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

[Nocturnal]

I think the price elasticity declines at some point to the right on the chart. Many shares are locked up and will not be available at any price. You need a variable that will give you a curved line. Econ is over 30 years ago, so my demand charting brain cells would require a refresher course, but usually supply and demand are non-linear. Some people just need to sell at any price and sometimes more shares become available as the price goes down (market makers hitting limit loss orders) and some shares won't sell no matter how much the stock rises day to day.
As a mental exercise, it is important and helpful to remember, that some people will sell as the stock rises. Not everyone is a TMC'r and even here, some people will reduce holdings when some magic number or feeling is hit. We had a lot of big winners on the original rise from 15 to 297 back in the 2012-2015 run. They may still check in and lurk, but I think most of them cashed out enough to retire or play with Nvidia and other stocks. Personally, I have some in the money calls and may move to deleverage if we go over some number. I am currently thinking I'll do this incrementally if we move over $700 this week. If that doesn't happen, my assumption is the indexers have managed to buy in without a squeeze. The stock could still fall after inclusion, but in that instance, I think deliveries, profits and product updates and new production will drive the price.

We would really need to separate short term supply/demand from long term as well. For many reasons those curves will be very different. Agreed that some holders won't sell no matter what (think Elon), some will sell but only at very high prices (many here), and some will sell at modest prices or any price (traders, Ark invest etc.).

Truly modeling the supply and demand curves for something like TSLA would be an immense task. Just modelling something like a model 3 is not easy.

I think for our purposes it suffices to say that this inclusion event is shifting both the demand and supply curves to the right. Regardless of temporary spikes we may see this means that a new and higher equilibrium price will be the result. Source: Degree in Economics, but I don't work in the field so some things are a little fuzzy.

I know we saw data saying the S&P funds havent bought yet, but I am beginning to think that there could be some agreement to transfer all shares in a non-volatile way around $640 a share between some of the front runners and some of the funds. We are just stuck to hard to $640 (and have been for a week) when we have all been expecting big volume.

That would be very illegal.

 

[Unpilot]

I know we saw data saying the S&P funds havent bought yet, but I am beginning to think that there could be some agreement to transfer all shares in a non-volatile way around $640 a share between some of the front runners and some of the funds. We are just stuck to hard to $640 (and have been for a week) when we have all been expecting big volume.

Yeah almost like the big boys have decided...no cake for the rubes...us being the rubes.

 

[dww12]

I know we saw data saying the S&P funds havent bought yet, but I am beginning to think that there could be some agreement to transfer all shares in a non-volatile way around $640 a share between some of the front runners and some of the funds. We are just stuck to hard to $640 (and have been for a week) when we have all been expecting big volume.

Patience.

 

[FrankSG]

I know we saw data saying the S&P funds havent bought yet, but I am beginning to think that there could be some agreement to transfer all shares in a non-volatile way around $640 a share between some of the front runners and some of the funds. We are just stuck to hard to $640 (and have been for a week) when we have all been expecting big volume.

This assumes speculators own enough shares to satisfy demand, which I doubt given volume hasn't been all that high since announcement. But I could be wrong.

Another thing to consider is that the front-runners don't actually benefit from the type of agreement you are describing.

 

[TheTalkingMule]

Another day where standing sell orders dwarf standing buy orders. A million shares' worth between current price and $700. About 192,000 sell orders between current price and $650.

Sounds about right. All week we should be expecting front-runners, traders, and other non-solo investors to be slowly offloading their massive piles of shares to indexes at prices 30-50% higher than they purchased. A swell deal and some easy money for these no-devotees.

The problem will or will not hit when those shares do or do not run out. I'm of the opinion they don't have the supply. Retail investors are expected to dump at the appropriate time, but IMO they(we) won't. At least not nearly to the extent that the wider market expects. This is all proceeding roughly as expected and many thanks to all the folks here trying to keep tabs on things so we're as informed as possible!

Will be interesting to see where SPY TSLA holdings stand on Friday morning(a figure somewhat known through trading Thurs 12/17).

 

[Tslynk67]

So we're looking at a another +5% day? I'll take it

Subaru announces all-electric Forester-size vehicle and you won’t believe when it’s coming
Spoiler: “first half of 2020s” .... so 2025??

Once we can extract ourselves from $640, yes

 

[Unpilot]

This assumes speculators own enough shares to satisfy demand, which I doubt given volume hasn't been all that high since announcement. But I could be wrong.

Another thing to consider is that the front-runners don't actually benefit from the type of agreement you are describing.

So all the buyers show up at 3:59 Friday?

 

[Todd Burch]

This assumes speculators own enough shares to satisfy demand, which I doubt given volume hasn't been all that high since announcement. But I could be wrong.

Another thing to consider is that the front-runners don't actually benefit from the type of agreement you are describing.

Frank, any theories why we're being held to $640 so hard? Not understanding what's so special about this value.

 

[lafrisbee]

Model of Supply and Demand for TSLA shares:

View attachment 617845

The point where the supply and deman curves intersect is the equilibrium SP, which in theory occurs after some hysteresis, but in practice equilibrium is never reached because of other events, ie:

• Q4 P&D
• FSD Beta
• Model S refresh
• Giga Shanghai Phase 3

This chart is produced from actual data, given some assumptions.

