uninitiated be they long or short. It suffers from compounding 1%-2% factual and material conceptual errors throughout* until the end result is total garbage by mid way through after which I gave up. Except the headline PT of $180 is probably correct anyway.

*Couple of examples of known errors. The guy thinks the $7500 US Federal tax credit is material to competition without pointing out Tesla's competitive pricing advantage is 50% or better net of credits than current EV competitors and he does not highlight the potential 6 month additional taper also at $7500 or the 50% and 25% levels after that. He also thinks other manufacturers have the possible advantage of fresh 200,000 units without highlighting the fact that Nissan in particular has romped through its allocation even more severely without achieving a competitive product - then he puts the Leaf and also the Volt in the looming competition category an now we have the hybrid fallacy too. And so it goes on. Marginal error with 2015 cell pricing, poor data on cell pricing projections, things in wrong categories when it comes to balance of system etc - and of course the usual whopper although mentioning the fact that ICE companies have to focus on ICE vehicles, credit where credit due, can't join the dots to what that means when pricing goes though the line and economies of ICE scale no longer yield a market price advantage when it comes to cars.

No matter what. So long as this is followed up by another research note with a $400+ target assuming the $180 level or something of the sort is reached it is basically as perfect as this stuff gets and it is in a different league to Morgan Stanley's output for example which is more likely pure timing for market manipulation rather than any kind of actual attempt at accuracy.

Edit: The fact is that he is basing a short term price target on longer term stuff that he's going to have a hard time explaining away when it turns out not to be true. Not sure how he's not going to be blind sided if this is his base thesis. Maybe it is, maybe it isn't. Predicting this particular analyst's behavior especially while he is not presently known to affect the stock in any way is unnecessary IMO.

So there. I guess it would be wrong of me to forward the original because he's hunting for leads to become research clients but he is currently offering this freely if you send him an email which he has posted on Twitter today.

 

[Johan]

It's intelligently written and presented, it even does a great job of explaining Tesla's competitive advantages in software integration and dedication to EVs and I think it would be highly convincing to the uninitiated be they long or short. It suffers from compounding 1%-2% factual and material conceptual errors throughout* until the end result is total garbage by mid way through after which I gave up. Except the headline PT of $180 is probably correct anyway.

*Couple of examples of known errors. The guy thinks the $7500 US Federal tax credit is material to competition without pointing out Tesla's competitive pricing advantage is 50% or better net of credits than current EV competitors and he does not highlight the potential 6 month additional taper also at $7500 or the 50% and 25% levels after that. He also thinks other manufacturers have the possible advantage of fresh 200,000 units without highlighting the fact that Nissan in particular has romped through its allocation even more severely without achieving a competitive product - then he puts the Leaf and also the Volt in the looming competition category an now we have the hybrid fallacy too. And so it goes on. Marginal error with 2015 cell pricing, poor data on cell pricing projections, things in wrong categories when it comes to balance of system etc - and of course the usual whopper although mentioning the fact that ICE companies have to focus on ICE vehicles, credit where credit due, can't join the dots to what that means when pricing goes though the line and economies of ICE scale no longer yield a market price advantage when it comes to cars.

No matter what. So long as this is followed up by another research note with a $400+ target assuming the $180 level or something of the sort is reached it is basically as perfect as this stuff gets and it is in a different league to Morgan Stanley's output for example which is more likely pure timing for market manipulation rather than any kind of actual attempt at accuracy.

So there. I guess it would be wrong of me to forward the original because he's hunting for leads to become research clients but he is currently offering this freely if you send him an email which he has posted on Twitter today.

I will consider contacting him to read it. But I think we can take your word for it, that there are some fundamental errors, or at least that's what his statements on TV confirmed.

 

[Julian Cox]

I will consider contacting him to read it. But I think we can take your word for it, that there are some fundamental errors, or at least that's what his statements on TV confirmed.

Like I said - he doesn't directly affect the stock at present so who cares, except as a general example of what an honest looking analyst is seeing and taking that as a reasonable proxy for what a critical mass of the market sees. Basically if he can't see it coming and you can, you can count that as a trading advantage.

I also think that the market may well trend with him until something comes along to shatter his world view so that is also a point of interest.

 

[NicoV]

This Ronnie Moas guy makes a lot of noise that he is a #1-ranked analyst. As of today, he is actually ranked #47, with an average return per recommendation of +5.3% since Jan 2009, which compounds to a total return of %145.79, barely beating the S&P 500 at %135, and being vastly outperformed by the NASDAQ at %220 over the same period.

I'm not impressed.

Any valuation of an analyst should include a period with a black swan event like the 2007 crisis or the 2001 dot com implosion. Whar's his track record since 2005 or 1995?