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

[Artful Dodger]

Peter Rawlinson* Baghdad Bob wants to let you know that Tesla's 4680's America's M1A1's aren't a big deal.

Lucid CEO: Tesla's 4680 Batteries Aren't A Huge Breakthrough

Tesla bets on a new 4680-type cylindrical cell format, but according to Lucid's CEO/CTO Peter Rawlinson, it will not be "this huge breakthrough."

insideevs.com

FTFY.

Cheers!
*Brit.

 

[PeterJA]

...And, no, only using half of your available margin does not protect one from a calamity.

One more friendly dissent:

Using only half your available margin (to buy shares) protects you from a share price drop of 50%. Using a tenth of available margin protects you from a drop of 90%. If you want to be prepared for TSLA to drop more than 90%, you probably also need a bomb shelter stocked with food and guns. This statement is not an insult. Some folks do prepare for that kind of calamity. I don't, yet.

 

[Accident]

Congress just passed the Bipartisan infrastructure Bill. This is NOT the bill containing the EV tax credit, but it does contain some EV infrastructure funding IIRC.

Focus now turns to the spending bill (the one that contains the EV tax credit). The desire by some in congress to tie the infrastructure bill vote to the spending bill vote was an impedediment previously, now that is no longer a problem and further horse trading can take place to hopefully speed up passage of the spending bill.

Moderates got the piece they wanted, and progressives lost their leverage with BIF passing.

I now doubt the Build Back Better bill will pass without major cuts.

 

[StealthP3D]

One more friendly dissent:

Using only half your available margin (to buy shares) protects you from a share price drop of 50%. Using a tenth of available margin protects you from a drop of 90%. If you want to be prepared for TSLA to drop more than 90%, you probably also need a bomb shelter stocked with food and guns. This statement is not an insult. Some folks do prepare for that kind of calamity. I don't, yet.

I'm sorry, there is no protection when you use margin. Financial developments can and will cause your broker to change the rules on money already lent out. It happens all the time and the investor has no real recourse. This is often not well understood.

I'm a big believer in free will and have no interest in preventing investors from doing whatever they want. But I do believe it's important for them to have accurate information. And unfortunately people are being actively misinformed here. I'm sure it's not intentional but that is what I'm trying to correct - the idea that an investor can ever be fully in control of their financial future when using margin. The rules can change after you are indebted and after the stock you have applied the margin to goes down. It's very different from a traditional loan one might take on a car or house.

 

[Featsbeyond50]

Now the wait time to take delivery of a LR Model Y is 8 months, delivery estimators in June. Price has increased by $5k on configurator. I have read numerous books about finance suggesting to buy a used car because they lose up to 30% in value in the first years. When you buy a Tesla Model 3, you can sell it the same price 2 years later with 35,000 miles and you can sell your Model Y you just bought for a profit 6 months later. Who would have ever thought buying a car was an investment? All these book were wrong :X

Your point is valid but I'll point out, the delivery estimator is all over the place. I ordered a LR MY a few weeks ago and the delivery estimate was August. I checked a couple days ago and it then said March. Funny thing was, I actually checked back to see if I could upgrade to red in order to get it faster (and because I'm feeling slightly rich).

 

[S3XY]

As part of the infrastructure bill passing tonight, Moderate democrats in the house who were holding up voting on the BBB (Build Back Better) spending bill (which contains the EV tax credit) agreed to vote in favor of the BBB bill after the forthcoming CBO costing is released.

So real progress has been made today, and now the focus will move to the senate to see what Emperor Manchin decides upon.

(Regardless of ones political leaning, I think nearly everyone can agree the American setup is real crap for actually getting anything done. I much prefer most other democratic systems which effectively gives the winner of the election a parliamentary term to do whatever they want and face the voters judgement at the next election - having 3 separate entities needed to agree on a bill is weird and extremely prone to gridlock).

Remove the filibuster and our system would be vastly improved. Although the ultimate fix is to get money out of politics. Not holding my breath on that.

 

[Paracelsus]

'Draw Down" by how much, or to how much?

