I'm pretty sure that there are a lot of folks that want to order a car but get pressured into taking one from a dealer's inventory rather than getting exactly what they want. "You can have this car today if only you'll give up this small item". Dealers really don't like order placers.
The disagree - I don’t think it’s going to happen like that nor in that time frame. The only companies I trust to expand as fast as humanly possible; Tesla and a couple of their current battery suppliers. That is all and that’s not enough.
opcalc.com
You lost me at ‘the safest’ - then my eyes crossed. The further I read, the more I thought this sounds like making beef wellington and a cheese soufflé - you just don’t do it unless you’re Gordon Ramsey and certainly not while he’s yelling obscenities at you, the latter being equivalent to what WallStreet is doing right now.Just wanted to add this opinion giving the conversation of people not wanting to use margin (which I generally agree with).
Why Deep ITM LEAPs Call Options Could Be Better Than Margin
ITM = In The Money
LEAPS = Long-Term Equity Anticipation Securities
#1 - The safest thing to do is hold shares. However, if you have the inkling to use a little bit of leverage, it is probably better and less stressful to buy LEAPs than more shares on margin.
#2 - Using a bit of leverage should be reserved for when you think the stock has hit or near a medium- term bottom.
1. Say you have own $100k of equity in TSLA at current share price. Say you are allowed to borrow up to 40% of that equity to buy more shares to give you 1.4x leverage. This of course would be stupid because any drop in stock price would give you a margin call, and it's quite likely there will some short term dip. So you try to estimate what the biggest dip could be from here. Say you estimate it's a 20% drop in share price, to $145. So actaully you only have enough margin for 1.3x. But still, now you have to stress out everytime the stock drops say 10-15%, not enjoyable.
But maybe you are super convinced the stock cannot drop past $100, so you use margin so you won't have any issues unless the stock drops past $100. So in reality you can leverage to 1.2x.
Compare that to buying Jan 2025 $50 calls with your $100k in cash. The cells indicate the call % change in value, each row being a % change in share price from current value, and each column a point in time. The calls give you about ~25%-30% (1.25x-1.3x) leverage depending on time and stock price value.
But you get that leverage without using margin.
So even if you buy these and the stock dips to $100 temporarily, you do not need to have any of the short term stress you would have to with margin.
Downsides:
If the stock goes and stays below $100 long term, you will start losing more money than you would have using margin. Share price near $50 in 2 years means you lose all your money. That is a big downside, and while may seem very unlikely, it is the reason there is upside allowed on all other share prices above it. There is no free lunch.
Also, whether you close the trade at some point before expiration or acquire the shares, this forces a tax event in your taxable accounts. Selling profitable calls after > 1 year of holding is a long term capital gain.
As you increase the strike price, you get more leverage but higher risk of losing a crapton of money to the downside. That's why I'm only bringing up the DEEP ITM example and talking about it after the stock has already been beating up bigly.
IMO it's safer and less stressful than using margin especially in current conditions. Not advice.
P.S. - if instead of buying straight $50 calls, you bought a $50 / $400 call spread, you leverage will increase to 1.8x near expiration up to $400.
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TSLA Long Call (bullish) calculator
Call option profit calculator. Visualise the projected P&L of a call option at possible stock prices over time until expiry.
Some background on the frank discussions between the US and Europe regarding the IRA. I don’t think this will impact Tesla’s investment decisions much beyond shifts of a quarter or two. But if Europe creates its own subsidy program, that could impact Tesla’s margins.
Glad that Tesla had the foresight to site a plant in Germany and to keep investing irrespective of subsidies.
Biden keeps ignoring Europe. It’s time EU leaders got the message
The US president has sparked new outrage in Europe over plans to subsidize industry.www.politico.eu
How would you propose that it be fast-tracked? I don't think it's a matter of money, but rather sequencing the movement of scarce engineering talent.
I understood that Berlin 4680s were delayed a bit due to a pretty small German engineering team going to Austin rather than Berlin. I don't know if that was cover for something else going on. Or I guess the "German engineering team" could have been the Tesla Grohmann automation folks coming stateside to consult on replacing the failed supplier.
It could be more than a bit of extra demand if we look a few decades out, especially if the future winning solution is multistage flash distillation instead of reverse osmosis as the article proposes. This is in line with my general expectation that electricity consumption will explode as solar energy begins to set unprecedented electricity prices in the coming years.
www.tesmanian.com
This is what I was talking about when I said getting off fossil fuels would be like "ripping our own guts out". Granted, covid is unrelated but most of the other major chaos has direct lines to Big Fossil. Expect more for a good while.
All technological interventions, especially the high scale and rapid ones, carry significant risks with them. And these are risks that we cannot anticipate since many natural systems are computationally irreducible. Geoengineering technologies must be some of the riskiest ones out there, and these type of "not enough water lets desalinate water to fill rivers" really make me angry especially since there are such beautiful solutions that are well aligned with said natural systems. Australia's own P.A. Yeomans' keyline design is the type of land stewardship and geoengineering that we ought to be putting our efforts towards. Obviously we as investors tend to be biased towards centrally scalable technological solutions since we want to be part of the concentration of capital that the dynamic inevitably leads to.
That's because they make more money off all the "weather package", "paint protection", and a bunch of other nonsense to the base car. You mostly end up paying for stuff you don't want. Rarely can you find a vanilla car without a few hundred or a few thousand of nonsense added on.
For certain, Russia and quite a few other dictatorial regimes are propped up by oil. Some of these countries cannot exist without oil revenue.
