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

[MXWing]

Is it reliable to say that any buy orders right now are all index funds?

 

[JusRelax]

Doug DeMuro and Ben Sullins have video reviews of the Mach-E today. Looks like Ford is trying to make a push in social media in an attempt to generate buzz like Tesla. Good luck with that. I hope it does well because I like EVs, but I don't see Mach-E becoming a target of desire like Tesla.

Not just the two of them... I also see Alex on Autos and others as well. You're right -- making a huge social media push.

 

[MP3Mike]

Is it reliable to say that any buy orders right now are all index funds?

No.

 

[StealthP3D]

When I was talking about market share, I was talking about time when there’s no more ICE auto sales. My percentages were referring to such market in the future.

I don't think of Tesla as an automaker in 15 years from now - they will have much larger business opportunities in the energy markets (and probably other things). Elon Musk might even be on Mars! Autos will be insanely profitable as they ride the EV cost curve down but, eventually, EV's will be a commodity business. While it's possible Tesla will still be a leading automaker in 15 years (and maybe even probable), my investment thesis is not based on that - it's too far out.

 

[ZeApelido]

Nio, not Tesla, is the better EV stock pick for 2021

 

[Tslynk67]

I am not the guy that should be presenting this:
But wouldn't the smart money have bought all the stock they needed in the form of calls that expire on Friday to avoid the risk of the SP being insanely high? I mean even if a call was sold for $750 SP and the stock price doesn't reach $700 couldn't the institution feel like it was in their best interest to go ahead and purchase the stock at $750? If enough of them did this...
That would change everything

Doesn't sound like a very sensible approach for an index to operate like that - just needs some big macro event to send the stock down 10% on the strike-date and they could be left with no stock and a whole in their fund.

 

[StealthP3D]

To be an S&P index fund, you have to obey their rules, which specify three days before, day of inclusion, three days after. (Trading days.) If you are a benchmark fund but not an index fund, you make your own rules... but then have to comply with them, whatever they are.

The S&P licensing rules are subject to S&P being able to make exceptions. I would not be surprised, not even a little bit, if they did exactly that to accommodate this unprecedented event.

Never bet against the people who make the rules to do what is in their best interest.

 

[Runarbt]

Doesn't sound like a very sensible approach for an index to operate like that - just needs some big macro event to send the stock down 10% on the strike-date and they could be left with no stock and a whole in their fund.

They could buy slightly OTM calls friday for cents, and exercise them anyway, if they get their hands on enough calls?
This way - price price run.up?

 

[GOVA]

Not just the two of them... I also see Alex on Autos and others as well. You're right -- making a huge social media push.

Ben Sullins has gone downhill lately, IMO. With his grotesque thumbnails and playing drama queen all the time.
AoA guy had terrible "reviews" of the M3 and MY. Very vague, full of bias and cherry picking stuff mostly against Tesla cars. He mostly lives off ICE car reviews so maybe that is why he is so terrible.

 

[Tslynk67]

Too many speculators are afraid of 'the big dip'. So if they think the plug gets pulled, they jump ship. This price action makes sense.

Good, they can **** off now before the real action begins!

 

[Todd Burch]

Nio, not Tesla, is the better EV stock pick for 2021

MySpace, not Facebook, is the better stock pick for 2013.

 

[Tslynk67]

They could buy slightly OTM calls friday for cents, and exercise them anyway, if they get their hands on enough calls?
This way - price price run.up?

Interesting idea, how quickly would the call prices would adapt? The delta-hedging would go into overtime...

 

[dww12]

Doesn't sound like a very sensible approach for an index to operate like that - just needs some big macro event to send the stock down 10% on the strike-date and they could be left with no stock and a whole in their fund.

Then wouldn’t you just buy. Right now knowing you had to buy Friday wouldn’t it make sense to buy some OTM options just in case it ran over 700.

 

[M|S|M MYP]

MySpace, not Facebook, is the better stock pick for 2013.

Buy CMGI, instead of GOOGLE because of it will be a better search engine

 

[FrankSG]

Ben Sullins has gone downhill lately, IMO. With his grotesque thumbnails and playing drama queen all the time.
AoA guy had terrible "reviews" of the M3 and MY. Very vague, full of bias and cherry picking stuff mostly against Tesla cars. He mostly lives off ICE car reviews so maybe that is why he is so terrible.

He's just salty.

In July of last year, right around the time TSLA bottomed, he made a video talking about why he doesn't invest in TSLA. He believed (among other things like the stock market being 'rigged') that TSLA was too volatile an investment for his family. So he chose to invest in Bitcoin instead. Because that's obviously way less volatile

 

[Artful Dodger]

Careful everybody, don't trip over that gauntlet

Great memes dare greatly:

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."
-- Theodore Roosevelt, 1910

"Fail quickly"
-- Elon Musk, 2010​

 

[jbcarioca]

FWIW...

1. Anybody who has really good analytics will not post them for free.
2. The best understanding of TSLA fundamentals might well be among TSLA retail shareholders who are devoted to the corporate mission.
3.1 and 2 might be mutually exclusive.
4. Some data intensive approaches here do actually have good insight.
5. It's an open question whether I know enough to reach these conclusions, after all this is an open forum.

 

[dc_h]

So, when shall we expect you to post your model? (difficult to evaluate "instincts")

Yeah, I don't have any hard numbers. A good idea to have that locked in before emotions take over, but I think this week is difficult to model. On the upside, index funds need to buy 100 million or so shares. On the downside, we've had a great run and many people may sell if it doesn't work out with big upside every day. Outstanding calls, that are hedged by market makers provide a good source of liquidity, but not enough to meet demand. Front runners generally are going to try to gauge the market, but may be happy with wherever we are, as the index funds enter the market. They've probably made a 30%++ return in a few weeks, which is nice if you are investing 10 to 100 million. We also have a covid thing going on and part of Europe having partial shutdowns and part of the USA looking at shutdowns, of varying degrees.

I'm curious about one risk that may not be a risk. What if you sell out of the money calls, say 800 and they get called after the market closes. The stock is 900 after the market on friday and you get to buy at 800. Yippee, you just made 10,000 per contract. But on Monday when the market opens, the stock drops back to 700, bummer, you just lost 10,000 per contract. A lot of weird, strange stuff can happen with unforeseen consequences. I have been noted to find complexity in the simplest of topics, so maybe this is not an issue, but it seems like a potential risk for anyone with some lottery calls.

*I wasn't trying to criticize you personally, I just think models of supply and demand can get pretty complex and are hard to do. You can get some useful explanatory power with your model, but a key role of economics and all abstract modeling, is to remember that a model is a model based on abstraction, not reality. It can be good, but breakdown when rules or data changes.

 

[StealthP3D]

I can't speak to schwab but SPYs prospectus appears to explicitly NOT allow the use of options and other such contracts in the fund- other than a specific exception for options awarded as dividends from owned stock.

Apart from that-in general Index funds have no reason to want to do something like that.

Their goal is to MIRROR the performance of the index, not beat it.

Benchmark funds might be interested in arrangements like this but index funds don't care what stock costs, just that their fund matches the index reference.

It wouldn't be about beating the Index, it would be about providing liquidity to the market to minimize the distortive effect that an addition of this size could have. This has the feel of something that S&P facilitated with the market makers.

I don't think it's wise to ignore the probability of something like this. And it's almost certainly going on with many of the benchmarked funds.

 

[capster]

Yesterday pre-pre-market volume was low, today it hardly has a pulse, never seen it so low.

The calm before the storm, I guess.

Probably won’t see any real buying before the 24th.

It’s just human nature to wait till the last minute to do your homework. /s