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

[Nuclear Fusion]

https://seekingalpha.com/article/4315085-fearless-forecasts-for-teslas-2020
Montana Skeptic is definitely holding the line, despite his dire predictions for 2020 being way off
Spiegel has for all intents & purposes disappeared from Seeking Alpha, only commenting twice in 2020, although the guy has shorted Tesla again after the S&P inclusion

 

[jerry33]

I dream of a day when Tesla would enter the smart phone/tablet/wearables market.With it’s constant innovation in hardware+ battery tech , software superiority and branding will let Tesla rekindle the Tech innovation that’s been languishing in that segment since Jobs’s passing.

That's what NeuraLink is for.

 

[Artful Dodger]

Just over a month ago the market thought 400 was a fair price for TSLA. The 500 we reached before that was based on the speculation that TSLA would be admitted to the S&P 500 index in September. When that didn't happen we dropped back to 300, only to stabilize around 400.

The second speculative S&P 500 run almost brought us to 700. In that same period we saw promising FSD beta testing, high Tesla sales in China and the continued Gigafactory buildout. Even if we drop back 150 or 200 points from the speculative top to 550 or 500 we are looking at a 25-30% rise of the base for TSLA.

Such a base would be a great starting point for a further rise towards 700 or 800 during 2021.

Mr. Market does not know how to value TSLA, nor do they care. They're trading only on technicals: (mostly shorting to remove capital and increase share supply).

They'll try to keep TSLA range-bound btwn the 10-day Moving Average and the Middle-BB, as long as MMs can deny the max. no. of Options holders with a Fri SP finishing somewhere in that range:

There is significant manipulation going on right now with MMs/hedgies and in the Media (no doubt the two are related/compensated).

I expect this to continue until the P&D report on ~Mon, Jan 4th or until Tesla announces a stock dividend.

 

[Prunesquallor]

He is moving to Lanai and is (so far as I know) the first Tesla investor, to own there own Island.

Pretty nice one, too, although personally I would have held out for Moloka'i. Better scuba diving.

 

[Stretch2727]

Honestly think Apple is too late to the EV party. Even if they start producing in 2024 it will take them 4-5 years minimum to get where Tesla is today. There are no short cuts in the automotive world. Elon has stated this himself that the pace of scaling is really not about $$. It's about having the right people, processes and infrastructure. Spent many years in auto manufacturing and the scale and complexity is like no other industry. You have thousands of parts that need to come together in a vehicle that needs to be 100% reliable from -40F to 120F in all kinds of weather for thousands upon thousands of miles. It is not an easy task. You can't launch at the 100K units of volume that Apple would need as you risk a production system that does not work or cars that may not be reliable. Maybe they can scale faster if Apple partners with an existing OEM but I don't think this is route they will take.

 

[Artful Dodger]

Underlying question: does a stock move as a dollar value or by a percentage change?
A $1 move post split is 5x the market cap value pre-split and also 5x the percentage change.
If stock price is a fixed multiple of profit, and profit goes up 5%, that is 5% of 1/5 the price * 5x the shares or 5% of 1 share. Same movement.

Psychologically, smaller $ moves are easier to handle though. $16 drop looks better than an $80 drop, even though the change to one's account is the same.

My theory is that the SP movement caused by a stock dividend is caused by the extra capital (re-)introduced by forced naked short covering.

The Aug 11th stock dividend movement was 100% explained by this simple assumption, as I predicted, also on Aug 11th.

In this case, MMs with naked shorts would be forced to cover the missing value of their positions, which was substantial in August. We need to see the next NASDAQ short interest report before I'd estimate the (min) amount of capital MMs would be forced to return to TSLA shareholders.

The larger issue is business practices. If abusive MMs and large hedge funds come to understand that naked shorting is no longer a profitable venture for their TSLA trading, they will move on to short some other equity (no chance they will stop, the rules will change, nor will the SEC enforce current rules or even look to see what is happening).

#STATISTICS don't lie; Liars lie.