Here is a link to the updated article on the BBB bill 401k and Roth proposals @UncaNed along with an example from the article describing how this would effect the accounts of anyone with an earned income over $400k single/$450k married if you don't want to click on the article. If this is implemented, the plan kicks in on Dec 31, 2028. Tesla growing 50% YOY through the end of 2028 (7 years) might make TMC Long HODLers take a 2nd look at what the combined value of their 401k & Roth TSLA might be worth 7 years from now. But I guess one could always hurry up and get older than 59 1/2 years old before Dec 31, 2028 to make qualifying withdrawls from their Roth so it doesn't count as earned income.............? (/s)

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www.forbes.com

 

[petit_bateau]

You seem to be thinking only of panels in a field feeding the grid.

Let me tell you how I respond as someone with a house that has a roof.

BoM costs continue to fall, install costs continue to fall (more efficient panels mean less racking and such, less time spent installing). Yes there is a floor to this and it will drop slower than panel costs. For practical purposes it won't drop much going forward once you get the surge pricing (excess profit) out of the picture.

What lower panel costs do in the long term is expand the system until it fills your roof space. As an example

Lets say I have 2000 sq ft of roof space to put panels on (ignoring ground mount options, and wall mounted panels).

Tesla .com solar told me a few years ago my best option in terms of years payback was a 4.x KW system, a couple of years ago it said my best payback per year was an 8.x KW system, more recently it says a 12.x KW system is the best payback. Maybe in a few years the balance point will be a 16.x KW system.

None of those systems fill my roof. As panel costs drop I can come closer and closer to filling my roof with a similar cost. That lowers my cost of electricity going forward.

Maybe distribution costs make it prohibitive for me to stay on the grid long term. At some point both the panels and batteries will be cheap enough I can just fill my roof and disconnect from the grid to avoid distribution costs.

After the point where BoM and Soft costs dominate (lower panel prices don't affect the decision much) you'll see customers asking how much can you fit on my roof and just doing the largest array they can get away with. We aren't there yet in my neck of the woods but it takes super cheap panels to have that happen.

All the costs I have listed increase as a proportion with the decreasing scale of the installation. So they affect utility scale solar least, domestic scale solar more. I have seen many studies of this over the years , and the top-down data matches my own bottom-up observations in the field.

 

[MABMAB]

Margin?
My virtual mentors (books) advocated for minimal to no use, and then only at the start of a run. These were the same people that would perhaps buy 5-10 of the best issues, then whittle them down to the best performers. Concentrating ones position in just one issue or mostly one issue raises the risk.

I've had margin calls before when I was a young buck and had not felt any real market pain. It was embarrassing to explain those calls and subsequent money moves. Mostly I would just sell out before further margin calls.

I view shorting a bit like using margin. I have been 100% convinced of my two most recent shorts and had my ARSE handed to me on a platter, unable to stomach giant moves up. Same is true for buying puts. I feel pain buying OTM calls. For calls I only consider deep ITM, willing to pay about 20% premium though my most recent TSLA call purchase I paid 25%. ITM has some underlying inherent value, much unlike the $1250 calls expired yesterday that I watched.

A key lesson missed in the market, likely out of my greed and Mr. Markets attractive gambling tables is that of risk of ruin and risk management. It is more important to live to fight another day than to make a profit. I only lived as the day job paid the bills and allowed new $$$ to be brought to work.

I had read and was warned of margin before I used it. I ignored the advice. I paid the price.

 

[MABMAB]

2021 Hedge Fund Contest - Page 5 - Bogleheads.org

For your internet trolling pleasure, please note how many went short TSLA, including one published author...

 

[22522]

Remove the filibuster and our system would be vastly improved. Although the ultimate fix is to get money out of politics. Not holding my breath on that.

1. Did the green wash of the UAW PHEV ICE business ( from those Tesla exclusive meetings) pass?
2. Did the restrictions on how much your retirement savings can appreciate during a year pass?

Crab mentality - Wikipedia

en.wikipedia.org

 

[The Accountant]

Trying desperately to keep this thread - even over the weekend - somewhat on topic, rather than GREENWASHING something close to half of what's posted. Remember that just about all of my Mod Squad has retired so that leaves, for now, just your favorite Hulk to throw his weight around.....

