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

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It's either pick from the usual Fidelity funds or go IRA and have the ability to pick stocks as well as funds. Given that option why not put 100k or even 200k into TSLA stock? Hindsight is 20/20, could have bought years ago but I figure I'd be saying the same thing 2-3 years from now. Of course a new car or boat is tempting. LOL

You seem like a non-regular visitor here, so I'll offer some "not advice" that is probably obvious to the regulars, but maybe not to you.

TSLA will almost certainly be higher in 2-3 years. By that time, three more factories should be ramped up (counting Shanghai Phase 2) and probably more factories being built... Autopilot will be trained by Tesla's super duper computer Dojo... Tesla Network (robotaxis) will be either rolled out or clearly showing its gargantuan potential... Cybertruck will be driving Ford toward bankruptcy... exponential sales growth of Solar Roof and Powerwall and Megapack will no longer be ignored by analysts... and world-conquering $25k "world cars" from China and/or Germany will be unveiled or ramping up production.

Billionaire investor Ron Baron predicted TSLA will reach $2k/share by 2025. I suspect it will get there sooner as the forward-looking market sees all the above and realizes Tesla is only getting started. The only question is whether the price will drop on the way and give you a better entry point than $600.

Nobody knows for sure, but I doubt it. The FUD is flying now like Gordon Johnson's spittle (including this gob of snot), but the recent upgrades from Goldman Sachs and Morgan Stanley are a hurricane blowing it away. Some folks here expect TSLA to drop after S&P500 inclusion (I don't), but even if does, it will likely drop from a higher point and maybe not reach $600 again.

Standard advice is invest half your cash now and half later, but I wouldn't wait too long. At least 15% of available shares are about to disappear permanently into index funds, and every day brings more YouTube videos showing the awesomeness of the Full Self Driving beta. And you never know what that tricky Elon will announce next.
 
I've decided to move both accounts over to IB and it was a painless and very smooth process (via ACATS transfer, took about 4-5 business days).

Please note that you will NOT be able to trade from start of transfer till end or even +1 business day
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You might want to wait until Jan with this move, considering TSLA's upcoming party.


A couple days later, an E*trade consultant reached out to me from the Cupertino office via phone call AND email and suggested we have a chat about the move. I told him my primary concern was margin rate, and secondary was customer service wait times. He suggested that we try to get an approval for a rate he got for a client recently (1.94%) and I was excited to do that.

Interesting, I moved some of my securities around to take advantage of bonuses that other brokerages were offering, and I have since received emails/calls from E*TRADE offering me a large cash bonus if I move them all back. (I don't use margin so that wasn't a negotiation point for me.)

I did learn one interesting thing though Schwab lets me put pre/after-market orders in before their trading hours start, which E*TRADE does not. (It is one of the things that annoys me about E*TRADE, if I want to trade in pre-market I have to get up way to early to put an order in; I can't plan ahead and put my order in before I go to bed.)
 
I do get the logic here, but I also see it as flawed.

You can use this logic to talk yourself out of continuing to live indoors (omg - all those mortgage payments that could have been buying TSLA instead), or owning a car of any kind (those car and insurance payments that I could have replaced with a monthly bus pass!), or even eating.

After all, you can always eat more cheaply - get a 25lb bag of beans and rice, and you might get your meal costs under $0.50, even if those meals start getting monotonous or even not so healthy for you.


From my own experience, I consider buying a Tesla about the best investment that a long term buy and hold investor can make. Because it will be a daily reminder of just how awesome and fun these products are, and any time you think about selling that Tesla in the driveway will remind you of what you're selling. That might help you question the wisdom of selling the shares, and over even a smallish number of shares and a long enough investment horizon, that car will pay itself back with a lot of interest instead of costing you.

I can use that argument to say the $80k used roadster in my avatar bought me financial independence and retirement 8 years later.


True. Buying my Model S over 4 years ago convinced me to purchase many more TSLA shares than I had before hand.
 
Tesla Facts: "I believe much of the TSLA volume on December 18 is going to happen on the "Nasdaq Closing Cross" at 4:00pm - a special end of the day auction process where those willing to sell TSLA shares and those buying them can negotiate a single closing price."

Thoughts @FrankSG and others? We screwed?

I would love to learn more about this as well.
 
