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

[wheelwhright]

First of all, there are Dec 2023 Options?!?! I thought Jun 2021 were furthest into the future available.

Yup, just double checked at my German broker account, A subsidiary of Societe Generale seems to be the only one writing those. Is that good or bad? ^^

Second of all, I only just started dabbling in options, so I'm not an expert on them.

With that being said, I am personally holding:

• $300 Aug16'19 @ 1.9$. I bought these a couple of weeks ago, expected them to not gain much from deliveries, but have a slight chance of paying off big from very good Q2 financials.
• $280 Jun20 @ 21$. These were the first I bought when stock was 195$, because I thought Tesla was highly likely to go back up to 350-380$ at some point before then, and with the help of a spreadsheet I calculated that these would be the best value for money.
• $450 Jun21 @ 16$. I bought these 2 days ago after doing an in-depth analysis on Tesla's growth and cash flow over the next 2 years through Giga 3 and Model Y ramp. I think these are likely to pay off just from automotive growth, with advances in autonomy being a potential icing on the cake.

I'm thinking of writing a blog in the next month or two about 2 types of TSLA catalysts. Catalysts that significantly change my long term view of TSLA's fundamental worth as a company (e.g. autonomy solved, battery supply chain secured), and catalysts that I believe have a high change of changing the market's perspective of TSLA.

These 2nd type of catalysts are the most important ones to pay attention to when buying options with an expiration date. I personally think that the Jun21 Call Options are a great choice at the moment. I do think the ridiculous narratives from Q1 are fading, and that the difference between share price and TSLA's actual value has been at an all time high as of late, so we could see a big run up before the end of the year or first half of 2020 with successful Giga 3 ramp. However, Tesla is also going to be spending a mountain on capex in the next 18 months to ramp both Giga 3 and Model Y. I think they have the cash flow to do so, and can more or less maintain FCF Neutral throughout, but the bears can use this to spread FUD about a lack of profitability once again. Successful production ramps alone might be enough to move the stock, but I think Q2 deliveries have shown us that it very well may not.

However, by June 2021 Tesla will definitely have ramped Giga 3, and as long as they don't royally screw up, they should be producing or close to producing 5k MY per week. If Tesla is able to ramp MY a little faster than M3, which seems plausible because the vehicles are similar, and they had a supplier screw up royally that delayed M3 ramp, it means that they will have a blow out quarter like they had in Q3'18 in Q1'21 or Q2'21, where the investments in MY will pay off and show up in earnings.

I have some models that has Tesla at a ~60B yearly revenue rate after Giga 3 and MY ramp, with ~4B profit from operations. With a revenue multiple of 2 (less than what Tesla has been at for most of its history) and an EBIT multiple of 30 (same as Alphabet), this would give them a market cap of 120B, and a stock price of around 600$. That's all excluding any sort of progress on the autonomy front.

Obviously various things have to go right for this to happen, and if they hit it in Q2'21, it wouldn't quite be before the options expire, but either way this is my reasoning for really liking the Jun21 Call Options at the moment, and picking a few up the other day.

Thank you for sharing your analysis on these catalysts. Also re @AlMc and @kbM3, I agree that it's completely out of question to accurately predict whether an option will be in the money or even at what time it will be in the money. I still find having these qualitative factors in mind very useful. I wasn't asking for exact advice, but more for ideas + reasoning to then go and see for myself whether that's a reasonable risk profile for me. You could read my question briefly as "What call options do you find appealing these days and why?" Still thank you for the reminder of the risk of buying options!

 

[KarenRei]

We all know the story of the "Boy who cried Wolf" right ...

Even though almost all CNBC article still names him as a Tesla Expert, I think his credibility is in question now

Well, he rightly called that Tesla would deliver only 70k vehicles in Q2....

 

[RobStark]

Tesla Takes 28% Share Of Western Europe BEV Market In H1 2019

 

[CyberDutchie]

Karpathy talk... don't know if it has already been posted.

Andrej Karpathy | Multi-Task Learning in the Wilderness

I posted it a few weeks ago, I loved how he described the Tesla cars as robots out in the wild. Maybe inadvertently a wink at AJ for his terminator question

 

[Drax7]

Agreed, although to channel Marco Rubio: "Let's dispel this fiction once and for all that [Jim Cramer] doesn't know what he's doing. He knows exactly what he's doing."

