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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Looks like someone misread your typo (like I did - thought you said that buffett tells the world every time they bought something - like BYD).
You meant, "Did Buffett ever tell the world what they bought"? As of this moment, no.
I guess Elon thinks the stock price is too high again.
https://twitter.com/elonmusk/status/1338365886542049282?s=20
https://twitter.com/elonmusk/status/1338365886542049282?s=20
A question I've seen come up a few times over the past few weeks, including here on TMC, is how will the upcoming index funds required holding of TSLA on an ongoing basis impact TSLA's price from a supply and demand perspective.
If we could isolate the increase in TSLA's share price due strictly to index buying in this period we are entering, will the indexes effectively pulling these shares off the market (as long as TSLA is in the S&P) equate to a decrease in supply that supports an underlying boost in the share price that will remain regardless of the other events that will move the stock price over time.
I think the answer to this question is yes and no, because we can theoretically think of, at the extremes, two markets for TSLA shares.
The first theoretical market is the one the indexes are the most extreme example of (along with Elon Musk). In this market, TSLA shares are a one-of-a-kind item for which there is not a substitute. These indexes will have to hold about 1.5% of their assets in TSLA. They can't own "the next Tesla," or an ETF of EV companies instead. For these index fund's, it's got to be TSLA. For Elon, and any theoretical '100% cultists' or '100% TSLA HODL buyers' it's the same. TSLA is strictly a market of TSLA, and 15% of TSLA stock being taken off the market is a 15% reduction in supply for the item they are in the market for.
The second theoretical market for TSLA, at the extreme, is those for whom TSLA is a commodity. For the investment/trading, portion of funds available to them, all their investment/trading options are basically commodity items. Whether using TA exclusively, or a mechanical, financial metric only valuation process, etc, they chose a stock w/out any attention to the people or business behind the ticker symbols. For this group, the S&P pulling 15% of TSLA off the market, is not removing 15% of the supply of the item they are in the market for... it's an infinitesimal reduction in the supply of the far larger commodity of all investment/trading options they have.
Of course, in reality, there's only one market for TSLA shares. Most people are probably a mix of the two theoretical extremes of viewing TSLA's market. There actually are TSLA shareholders who basically are in that first theoretical market, but, they are probably a small minority of TSLA shareholders (even if that's not the case on this thread), though about to grow by the index funds being forced into that group.
So, as I see it, yes, supply/demand is going to impact the TSLA price by the index buying, but, not to anything like the extent it would if the whole universe of potential TSLA buyers saw TSLA exclusively as the entire market of a one-of-a-kind, irreplaceable offering.
If we could isolate the increase in TSLA's share price due strictly to index buying in this period we are entering, will the indexes effectively pulling these shares off the market (as long as TSLA is in the S&P) equate to a decrease in supply that supports an underlying boost in the share price that will remain regardless of the other events that will move the stock price over time.
I think the answer to this question is yes and no, because we can theoretically think of, at the extremes, two markets for TSLA shares.
The first theoretical market is the one the indexes are the most extreme example of (along with Elon Musk). In this market, TSLA shares are a one-of-a-kind item for which there is not a substitute. These indexes will have to hold about 1.5% of their assets in TSLA. They can't own "the next Tesla," or an ETF of EV companies instead. For these index fund's, it's got to be TSLA. For Elon, and any theoretical '100% cultists' or '100% TSLA HODL buyers' it's the same. TSLA is strictly a market of TSLA, and 15% of TSLA stock being taken off the market is a 15% reduction in supply for the item they are in the market for.
The second theoretical market for TSLA, at the extreme, is those for whom TSLA is a commodity. For the investment/trading, portion of funds available to them, all their investment/trading options are basically commodity items. Whether using TA exclusively, or a mechanical, financial metric only valuation process, etc, they chose a stock w/out any attention to the people or business behind the ticker symbols. For this group, the S&P pulling 15% of TSLA off the market, is not removing 15% of the supply of the item they are in the market for... it's an infinitesimal reduction in the supply of the far larger commodity of all investment/trading options they have.
Of course, in reality, there's only one market for TSLA shares. Most people are probably a mix of the two theoretical extremes of viewing TSLA's market. There actually are TSLA shareholders who basically are in that first theoretical market, but, they are probably a small minority of TSLA shareholders (even if that's not the case on this thread), though about to grow by the index funds being forced into that group.
So, as I see it, yes, supply/demand is going to impact the TSLA price by the index buying, but, not to anything like the extent it would if the whole universe of potential TSLA buyers saw TSLA exclusively as the entire market of a one-of-a-kind, irreplaceable offering.
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Cape Coddess
2 Roths full - holding!
I can't believe I have to sleep for two more hours before the show starts.
Depends how much you pay them...
Cape Coddess
2 Roths full - holding!
LN1_Casey
Draco dormiens nunquam titillandus
Little more Holiday cheer coming around, put in an order for two shares come market open.
So excited to see this part play out!
Robs' analysis is second to none!
- at least 15% of available shares are disappearing permanently into index funds
- up to 22% of available shares are disappearing likely permanently into benchmarked funds
StealthP3D
Well-Known Member
Look at the outline provided by @ZeApelido a few posts back. I don't see how inclusion reduces volatility overall. It probably increases it but, in any case, it will still be far more volatile than the typical stock.
As the market cap of a company grows it will become somewhat less volatile (look at how volatile penny stocks are). But that is not really a direct function of S&P inclusion and we are still many years from TSLA having a beta of 1.
EM needs to start dropping update bombs today!
Wider FSD.
CT!
Another factory announcement!
China designed car.
Battery powdering success (or whatever process they were working on still)
Range updates
Charge updates
New CT glass display, allow visitors to throw!
Or even, he needs to buy more shares!
SebastianR
Active Member
StealthP3D
Well-Known Member
I explained in an earlier post that the reduced float of inclusion should have an upward pressure overall on the share price because the lower float self-selects those who don't value TSLA as much right out of the marketplace. The stock trades at whatever price the buyers and sellers find equilibrium at any given moment. Fewer shares being held by those with discretion naturally selects for those willing to value it the highest.
StealthP3D
Well-Known Member
He seems to have good intentions but perhaps he doesn't understand all the things he's talking about. I think some of those things Tesla is already doing and some are unrealistic. For example, you can't build a 25K Model 2 before you have more batteries and at a lower cost.
How do you accelerate something that you're already giving 100% on? I've never been a fan of those who say "step it up to 110%" because that's not possible (at least not in the way I use language). The real question is whether Tesla is already giving it 100% and I see no indication they are not.
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