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

[lafrisbee]

One of you guys that knows how this works...WTF is happening?
Is this going to be the loooooooooooooooooooooooooongest squeeze in history?

 

[StealthP3D]

So, who is going to do the math how quick FSD pays for itself if you have your car driving around the block endlessly until your appointment is over?

I think what will eventually happen is a prohibition against using such a mode to bypass parking expenses because it could cause grid lock in city centers during peak hours.

 

[woodisgood]

Index Squeeze?

If you’re one of the index funds, aren’t you asking S&P to let you start buying ASAP instead of the announced date sitting there a month out so everyone can front-run?

 

[TheTalkingMule]

Noble effort by the MM's today, I was actually a believer that we'd be capped at $532 for the day. So much for that.

The 2nd wave of front-runners is piling on.

 

[TheTalkingMule]

One of you guys that knows how this works...WTF is happening?
Is this going to be the loooooooooooooooooooooooooongest squeeze in history?

Yes

 

[StealthP3D]

One of you guys that knows how this works...WTF is happening?
Is this going to be the loooooooooooooooooooooooooongest squeeze in history?

Nobody can predict these things but I would guess the share price is going to get soft well before the actual inclusion dates. There are bound to be a lot of speculators buying now so they can sell shares to the index funds at what they hope will be a higher price. But there is no guarantee it will be - that's why it's called "speculation". So it comes down to the balance of willing sellers and buyers (as it always does). And no one can predict that with any certainty.

 

[StealthP3D]

If you’re one of the index funds, aren’t you asking S&P to let you start buying ASAP instead of the announced date sitting there a month out so everyone can front-run?

No.

1) The funds goal is match the index. They just want to have an average buy price equal to TSLA on the inclusion date.
2) S&P has no authority over when index funds do their buying.

 

[Chunky Jr.]

I'm usually on the outside looking in on opportunities like TSLA. It's fun to be on the inside for once.

 

[StealthP3D]

I'm usually on the outside looking in on opportunities like TSLA. It's fun to be on the inside for once.

What's worse than always being on the outside looking in?

Being on the outside looking in AFTER you were on the inside looking out!

 

[thx1139]

No.

1) The funds goal is match the index. They just want to have an average buy price equal to TSLA on the inclusion date.
2) S&P has no authority over when index funds do their buying.

So firms that have S&P Index Funds can purchase TSLA with free funds they have available and then on the date of the inclusion sell to their own fund from this holding account?

 

[Prunesquallor]

I'm usually on the outside looking in on opportunities like TSLA. It's fun to be on the inside for once.

I would be on the outside looking in if not for :
1) My wife asking about Tesla cars back in Nov 2018
2) Me researching the car
3) Me buying M3 Dec 2018
4) Me finding this thread April 2019
5) Me investing starting in May 2019
6) Me very happy Nov 2020

 

[WarpedOne]

One of you guys that knows how this works...WTF is happening?
Is this going to be the loooooooooooooooooooooooooongest squeeze in history?

And it could not happen to nicer guys.
On both sides ...

 

[Nocturnal]

One of you guys that knows how this works...WTF is happening?
Is this going to be the loooooooooooooooooooooooooongest squeeze in history?

We are watching game theory in practice. Many funds etc. want or need to buy the stock. If those buyers were able to cooperate and trust each other they would all buy slowly so as not to make the price spike and cost them more money. That works until one of them starts to get a little greedy (think Prisoner's dilemma) so that guy buys a little faster hoping to jump the gun on his peers. That causes others to consider doing the same.

On top of that you have traders and speculators and a million other actors who also have an interest in increasing SP or suppressing it. My guess is that we see this "slow" daily increase until the damn breaks, then who knows what will happen.

 

[Robocop]

Lol, I have some 10-15 year SP projection spreadsheets, and the recent runup this week started causing some insane calculations 15 yrs out. Had to learn how to create a cell limitation in Google Sheets to ensure it didn't create crazy valuations in say 2035 of $25 Trillion market cap, etc.