I actually followed Jim Cramer’s real time stock portfolio about 10 years ago for a good two years.
His performance was inferior to that of the s&p index, and his portfolio turnover was very high.
The net of it all, his recommendations and analysis are practically useless.

 

[mrmage]

Just search the web a bit, lots of articles about this. The most "vegan" thing you can eat is a pasture-fed cow.

Ordering the vegetarian meal? There's more animal blood on your hands

Look, this isn't the place to discuss this anyway, I'm going to stop now.

As with Tesla, do your own due diligence, don't just accept what's written by others, because they usually have a hidden agenda, vested interest, or have been bought-out by big food/pharma.

I wonder if meat industries will someday need to carbon trade with Tesla, because it's such as large greenhouse contributor.

Although less killing of more sentient animals is better, I'm more concerned about the human kind which is impacted by climate change. Eating lots of more sentient animals is one of the greatest contributors to greenhouse gases. The correlation between killing sentient animals and greenhouse is not entirely coincidental, because brains are energy intensive and require a great deal of infrastructure to maintain. E.g. Eating bugs is a lot greener than eating cattle.

Also, the article you cited uses Australian steer for their example. This is a cherry picked example, because the country has a very low population density with enough range land per capita. Not so for the more populous countries, where there is not enough range per capita.

Australia 8.3 (people / sq mile)
USA 86
China 375
India 1055

 

[FrankSG]

Yup, just double checked at my German broker account, A subsidiary of Societe Generale seems to be the only one writing those. Is that good or bad? ^^



Thank you for sharing your analysis on these catalysts. Also re @AlMc and @kbM3, I agree that it's completely out of question to accurately predict whether an option will be in the money or even at what time it will be in the money. I still find having these qualitative factors in mind very useful. I wasn't asking for exact advice, but more for ideas + reasoning to then go and see for myself whether that's a reasonable risk profile for me. You could read my question briefly as "What call options do you find appealing these days and why?" Still thank you for the reminder of the risk of buying options!

Ah, my EU broker also has some weird derivatives like that. Probably a small risk, but if this Societe Generale corporation somehow goes bust, I think you also lose your options.

Also, it sounds like you won't be able to sell these options before expiry. You may be able to exercise them before expiry, but you may not. Definitely read the prospectus thoroughly before buying anything.

I decided against buying any of these things with my EU broker and opened an account with Interactive Brokers just for option trading. You might want to look into that. Account setup was fairly fast and easy for me, and I've been very happy with them.

And yeah like the others said, options are definitely more risky than shares. I personally have put a relatively small amount into options compared to the amount of TSLA shares I'm holding.

 

[Prunesquallor]

Agreed, although to channel Marco Rubio: "Let's dispel this fiction once and for all that [Jim Cramer] doesn't know what he's doing. He knows exactly what he's doing."

I assume this implies “what he's doing" has little to do with investment/trading advice.

 

[VValleyEV]

I don’t have scientific proof, but am convinced the world will never run out of Malthusian’s. I’m concerned that they may populate faster then the general population. At some point everyone will become a Malthusian, at which point no one will have children because we’re all going to starve.

I love this. It made my day.

BTW I didn’t mean to endorse the strident anti-vegan theme from the VM book, only my surprise at the “agriculture has ruined most of the global topsoil so we are doomed because fertilizer depends upon oil and we are going to run out of that!” part.I think someone posted this encouraging article one the subject:
Restoring forests may be one of our most powerful weapons in fighting climate change

And, if you are interested in a small but real reforestation project initiated by a member here, check out this thread:
Sequestering carbon by land restoration and reforestation in Iceland

 

[canoemore]

I assume this implies “what he's doing" has little to do with investment/trading advice.

Yep

 

[PeterJA]

Just search the web a bit, lots of articles about this. The most "vegan" thing you can eat is a pasture-fed cow.

Ordering the vegetarian meal? There's more animal blood on your hands

Look, this isn't the place to discuss this anyway, I'm going to stop now.

