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

[AndrewZ]

Not really

Love how people continually use 2008-2009 as an example of what's about to happen when in reality, there's been 20X more times when the economy was just fine or had a soft landing after a rate hike cycle.

But sure.....keep listing 2008-2009 like it's the only time the Fed has gone through a rate hike cycle

It seems to have happened in the early 2000s after the dot-com bubble, and ~1998, and 2008-2009, and 2020, periods before that are too difficult to view with granularity in this overlay

US - Federal Funds Rate vs. S&P 500 | US Market | Collection | MacroMicro

The chart shows that when the Fed enters a rate-rising cycle, the economy grows faster and the stock market can yield higher returns than the bond market.

en.macromicro.me

Rates are being hiked right now to cool an overheated economy, and an overheated economy = things are good = stocks should be higher.

Rates are cut when the economy needs the stimulation from lower financing costs.

So the idea that markets will rally when rates are cut doesn't seem to make a whole lot of sense conceptually. When that happens, it'll be because the economy is hurting and I doubt market valuations will be high at that time -- that will be the market bottom IMO.

 

[StarFoxisDown!]

It seems to have happened in the early 2000s after the dot-com bubble, and ~1998, and 2008-2009, and 2020, periods before that are too difficult to view with granularity in this overlay

US - Federal Funds Rate vs. S&P 500 | US Market | Collection | MacroMicro

The chart shows that when the Fed enters a rate-rising cycle, the economy grows faster and the stock market can yield higher returns than the bond market.

en.macromicro.me

Rates are being hiked right now to cool an overheated economy, and an overheated economy = things are good = stocks should be higher.

Rates are cut when the economy needs the stimulation from lower financing costs.

So the idea that markets will rally when rates are cut doesn't seem to make a whole lot of sense conceptually. When that happens, it'll be because the economy is hurting and I doubt market valuations will be high at that time -- that will be the market bottom IMO.

Sorry but the chart you posted does not back up what you're saying. Again, you're calling out 2008-2009 and 2000-2001.

As I mentioned before, to have a 2008-2009 chart, some sort very big event, something completely unforeseen by everyone needs to happen.

As for 2000-2001, that was simply valuation. You might want to go be back and correlate the PE ratio of the Nasdaq/S&P during that time. We're talking absurd valuation across most of the tech space that were never going to live up to.

Not sure how you're going to ignore that very same chart you posted huge stretches where Fed Fund rate was moving around the S&P was just fine and continued a nice upwardly trend without hitting previous lows.

If you're going to look at previous history, then the odds are the S&P stabilizes and gains are somewhat muted going forward for a long stretch (at least compared to the gains in the S&P since 2009)

 

[StealthP3D]

I'm a big fan of your long term investing philosophy and value your inputs but this above is a poor take.

TSLA is a very liquid stock and when you place market orders you are bound to have some variance with the order execution. In this particular case your broker did the right thing and gave you the best execution price. Market orders can sometimes fill at a lower price especially when you have short sellers hitting the bid to pull the stock down. IMO this has nothing to do with market makers.

The primary relevant data point is that the order did not execute immediately, not that the price suddenly dropped.

The maximum latency on my Internet service is measured in microseconds and the exchanges are set up such that microseconds matter. There is no reason for a trade to take seconds to fill when there are a stack of sell orders at higher prices.

Sure, this benefited me by providing a lower price for my purchase, but it did it at the expense of lowering the quoted price at which TSLA was trading at. My buy order should have caused the quote to rise, not fall. Maybe now you can see what I'm saying. Unless you want to take the untenable position that there were zero standing sell limit orders at a higher price for a brief moment. I don't buy that for a minute. The price should have risen, not fallen.

 

[AndrewZ]

Waymo and Cruise are already running robotaxi fleets in multiple American states, which strongly suggests that the legal and risk management implications are not only tractable but have already been more or less sorted out, at least in California where Tesla Network would most likely be rolled out first.

Furthermore, the absence of any commentary from Tesla on this supposed issue also would seem to indicate it’s not a big deal. Tesla has guided for robotaxis to be worth far more than the current automotive business. It would be negligent and borderline fraudulent for them not to disclose such risks, wouldn’t it? That would be extremely material information for investors.

AAA estimates insurance premiums cost the average American driver $1,588 per year per car (link) with 15k miles per year of driving. That’s approximately $0.10/mile. In urban areas, car insurance tends to be more expensive and that’s where robotaxis would be primarily operating for many years. Let’s conservatively go with $0.30/mile to align with the extreme costs seen in urban zones in e.g. Florida or New York.

The primary cost for car insurance companies is payouts for claims. According to data compiled by S&P Global the average loss ratio (claims expenses divided by premium revenue) is usually around 65%. In other words $0.20 out of our $0.30/mi estimate is for claims costs.

