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

[AudubonB]

There is, alas, a strong example of the power of sowing doubt and suggestive misinformation right in the recent pages of this thread. I see that two opposing posts - one presenting a seemingly innocuous, rhetorical question and the other presenting solid answers as to why that is not a worry - have so far received a respective 38 and 4 positive responses.

That speaks poorly on this forum as a whole. It does, however, go a long way toward demonstrating why there is a mess around both Tesla and the world we occupy.

Does anyone here see a conflict of interest if, I dunno... the "Ford Foundation Executive" were to "Lead Consumers Reports"?

https://twitter.com/x/status/1385414101917069316

No.

The Ford Foundation sold off the last of its Ford shares in the early 1960s. Henry Ford II, the family’s sole representative on the Board, departed around 1975, if memory serves. Anyway, between ‘74 and ‘76.

Not for years, but for many decades, the foundation and its programs have either been antithetical to or at most irrelevant to the interests of the motor company.

So much so that to the extent something like that were to worry me at all, it would be had the headline been inverted - were the head of CR to move to 320 E. 43rd. THEN I might worry about FF.

 

[Tim S]

Today is a good setup for a possible afternoon explosion.

Options expiring today may be like lotto tickets. Although Friday usually MMs are firmly in control, this has happened in the past on a Friday. Remember one in particular where price exploded at 2pm and there all these OTM options that suddenly profited in percentages in the thousands.

This is also known as gambling.

Not an advice

Gave you a "Helpful" and bought some $745 calls (Edit: for $1 at 11:14 ET). Will probably change it to Love or Disagree by the end of the day.

Edit: Already up 90%

 

[JusRelax]

There is, alas, a strong example of the power of sowing doubt and suggestive misinformation right in the recent pages of this thread. I see that two opposing posts - one tossing out a seemingly innocuous, rhetorical question and the other presenting solid answers as to why that is not a worry - have so far received a respective 38 and 4 positive responses.

That speaks poorly on this forum as a whole. It does, however,go a long way toward demonstrating re is a mess around both Tesla and the world we occupy.

@AudubonB I believe you are a moderator? I was unaware of the history of the Ford Foundation and am regretful that I contributed to any type of FUD, regardless if it is FUD against someone other than Tesla.

