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

[Snerruc]

Sometimes I wonder how people end up with a dozen interventions in a 10 mile drive. My 10 mile drives usually has like 2 to 3 turns because most distance traveled is a straight line.

Is this the route you put into the GPS?

I would be happy with 12 interventions in one mile, if it would do that good. It simply won’t work at all in my car. Tesla is going to take a look at it.

 

[Discoducky]

I had FSD V. 11 waiting for me when I woke up this morning. I think the FSD team has been working overtime to get this out.

I want this to be true, but I think you're mistaken. Is true, super cool! And provide details!

 

[OrthoSurg]

I'm beginning to feel like I might be an ignorant fool because I'm not seeing the problem with margin. I'm afraid I'm the guy at the card table who can't spot the sucker.

I have 2600 TSLA shares in my brokerage account. 200 of them were bought on margin at an average price of about 210. I feel perfectly comfortable with this and the only concern I have is when I read all your posts warning against margin. Is there something I'm missing? I don't feel like I have any realistic risk of getting Called, am I wrong on that?

Below 10% margin usage is responsible as long as you can pay it back within the following year.
Between 10%-30% is fine as long as you are in a bull market however in a bear market with strong move to the downside with -60% stock price moves might make you uncomfortable
Over 30% margin usage is playing with fire.

I’d saw margin usage should be proportional to your time left to retirement. The closer you get to retirement the lower should be margin usage. I think @Gigapress is a strong advocate of using margin to accumulate as much as leveraged TSLA shares possible however you need to be comfortable with margin calls. As long as you don’t lose sleep over it and don’t stare into the oblivion with the possible scenario of your portfolio going down 90% while losing half of your shares before the market reverses, margin usage >10% would then be right for you. My no more margin mantra is a reminder for older me before retirement to never touch this again when I stop having a regular income.

 

[hobbes]

I’m at Tesla right now, getting my winter wheels fitted (not sure they needed any more, the way the weather is these days in Europe…)

I had a chat with the sales guy about my pending MXP delivery and he said they have “lots” of Plaid cars coming, also “loads”of MSLR, apparently, which I wasn’t aware of

I’m now expecting exceptional EU deliveries, on top of October deliveries already exceeding Jan + Apr + Jul combined

Sure looks like it - as of yesterday already more than twice the deliveries for Spain+Netherlands+Norway+Sweden as 2021 Q4 (which was the highest at this time before):

Electric Vehicle registrations in Europe: 15 countries, majority of BEV market

 

[Singuy]

The China COVID outbreak is already happening (31k recorded cases yesterday EDIT: another 33k today).

Although it’s a big near term negative, if it means COVID zero policy is abandoned in 2023, then it has a very silver lining.

2023 could actually turn out to be a good year. Many are predicting gloom with recessions etc, but if China gets through its COVID death wave and there is an end to the Ukraine/Russia war, then things might be looking pretty good in 12 months time.

Xi pivot is unlikely. Bloomberg is estimating 5.8mil people ends up in the icu in a country of only 100k icu beds if full opening happens.

China’s Exit From Covid Zero Seen Stretching Beyond 2023

China’s lack of intensive care hospital beds leaves the nation facing a slow exit from Covid Zero, likely stretching beyond 2023.

www.bloomberg.com

 

[traxila]

Reporting here is as bad as it gets. Believe these are all OTAs fixes that have also been reported in USA recently as well.

Tesla to Recall About 80,000 Cars in China

The recall involves Model S and Model X vehicles with software problems that may lead to battery malfunction, as well as Model 3 cars with seat-belt issues.

www.wsj.com

 

[Gigapress]

I think @Gigapress is a strong advocate of using margin to accumulate as much as leveraged TSLA shares possible however you need to be comfortable with margin calls.

That is what I’m personally doing but to be clear I’m not advocating one way or another. Thus far my aggressive usage of margin has caused me to lose shares and sell in a tax-inefficient manner. I didn’t expect that, but oh well. I got the opportunity to buy a lot of LEAPS at what I believe is an extreme discount, so if I’m right about the next two years for TSLA then this crash was actually extremely beneficial if I just stay the course, because the gains from the LEAPS would far outstrip the loss from margin issues.