View attachment 874851

Triple-I Blog | Personal Auto Insurers’ Losses Keep RisingDue to Multiple Factors

10x or more reduction in incidents is required by the Master Plan for robotaxi deployment. Even if for some reason courts apply a double standard for collision liability that penalizes autonomous driving systems for errors more than human drivers, Tesla’s self-insurance would still come out ahead as long as the penalty is less than 10x (or whatever >10x safety improvement Tesla ends up actually achieving).

For example, suppose Tesla unfairly has to pay out 5x more for damages compared to current baseline averages. Even then:

$0.20/mi * 5 / 10 = $0.10/mi claims cost burden​

​

Robotaxis will probably earn at least $0.50/mi gross profit after accounting for all other costs except insurance, so $0.10/mile insurance cost can easily be absorbed. Tesla conservatively estimated $0.65/mi in 2019.

View attachment 874878

Your stated goal for being here is to be “contrarian” and countering unrelenting optimism right? Not, you know, accuracy?

I'm not sure what you're arguing isn't accurate in my post.

Waymo, Cruise, and others' risk mitigation is clearly built in through the heavy geofencing and other limitations on their services + backup drivers in some instances. I'm aware of one Robotaxi fatality, a 2018 accident with an Uber in Arizona, and there was a backup driver who was charged with negligent homicide -- he was watching videos on his phone when the accident occurred. That isn't even Level 4+, it's Level 2 if a human driver is responsible.

Damages from accidents are one thing, I'd say the real risk is from injuries and fatalities and whatever legal action comes from it when the DDT is owned by a corporation. I don't think that has been addressed yet, and I think the risk is encapsulated in Elon's statements about regulatory approval etc

 

[MABMAB]

The primary relevant data point is that the order did not execute immediately, not that the price suddenly dropped.

Post times or keep it to yourself.
All you know is it did not show on your screen immediately.
It happened to me all the time on Street Smart Edge.

I'd like to report Stealth to the mods and whatever county sanity agency exists in his borough. Something deep and serious happened to him in the missing time frame. This thing, was bad enough that for the first time ever he posted a trade, and then brought forth his weakest ever arguments. The mods ought make sure the site is safe.

Seriously dude, like when have you ever posted a trade here?

 

[elasalle]

If anyone wants proof that the media is scummy just look at that. "Tesla shareholder" = guy who owned 9 shares.

If Tesla stock split 5*3, i.e 1:15 , was this guy with 9 shares a Tesla shareholder when Elon's package was announced.
9/15 = 0.6 s.

Your Honor, I rest my case!!

 

[AndrewZ]

Sorry but the chart you posted does not back up what you're saying. Again, you're calling out 2008-2009 and 2000-2001.

As I mentioned before, to have a 2008-2009 chart, some sort very big event, something completely unforeseen by everyone needs to happen.

As for 2000-2001, that was simply valuation. You might want to go be back and correlate the PE ratio of the Nasdaq/S&P during that time. We're talking absurd valuation across most of the tech space that were never going to live up to.

Not sure how you're going to ignore that very same chart you posted huge stretches where Fed Fund rate was moving around the S&P was just fine and continued a nice upwardly trend without hitting previous lows.

If you're going to look at previous history, then the odds are the S&P stabilizes and gains are somewhat muted going forward for a long stretch (at least compared to the gains in the S&P since 2009)

In your last sentence there, I think what you're describing is the unicorn "soft landing" we hear referenced by the talking heads.

The other possibility is overtightening or something else happens over the course of the rate hikes hitting the economy harder than expected, revenue and earnings crater, and the Fed starts cutting rates to stimulate activity again.

 

[UltradoomY]

OT of course-
SpaceX is currently seeking to increase capital and is currently looking for a funding stage that will increase it's value from $127B --> $150B or so.

I would imagine that Elon is going to offload some equity in SpaceX to help with Twitter funding through this round.

This would further the idea, that he is in fact done selling TSLA stock for the endeavor.

Thoughts?

 

[Mengy]

Post times or keep it to yourself.
All you know is it did not show on your screen immediately.
It happened to me all the time on Street Smart Edge.

I'd like to report Stealth to the mods and whatever county sanity agency exists in his borough. Something deep and serious happened to him in the missing time frame. This thing, was bad enough that for the first time ever he posted a trade, and then brought forth his weakest ever arguments. The mods ought make sure the site is safe.

Seriously dude, like when have you ever posted a trade here?

I can't tell if this is a serious post or sarcasm, can someone enlighten me please?

 

[bkp_duke]

Here are screenshots of the WSJ article on the trial today... rather enlightening and positive IMO:
View attachment 874899View attachment 874900View attachment 874905View attachment 874906

Likely to be "Dismissed with Prejudice" (i.e. you can't sue for this again).

 

[InDaClub]

Post times or keep it to yourself.
All you know is it did not show on your screen immediately.
It happened to me all the time on Street Smart Edge.