 

[vikings123]

Nobody can predict these things but I would guess the share price is going to get soft well before the actual inclusion dates. There are bound to be a lot of speculators buying now so they can feed shares to the index funds. So it comes down to the balance of willing sellers and buyers (as it always does). And no one can predict that with any certainty.

The bigger question for me is are these front runners buying enough of TSLA to feed the index? I don't know what percentage of this volume is HFT but the volume is still generally low compared to our previous high volume days.

I understand the effective rebalance date remains Dec 21st regardless of how many tranches. So if it is two tranches we can expect indexes to start the week of Nov 30th potentially and then the week of Dec 14th. If it is only one tranche most of the buying will happen will occur during the week of Dec 14? Is that true?

 

[StealthP3D]

So firms that have S&P Index Funds can purchase TSLA with free funds they have available and then on the date of the inclusion sell to their own fund from this holding account?

There would be no point in doing that unless they just want to speculate like (presumably) they can do at any time. Different funds within a firm are comprised of different owners or holders of the fund. Every transaction needs to happen at current market rates. There are exceptions but that doesn't really change anything here.

I was talking about general speculation in the market. I'm sure plenty of the buying happening now is being done by traders or short-term holders who are speculating the price will continue to rise. And I think it will but no one knows how high. At some point the price will fall. It's all short-term noise as far as I'm concerned.

That's why I recommend investors pay attention to the performance and growth of the company, not the share price. Don't be attracted by shiny things - the real gold is inside the company.

 

[Mengy]

Actuall

I'm usually on the outside looking in on opportunities like TSLA. It's fun to be on the inside for once.

It sure is.

I likely wouldn't even be invested as heavy as I am into Tesla if not for me test driving a M3 in early 2019. It impressed me so much that Tesla was all I could think about. Soon after that I started accumulating shares. LOTS of shares.

I haven't bought a Tesla car yet but I will buy a MY within a year or two. I could get it now but I'm going to wait to test drive a Cybertruck first, just to be sure I wouldn't rather own that!

 

[NooB_cat]

We are watching game theory in practice. Many funds etc. want or need to buy the stock. If those buyers were able to cooperate and trust each other they would all buy slowly so as not to make the price spike and cost them more money. That works until one of them starts to get a little greedy (think Prisoner's dilemma) so that guy buys a little faster hoping to jump the gun on his peers. That causes others to consider doing the same.

On top of that you have traders and speculators and a million other actors who also have an interest in increasing SP or suppressing it. My guess is that we see this "slow" daily increase until the damn breaks, then who knows what will happen.

Sounds like lockdown-toilet roll theory to me!! (in the UK at least)

 

[StealthP3D]

The bigger question for me is are these front runners buying enough of TSLA to feed the index? I don't know what percentage of this volume is HFT but the volume is still generally low compared to our previous high volume days.

I understand the effective rebalance date remains Dec 21st regardless of how many tranches. So if it is two tranches we can expect indexes to start the week of Nov 30th potentially and then the week of Dec 14th. If it is only one tranche most of the buying will happen will occur during the week of Dec 14? Is that true?

I don't think the S&P people have announced that yet (whether the inclusion will be split into two smaller inclusions and what the dates are, just that it will be included before the 21st). IMO, it doesn't really matter much, if at all, to an investor. It would only matter if you were thinking of buying more or selling off some of your holdings. Even then, it's impossible to accurately predict the effect those dates, when announced, might have on the share price.

 

[Prunesquallor]

Lol, I have some 10-15 year SP projection spreadsheets, and the recent runup this week started causing some insane calculations 15 yrs out. Had to learn how to create a cell limitation in Google Sheets to ensure it didn't create crazy valuations in say 2035 of $25 Trillion market cap, etc.

LOL. Same thing happens with propellent mass when you put too much delta-v into rockets. Dang exponents.