Here’s how I looked at this a few weeks ago and nothing’s really changed.

I’m 28, single, have no kids nor house, and am ok with living a lifestyle that is exceptionally frugal by first world standards. This situation profoundly affects my risk tolerance with respect to loss of capital. I could sell my Tesla and go back to exclusively bike/transit/Uber without much disappointment. I could move to a cheaper apartment that’s not in the city. My brokerage accounts could go to zero and I could recover and probably be a multimillionaire before age 35 or so, because I can still get a paid job and the long-term TSLA opportunity still hasn’t gone anywhere. The longer the irrationality persists, the bigger the opportunity to funnel income into LEAPS until TSLA catches up with reality.

I would like to explain my rationale more on my aggressive investment strategy to get feedback from the TMC hivemind and to maybe give useful perspective for people.

Not that I'm giving advice anyway, but I want to say that I would absolutely not recommend that most people copy this strategy. I am doing things and thinking about things radically differently than most people, my situation is different than most people, and presently I have neither dependents to support nor a long-term partner whose feelings I need to consider when making investment decisions.

First of all, I should mention that the majority of my TSLA shares are safely tucked away in tax-advantaged retirement accounts with no debt or options shenanigans. I could liquidate these accounts in an emergency. The countless margin calls (literally...I have lost count of how many happened this year) are only occurring in my regular brokerage account. I checked in today and calculated that my net debt-to-equity ratio for my investment portfolio is about 40%, which is tolerable risk for my current preferences. If I were really fully leveraged on margin this D/E ratio would be much higher.

My overall personal net debt is probably much lower than most people here, because I don't own my residence and I have no student loans, medical loans or anything like that. I do have a car loan because I finally bought a Model 3 a couple weeks ago, but that debt is low-risk because it is approximately canceled out by the resale value of the car, which is quite stable compared to assets like TSLA, and the car itself is insured against catastrophic loss of value from stuff like damage and theft. I also have a few credit cards I'm maxing out, because I kept getting mail advertisement for no-strings-attached 0% interest for 18 months and I decided it would be irrational not to take advantage of that. Presumably they hope I'll just not pay the debt off at the end of the intro period.

Also, I still think people generally misunderstand something fundamental and crucial about the risk of margin, which is that you can lose extra money on the way down, but as long as the asset price eventually increases, then the same process works in reverse. As the stock price rises, the market value of my margin equity would increase in proportion to the TSLA price, which then increases my margin credit, which enables me to buy more shares to replace the shares I sold on the way down. This is a bit of an oversimplification and one important factor is that forced sales have tax consequences; I'm locking in a huge amount of long-term capital gains this year, which is not very tax-efficient, but oh well. Except for the tax stuff, I haven't identified any reason to care about margin calls as long as I am extremely confident that the underlying asset is eventually going back up to where it was and beyond.

That's why I don't complain or fret about Wall Street manipulation and misunderstanding; they are serving me a Golden Opportunity on a Silver Platter and I intend to exploit it hard. I will gladly take their capital because I have big ambitions for philanthropy projects I'd like to do when I'm older and I don't think the hedge fund managers would spend the money as well as I can. Alternatively, it's not the end of the world if my projections are totally wrong and I lose everything and end up as a washed-up 28-year-old engineer with good health, around $10k or $100k, and an employment history gap of one year in which time I put out 1000 investment analysis posts that are allegedly pretty impressive. I could do a lot worse than that, and I think I could recover quickly in such a scenario.

My overall financial risk is mitigated when I take into account other assets with less-tangible value that I can use to acquire more money in the future at the expense of the unemployed freedom I currently enjoy, such as:

• Health
• Engineering degree and employment history
• Knowledge & skills about all kinds of things
• US citizenship and passport
• Native English language fluency
• Boeing network (I know they would like me to come back)
• TMC network (If I needed a job, I think probably someone here would be able and willing to help)
• Being a white male
• Ability to get into good grad school
• No criminal record
• Enjoying working with computers
• Living in the 21st century with all its technological and infrastructural wonders like indoor plumbing, smartphones, cheap ubiquitous broadband internet, electricity, etc.

