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

[Beltsbear]

Clickbait title

After watching the video, it is worse then a clickbait title. Its a flat out lie. He is more long on his options then short. Way more. Plus he is long actual shares.

 

[lascavarian]

He later admits that he knows what he's doing is dangerous and gambling, and the best strategy is generally just buy and hold, "but I can't help myself". That these sorts of playable swings are just too tempting.

I take this to be his observation of a disequalibrium. He is seeing pressure on the shorts and guesses that they will have to cover when the Y is pulled forward and the stock jumps as the Y becomes very popular. He sells his calls as the stock climbs. Once the short covering pressure on the stock releases, he sees the stock searching for it's true value and dropping again where he begins to sell off his puts for a profit.... or maybe just expire worthless.

He also revamped his 5 yr projection of a $900 price to a new five year projection of a $1500 price, if I have that right.

He feels the longs will do very well but he finds the excitement of the potential volatility and leverage to be an opportunity for those comfortable with the risks of leverage as I think I heard it.

 

[VValleyEV]

I have been carrying on a conversation about BEVs with an old friend in Germany. He agrees that BEVs are the future, and that reasonably well-off folks like us can afford to make the jump. But he worries about the overall demand to support a transition to BEVs in Germany and Europe based on the current prices and incentives, and hence is a bit concerned that VW and Tesla will build lots of of BEVs but not enough folks will be able to afford them.

He very recently purchased a Smart EQ BEV. Here is his latest summary:

(???Comments???)

——————
“Right now the price difference between a EV and a comparable gas engine car is just too much.

A great example is my EQ:The EQ costs 20k € (after all subsidies)
The absolutely identical car with a gas engine costs 12k.
So I spent 8k to go electric

100km with the gas car will take about 6 litres of gas – costing about 8.5 €
100km with the EQ will take 14kWh that is 4.2 € ( I pay 30 cents per kWh)

So I save 4.3€ on 100km with the EQ
8000 / 4.3 yields 1860 lots of 100k à 186000 km
186,000km ???? that will take ions – at least much longer than the EQ lasts

Yes I know – maintenance cost is lower for the EQ – but after 10 years or so that battery is dead and must be replaced.
A replacement gas engine is a lot cheaper.

All this is just for a tiny EQ – a typical family sedan or wagon probably doubles these values
As long as the economics are as described, why would normal family with a budget go for the EV ?”
————-

 

[NicoV]

Whomever has been able to watch even one of his videos in full, at normal speed is my hero (not)
I am glad he's a fan and all, but please don't.

I watched it. He’s switching from holding stock to out-of-the money 600 calls and 350 februari/march puts on his conviction that there will be a short squeeze by then. Personally I think that’s an excellent strategy to lose a lot of his money, since there is very little time to be right (right = 30% volatility between now and 6 weeks or so) to make this a profitable move.
I’d love to see such a price move, but I think februari is too close for such a move.
The guy confesses that he’s a pathological stock gambler, that it’s much wiser to buy and hold, but that he couldn’t let this ‘opportunity’ go away.

 

[EVMeister]

Mercedes-Benz recalls 750,000 cars for sunroofs that can fly off

Serious panel gaps!

 

[elasalle]

He says he does puts and calls, had 1,101? Shares
Sold 801 shares to essentially casino gamble with, loves gambling
Expects range bound volatility to do options with
Has lost a zillion dollars
Loves gambling
Says stock should do a 10:1 split, will be $1,500/share by 2023
Think he said, buy and holders will do well
Loves to casino gamble
Listen at 2x and wish it was faster
Nap while listening

If you start taking financial advice from engineers, and engineering advice from finance you are screwed.

Lot of players, evaluate their strengths. Respect them, but listen to them just on their strengths and ignore them for the rest.
(Applies to many others). Cheers!!

(My brief scan on the video was all about Adding Rasberry Pi to USB drive on the portions I stopped to listen)

 

[NicoV]

I have been carrying on a conversation about BEVs with an old friend in Germany. He agrees that BEVs are the future, and that reasonably well-off folks like us can afford to make the jump. But he worries about the overall demand to support a transition to BEVs in Germany and Europe based on the current prices and incentives, and hence is a bit concerned that VW and Tesla will build lots of of BEVs but not enough folks will be able to afford them.

He very recently purchased a Smart EQ BEV. Here is his latest summary:

(???Comments???)

——————
“Right now the price difference between a EV and a comparable gas engine car is just too much.

A great example is my EQ:The EQ costs 20k € (after all subsidies)
The absolutely identical car with a gas engine costs 12k.
So I spent 8k to go electric

100km with the gas car will take about 6 litres of gas – costing about 8.5 €
100km with the EQ will take 14kWh that is 4.2 € ( I pay 30 cents per kWh)

So I save 4.3€ on 100km with the EQ
8000 / 4.3 yields 1860 lots of 100k à 186000 km
186,000km ???? that will take ions – at least much longer than the EQ lasts

Yes I know – maintenance cost is lower for the EQ – but after 10 years or so that battery is dead and must be replaced.
A replacement gas engine is a lot cheaper.

