Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Bet TSLA]

So then to see that drop, over 5 days, due to the a-holes at the S&P and the a-holes speculating the stock, was galling, it hurt.

You know what's galling? Listening to somebody who just had his portfolio pumped up to ridiculous heights complaining when he gives a little back. Especially when he insults the very people who pumped the stock price up in the first place. You must understand that it was the speculators and S&P front-runners who ran the price up in the first place, right? So please dial back on the greed. Get a grip.

If you play around with money you will need short term you're going to be unhappy sometimes. If you are foolish enough to mistake money that appears magically and makes life potentially even more wonderful than it already is, for money you earned by hard work and cleverness and seriously deserve, then you will always be unhappy, and you'll have a lot of bad weekends.

You took a risk. You got lucky. So have many here. If you think you've made money because you're extra smart, then surely you would have gotten out on August 31 rather than give some back. I think you know who's to blame.

I've realised around $430k this year in my trading account and will need to pay around $120k tax on that at the end of 2021/beginning 2022, so looking to build some cash now.

I've solved that problem in the past by trying to build some cash and as a result running the profit back down to zero by the end of the year. In fact, I went way negative. And for way more $ than you're talking about. I was very relieved I didn't have to pay lots of taxes, as here in California it ends up being more like 50% on short-term millions. Well... maybe what I felt wasn't relief.

In any case, congrats on making a lot of money. I think many of us will be giving big pile of money to the taxman. It's a sign of success! But complaining about it is not classy.

 

[mrmage]

Thanks, appreciate your comments. I started with ~3% of my net worth in TSLA back in 2018, At Friday's Close, that position has grown to just over half the market value of my house.

But I'm not selling (neither my TSLA or my house), nor am I moving any time soon. We have it good in Canada, and I like it here...

Back in the '80s, a friend joked "WOT? Live within my means? I can't even live within my CREDIT LIMIT!!" IMHO, steady growth in personal wealth is simply a matter of living slightly below your means, then investing the surplus. Oh, and make a spreadsheet. It really does help.

Cheers, and GLTA!

I went all in in with Tesla with 10% of my net worth in 2019. Because that was a significant amount, most was split between safer convertibles and stock, with a sliver in calls. Today, it’s over half my net worth.

I’m looking forward to the day it will be 90%, so I will no longer be underweight Tesla.

 

[Dreadnought]

Flurry of tweets from Elon this morning about the AP rewrite. Now aiming for full deployment by the end of Q4. Should make for some FSD revenue recognition.

https://twitter.com/elonmusk/status/1304802133355556864?s=19

Thanks for the link. And as Elon's timelines tended to be a bit on the optimistic side every once in a while, I think it is noteworthy that the 2..4 weeks closed beta estimate is consistent with the 6..10 weeks target from mid August. Makes me bullish AF that everything goes according to plan. Potentially as close as 2 weeks from here, this means that they're in the final stages of testing.

 

[wipster]

@Artful Dodger @Lycanthrope Man, you two will fall for anything! Germany is still unchanged this morning and I slept like a baby (albeit a cranky one). Unfortunately woke up to an even smokier sky this morning. Rain possible early next week and it can't come soon enough for me.

Good thoughts for all and go Tesla!

 

[Creekstalker]

I went all in in with Tesla with 10% of my net worth in 2019.

10% qualifies as "all in"?

I'm "aller in" then.

 

[Cherry Wine]

IV of DITM Leaps

I am looking at options to deleverage LEAPs.
I am considering writing a vertical spread against these long calls rather than selling the calls, helps with taxes (LTCG, rather than STCG).

I want to continue positioned in TSLA. I am wondering whether I should

1. Switch to the common stock or
2. Switch to DITM LEAPs. In this case, at least for some amount, I have some short calls DITM I would like to buy back. (Buying back too many might be suboptimal amount losses for the tax year, but taxes aspect is a different story). For the remaining amount, I will be buying DITM long calls, all LEAPs.

IV effect if I switch to DITM LEAPs?

• When I cash out my LEAPs (ATM, OTM) through vertical spreads, the IV is likely going to be high
• If I switch to DITM LEAPs, when IV goes down, will my DITM calls also loose value due to IV crush?
• For ATM, OTM calls, IV crush tends to be very significant. For DITM calls how significant does this tend to be?