As with Tesla, do your own due diligence, don't just accept what's written by others, because they usually have a hidden agenda, vested interest, or have been bought-out by big food/pharma.

Thanks for the link, and I agree about the scourge of Big Food/Pharma. But that article is about as credible as those claiming EVs are worse for the environment than ICE cars.

EVs don't have to rely on electricity generated from coal. There is such a thing as renewable energy.

Likewise, vegan diets don't have to rely on pesticides, herbicides and mouse torture. There is such a thing as organic farming and Integrated Pest Management. (And I don't see kangaroo meat in American grocery stores.)

I'll stop now too, since I don't know where to post such discussion, especially when responding to discussion in this thread.

 

[JRP3]

@Lycanthrope You need to stop trying to push your agenda in this thread. There are two other threads on the subject, both of which you bailed out of when your nonsense was easily discredited. If you insist on pushing the topic do so here:
Veganism/Leather etc. out of Market Action
BYND Beyond Meat out of main

 

[EVNow]

I believe most of the people who left or were let go in the last two quarters appear to be from the non-vision, non-NN group of the Autopilot team.

I.e. neural network based Software 2.0 is possibly taking over more and more of the FSD driving tasks, which causes organizational friction on the 'procedural code based FSD driving' side of the Autopilot team.

They need on the heuristics side people who want to code less i.e. those who are fully bought into NN and want NN to as much as possible.

BTW, current FSD/AP is quite poor on the heuristics side. I think the major difference between Waymo and Tesla is on heuristics side, so they need to up their game there.

 

[MarcusMaximus]

They need in the heuristics side people who want to code less i.e. those who are fully bought into NN and want NN to as much as possible.

BTW, current FSD/AP is quite poor on the heuristics side. I think the major difference between Waymo and Tesla is on heuristics side, so they need to up their game there.

I’m a little confused on what you mean here. Heuristics are generally applied in places not using neural networks. Anywhere that you’d use a heuristic would be better served with a neural network that can learn the actual correlation, rather than relying on a human guess about it.

 

[Tslynk67]

@Lycanthrope You need to stop trying to push your agenda in this thread. There are two other threads on the subject, both of which you bailed out of when your nonsense was easily discredited. If you insist on pushing the topic do so here:
Veganism/Leather etc. out of Market Action
BYND Beyond Meat out of main

I never try to push it, I was just reacting to others. I don't care what anyone else eats, like I said above. I have no agenda, I eat for my own health and my personal experience along with all th research I have done leads me to where I am now.

YMMV.

 

[EVNow]

I’m a little confused on what you mean here. Heuristics are generally applied in places not using neural networks. Anywhere that you’d use a heuristic would be better served with a neural network that can learn the actual correlation, rather than relying on a human guess about it.

I'm using heuristics to loosely mean "software 1.0". Basically anything other than NN.

eg. Drive in the center of the lane is heuristics. But that needs to be upgraded to take care of special situations like cyclist or construction worked or huge truck on one side when the car should drive closer to the lane marking on the other side (or even cross over the center line).

Now, if and when NN takes over that part, you delete that heuristics code.

BTW, according to Karpathy there will be parts where heuristics will be much easier and better than NN. Like whether to drive on left or right side of the road.

 

[JRP3]

I never try to push it, I was just reacting to others.

You "react" with outrageous claims and "support" that crumbles under scrutiny. If you must then do so in the appropriate threads.

 

[EVNow]

Just search the web a bit, lots of articles about this. The most "vegan" thing you can eat is a pasture-fed cow.

Ordering the vegetarian meal? There's more animal blood on your hands

Look, this isn't the place to discuss this anyway, I'm going to stop now.

How about genocide ? Afterall colonization of Americas or Australia wasn't exactly peaceful.

 

[EVMeister]

Children! I know it's the weekend, but behave.

 

[hobbes]

This will soon be exiled to the Mod Dimension, but just have to call out “Three Body Problem” by Cixin Liu (excellent job on translation by Ken Liu). Wild take on First Contact by stretching physics. First of a trilogy.

Everybody is complaining this thread is going off topic and the mods not doing enough. But way too many people just keep posting OT even after mods have called for a stop. I find this quite disrespectful.