Please feel free to delete my post if you are able to as a moderator. Thanks!

~~~MODERATOR: Thank you for this sincere post. Yes, I could erase it but I cannot do what I wish were the case: relocate my response so that it were directly below yours.
What I DO hope would happen is that those who gave yours a positive response would spend a moment reconsidering their action and, if they believe as you do, removing their responses.~~~

 

[Thumper]

What kind of world do we want to live in with our wealth? I want for myself and progeny to have clean air, water, health care, safe roads and bridges and a general social milieu in which most people are kind and respectful to each other. I am not only willing but eager to contribute more of my wealth to create that world. It is money well spent. Sure there will be corruption in government, it's run by humans after all. But government is the best institution to do most of the necessary work. Let's push for that world and fund it cheerfully.

 

[Krugerrand]

So ... is this worrying anyone? Like I guess a lot of you, I have a lot of unrealized capital gains in my portfolio. The problem with selling stock is that you have to pay taxes on it, which means your re-investment amount has now been slashed. So if you don't need to sell stock, you might not want to. In addition, inflation is a very real worry this time around, so being invested in the stock market isn't a bad idea. But if this passes (below), stock prices will come down. What to do, what to do...

---

President Biden is set to announce tax increases on the wealthy as soon as next week to pay for an increase in funding for childcare and education. The proposal, called the "American Families Plan," would reverse some of former President Trump's tax cuts from 2017, while the capital gains tax for Americans making over $1M per year could nearly double to 39.6%. Coupled with an added 3.8% tax linked to the Affordable Care Act, that's a potential 43.4% levy. The new package would also include an increase in the top income tax rate, building on a recent infrastructure proposal to raise the corporate tax rate to 28%. Biden's proposals on capital gains would only affect the federal rate. Wealthy individuals who live in California and New York, which tax capital gains as regular income at 13.3% and 11.85% (plus 3.88% in NYC), would see total capital gains duties of nearly 60%. From a strategy standpoint, increases to the capital gains tax will likely present a secular headwind to multiples going forward. Over the last 40 years, capital gains taxes have been moving in a downward trend while multiples have been moving higher. With the opposite expected to occur now, we will likely see this trend reverse.

View attachment 656318

No. For real. If you want a real wall of worry, I have an excellent imagination.

If you need money for basic living, sell enough shares to cover it. Otherwise go back to sleep.

 

[Cosmacelf]

Not really.

Why?

I think you missed the core of the argument that PE multiples have been rising perhaps due to marginal capital tax rates dropping. That's what the chart was showing. Ergo, if capital tax rates start rising, PE multiples will drop, meaning share prices will drop. Now maybe this link won't hold, but that's the argument.

 

[ninpb]

What kind of world do we want to live in with our wealth? I want for myself and progeny to have clean air, water, health care, safe roads and bridges and a general social milieu in which most people are kind and respectful to each other. I am not only willing but eager to contribute more of my wealth to create that world. It is money well spent. Sure there will be corruption in government, it's run by humans after all. But government is the best institution to do most of the necessary work. Let's push for that world and fund it cheerfully.

Don't worry, Elon is working on deriving from Neural Network for government called Sky Net... oh wait.

 

[Cosmacelf]

I assume the tax is only on realised gains - the text states "making", so if you don't sell, you don't pay, right? This is the whole push-back against the nonsense that Bernie S has been spouting about Musk being a billionaire, well he is, but only on paper

This is where selling safe covered calls to get income might be useful for many here (that aren't already doing it)

Correct. If you don't sell, cap gains aren't a worry. However, the theory is that in aggregate the market cares. Most stock market shares are held by institutions and they have different considerations than HODL investors. The chart shows a correlation. It may not hold going forward, or it may...

 

[Mengy]

I can't speak for you, but I can probably get by with "only" 950k a year in income if I really have to.

Hah, I'm such a frugal spending person that I'll never have an income over 1,000,000 per year. I'd never sell enough of my stocks in a year to reach that level, I simply don't spend amounts of money like that and I strongly doubt I ever will.

So the new tax plan will likely never impact me directly, and if it does that will just mean I'm doing so exceptoinally well that I doubt I'd even care!

 

[thx1139]

Not really.





Why?

Where ELSE do you put your money?





I can't speak for you, but I can probably get by with "only" 950k a year in income if I really have to.

I suspect that's true for most people.

So not terribly worrying.





Seems dishonest to mention this here- That tax already exists- and on a much lower income level than 1 million--- I paid it this year in fact. It keeps existing regardless of anything Biden is suggesting.







Yes from 37% to 39.6%

Which is actually still lower than it was for the vast majority of the last 100+ years.

In fact it's the SAME rate we had during the economic boom of the mid-late 1990s. We had that rate as recently as 2017.

Somehow we survived.

I also tend to believe that any increase will be on short term capital gains which now are taxed the same as regular income. We may see long term capital gains taxes increase as well, just doubt by the same level. Also remember you need to have income of over $1M per year for this to hit you. It is also the amount that is over $1M that is taxed at this level.

 

[traxila]

What kind of world do we want to live in with our wealth? I want for myself and progeny to have clean air, water, health care, safe roads and bridges and a general social milieu in which most people are kind and respectful to each other. I am not only willing but eager to contribute more of my wealth to create that world. It is money well spent. Sure there will be corruption in government, it's run by humans after all. But government is the best institution to do most of the necessary work. Let's push for that world and fund it cheerfully.

I agree.

I have been paying huge taxes by most standards.

Even paid taxes on crypto gains in the BTC run to 20K couple of years ago. I personally do not know of anyone else who even declared their profits at the time. An accountant told me that I was the only person he knew who did this.

But have to admit, despite my willingness to pay and pay, there is a bit of a sting above 50%. It takes the partner aspect out of it somewhat. And it especially galls when I know people with far more income and colossal net worth are paying much less than 50%, even less than 30%.

I know the 50% issues are about people in high tax states.