 

[Bet TSLA]

Me a sold a bunch of 645 strike 12/24 puts when TSLA was at 630 on the way down. The market informed me I was an idiot, so I wrote a bunch more when TSLA was at 615. Thankfully it didn't go down much more. Breakeven is TSLA 617 at close on Friday. At the moment, both positions are green. If TSLA goes green for the day I'll be quite happy, but I don't think it's likely.

I'll be satisfied if this position just does some to offset all the large down moves in all the others.

With the return of TSLA to just above 640, the gains on this new position offset all the other down moves, and my account ended up green on the day. Unexpectedly awesome! At least for today.

** Note: I'm posting these details because I think my experience may be useful to others. If it isn't useful to you, skip it. **

So what happened? As expected, the 610 and 670 short puts expired worthless (up $117K, positions taken in the last couple of days, history not posted). But the 690 short puts, despite being out of the money at expiration, were assigned to me, so I now have an extra 2500 TSLA shares (and yes, I had the cash in the account to cover the purchase). What E*Trade's web site has to say about this situation is:

Normally, you would not receive an assignment on an option that expires out of the money. However, even if a short position appears to be out of the money, it might still be assigned to you if the stock were to move against you just prior to expiration or in extended aftermarket or weekend trading hours. The only way to eliminate this risk is to buy-to-close the short option.

Bummer! So my potential $237K profit now enters a new phase as 2500 shares, at the moment theoretically up $250K with TSLA at 695. It's better than the 690 puts in that breakeven is still TSLA at $595, but there's now unlimited upside. It's worse in that I've committed the full amount of cash. I hate selling TSLA shares, but that's probably what I'll do on Monday since this was not the plan. So maybe I make more than $237K on this, but probably I make less.

There was no serious spike up, and I see it as unlikely to happen now, so "endless bounty" has not materialized. I think the 12/31 calls are doing well, but I won't really know much until Monday. The published bid/ask continues to be nonsensical.

** Note: I'm posting these details because I think my experience may be useful to others. If it isn't useful to you, skip it. **

I haven't sold any of the 2500 shares yet; not Monday and not today. My potential $237K profit is now sitting at $113,600 with TSLA at $640.34. Not an improvement, but hope springs eternal....

Even less improved are the "endless bounty" 12/31 calls. The 690s are now down 80% and will likely expire worthless, as I will probably roll the dice rather than recover the $10K left in them. The 590s are up 60%, much less than before. I'll no doubt hang on to them until next week some time, maybe to expiration. I'm expecting that overall the profit on the 590s will at least offset the losses on the 690s. Before inclusion day I sold off 2/3 of my 690s for a $3000 profit, so it's not nearly as bad as it might have been.

For the 590s, breakeven at expiration is $630; for the 690s, $715. The chance of a spike up seems quite small now. This is how being greedy works out sometimes.

 

[Artful Dodger]

Damn it if she breaks 630 I'm a buyer.

Edit: Done 10 more @629

The 2 inflection points in play right now (today) are the Middle-BB (floor) and the 10-Day Moving average (ceiling).

Helps not to think of a SP value, but as 'support' or 'resistance' (if you're trading). If you buy'n'holding, any price today will seem cheap in Jan 2025.

Cheers!

 

[Artful Dodger]

Seriously?

Being added to a stock market index doesn't seem like the kind of thing Elon would celebrate. He has respect for innovation and productivity but not so much the people who count the money. While you could argue the market is a proxy for those things, it just doesn't seem like Elon would celebrate it.

Yes, seriously. Outside this bubble of opinions, there exist real benefits to S&P inclusion:

• many more mutual funds are now able to buy TSLA due to their rules
• Tesla's quarterly interest expense goes down as it's credit rating goes up
• FED bond-buying inches closer with approaching 'investment grade' status
• Tesla is in the 'Bigs' now; that affects the buying decisions of the public
• Tesla doesn't have a PR department; instead headlines tout their successes

Elon didn't spend more than 2 minutes on this before he went back to business. But it's important for a leader to recognize the accomplishments of his team, which he did.