I'd like to report Stealth to the mods and whatever county sanity agency exists in his borough. Something deep and serious happened to him in the missing time frame. This thing, was bad enough that for the first time ever he posted a trade, and then brought forth his weakest ever arguments. The mods ought make sure the site is safe.

Seriously dude, like when have you ever posted a trade here?

I know what happened. @StealthP3D read your tirade on ’run rates’ and temporarily fell into a coma.

 

[StarFoxisDown!]

In your last sentence there, I think what you're describing is the unicorn "soft landing" we hear referenced by the talking heads.

The other possibility is overtightening or something else happens over the course of the rate hikes hitting the economy harder worse than expected, revenue and earnings crater, and the Fed starts cutting rates to stimulate activity again.

No I'm not, go through the chart you posted.

What's funny to me is the twitter account you linked two, in their own chart, backs up what I'm saying.

In the 3 examples in the in 69, 71, 81, the chart DOES NOT show what they're saying. Yes the S&P declined for a period after the fed pivot.....but the S&P also didn't have 25% decline BEFORE the Fed pivot. The set up is not the same......at all.

2000 and 2008 I already covered as to why the S&P traded like that and his last example which is list as 2019.......was actually the COVID crash. Again..........an event that NO ONE saw coming.

In the chart he posted in his twitter post, only 2 of the 6 events actually acted the way he's claiming they did.

Twitter at it's finest

Before you reply, I think we can both agree that yes a further decline could happen but that there are just as many examples of the S&P continuing on it's merry way without having another major leg lower.

 

[JRP3]

This would further the idea, that he is in fact done selling TSLA stock for the endeavor.

Thoughts?

 

[StealthP3D]

Post times or keep it to yourself.
All you know is it did not show on your screen immediately.
It happened to me all the time on Street Smart Edge.

I'd like to report Stealth to the mods and whatever county sanity agency exists in his borough. Something deep and serious happened to him in the missing time frame. This thing, was bad enough that for the first time ever he posted a trade, and then brought forth his weakest ever arguments. The mods ought make sure the site is safe.

Seriously dude, like when have you ever posted a trade here?

Nothing bad happened to me, I got a better price.

I have posted almost all of my TSLA trades here, at least over 90% of them. If I didn't post one or two it was simply because I was busy with other life things and they went by the wayside. You are flat out wrong about this being the first time I've ever posted a trade here. Pay attention before making accusations.

 

[AndrewZ]

No I'm not, go through the chart you posted.

What's funny to me is the twitter account you linked two, in their own chart, backs up what I'm saying.

In the 3 examples in the in 69, 71, 81, the chart DOES NOT show what they're saying. Yes the S&P declined for a period after the fed pivot.....but the S&P also didn't have 25% decline BEFORE the Fed pivot. The set up is not the same......at all.

2000 and 2008 I already covered as to why the S&P traded like that and his last example which is list as 2019.......was actually the COVID crash. Again..........an event that NO ONE saw coming.

In the chart he posted in his twitter post, only 2 of the 6 events actually acted the way he's claiming they did.

Twitter at it's finest

What is this on Twitter? Singuy posted that overlay here a while back and it was the first time I had seen it. This overlay appears to go back only to 1980.

The instances you're citing seem to be good examples of why rates are cut. Cutting interest rates is not a bullish event conceptually, it's what the Fed does to stimulate a struggling economy and really drastic rate cuts happen when the economy is in particularly bad shape. That's why market bottoms don't happen when rates are going up, because rate increases are used when the economy is running too hot.

I feel like people generally have this bass ackwards

 

[MABMAB]

Nothing bad happened to me, I got a better price.

I have posted almost all of my TSLA trades here, at least over 90% of them. If I didn't post one or two it was simply because I was busy with other life things and they went by the wayside. You are flat out wrong.

My b ad, never seen yo disclose.

 

[mars_or_bust]

The entire market dropped a bit - probably due to two stray Russian missiles hitting Poland. This might make everyone nervous a bit. I suspect it will be good medium and long term, as NATO is now more likely to send higher tech/longer range weapons to Ukraine, speeding up the end of the war/Russian defeat.

 

[Paracelsus]

I usually just enjoy the fireworks on TMC between posters, but I am going to weigh in on the side of @StealthP3D here. 55 Million shares have been traded so far today, and much of that was within a 50 cent swing in price..............? Nothing to see here? Really? One might expect the bottom to fall out any minute now..........

Edit - Oooops, the bottom just fell out. MM's - 1 TSLA Retail Investors - 0

 

[Singuy]

Well I guess Spy got rejected from critical resistance and vix is spiking like crazy. Didn't people say TA is fake news? Even the crashing 10 year can't seem to break resistance.

 

[saniflash]

Well I guess Spy got rejected from critical resistance and vix is spiking like crazy. Didn't people say TA is fake news? Even the crashing 10 year can't seem to break resistance.

probably due to two stray Russian missiles hitting Poland