Your wants are my wants as well and I will continue to do my best to pay big taxes every year (hey, I am making money, right?). But I wish the 50% mark was in the conversation. It is a slippery slope once you cross it, IMO. Recent developments in NY and CA certainly seem to point in that direction. No such thing as taxes getting too high for some...

For TSLA, this could indeed be a headwind to possibly trade or hedge around or more likely ride out unhappily. I cannot see how this will effect long term holders years into the future. If TSLA executes it should not matter.

 

[ninpb]

For me, as someone late to the party, I am only really counting on my TSLA to provide me piece of mind that I won't go hungry in retirement. My fun is to just watch the price go up and end goal somehow giving it to my children. Inheritance and taxes is probably going to be on my mind years from now.

I do agree, things like this, that are merely headlines do rile up the market. It's like my avatar, Humphrey the Bear. Arms full of fish and getting so stupidly excited about fish being thrown in the lake he let's go of the fish in hand.

 

[StealthP3D]

I think you missed the core of the argument that PE multiples have been rising perhaps due to marginal capital tax rates dropping. That's what the chart was showing. Ergo, if capital tax rates start rising, PE multiples will drop, meaning share prices will drop. Now maybe this link won't hold, but that's the argument.

I think you're over-thinking this. While taxation can adjust the values of assets like stocks relative to other investments, the primary driver of the value of stocks over time is revenue growth, innovations and increasing efficiencies that cause increased earnings. Since you cannot predict the market's reaction, or the exact timing of the reaction, to any such possible adjustments to the tax rate, it's best for a long-term investor to mostly ignore such changes.

To do otherwise is to become a market timer and that probably doesn't have a happy ending.

 

[uujjj2]

Did anyone catch what's going on over at Canoo? Their supposed deal to engineer EVs for Hyundai is dead. They had a bizarre quarterly conference call from a remote office rather than HQ, and on the call, instead of the CEO, were newly hired business execs plus the board chairman who'd joined from the SPAC. They announced they were going to build their own "mega microfactories" instead of outsourcing manufacturing. As a Tesla investor the insourcing and vertical integration sound great. But the call also gave off weird vibes that there's some sort of power struggle going on at the company where the current CEO is imminently about to be fired and the newly hired execs are camping out in Dallas because they aren't being allowed to enter the main office in Los Angeles.

And it's confirmed. As of yesterday the old CEO Ulrich Kranz is out ("resigned") and the SPAC guys from Dallas led by Tony Aquila have officially taken over the company.

 

[Knightshade]

I think you missed the core of the argument that PE multiples have been rising perhaps due to marginal capital tax rates dropping. That's what the chart was showing. Ergo, if capital tax rates start rising, PE multiples will drop, meaning share prices will drop. Now maybe this link won't hold, but that's the argument.

Yeah I just don't buy it.

Again were ELSE would they put the money?

There's little to no evidence the cap gains rate differing from income tax rate has much impact on growth

The primary benefit of the rate being lower than the normal income tax rate is just making already pretty rich people a little extra rich specifically.

What is the effect of a lower tax rate for capital gains?

Throughout the history of the income tax, capital gains generally have been taxed at lower rates than ordinary income. In 1988, 1989, and 2000, the...

www.taxpolicycenter.org

Your thinking is exactly the problem. If it doesn't affect me, I don't oppose it, And the rich are so rich, they shouldn't care. Never mind that the top 5% already pay almost all the federal taxes in this country.

They also have most of the money. So that tracks.

Even Adam Smith understood progressive taxation made the most sense.

It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.

 

[uujjj2]

I think now could possibly be good time to cash out gains on Tesla stock, and wait for a buying opportunity to get back in. Lock in today's (unjustifiably) low capital gains tax rate and then buy back in to TSLA at something like today's price. That assumes any changes to the tax rates aren't retroactive (possible but not guaranteed).

<trigger warning>

As much as the capital gains rate benefits me (as a guy sitting on major TSLA gains), to be truly honest I don't think it makes sense for regular income from hard work to be taxed at 37% while passive profits from the stock market are taxed at 20%. I know there's an economic theory argument for making capital gains rates lower than regular income rates, but it's weak and I personally think the lower capital gains rate is a result of self-dealing by the rich people that run this country to get a special lower tax rate for themselves.

 

[JRP3]

I took risks and lost endless nights of sleep to earn those gains.

Such suffering. I've made far more money sitting on my couch pressing buy and sell buttons than I ever did working 6-7 days a week at physically active jobs. I did not work harder when making more money, quite the opposite in fact.

 

[Frank Einstein]

Your thinking is exactly the problem. I'll take something for free as long as the guy over there has to pay for it. If it doesn't affect me, I don't oppose it, And the rich are so rich, they shouldn't care. Never mind that the top 5% already pay almost all the federal taxes in this country. They also don't get child tax credits, or financial assistance when their kids go do college (in other words, their kids tuition are paying for the other kids tuition who are getting FA). To really make my blood boil, the dems and the press push the narrative that the rich don't pay their fair share, when in reality, they are the ones paying for EVERYTHING!!!! If you want to pay more to the government, nobody is stopping you from making a donation. But don't force me to pay half of my gains (Fed + Obamacare + state) after I took risks and lost endless nights of sleep to earn those gains. Let me decide how I spend/donate my money.

Civilisation is expensive and worth every penny. How much of your hard-earned gains would you have if you lived in a society with no infrastructure, security, education, or healthcare? This ultra-individualism, the myth of the self-made man, is the real problematic thinking here.

 

[JRP3]

Bottom 50% pay nothing

This is false.

The income tax is not the only tax collected by the federal government — far from it. Just half of the taxes collected by the federal government come from the income tax. About a third come from payroll taxes — which fall much more heavily on working people, since they’re largely levied only on the first $130,000 or so of earned income.


This means the rich pay a far lower payroll tax rate than regular people.

This April 15, Don’t Fall for the Right’s Favorite Lie About Taxes

You've probably encountered propaganda using extremely misleading statistics to claim that the U.S. tax system is soaking the rich. It's not.

theintercept.com

 

[Unpilot]

Thread derailed.....out for a walk...again