 

[MC3OZ]

In terms of what are the next products Tesla should develop, a starting point is looking at what is needed to complete the mission Clean Energy and Transport.

Transport, essentially more of the same including:-

• Vans
• RVs
• Compact $25K cars.
• Possible future $15K ultra-compact car?
• Bus?

On this list the only really difficult thing is the $15K Ultra-compact, but if they want to do it, they will find a way.

A public transport solution isn't needed, because Boring Co tunnels and Robo-Taxis will fill that niche.
I'm not even sure a bus is needed.

For clean energy:-

• Home HVAC / Hot water
• Lighting
• Cooking?
• Refrigeration domestic and industrial - including refrigerated transport.
• Lower cost grid transmission HVDC components?.

Overall we are close to "Mission Accomplished" on clean energy and transport, although execution is always the difficult part.

The next consideration is if Tesla will make great products in areas not related to the mission if the opportunity was there to make a great product make some money and perhaps achieve an incremental improvement in human happiness

The list here is long, simply because there are many products that can be improved.

• Phone/Tablet/Laptop - could be the best product in this category worldwide - would include Neuralink integration
• Social media - moderated by AI - great for humanity, even if not a big money earner.
• Home construction - highly automated - 3D brick printing CAD based - with Tesla domestic appliances batteries and solar

In terms of the Phone/Tablet/Laptop and Neuralink, Neuralink requires a phone. With a mobile Starlink terminal these devices can be used anywhere on earth. I suppose a "Neuralink Gateway" device could replace the need for a phone, but adoption of Neuralink will be slow.

So IMO if they stray beyond their mission they need to use core competencies in areas closely related to current areas of expertise.

One question would be the internal management bandwidth if the company becomes too diversified, but Tesla and Elon have already demonstrated the ability to innovate in a wide variety of fields simultaneously. As clean energy and transport becomes closer to "Mission Accomplished" it becomes more routine, my hunch is they may want new challenges to keep the team energized.

 

[Bet TSLA]

I dream of a day when Tesla would enter the smart phone/tablet/wearables market.With it’s constant innovation in hardware+ battery tech , software superiority and branding will let Tesla rekindle the Tech innovation that’s been languishing in that segment since Jobs’s passing.

The only reason some people think Tesla is good at software is because they are competing with incompetents (i.e. auto OEMs).

What they have done adequately is security (albeit running on a closed hardware system with no third party software), software updates (again on their own hardware with no third party software), and UI (at least I think so, but others disagree). And none of it is more than adequate. Their web page is borderline awful and bugs never get fixed that I can see.

No, you really don't want to see Tesla entering other markets where software matters much. It's not their strength.

What we have to hope is that they do a bang up job on AI software for vision and training. So far it's looking pretty good after several false starts. And that the robot controller software is either done by somebody good or that Tesla is good at it. Hard to tell from outside.

We already know that the software they say they have built themselves for running the customer care portion of the business is borderline awful. It's been years now since it has been good, and even then (2014-15) it wasn't very good. There is essentially no chance that you can talk to a Tesla person one day and have another Tesla person pick up where they left off with you on another. It will get better only when Elon decides it matters to him, at least that's what it looks like to me.

 

[MC3OZ]

The only reason some people think Tesla is good at software is because they are competing with incompetents (i.e. auto OEMs).

What they have done adequately is security (albeit running on a closed hardware system with no third party software), software updates (again on their own hardware with no third party software), and UI (at least I think so, but others disagree). And none of it is more than adequate. Their web page is borderline awful and bugs never get fixed that I can see.

No, you really don't want to see Tesla entering other markets where software matters much. It's not their strength.

What we have to hope is that they do a bang up job on AI software for vision and training. So far it's looking pretty good after several false starts. And that the robot controller software is either done by somebody good or that Tesla is good at it. Hard to tell from outside.

We already know that the software they say they have built themselves for running the customer care portion of the business is borderline awful. It's been years now since it has been good, and even then (2014-15) it wasn't very good. There is essentially no chance that you can talk to a Tesla person one day and have another Tesla person pick up where they left off with you on another. It will get better only when Elon decides it matters to him, at least that's what it looks like to me.