So? From this chart with the two "curves"... after less than 15m shares have been purchased "equilibrium" will be reached concerning the Inclusion, and the price will further decrease after 15m shares have exchanged hands.

And yet the title of the chart is "...$75 BILLION..." as part of it. and yet 15m shares at $670 gives me roughly $10Bn?
Do I have this right?

 

[Tslynk67]

So all the buyers show up at 3:59 Friday?

I thought it was 5 seconds after 16:00, no - 120m shares change hands in this closing-cross thing?

 

[Artful Dodger]

I think we all know you meant "untenable demand curve", but why is it untenable? Secondly, the supply curve should be logarithmic not linear, since there are only 760million shares in the free float, and some of those are held by retail investors and some funds that would "never sell".

Okay the "It" you're talking about has never been produced, only talked about. You need to see the curve.

The Supply curve in my example is logarithmic. The 'price elasticity' factor calculated from the past 6 mths of SP data is about 16% or about a 1.16x multiple of Supply for ever unit change in SP. With this relatively small range of share numbers, its hard to see that the change in SP increases with the number of shares.

People expect/want to see a dramatic decrease in supply vs share price. These people would be called 'bulls'. There is a whole other side to the market who will sell with somewhat less 'drama'.

This model, however, is based on closing SP data from Jun 12, 2020 to Dec 11, 2020. And the data says the price elasticity factor is lower than people might imagine it to be (that's why we use data).

 

[dl003]

Frank, any theories why we're being held to $640 so hard? Not understanding what's so special about this value.

As @Singuy suggested, a decisive break above 640 will signal readiness for another run. This looks like MM trying to deter traders from jumping in. Trying to minimize their gamma exposure. I don't know what the heck I'm talking about.
PS: Doesn't matter. When you're rich you can say anything and I'm hella rich.

 

[Yuri_G]

Frank, any theories why we're being held to $640 so hard? Not understanding what's so special about this value.

Given that volume is low, my guess is that there are no big buyers to try to keep the price as low as possible before Friday. All we need is a little push...

 

[strago13]

This assumes speculators own enough shares to satisfy demand, which I doubt given volume hasn't been all that high since announcement. But I could be wrong.

Another thing to consider is that the front-runners don't actually benefit from the type of agreement you are describing.

I dont think they own enough shares to satisfy all demand, but they could have been sitting on these shares since August. So if I could make 30-40% by holding since the run-up in August, that isn't a benefit for a front runner?

 

[Todd Burch]

I dont think they own enough shares to satisfy all demand, but they could have been sitting on these shares since August. So if I could make 30-40% by holding since the run-up in August, that isn't a benefit for a front runner?

Compare that to the benefit of those front-running funds holding and NOT selling to the index funds. They could make considerably more money by holding and forcing the index funds to buy at market prices, which would inevitably be higher.

 

[jbcarioca]

Jaguar Teases New Vision Gran Turismo Supercar


Nice to see Jaguar’s new EV-type halo supercar will be all electric.


Interesting fun fact: The classic Jaguar E-type is one of 2 ICE cars that Elon still owns.

Billionaire Tesla CEO Elon Musk reveals he owns two gas cars and one is his ‘first love’

OT, I know. The first direct experience I ever had with vehicular love at first sight was an event that happened when I was twelve years old. While passing by a local gasoline station on my bicycle I saw a handsome man and a beautiful older lady (20`s maybe) in a red series 1 Jaguar XK-E convertible. I recognized the car from my vice of Sports Cars Illustrated. I went up to them and looked wistfully. The lady asked if I wanted a ride, and her male companion acquiesced. It took another 40 years before I owned a Jaguar convertible myself... another 25 years and I wait impatiently for my Tesla Roadster.

 

[kanweg]

I made this future stock prediction with data, and a few assumptions.

View attachment 617920

SMR may make a T shirt with this and the both of you may get rich.

 

[jbcarioca]

Even Enzo Ferrari himself famously said that the Jaguar E-type was the most beautiful car he's ever seen. They did suck at making cars then and it's good to see their tradition continues. LOL. The new F-type is a decent car, but plagued with reliability issues and so is the rest of the JLR line up.

Elon should convert that E-Type to an electric powertrain so he can get rid of most of the problems. Imagine a car as lite as the e-type with the plaid powertrain!

Prince Charles already did that, and you can buy one too from JLR.

 

[Cherry Wine]

Frank, any theories why we're being held to $640 so hard? Not understanding what's so special about this value.

Yesterday he speculated that whatever entity/ies were buying had set a price point at $635 (I believe? or was it $625?), based on volume and price action. We could be seeing something similar at $640 (or possibly even $645) now.

 

[StealthP3D]

This is of course all contingent on the still open question if slowing CO² would actually also slow/decrease the global temperature... (I accept the reverse relationship as a given)

That's not an "open question" in any serious scientist's mind. The relationship between CO2 and greenhouse effect is well understood - the only question is the exact speed and magnitude of the response due to secondary and tertiary effects and other unknowns.