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

[JusRelax]

I wish I could. My paper losses are literally making me ill (constant head ache, can't sleep, stomach hurts). If I had sold everything in December, I could have paid off my house with the profits, and still had more money left over in the account than I do now.

Ugh. I'm so sorry to hear that, @rdalcanto. I hope that you've significantly decreased your leverage since then, and the rest of your investment in TSLA is a longer term bet. I don't know how long the shorts are going to keep this down.

On that note... if you'd like to do something to help your position a little, feel free to poke this bear:

Keubiko on Twitter

Their argument against ARK's TSLA valuation model is.... quite holey.

 

[kbM3]

I don't agree with you. This kind of thinking gets people into trouble. I bet a lot of people on this forum already got into trouble, it's unfortunate. Investment is a very difficult endeavor, it's not a gamble based on simple math or confidence. But we do know there are sound investment rules, people should study and follow those rules.

Borrowed money has cost. Margin probably costs 5~7%. You are making money for the brokerage. It's a risk free gain for them, but there is no free lunch in the market, so who took the risk? Basically you took the risk, and will take reduced gain, or take a loss on top of paying margin interest. I think most people should treat margin like drugs, never touch it. A little bit margin will turn into a habit then later a lot of margin. I mentioned this a long time ago, the only time you might consider using a bit margin is after the market has been in a recession for 2 years, you start to see the market recovery. Even in that case only very experienced traders can do with strict cut loss rules.

Second, what works on math may not work in the real world. You think you get everything checked out, this is guaranteed to be a 10 fold, then something happened, turns out this is not as great as expected. William O'neil said, in the end you will find ten baggers are very rare, one out of 10 of your picks may turn out to be a 10 bagger. I will add, usually the one you are most sure may end up disappoints you.

When you talk about someone investing 100% or 105% of net worth into one stock, both ideas are crazy. I know you are just using it as an example. If you have a large sum to invest, you need to have a plan, follow sound investment rules, don't gamble. Having the entire net worth in one stock may end up losing his entire net worth, or watch all the other stocks he liked to triple, only the one he actually invested goes nowhere.

If someone can not find 5 great stocks good for long term investment, I doubt he is that great to pinpoint an exact 10 bagger. If he can find 5 great stocks, why not invest in all of them? The benefit of diversification is huge.

However, TSLA might rally, then those with high leverage and concentration could gain a lot. So everything I said is purely opinion, not advice.

Nope. It is simple math.

As long as the average gain over the holding period exceeds the margin interest rate (currently 3.75% for me) and the stock never dips low enough for a margin call, you will come out ahead.

You can say it is psychologically difficult. You can say it adds risk in proportion to the amount borrowed. You cannot is is a bad investment decision.

 

[printf42]

I think most people are talking about Q2 results but the drop from 250 I think might have more to do with the uncertainty around China. Good evidence for that is how little the stock benefitted from Elon's email yesterday which mostly answers the Q2 question.

So what's the next step on China from the powers that be? That's my question.

Similar to when Elon had issue with SEC, people say TSLA is at risk and need to go down, then when that issue got resolved, they started to say TSLA went down not because of that, so should not raise back up.

IMO these narratives are just that, narratives. They are the excuses that manipulators uses to justify their actions, many of them using other people’s money not their own.

 

[Silent Ludicrosy]

I’ve heard several times on here that a short squeeze is not possible due to unlimited naked shorting. Ihor seems to think that naked shorting is not happening on a large scale except intraday market making. Is he wrong? Ihor Dusaniwsky on Twitter

 

[JusRelax]

I wonder what her source is or if she is just trolling:



Or maybe it is just a terms issue... Media has been saying "cars per day" when they mean "Model 3s per day". Since with Elon's leaked email they were probably close to 1,100 cars per day. (900 Model 3 plus 200 S&X.)

I'd suspect she's just trolling. Still, I'm not quite sure what exactly her angle is in tweeting this if she has such a disdain for Elon....

 

[Boomer19]

i wouldn’t get hopes up about LTSE and any other fallacy about listing in a place where no shorting is allowed

even if such a place existed, the volume and liquidity would be so barren compared to now, that the price would suffer as a result

asking the whole street to implement changes to support such an exchange (long term holders, separately managed end beneficiary holdings, etc) is a nightmare.

brokerages, banks, DTCC, and NSCC try to implement new clearing convention for this new ‘exchange’ is years in the making. half of them wouldn’t bother, or offer it to clients, because the project cost would outweigh the value of doing it. i just don’t see it at this time, without more details on exactly what LTSE rules are and plan of implementation

 

[Carl Raymond]

Tesla could actually end up destroying much of the auto industry. Excess ICE capacity builds by the day. What's the tipping point? BMW/Merc/etc could actually go bk within a few years. That's massive and will fuel much hatred. But that's also only a limited % of the population (not sure of actual %, my guess would be 10-15%). I think there is a big enough % of population that can view this objectively and are fans of Tesla and the transition to sustainable transport (>=50%). But will be impossible to mute the hate.

I was IT manager for an advertising company for 14 years. We did procedural advertising (ads that use the same template each week, but the content changes), for ads going in newspapers. Of course smart phones killed newspapers, from both ends. The circulations dropped and the ads went online. We bankrupted, despite seeing it coming 4 years out.

I do not hate Apple, or smart phones. It’s hard to hate progress. These days I work from home as a web developer (LAMP). I don’t think the hate will be as strong as you expect. Most people are resilient and will reinvent themselves. They should start learning the skills they will need now.