I don't know why a relatively small amount of debt would make it hard for you to sleep. To each his own I guess. :rolleyes:

Your original statement was:

"This is the reason wise TSLA shareholders finance all large purchases instead of paying cash."

Now you are trying to characterize "all large purchases" as a "relatively small amount of debt"? If I financed all my large purchases I would be around 2+ million in debt. To me, that's not a "relatively small amount of debt". To make it worse, the implication is that it should be financed so I could buy even more TSLA than I already have! And to service the loans I would need to regularly sell off some of my stock, regardless of what the price was.

I don't think I need to explain why this would not be the wisest management of personal finances even if it might increase my returns. :rolleyes:
 
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Rolling over my 401 and have the option to put it in an IRA account which I can mange. I know better but 100k of TSLA is tempting.

Someone in another thread, or upstream in this one, described thinking of TSLA as his new S&P 500. That's exactly how I've come to think of it too. Not investment advise, just perspective on how some people are thinking.
 
I don't know why a relatively small amount of debt would make it hard for you to sleep. To each his own I guess. :rolleyes:

The interest on a car loan doesn't begin to compare with the rate of return of owning TSLA.

Being debt free isn't where one should celebrate. The celebration should start when one has the ability to pay off all debt with no sweat. Again, whichever floats your boat.

I have no idea why you bring up "the most important things in life". Totally irrelevant to what I was addressing.

Is a 25M dept of a joint venture to buy a commercial private medical center something that would prevent sleeping at night :X
 
BTW, it's gone up 15x since the $200 stock price pre-split, so just take your car purchase, your vacation costs, etc. and times it by 15, and then start crying...

If it makes you feel any better, I just did this exercise for "what if I had sold the business and retired last year?". I estimate after tax I'd clear around $1M for the sale of the business.

$1M x 15 = :eek:!!!

I think I need a beverage... :oops:
 
Tesla Facts: "I believe much of the TSLA volume on December 18 is going to happen on the "Nasdaq Closing Cross" at 4:00pm - a special end of the day auction process where those willing to sell TSLA shares and those buying them can negotiate a single closing price."

Thoughts @FrankSG and others? We screwed?

I'm not sure tbh. I haven't had the time to research this in depth.

I don't know how there'd be enough sellers participating in this for this to work out, but Fact Checking usually knows what he's talking about.
 
I rarely disagree with Stealth but...
...If I financed all my large purchases I would be around 2+ million in debt. To me, that's not a "relatively small amount of debt"....
It is to me, if your net worth is 20+ million, as your reported investing history might suggest. TSLA and your other stocks would have to drop way more than TSLA ever has before you'd suffer a margin call.

...And to service the loans I would need to regularly sell off some of my stock, regardless of what the price was....
No, as mentioned above, you could add the interest to your loan, and let your estate pay it off from your gigantic stock holdings when a jealous husband shoots you at age 100. The interest rate on $2 million from Interactive Brokers is less than 1%. You could live a long time at that rate, especially if your stocks are growing much faster.

That's what I plan to do if/when IB lowers their margin equity requirement for TSLA, hopefully soon because of S&P inclusion or the Goldman upgrade or whatever made E*Trade lower theirs recently. (That was great news, thanks @Prunesquallor.)
 
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I rarely disagree with Stealth but...

It is to me, if your net worth is 20+ million, as your reported investing history might suggest. TSLA and your other stocks would have to drop way more than TSLA ever has before you'd suffer a margin call.


No, as mentioned above, you could add the interest to your loan, and let your estate pay it off from your gigantic stock holdings when a jealous husband shoots you at age 100. The interest rate on $2 million from Interactive Brokers is less than 1%. You could live a long time at that rate, especially if your stocks are growing much faster.

That's what I plan to do if/when IB lowers their margin equity requirement for TSLA, hopefully soon because of S&P inclusion or the Goldman upgrade or whatever made E*Trade lower theirs recently. (That was great news, thanks @Prunesquallor.)

I don't know where to start with this except to say that's not how I roll or recommend others do.

A lot could happen in the next several months that are totally unexpected. Looking further down the road, we can bet borrowing interest rates are not going to be 1% so I wouldn't want to plan anything on that. Everything seems certain until it isn't.
 
I rarely disagree with Stealth but...

It is to me, if your net worth is 20+ million, as your reported investing history might suggest. TSLA and your other stocks would have to drop way more than TSLA ever has before you'd suffer a margin call.