About MARGIN -
Family story here. Both my parents spent their childhoods in the Roaring 20s and they, and their own parents, lived indeed what many think of as The Good Life.
For both these sides, the Great Crash of '29 was effectively fatal to all that lifestyle, and literally fatal to one of my grandfathers. The proximal culprit? Investment margin.

Fast forward to the 1960s and, as I have related before, my father was one of the few "names" on the Buy Side (ie, investors rather than brokers) that everyone on Wall St. knew, along with John Templeton, Edward Johnson II, Jon Lovelace and one or two others. But even he - with the Great Depression seared in his memory - twice was wiped out before I finished my childhood. Why? Investment margin. That he was able three times to pick himself back up required an enormity of will that few in these times can comprehend, let alone emulate. Fortunately for him, after that second time he learned his lesson.

As for me, I benefited from the prior generations' travails and, in my first career as an investor never extended myself beyond what I knew I easily could cover. After releasing to others what I had acquired, shunning all that wealth and for a quarter-century living the life of a scratch-bottom backwoods Alaskan, in this my second investor career I certainly have no taste ever for margin. Of the firms I worked for, though? One was owned and run by some for whom margin was a natural part of their investment behavior, and when the Crash of 1987 occurred, they were blindsided and, falling from their lofty perches as being quite close to Masters of The Universe - as the Wall St. biggies were called then - they hobbled along in the nether regions for too many years without ever being able again to grasp the brass ring, and 2008 finished them off.

THIS FORUM - this thread - is self-selecting in that so many of us have joined one of the great capital-creating stories of history - some earlier, some later - and just by virtue of us, collectively, so wonderfully sitting in that position it is possible to fall into the trap of believing that I - you...he...she...we are somehow smart enough and agile enough and clever enough to be able ever to elude margin's fatal jaws.

That it may be so. History - MY history, my immediate family's history - says otherwise. I would counsel all to take the last four letters of the prior sentence and hold onto them, and eschew margin, as fiercely as you hold on to TSLA.

THIS IS WHY
Posts like this! This is one of the reasons I come to this forum/thread practically everyday.
Storytelling is very powerful. Lessons of what Audie has learned during his lifetime, has entered my mental investing database in minutes . . and will stay saved there for years to come. It does not matter if I agree or disagree with his position on margin; the manner in which Audie has communicated his view has shaped my thinking.

I appreciate and envy all the members with the courage to share their personal experiences. I rarely do and usually stick to the numbers and the reason for this is that I worry about doxxing myself (lots of crazy people out there) or publicly disparaging a prior employer. But I believe I have some personal experiences worthwhile to share as many experiences from my corporate life are what led me to investing in Tesla. I need to reconsider my stance on this.

Here's to the Brave Ones

 

[winfield100]

Let me tell you how I respond as someone with a house that has a roof.

Lets say I have 2000 sq ft of roof space to put panels on (ignoring ground mount options, and wall mounted panels).

Tesla .com solar told me a few years ago my best option in terms of years payback was a 4.x KW system, a couple of years ago it said my best payback per year was an 8.x KW system, more recently it says a 12.x KW system is the best payback. Maybe in a few years the balance point will be a 16.x KW system.

None of those systems fill my roof. As panel costs drop I can come closer and closer to filling my roof with a similar cost. That lowers my cost of electricity going forward.

OT for investing thread but it’s the weekend ‘n such
your 2,000 sq ft roof roughly 180-190sq meters
my PV array is 60sq meters, 1/3rd and is 11,655w, derated to 9,907 (85%)
it makes 17,400kwh/year of which i use 8,000 - 9,000, for EV, 100% electric house, heat swimming pool to 91 degrees (arthritis and old age)

i could triple the size, make around 50,000 kwh/yr (50 megawatt hours) with an excess of 40mwh and be at Tony Seba 4x-5x U curve, “loosely coupled microgrids” into variable sized larger grids.

there are both threads here on Solar PV and a thread on VPP’s

 

[jbcarioca]

Genau; at least one of the two of us does not know how to spell gr*y. Jedenfalls: es freut mich.

This time you missed it. Gray and grey are both acceptable. Gray more common us grey more common uk, allegedly . BTW, I think a nice name for a gr*y car.