You need to factor in that for most of the time they have bene operating on a very limited budget, juggling a not of different priorities with ambitious delivery dates. Also that building the cars and getting FSD working have been the priority.

Great software plays into Tesla's core strengths, attention to detail, product vision and continuous improvement.
But first it needs to be a priority.

If we already had great software, that was universally good at everything, I agree there is a limited opportunity.
But IMO there is considerable scope for improvement not in all areas but definitely in some areas.
In terms of hardware the opportunity for improvement also exists. that is mostly performance, robustness and longevity.

As with cars, number one position might be taken by Apple, but below that there is plenty of market share available.

Specially the opportunity is a pre-installed Linux environment that is easy for a causal user to learn, but retains the full power of Linux.

 

[ReddyLeaf]

Stock Option Max Pain
620 is max pain, though at least under 630 seems where "they" would want it, if you believe in they.

Mr. Market does not know how to value TSLA, nor do they care. They're trading only on technicals: (mostly shorting to remove capital and increase share supply).

They'll try to keep TSLA range-bound btwn the 10-day Moving Average and the Middle-BB, as long as MMs can deny the max. no. of Options holders with a Fri SP finishing somewhere in that range:

View attachment 620224

There is significant manipulation going on right now with MMs/hedgies and in the Media (no doubt the two are related/compensated).

I expect this to continue until the P&D report on ~Mon, Jan 4th or until Tesla announces a stock dividend.

Instead of endless AAPL dribble, let’s discuss something much more interesting: Expiring Jan 15, 2021 monthly options. Has anyone else looked at the $190 max pain and the huge number of calls below $200? What will the MMs do? This is not your normal weekly max pain manipulation. Thoughts experts? @Bet TSLA @Right_Said_Fred @Papafox

 

[Silent Ludicrosy]

In terms of what are the next products Tesla should develop, a starting point is looking at what is needed to complete the mission Clean Energy and Transport.

Transport, essentially more of the same including:-

• Vans
• RVs
• Compact $25K cars.
• Possible future $15K ultra-compact car?
• Bus?

On this list the only really difficult thing is the $15K Ultra-compact, but if they want to do it, they will find a way.

A public transport solution isn't needed, because Boring Co tunnels and Robo-Taxis will fill that niche.
I'm not even sure a bus is needed.

For clean energy:-

• Home HVAC / Hot water
• Lighting
• Cooking?
• Refrigeration domestic and industrial - including refrigerated transport.
• Lower cost grid transmission HVDC components?.

Overall we are close to "Mission Accomplished" on clean energy and transport, although execution is always the difficult part.

The next consideration is if Tesla will make great products in areas not related to the mission if the opportunity was there to make a great product make some money and perhaps achieve an incremental improvement in human happiness

The list here is long, simply because there are many products that can be improved.

• Phone/Tablet/Laptop - could be the best product in this category worldwide - would include Neuralink integration
• Social media - moderated by AI - great for humanity, even if not a big money earner.
• Home construction - highly automated - 3D brick printing CAD based - with Tesla domestic appliances batteries and solar

In terms of the Phone/Tablet/Laptop and Neuralink, Neuralink requires a phone. With a mobile Starlink terminal these devices can be used anywhere on earth. I suppose a "Neuralink Gateway" device could replace the need for a phone, but adoption of Neuralink will be slow.

So IMO if they stray beyond their mission they need to use core competencies in areas closely related to current areas of expertise.

One question would be the internal management bandwidth if the company becomes too diversified, but Tesla and Elon have already demonstrated the ability to innovate in a wide variety of fields simultaneously. As clean energy and transport becomes closer to "Mission Accomplished" it becomes more routine, my hunch is they may want new challenges to keep the team energized.

If Tesla expands beyond transport & energy, I think it will be into AI. Tesla’s neural net training and 4D labeling experience have applications well beyond cars.