My net investment portfolio value is down approximately 80% since the peak last year. My assets as of today are definitely not enough to sustain this semi-retirement indefinitely with a 4% withdrawal rate. Back in January, I didn't anticipate this when I handed over my badge and laptop to my manager and said goodbye. However, with the way I have chosen to play this craziness, the 2022 TSLA market irrationality will actually end up being by far the best thing that ever happened to my finances, because TSLA call options have gotten so ludicrously freaking cheap (in my estimation) that the temporary annoyance we are experiencing may pay off by one or two orders of magnitude over the next two years. The more irrational the pricing error gets, the more aggressive I get. If actual bad stuff threatening the earnings explosion were happening then I would not be doing this, but I've concluded that the market doesn't understand what's coming and in many cases the market seemingly misinterprets very good news as disappointing. I mean, the stock dropped hard after Battery Day and after AI Day. Come on.

I think my risk of being wrong on TSLA/Tesla modeling is greatly mitigated by:

• Specialization. I know a lot about this one thing and related subjects due to obsessively researching it and spending thousands of hours crunching numbers and thinking.
• Formal educational background in electrical/computer engineering and economics and career in manufacturing/quality, which seems to be very important for deeply understanding this one thing.
• Past history since 2017 of generally understanding Tesla the company and the EV market and making generally accurate predictions about how the business would work out. (Actually, I underestimated Tesla in 2018 when I bought most of my shares.)
• Living in Seattle/Bellevue for the last several years and seeing the staggering growth with my own eyes
• TMC community. I learn things here every day. I hope I've successfully communicated that I want critical feedback and y'all follow through on that. This makes me less concerned that this place is an echo chamber where I'm just getting dopamine hits from likes for saying stuff merely because we all like the conclusion and want to rationalize it. Also, here at TMC the quality of the critiques, from those who aren't trolls, is much better than Reddit or real life or wherever else I try to have discussions. It's not efficient to debate with someone whose mind is filled with basic misconceptions about the topic at hand, like talking about orbital mechanics with a flat-earther.

 

[Max Plaid]

Reporting here is as bad as it gets. Believe these are all OTAs fixes that have also been reported in USA recently as well.

Tesla to Recall About 80,000 Cars in China

The recall involves Model S and Model X vehicles with software problems that may lead to battery malfunction, as well as Model 3 cars with seat-belt issues.

www.wsj.com

Yeah, TSLA pre-market was too hot, so throw out some FUD to cool it down…

Remember, we are the lucky ones that “see” this manipulation, and profit from it

 

[unk45]

Below 10% margin usage is responsible as long as you can pay it back within the following year.
Between 10%-30% is fine as long as you are in a bull market however in a bear market with strong move to the downside with -60% stock price moves might make you uncomfortable
Over 30% margin usage is playing with fire.

I’d saw margin usage should be proportional to your time left to retirement. The closer you get to retirement the lower should be margin usage. I think @Gigapress is a strong advocate of using margin to accumulate as much as leveraged TSLA shares possible however you need to be comfortable with margin calls. As long as you don’t lose sleep over it and don’t stare into the oblivion with the possible scenario of your portfolio going down 90% while losing half of your shares before the market reverses, margin usage >10% would then be right for you. My no more margin mantra is a reminder for older me before retirement to never touch this again when I stop having a regular income.

I hardly believe what I am saying, but here goes anyway. Even in 'retirement' using margin to defer large capital gains or other taxes can be prudent. During the last two years I have done that twice when I had mandatory expenses within a tax reporting period that would have caused excessive taxes were I to have sold shares then. Both times I liquidated the debt once the tax consequences had been eliminated.

As a related topic, there are situations in which a charitable contribution can affect similar benefits. Those are a trifle more complex and are tax-jurisdiction-specific. Thus far my charitable contributions have worked out well for the ones that did not sell the shares I contributed.

 

[Tronguy]

Sometimes I wonder how people end up with a dozen interventions in a 10 mile drive. My 10 mile drives usually has like 2 to 3 turns because most distance traveled is a straight line.