 

[⚡️ELECTROMAN⚡️]

But I guess one could always hurry up and get older than 59 1/2 years old before Dec 31, 2028 to make qualifying withdrawls from their Roth so it doesn't count as earned income.............? (/s)

I don't think IRA withdrawals are considered earned income.

 

[Nolimits]

Tsla has risen drastically in last few weeks. I am thinking it’ll trade sideways for few months or so, (maybe even a year) in the range of 1200-1500 after the EOY numbers/q1 results. I am tempted to sell some to pay off the mortgage completely and be debt free. The amount of shares sold would be 10% of my tsla hodlings. The mortgage rate is only 2% so I am struggling to see the benefits. Especially since 2 factories are coming online. Is this a stupid idea? I understand tsla will likely go up higher even higher than the all knowing StrongGuys price target in the future. But love the thought of being debt free. My personal Greed index is high and everyone is exuberant about tsla currently. It scares me a bit (in short term). Anyone having similar dilemma?

Now that said, I sold some shares to pay off my M3 and wife’s mercedes 2years ago w tsla gains and I paid for it dearly. This is adding to the “fool me twice” issue as well….

 

[OrthoSurg]

Just a quick anecdote. Currently I would say I do not know what I am doing. Years ago though I really did not know what Iwas doing. Had a margin account, and one day woke up, and all my shares in that account were gone. No warning. Sold by bank.

The US dollar had fluctuated, briefly steeply downward, making my holdings less valuable. So I exceeded my limits in Canadian dollars and…gonzo. I know we are a Worldwide forum and just something to consider, as I had not.


If I knew know what I knew in 2011…not about Tsla price but just about investing I would likely be 10x from where I am. But thanks to this board…when the next Tsla comes along I will be ready.

In 2014, I put 75k in TSLA of the money I earned while working during my too many years of studying. Had I not listened to my financial advisor who told me Tesla was related to the price of oil and since oil price was dropping and TSLA would drop, I would have not sold for a ridiculously low profit and today I would have 10x what I have in my personal account. My greatest regret was listening to people I thought what they knew because they were older and had previous experience in making money in the energy, mainly oil market. I realized age and experience was not of use in a disruptive market technology.

Trying desperately to keep this thread - even over the weekend - somewhat on topic, rather than GREENWASHING something close to half of what's posted. Remember that just about all of my Mod Squad has retired so that leaves, for now, just your favorite Hulk to throw his weight around.....

About MARGIN -
Family story here. Both my parents spent their childhoods in the Roaring 20s and they, and their own parents, lived indeed what many think of as The Good Life.
For both these sides, the Great Crash of '29 was effectively fatal to all that lifestyle, and literally fatal to one of my grandfathers. The proximal culprit? Investment margin.

Fast forward to the 1960s and, as I have related before, my father was one of the few "names" on the Buy Side (ie, investors rather than brokers) that everyone on Wall St. knew, along with John Templeton, Edward Johnson II, Jon Lovelace and one or two others. But even he - with the Great Depression seared in his memory - twice was wiped out before I finished my childhood. Why? Investment margin. That he was able three times to pick himself back up required an enormity of will that few in these times can comprehend, let alone emulate. Fortunately for him, after that second time he learned his lesson.

As for me, I benefited from the prior generations' travails and, in my first career as an investor never extended myself beyond what I knew I easily could cover. After releasing to others what I had acquired, shunning all that wealth and for a quarter-century living the life of a scratch-bottom backwoods Alaskan, in this my second investor career I certainly have no taste ever for margin. Of the firms I worked for, though? One was owned and run by some for whom margin was a natural part of their investment behavior, and when the Crash of 1987 occurred, they were blindsided and, falling from their lofty perches as being quite close to Masters of The Universe - as the Wall St. biggies were called then - they hobbled along in the nether regions for too many years without ever being able again to grasp the brass ring, and 2008 finished them off.

THIS FORUM - this thread - is self-selecting in that so many of us have joined one of the great capital-creating stories of history - some earlier, some later - and just by virtue of us, collectively, so wonderfully sitting in that position it is possible to fall into the trap of believing that I - you...he...she...we are somehow smart enough and agile enough and clever enough to be able ever to elude margin's fatal jaws.