No, as mentioned above, you could add the interest to your loan, and let your estate pay it off from your gigantic stock holdings when a jealous husband shoots you at age 100. The interest rate on $2 million from Interactive Brokers is less than 1%. You could live a long time at that rate, especially if your stocks are growing much faster.

That's what I plan to do if/when IB lowers their margin equity requirement for TSLA, hopefully soon because of S&P inclusion or the Goldman upgrade or whatever made E*Trade lower theirs recently. (That was great news, thanks @Prunesquallor.)
For how much an investment has to drop to be stroke by a margin call from the bank?
 
Tesla Facts: "I believe much of the TSLA volume on December 18 is going to happen on the "Nasdaq Closing Cross" at 4:00pm - a special end of the day auction process where those willing to sell TSLA shares and those buying them can negotiate a single closing price."

Thoughts @FrankSG and others? We screwed?
I can confirm this. Was talking to a colleague who worked on the street in a prior life, and he confirmed that index fund managers wishing to minimize tracking error would simply place market on close order. And there are a lot of these.

The net imbalance will only be known a few minutes prior. So a lot of front running will happen earlier. For what it's worth, he himself is positioned for this trade.
 
No, that's almost a sure thing.

Errr... wait, I see you are in Canada where medical robbery is illegal.

/s
There is a 25 years private owned surgical center for sale in Montreal if you are interested in diversification, since it’s a sure thing.
Since total joint replacements will increase 550% by 2030 because of aging and obesity, that might be the closest thing that mimics the growing business of TSLA ;)
 
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I can confirm this. Was talking to a colleague who worked on the street in a prior life, and he confirmed that index fund managers wishing to minimize tracking error would simply place market on close order. And there are a lot of these.


The net imbalance will only be known a few minutes prior. So a lot of front running will happen earlier. For what it's worth, he himself is positioned for this trade.

Since Tesla shares are in demand couldn’t you have a higher ask price than you normally would when there is high volume?
 
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I can confirm this. Was talking to a colleague who worked on the street in a prior life, and he confirmed that index fund managers wishing to minimize tracking error would simply place market on close order. And there are a lot of these.

The net imbalance will only be known a few minutes prior. So a lot of front running will happen earlier. For what it's worth, he himself is positioned for this trade.
So let’s say you have half the shares that have not been bought prior to this day and you have a market imbalance of 41,600,000 shares. How is the price going to react if there is not enough share for sale?
 
Attached documents provide the necessary info on the Nasdaq Opening/Closing Cross.

The essential purpose seems to be that by placing large orders for open or close, one can
(1) access enough liquidity to be executed all at once rather than affecting the market price over the course of the day
(2) adjust your limit price during the preceding several minute window based on the subscription-only Net Order Imbalance Information stream.
(3) benefit from "Imbalance-Only Orders" whose express purpose is to add liquidity (presumably via MMs).

The "Opening and Closing Cross threshold" is 10%, meaning that the Cross is restricted to within 10% of the bid-ask midpoint. However, "the threshold range is dynamic; as the Nasdaq Best Bid and Offer (QBBO) changes, the threshold price range changes." My uneducated interpretation is that the SP can change an unlimited amount up until the QBBO stops changing, then it can only move another 10%.

Therefore, the 12/18 Closing Cross presents an enticing opportunity for both sides of the trade. As others are saying, front-runners could create a gap up just prior to close upon the initiation of the Net Order Imbalance Information stream at 3:50pm (we saw a similar movement on Friday), by entering LOC orders with a much higher ask. Index funds must then decide whether to 'get it over with' or wait until 12/21.

Did You Know? "Short selling is permitted during the Cross."
 

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I don't know where to start with this except to say that's not how I roll or recommend others do.

A lot could happen in the next several months that are totally unexpected. Looking further down the road, we can bet borrowing interest rates are not going to be 1% so I wouldn't want to plan anything on that. Everything seems certain until it isn't.
Fair enough. Different folks have different tolerances for risk. But there's some risk in just getting out of bed, and the risk of a margin call when your margin loan is relatively small is relatively low.

Also, a plan to live on a 1% loan can be changed anytime the rate goes higher. By then, your growth stocks will likely be much higher.

Cathie Wood thinks inflation will not be a problem for at least the next year or so, "because of the productivity gains from explosive innovation."

(minute 2:10)