 

[JusRelax]

Nope. It is simple math.

As long as the average gain over the holding period exceeds the margin interest rate (currently 3.75% for me) and the stock never dips low enough for a margin call, you will come out ahead.

You can say it is psychologically difficult. You can say it adds risk in proportion to the amount borrowed. You cannot is is a bad investment decision.

How do you guarantee that you won't get margin called and/or the average gain over the holding period exceeds the margin rate? There are no guarantees....

 

[ZachShahan]

I'm still waiting for the mainstream media to start reporting that Tesla had the 3rd best selling VEHICLE (car, SUV, or pickup) in California in first quarter this year (after drop in tax credit). Best selling AMERICAN vehicle. Outsold BMW 3-series 7:1. Tesla isn't the company with a demand problem....

Do we count? Tesla Model 3 = 3rd Best Selling Vehicle In California In 1st Quarter | CleanTechnica

Also, have two more pieces based on this data coming. I said one was coming the other night but changed my mind and it is coming tomorrow.

I know, I know ... we don't count.

 

[Prunesquallor]

My theory is that he had some insight or perhaps influence into the creation of the LTSE. And he has the option to go there in his back pocket. It would be a great fit and such an epic move. Would allow retail investors to stay in while disallowing short sellers. Makes a lot of sense imo

That would be absolutely classic and the ultimate vertical integration.

 

[dqd88]

Nowhere do they say anything like that. They say: LTSE



Not allowing short selling could be part of that, but that isn't the entire premise... In fact it seems that the entire premise is to sell companies software.

It would not behoove them to say it literally. That would make it too obvious. Would be bad strategy. Keep that card to the chest. Intuitive types will read between the lines.
And "not allowing short selling" could easily fall under those two umbrella statements you referenced. Read them again and ask if short selling could be encapsulate under those statements. They are just blanket statements saying the LTSE is optimized for long term horizon. They aren't going to lay out every rule yet.

 

[wipster]

OT

When robotaxis are cheaper than owning a car, and not much more inconvenient(sometimes more convenient because you don’t need to worry about parking), why would you still own a car?
It’s fundamentally different from ride sharing as of today. Just because of pricing.

'Cause I like to drive a car!

 

[EVNow]

Tesla could actually end up destroying much of the auto industry. BMW/Merc/etc could actually go bk within a few years. That's massive and will fuel much hatred. But that's also only a limited % of the population (not sure of actual %, my guess would be 10-15%). I think there is a big enough % of population that can view this objectively and are fans of Tesla and the transition to sustainable transport. But will be impossible to mute the hate.

But when you consider realpolitik, this won't happen. The companies will be bailed out - infact almost all auto companies will be bailed out. VW, BMW, Merc are too important for Germany. Fiat for Italy. Toyota, Honda, Nissan for Japan. Hyundai/Kia in S Korea. etc. Only the smaller players could have issues - but they are already being bought out (like Mitsu, Volvo etc).

But most importantly when the big change happens, it happens because of a wide recession - so that gets blamed and not Tesla.

 

[MP3Mike]

I'd suspect she's just trolling. Still, I'm not quite sure what exactly her angle is in tweeting this if she has such a disdain for Elon....

I just think she is saying that Elon deserves no credit for the progress Tesla has made in producing 1000 cars/day.

 

[ZachShahan]

Depending on how you calculate your it, Tesla debt can also include solar debts that are fully covered by income from solar customers. Not sure if Jonas accounted for that or not...including those debts can be misleading.

That's how they deceivingly attacked SolarCity for years.

 

[Boomer19]

I’ve heard several times on here that a short squeeze is not possible due to unlimited naked shorting. Ihor seems to think that naked shorting is not happening on a large scale except intraday market making. Is he wrong? Ihor Dusaniwsky on Twitter
View attachment 411706

he’s right
there’s ton of inventory (locates) for shorts to borrow and remain covered. rates to borrow are still within a % of what it costs to borrow a highly liquid, or GC (general collateral) like SPY

until you get a scenario that causes holders to recall their loans, rates will remain fairly reasonable and shorting will remain strong.
the introduction of stock yield enhancement programs by brokers on the street further enables shorts to locate stock to borrow.

syep stock is fully paid stock (cash paid) that the holder signs off on for their broker to lend on their behalf and split the interest

if, for example, every syep participant decided to unenroll in the program, that would cause a lot of recalls, locates to dry up, rates to rise, squeeze

but since the SCTY vote, that hasn’t been close to being a factor

 

[EVNow]

'Cause I like to drive a car!

Yes, it becomes an expensive hobby. Like horse riding.

 

[MP3Mike]

It would not behoove them to say it literally. That would make it too obvious. Would be bad strategy. Keep that card to the chest. Intuitive types will read between the lines.

It is either going to be in the rules or it isn't. They aren't going to be able to hide it.

 

[Artful Dodger]

I am a CPA as well so even if I lose my job...

I call bullshit. Riverboat gambler's wouldn't even place that bet.

CPA's wouldn't lose their job; they'd be fired for reckless personal conduct.

Nice try, noobie. Troll elsewhere.

 

[JRP3]

So I think it's a logical assumption they would not allow since it's creation in the first place is to support long term.

Short-selling, or betting that a company would lose value, would still be allowed on the LTSE —

America’s newest stock exchange wants to fix one of capitalism’s fundamental challenges