Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
When the economy goes to hell, which might or might not happen in the next couple of years and might be happening now (covid impact), cash is king. If Tesla is not only capable of staying on top of its bills but can also rapidly build out manufacturing and refining plants and pay for mine development while costs are low due to the recession, and while Tesla's cash flow and income statements are compromised for the same reason, this would be a big advantage. Tesla needs to invest $100 billion in the next ten years just on battery cell production (per one of Rob Maurer's videos today). Why isn't paying off bonds a lower priority than capital spending and maintaining a large amount of cash to maximize maneuverability in hard times?
ggr
Expert in Dunning-Kruger Effect!
$ 1 Year
$ 12 1
$ 145 2
$ 1,742 3
$ 20,959 4
$ 252,184 5
$ 3,034,315 6
$ 36,509,352 7
$ 439,286,205 8
$ 5,285,560,046 9
$ 63,596,681,796 10
For day traders. Start with $1. Every day just make 1% on a trade. Do this for 250 days a year. That means you have weekends off and two weeks a year for holidays and vacation. Do this for 10 years, and you will have $63 Billion. Best to do in a Roth IRA, so no taxes on the gain. The power of compounding. You will be one of the richest people in the world.
$ 12 1
$ 145 2
$ 1,742 3
$ 20,959 4
$ 252,184 5
$ 3,034,315 6
$ 36,509,352 7
$ 439,286,205 8
$ 5,285,560,046 9
$ 63,596,681,796 10
For day traders. Start with $1. Every day just make 1% on a trade. Do this for 250 days a year. That means you have weekends off and two weeks a year for holidays and vacation. Do this for 10 years, and you will have $63 Billion. Best to do in a Roth IRA, so no taxes on the gain. The power of compounding. You will be one of the richest people in the world.
Congo Line
(not the dance)
Ark is running circles around other Wall St folks.
Can’t help noticing the $222 pre-split price on the day of that clip. Too bad my wife talked me out of buying even more shares back then!
StealthP3D
Well-Known Member
Capital spending: Money can only be efficiently spent so fast. It's pretty difficult to appreciate the magnitude of expertise that goes into spending a billion dollars in an efficient manner, let alone $12 billion. One reason TSLA has been my largest investment, by far, is that they are a very efficient corporation.
Paying off debt: It's better to pay off debt than just have the cash sit there, waiting. Tesla will maintain plenty of cash to get them through a potential economic downturn but maintaining excessive reserves is wasteful.
When Tesla management was weighing the pros and cons of a capital raise at this time, they figured they could take it or leave it. The ability to retire debt and bolster their cash reserves a bit were the deciding factors even though it wasn't a "must do". Less debt allows them to easily borrow money again in the future if they feel it would accelerate the mission so it's not like they are really giving anything up by paying down the debt.
I posted the comment to tap alternative opinions.
The advantages of paying on convertibles are;-
- Lower dilution by avoiding conversion
- Avoiding interest payments
Covid is a short term impact. I expect the migration to clean energy and transport to pickup momentum, it is a multi-speed economy, some are doing better than others, and that trend will accelerate. Ultimately, dying industries have no future..
I'm also on board with clean energy lowering the cost of embedded energy in all products. companies that tap that trend will have lower prices sooner and a competitive advantage.
The reason I mentioned paying down debt, is Elon mentioned it in the context of the raise
LN1_Casey
Draco dormiens nunquam titillandus
Welp, did some price crunching for my pending purchase of my car (eventually... whenever it shows up...) and found I had a bit of excess cash lying around even with taxes owed. Waste not, want not, so I put in an order for a few shares at $650 for tomorrow. 
Then realized I was $16 short, and corrected it.
Then again, market hates me, so expect to open in the $700s. You're welcome.
Then realized I was $16 short, and corrected it. Then again, market hates me, so expect to open in the $700s. You're welcome.