Rationale for considering DITM calls and not the common stock

• (DITM) Calls allow me to later switch to ATM or OTM calls, without tax implications. If I switch to stock, and if there's any appreciation in the value, I will end up paying taxes from sale (to raise cash to buy ATM or OTM calls later)

DITM LEAPS are almost entirely intrinsic value. There's very little impact from IV since IV inflates the extrinsic value. The one way you would get crushed on IV with DITM LEAPS is if the stock were to drop precipitously such that the option became more "shallowly" ITM or ATM, meaning that more of the option premium is derived from its extrinsic value, and then experience an IV crush. The deeper in the money, the less IV matters. At a certain point however, why not just buy common shares?

I don't understand your rationale for "switching to ATM/OTM calls without tax implications." Are you talking about deferring the taxes for a given year by capping the long call with a spread? Because you could do the same thing with shares, you know.

 

[Unpilot]

If you portfolio is 97.82% TSLA ...is that all in?

 

[mrmage]

I've solved that problem in the past by trying to build some cash and as a result running the profit back down to zero by the end of the year. In fact, I went way negative. And for way more $ than you're talking about. I was very relieved I didn't have to pay lots of taxes, as here in California it ends up being more like 50% on short-term millions. Well... maybe what I felt wasn't relief.

How do you run profit down to zero by building cash? That increases profits for anything held for awhile.

 

[mrmage]

If you portfolio is 97.82% TSLA ...is that all in?

Depends on how much of your net worth is tied into your portfolio.

 

[Bet TSLA]

I went all in in with Tesla with 10% of my net worth in 2019. Because that was a significant amount, most was split between safer convertibles and stock, with a sliver in calls. Today, it’s over half my net worth.

I’m looking forward to the day it will be 90%, so I will no longer be underweight Tesla.

Hmm. If I had 10% of my net worth invested in Tesla, I'd consider myself basically out of the market.

Ignoring the value of my house (people seem to differ on whether to consider that part of their "net worth" when talking about investing), I'm usually in for between 80% and 120% of my net worth, depending on how you compute the effects of leverage and margin, i.e. what you mean by value at risk. Although lately I've been trying to reduce that, largely because pursuing greater riches seems stupid.

But I don't consider myself "all in" because I have some money in other stocks, just to keep my hand in. And my wife prefers that I keep some cash in the checking account so we can buy food. I keep having to move money out of my investments to fund that obviously non-productive use.

 

[Bet TSLA]

How do you run profit down to zero by building cash? That increases profits for anything held for awhile.

Investments sometimes lose money when the stock goes in a contrary direction. I'm sure you've experienced that. When you lose as much as you had gained, you've run your profit down to zero. Makes you feel like an idiot. I've been an idiot multiple times. If you're married, your wife can explain this to you.

 

[JRP3]

If you portfolio is 97.82% TSLA ...is that all in?

Depends on how much of your net worth is tied into your portfolio.

TSLA is currently around 75% of my net worth. Large price swings are...interesting for me.

 

[AperiodicCoder]

Hi all,

I've been doing a lot of lurking here recently, but I find that I don't have enough time to go through all of the posts and find the best ones. So I figured I'd throw a little automation at it and help myself and others find the most useful posts.

My first attempt at this just takes the posts from the last 24 hours with what I'm calling "total positive votes," which is just all votes minus disagrees.

Enjoy!