Is this the route you put into the GPS?

The normal route that pulls up the single digits to a dozen interventions has about 15 turns, 16 lights, a small number of stop signs, and no interstates. An alternative route with lots more interstates can get through with roughly half that number, but has mind-numbing problems getting through a merge between two of them. And then there’s the issues with speed limit signs where it’s cars 50, trucks 45, and the car flips dice as to which of the stacked signs apply to it. In traffic going lots faster than either .

 

[traxila]

It gets better! In this article describing a Ford recall that involved fires and CRACKED fuel injectors (OTA maybe? ) they go out of their way to bring up the China Tesla recall as well at the end of the article. Again with no mention of OTA fix.

Ford Recalls 518,993 Vehicles in the U.S. Due to Fire Risk

Ford's recall includes the 2021 to 2023 Bronco Sports and 2020 to 2023 Escapes.

www.barrons.com

EDIT: In fairness, Barron’s also posted this:

Tesla Recalls 80,000 Vehicles in China. Why That's Not a Big Deal.

The company will take back 67,698 imported Model S and Model X vehicles with software issues that may cause the battery to malfunction.

www.barrons.com

 

[JRP3]

EDIT: In fairness, Barron’s also posted this:

I'd hardly call this "fair":
"The company will take back 67,698 imported Model S and Model X vehicles with software issues that may cause the battery to malfunction."

 

[Coolio2000]

The China COVID outbreak is already happening (31k recorded cases yesterday EDIT: another 33k today).

Although it’s a big near term negative, if it means COVID zero policy is abandoned in 2023, then it has a very silver lining.

2023 could actually turn out to be a good year. Many are predicting gloom with recessions etc, but if China gets through its COVID death wave and there is an end to the Ukraine/Russia war, then things might be looking pretty good in 12 months time.

Do you still believe that there will be millions of severely ill and deaths? And China's current "COVID death wave" that hasn't even happened yet? According to CNN they just had their first Covid death in the past 6 months. I'm not saying more potential lockdowns won't effect Giga Shanghai and TSLA, but I feel like you're screaming "FIRE" in a movie theater.

China reports first Covid-19 deaths in nearly 6 months as cases spike

 

[StarFoxisDown!]

So much for that pre market trading action lol. What’s even the point of pre market when a stock can go from up 2% to down 1% in the matter of a minute in regular trading

 

[Speedr117]

Anyone know Max pain today?

 

[ThisStockGood]

So much for that pre market trading action lol. What’s even the point of pre market when a stock can go from up 2% to down 1% in the matter of a minute in regular trading

Let them MM rule the show for half an hour... after that we shall see...

 

[UncaNed]

Anyone know Max pain today?

Yeah. I do. I know it all too well.

I think I'm at the maximum I can take. /s

Seriously, for max pain click- Stock Option Max Pain

Also, I just received an unexpected letter from a Financial Group saying there are unclaimed funds in one of my parent's accounts, and I need to respond immediately or else it will be given to the state. Serious couch cushion change to buy TSLA!!

The lessons I'd like to share are:
1- If you are the executor or heir of an estate, relentlessly and exhaustively investigate every old investment and savings account the deceased had.
2- Exhaustively list all your assets so your heirs and executor can find everything.
3- Assign Payable On Death "POD" names to each account.
3- put your primary residence in a "Life Estate" if in the US.

 

[Unpilot]

Yeah. I do. I know it all too well.

I think I'm at the maximum I can take.

Seriously, for max pain Stock Option Max Pain

/s

So 177.5 close it is then.

 

[Papafox]

Anyone know Max pain today?

177.50. I always look at specific strike prices since keeping TSLA above a specific put wall or below a specific call wall might mean more to the MMs.

 

[Max Plaid]

177.50. I always look at specific strike prices since keeping TSLA above a specific put wall or below a specific call wall might mean more to the MMs.View attachment 878092

Yeah, if I was a Hedgie/MM/Wedgie and could pin the donkey on the tail, would be > 177.50 < 180

But of course the open-interest will move during trading, likely shifting up a bit from here to 180