 

[petit_bateau]

Home automation. That will be their final battlefield. If Tesla introduces an HVAC heat pump as a Tesla Energy product next year or two, home automation is where Google, Amazon, Apple, and Tesla will compete for growth.

The whole business of heat pumps is very relevant, but not yet urgent for TSLA.

At the moment TSLA can take 80kWh (=$8,000) of battery and put it in a mobility wrapper using a highly automated high volume production line and sell it for $50,000 at a GM of ~30% with some add-ons, and have no effective competition and a simple sales/delivery process. Or TSLA can put 6 Powerwalls together (80kWh) in a stationary wrapper using a very mandraulic low volume batch-build process and sell it for 6 x $8k = $50k at ~10% margins with competition that is half the price for 80% of the value (typical LG product), i.e, highly competitive (and would be even more so if they hired some one like me !) and a complex sales/delivery process..

(we are not exactly sure of the numbers because they are not breaking out the detail we require - I am giving some of my own insight here)

On that basis TSLA should ramp stationary only so fast as is required to not lose the #1 position, which is exactly what they are doing.

When there comes the day that the TSLA product reaches sufficient scale to grab the value associated with the rejected (battery management) heat for trivial associated extra product or delivery chain cost, then, and only then (unless LG etc get there first ....) should TSLA start to go aggressively after the higher %GM that are intrinsically available in the homepower (and office/etc) power markets.

Until then the best strategy for TSLA is to hang back, which I say with some regret.

regards, dspp/pb

 

[heltok]

Some thing that should be noticed. Some rumor comes out about Apple making a car and everyone is talking about Tesla. Not GM, not Toyota, not even Apple. Tesla.

Elon casually comments on the technology in the rumor, because they put all the cards on the table while Apple are hiding in secrecy. Tesla are speaking for a position of confidence and openess, while competition is making vague claims about the future. It takes a lot of guts to do what Tesla is doing, now they are 50% of every conversation.

Competition knows what Tesla is doing, but can they catch up? They have to release products in the meanwhile, not just spend 100% of their effort to figure out what Tesla’s solution was. And who do you want to work for if you are a talented engineer, the company trying to catch up by copying or the company pushing the development forward? And what image are you projecting when you buy a product of a polluting cheating laggard trying to catch up with the times or when you buy the product of the leader pushing technology trying to save the world? What will men think of you if you drive a VW ID4 instead of a Tesla Model Y? What will women think of you? Which group do you choose to identify yourself with...

 

[Prunesquallor]

In terms of what are the next products Tesla should develop, a starting point is looking at what is needed to complete the mission Clean Energy and Transport.

Transport, essentially more of the same including:-

• Vans
• RVs
• Compact $25K cars.
• Possible future $15K ultra-compact car?
• Bus?

On this list the only really difficult thing is the $15K Ultra-compact, but if they want to do it, they will find a way.

A public transport solution isn't needed, because Boring Co tunnels and Robo-Taxis will fill that niche.
I'm not even sure a bus is needed.

For clean energy:-

• Home HVAC / Hot water
• Lighting
• Cooking?
• Refrigeration domestic and industrial - including refrigerated transport.
• Lower cost grid transmission HVDC components?.

Overall we are close to "Mission Accomplished" on clean energy and transport, although execution is always the difficult part.

The next consideration is if Tesla will make great products in areas not related to the mission if the opportunity was there to make a great product make some money and perhaps achieve an incremental improvement in human happiness

The list here is long, simply because there are many products that can be improved.

• Phone/Tablet/Laptop - could be the best product in this category worldwide - would include Neuralink integration
• Social media - moderated by AI - great for humanity, even if not a big money earner.
• Home construction - highly automated - 3D brick printing CAD based - with Tesla domestic appliances batteries and solar

In terms of the Phone/Tablet/Laptop and Neuralink, Neuralink requires a phone. With a mobile Starlink terminal these devices can be used anywhere on earth. I suppose a "Neuralink Gateway" device could replace the need for a phone, but adoption of Neuralink will be slow.

So IMO if they stray beyond their mission they need to use core competencies in areas closely related to current areas of expertise.