Author	Time (GMT)	Link	Content Preview	Total Positive Votes
hobbes	11 Sep 17:35	Link	German public TV station Das Erste just aired Elon´s tweet where he is recruiting workers for Giga Berlin. Börse vor Acht (Stock Market before eight), a short daily segment on the economic situation a...	63
Jackl1956	11 Sep 19:08	Link	Snapped a pic over my pool. It is time for a full-throated discussion of climate change and Tesla’s “Master Plan.” In a clear and deliberate voice, tsla is undervalued. We should be calling for a ca...	48
canoemore	12 Sep 00:06	Link	I just drove 6 hours on I-80 from central PA west and saw no fewer than 18 trailers loaded with mostly Model Ys. Made me feel warm and fuzzy.	32
Nocturnal	11 Sep 17:08	Link	To play devil's advocate, I've spent the last few years telling myself that these analysts are all idiots so when they agree with me I'm a little uncomfortable.	31
Lycanthrope	12 Sep 11:58	Link	Indeed, I have a lot of empathy here. When I first put some decent money into $TSLA (€60k in 2016), my wife and I had the hope that it would grow enough to buy a summerhouse in Denmark, so 3x, 4x wou...	30
MTL_HABS1909	12 Sep 12:03	Link	Does anyone else see something missing from Biden’s “Buy American” speech?	27
Curt Renz	11 Sep 17:24	Link	A gain of 0.37% for each of 252 trading days would boost the TSLA share price in a year by more than 2.5 times to $945.	25
ZachF	11 Sep 18:02	Link	Remember, a year ago the stock was $245. ....Before a 5x split.	25
Jackl1956	12 Sep 12:22	Link	Showed this post to my wife; she explained: “Tesla is the only American car company that doesn’t need help.”	24
The Accountant	12 Sep 11:37	Link	Impact of CEO Performance Award on Q3 2020 Linking to the financial projections thread to avoid cluttering this thread with accounting discussions. Two main points I will make here: 1. Cap raise this...	24

 

[mrmage]

DITM LEAPS are almost entirely intrinsic value. There's very little impact from IV since IV inflates the extrinsic value. The one way you would get crushed on IV with DITM LEAPS is if the stock were to drop precipitously such that the option became more "shallowly" ITM or ATM, meaning that more of the option premium is derived from its extrinsic value, and then experience an IV crush. The deeper in the money, the less IV matters. At a certain point however, why not just buy common shares?

I don't understand your rationale for "switching to ATM/OTM calls without tax implications." Are you talking about deferring the taxes for a given year by capping the long call with a spread? Because you could do the same thing with shares, you know.

I don’t get the tax part either, but to beat my dead horse... @Criscmt can sell enough of the leaps/calls/spreads to convert the rest of the calls to shares. This simultaneously reduces short term profit and deleverages.

 

[Bet TSLA]

Thanks for posting your thinking.

I have some LEAPs that I (at least today) intend to become shares. My understanding (not a pro) is that LEAPS purchased when out of the money and then over a year later converted into stock will result in stock that is considered long term capital gains immediately. There are no tax implications in conversion into shares as I understand it. The purchase date is the date of the LEAP purchase as I understand it. I am less clear as to the tax basis of the shares but it is probably the strike price (again not experienced here).

A consideration I have is to have the highest basis for the shares since a high basis is helpful in tax considerations. This is tax basis thinking is not often discussed but it has implications for taxes down the road.

I also note that the split is very helpful for LEAP holders (or others) since it expands what can be managed into smaller but more numerous pieces reducing the "all or nothing" scenarios. Here's hoping for more splits going forward.

Both of you would do well to talk to an accountant, or try reading something about how taxes work. Being clueless does not lead to good investing decisions. Most of what you think you know is wrong.

As a side note, I've found that when I let tax considerations guide my investing, I end up with terrible results, saving money on taxes by making less (or no) money on my investment. Of course your results might be different.

 

[Fobble]

Showed this post to my wife; she explained: “Tesla is the only American car company that doesn’t need help.”

You have a very smart wife, Sir!!

 

[jerry33]

10% qualifies as "all in"?

I'm "aller in" then.

If you are including items such as your house in net worth, 10% might be all the liquid capital you have.

 

[ggies07]

Does anyone else see something missing from Biden’s “Buy American” speech?

View attachment 587394

I think this is incredibly sad and a missed opportunity. Even with how progression his campaign is, it's still stuck on the normal political game system. You can't even possibly think of The Green Deal with those companies. **** that *sugar*.

 

[tinyrodent]

 

[AudubonB]

I would suggest that were Mr Biden to have spent political time in Michigan by touting Tesla, even when agglomerated with other manufacturers, that would have been a surefire way for him to lose votes.

Pick your battles carefully, especially if you’re running for election.