That it may be so. History - MY history, my immediate family's history - says otherwise. I would counsel all to take the last four letters of the prior sentence and hold onto them, and eschew margin, as fiercely as you hold on to TSLA.

The best time in history to use margin was at the low of covid crash when TSLA stock was recovering and sky rocketing. My not advice on using margin is if you are starting your investing career, are ready to declare bankruptcy, or have high income to refund the margin within 1 year of extra hard work. I would never recommend using margin today to buy TSLA at all time highs. I see margin to be used after market black swan events, if you have high confidence in a stock, company and its CEO, and you give a 99,99% probability of recovery after studying the company financials like you never had before.

 

[SO16]

THIS IS WHY
Posts like this! This is one of the reasons I come to this forum/thread practically everyday.
Storytelling is very powerful. Lessons of what Audie has learned during his lifetime, has entered my mental investing database in minutes . . and will stay saved there for years to come. It does not matter if I agree or disagree with his position on margin; the manner in which Audie has communicated his view has shaped my thinking.

I appreciate and envy all the members with the courage to share their personal experiences. I rarely do and usually stick to the numbers and the reason for this is that I worry about doxxing myself (lots of crazy people out there) or publicly disparaging a prior employer. But I believe I have some personal experiences worthwhile to share as many experiences from my corporate life are what led me to investing in Tesla. I need to reconsider my stance on this.

Here's to the Brave Ones

All I ask is that you be careful and not accidentally scare yourself away from posting on this thread. I find your posts to be EXTREMELY helpful as well. I come to this thread to read posts like yours too.

 

[Sancho]

We’ve discussed at length here the future value to Tesla of the machine that builds the machine. That’s huge. But there’s something even more valuable happening, and that’s the innovation that enables the innovation.

A lot of companies through skill or luck generate a few major innovations, but generating many innovations is itself a skill: an extraordinarily challenging skill to develop. At first you’re going to make more mistakes than successes, and even with your successes you will have all sorts of challenges integrating them. But like any skill, if you practice really hard, efficiently and strategically, you get better at it.

Musk is doing something with innovation that is unprecedented at a scale that leads to unprecedented innovative competency.

First, he considers what big things need improvement (climate change, space exploration, traffic gridlock, etc). Then at the highest level he considers what engineering change will most likely solve the challenge quickly (electric cars, reusable rockets, tunnels). So far, that’s very good first principles thinking, but that and a dollar won’t get you a cup of coffee at Starbucks.

It’s what Musk does next that creates the wealth: he puts at risk his capital, energy and reputation to make it happen entirely through innovation. He takes nothing as a given and allows everything to be reinvented in search of the best solution to each challenge.

At first, this approach took enormous cajones, and may have been foolhardy risky. The number of mistakes should have been ruinous. But now he’s got all the capital needed to make this enormously successful.

But the capital is now the least of his advantage when it comes to innovation. Because he’s now created an innovative competency that no company has ever had before. Innovations will now come faster, and more efficiently. They will be better integrated from the start. There are a million examples of this. Here’s one: when Tesla designs a new part for a car, a major design consideration is how easy it will be for that part to be handled by the kind of robot others at Tesla are designing.

I just watched the new video created by Tesla Canada to recruit employees. It’s not that interesting, but there’s a short clip of this young engineer talking about how he’s discovered that there is always a way to overcome a technological hurdle. Think about that for a second: here’s a company where thousands of engineers are empowered to think outside the box every day, and their best innovations are instantly actualized into product creation.

The innovation that has enabled the innovation is that every technological problem has a solution, and we’re going to build a company that not only puts no restraints on re-engineering, but rewards hyper-innovation by actually deploying it, as fast as possible.

Bell Labs was the innovation leader when I was growing up, but Tesla, SpaceX, etc are in another league now because they are deploying, not just designing. It’s the act of deploying that builds the competency of how to innovate more productively, more valuably.

It’s the innovation that enables the innovation.

And the applications of all these innovations are so numerous and wide scale they blow the mind. Cars and rockets are just the tip of the iceberg.

 

[Lessmog]

You need a butler who can make these trivial decisions for you.

Did you mean: BOTler?