One question would be the internal management bandwidth if the company becomes too diversified, but Tesla and Elon have already demonstrated the ability to innovate in a wide variety of fields simultaneously. As clean energy and transport becomes closer to "Mission Accomplished" it becomes more routine, my hunch is they may want new challenges to keep the team energized.

Disagree on the “close to Mission Acommplished on clean energy and transport” part. Not by a long shot. The transition needs to be much faster to ensure its success (climate change averted).

1). 65% of oil production is burned as automotive petrol/diesel and heating oil which must be eliminated ASAP. BEVs and renewable/battery stationary need to scale much faster by demonstrating clear production and operating economic superiority over ICE and oil heating. Scale and economy of existing tech/products/batteries must take priority before any of the "fun stuff".

2) Renewable battery/stationary costs must decrease to the point of making NG power production clearly uneconomical (as in the deliberate retirement of existing assets).

FSD, Mega-casting, battery efficient/production are all the right things, but we need more of the same. There needs to be another round of innovation that puts oil/NG burning out of business within 10 years.

 

[wipster]

My theory is that the SP movement caused by a stock dividend is caused by the extra capital (re-)introduced by forced naked short covering.

The Aug 11th stock dividend movement was 100% explained by this simple assumption, as I predicted, also on Aug 11th.

In this case, MMs with naked shorts would be forced to cover the missing value of their positions, which was substantial in August. We need to see the next NASDAQ short interest report before I'd estimate the (min) amount of capital MMs would be forced to return to TSLA shareholders.

The larger issue is business practices. If abusive MMs and large hedge funds come to understand that naked shorting is no longer a profitable venture for their TSLA trading, they will move on to short some other equity (no chance they will stop, the rules will change, nor will the SEC enforce current rules or even look to see what is happening).

#STATISTICS don't lie; Liars lie.

I think it's "Figures don't lie, liers figure." But close enough for government work!

 

[Criscmt]

Mr. Market does not know how to value TSLA, nor do they care. They're trading only on technicals: (mostly shorting to remove capital and increase share supply).

They'll try to keep TSLA range-bound btwn the 10-day Moving Average and the Middle-BB, as long as MMs can deny the max. no. of Options holders with a Fri SP finishing somewhere in that range:

View attachment 620224

There is significant manipulation going on right now with MMs/hedgies and in the Media (no doubt the two are related/compensated).

I expect this to continue until the P&D report on ~Mon, Jan 4th or until Tesla announces a stock dividend.

Pardon my lack of attention to the 2:1 dividend discussion in the pages here the last week or so. With the total shares outstanding now, after the two capital raises since September, there’s not need for voting for the company to again if it’s just calling call a 2:1 dividend right?

 

[MC3OZ]

Disagree on the “close to Mission Acommplished on clean energy and transport” part. Not by a long shot. The transition needs to be much faster to ensure its success (climate change averted).

1). 65% of oil production is burned as automotive petrol/diesel and heating oil which must be eliminated ASAP. BEVs and renewable/battery stationary need to scale much faster by demonstrating clear production and operating economic superiority over ICE and oil heating. Scale and economy of existing tech/products/batteries must take priority before any of the "fun stuff".

2) Renewable battery/stationary costs must decrease to the point of making NG power production clearly uneconomical (as in the deliberate retirement of existing assets).

FSD, Mega-casting, battery efficient/production are all the right things, but we need more of the same. There needs to be another round of innovation that puts oil/NG burning out of business within 10 years.

I understand your point, but IMO what was revealed at Battery Day, combined with casting and their existing products does a lot of the work and will solves most of the problems.

So the outcome is apparent well before it actually happens, what is mostly needed to make it happen is execution and hard work.

My expectation on the mission is it will all happen much faster than most of us expect, I hope I am right.
The Berlin and Austin factories, in house roadrunner cell production, the 25K car and home HVAC are all needed.

My hunch is most of these projects are well advanced, however,, I agree the mission is the priority and they is no certainty they will stray beyond that.