Lycanthrope
S3XY old dude
TBH, it's pretty easy to be successful when you've spent years accumulating a stock, which then rises 15x - for sure you need the conviction to buy and hold, and some patience. Many here perhaps forget 2014 to 2019, where we pretty much traded sideways, yes great for accumulation, but what if you'd opened your position at the start of that and not been able to add to it, then gains at that time were paltry, hell, I even went negative at one point.
So during these times of stagnation, other strategies can be profitable, this being one, along with playing with weekly calls.
And yes, it can be a lot of work, but it's fun too.
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657$ in premarket, let’s see where we end up today
There is a nice article (from November) in The Economist that highlights a big flaw in Jimmy Chanos' thinking regarding Tesla. Personally, I hope he sticks to his guns and keeps riding this one out.
Value investing is struggling to remain relevant
"The nature of intangible assets makes this a tricky calculation. But worthwhile analysis is usually difficult. “You can’t abdicate your responsibility to understand the magnitude of investment and the returns to it,” says Mr Mauboussin. Old-style value investors emphasise the steady state but largely ignore the growth-opportunities part. But for a youngish company able to grow at an exponential rate by exploiting increasing returns to scale, the future opportunity will account for the bulk of valuation. For such a firm with a high return on investment, it makes sense to plough profits back into the firm—and indeed to borrow to finance further investment.
Picking winners in an intangible economy—and paying a price for stocks commensurate with their chances of success—is not for the faint-hearted. Some investments will be a washout; sunkenness means some costs cannot be recovered. Network effects give rise to winner-takes-all or winner-takes-most markets, in which the second-best firm is worth a fraction of the best. Value investing seems safer. But the trouble with screening for stocks with a low price-to-book or price-to-earnings ratio is that it is likelier to select businesses whose best times are behind them than it is to identify future success."
Lycanthrope
S3XY old dude
That needs some Y-axis legend and scale, otherwise meaningless - might the litres (m) of tequila drunk in Mexico in 2020...
mulder1231
Active Member
If it was a 50/50 decision this time, it’s unlikely they will do another round before S&P inclusion, or even this year. That’s good for continuing the run-up. We don’t want shares to get too easy to buy for the index funds, we’d like them to have to raise their bids a few times when supply dries up.
Lycanthrope
S3XY old dude
"Rebellion Stocks", I like it - "What are you rebelling against, Johnny?", "Whaddaya got?"
I have to say I have a hard time understanding what the green is implying here.
What makes you feel like Tesla is way ahead in software department? Not questioning you, just trying to understand better.
Like this, what is it that he is saying. The sun sets in west afaik, so is he saying that software 2.0 is over hyped and programming will go the way of Dodo basically never???
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I think hes just pointing out Teslas autopilot team have put in a metric *sugar* ton of work into this and it's no small achievement.
Yeah, we have had discussions about buying more. We agreed (she said) to not buy more.
I ignored that at certain times, have almost always had a bit of pain followed by immediate life changing gains.
In for a penny, in for a pound!
wipster
Gold Member
Just as long as it's Teslaquila... otherwise the Z axis takes hold and nobody wants to that!
Lycanthrope
S3XY old dude
And the statement that "programming goes the way of the dodo" is a reference to the old days when all these decisions would need to be hard-coded IF-THEN statements, whereas with AP 2 it's just a self-learning tool now, so little human input needed.
The other observation he makes is the levels of detail that AP 2 goes into when making decisions is not something that a human would get engaged with on a conscious level, we would not have the patience for it.
jeewee3000
Member
If making "just" 1% profit with day trading for 250 days straight is so easy, everyone and their mother would do it.
Of course I don't disagree with the math of compounding interest. I disagree with the possibility. This disregards down days in which you erase the profits of the day(s)/week(s) before, setting you back to square one.
This is similar advice to using the Martingale strategy on Roulette/Blackjack. The internet is full of people explaining these strats (they're the smart ones, they receive views/clicks) but nobody gets rich by doing so.
Just wanted to point this out in case someone on here read this post and thought "now THAT's what I'm gonna be doing with my life".
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