All this is just for a tiny EQ – a typical family sedan or wagon probably doubles these values
As long as the economics are as described, why would normal family with a budget go for the EV ?”
————-

I’ve had similar discussions with various friends. They’re interested in buying an EV, but the purchase price is too high. When I explain them what to take into account to calculate a proper TCO, they understand that an EV may be cheaper than an ICE (if they drive enough Km), but still the purchase price is problematic.
That will change with:
- availability of second hand EV’s. (Will improve in about 4 years when the EV company car leases end that are now becoming popular)
- availability of smaller Tesla’s. (Will improve in hopefully less than 4 years, I expect the Brandenburg GF to be the first GF to produce the compact Tesla model that the European market so desperately needs. It also doesn’t hurt that Tesla Grohmann is very nearby to make the compact Tesla’s production costs more affordable by extreme automation).

 

[Maitri982]

So you expect no sales bounce from Plaid? Coming this Summer....

I expect a PROFIT bounce from Plaid.

Cheers!

I am sample size of one, but I am waiting for plaid myself. I am hoping for much longer range option like 500 miles. I think I am not alone and if they deliver something that exciting no one is modeling how big the sales would be.

 

[Sudre]

I have been carrying on a conversation about BEVs with an old friend in Germany. He agrees that BEVs are the future, and that reasonably well-off folks like us can afford to make the jump. But he worries about the overall demand to support a transition to BEVs in Germany and Europe based on the current prices and incentives, and hence is a bit concerned that VW and Tesla will build lots of of BEVs but not enough folks will be able to afford them.

He very recently purchased a Smart EQ BEV. Here is his latest summary:

(???Comments???)

——————
“Right now the price difference between a EV and a comparable gas engine car is just too much.

A great example is my EQ:The EQ costs 20k € (after all subsidies)
The absolutely identical car with a gas engine costs 12k.
So I spent 8k to go electric

100km with the gas car will take about 6 litres of gas – costing about 8.5 €
100km with the EQ will take 14kWh that is 4.2 € ( I pay 30 cents per kWh)

So I save 4.3€ on 100km with the EQ
8000 / 4.3 yields 1860 lots of 100k à 186000 km
186,000km ???? that will take ions – at least much longer than the EQ lasts

Yes I know – maintenance cost is lower for the EQ – but after 10 years or so that battery is dead and must be replaced.
A replacement gas engine is a lot cheaper.

All this is just for a tiny EQ – a typical family sedan or wagon probably doubles these values
As long as the economics are as described, why would normal family with a budget go for the EV ?”
————-

Sounds like he paid way to much for an EV then.... Isn't the Model 3 supposed to be competing upmarket? That means you are paying close to the same for a Model 3 as the competitors ICE version yet still get all the savings. That is not spending too much for a car. For those who have to stretch to purchase a Model 3..... sure they are spending a lot in their eyes but they are buying a car out of their market price. That is not the fault of the car. I do salute them for fighting climate change.

That EQ should have cost closer to the ICE version after incentives. That IMO is why existing car makers are not able to sell their EVs. They are priced way to high for what they are offering. Plus the lack of a charging network.

 

[JustMe]

I have been carrying on a conversation about BEVs with an old friend in Germany. He agrees that BEVs are the future, and that reasonably well-off folks like us can afford to make the jump. But he worries about the overall demand to support a transition to BEVs in Germany and Europe based on the current prices and incentives, and hence is a bit concerned that VW and Tesla will build lots of of BEVs but not enough folks will be able to afford them.

He very recently purchased a Smart EQ BEV. Here is his latest summary:

(???Comments???)

——————
“Right now the price difference between a EV and a comparable gas engine car is just too much.

A great example is my EQ:The EQ costs 20k € (after all subsidies)
The absolutely identical car with a gas engine costs 12k.
So I spent 8k to go electric

100km with the gas car will take about 6 litres of gas – costing about 8.5 €
100km with the EQ will take 14kWh that is 4.2 € ( I pay 30 cents per kWh)

So I save 4.3€ on 100km with the EQ
8000 / 4.3 yields 1860 lots of 100k à 186000 km
186,000km ???? that will take ions – at least much longer than the EQ lasts

Yes I know – maintenance cost is lower for the EQ – but after 10 years or so that battery is dead and must be replaced.
A replacement gas engine is a lot cheaper.

All this is just for a tiny EQ – a typical family sedan or wagon probably doubles these values
As long as the economics are as described, why would normal family with a budget go for the EV ?”
————-

At first I was going to attribute the big price difference to battery cost, but that car only has an ~18kwh battery pack. At an industry average of $150/kWh, a battery pack that size should cost less than $3000. And that cost is coming down steadily by more than 10%/year.

So in my view:
* There is no fundamental reason that BEVs will remain “too expensive “ for much longer, even at the sub $20k euro price point.

* OEMs that buy batteries/battery packs from third party suppliers may have to pay a higher price/kWh

* Most EV models will be more expensive to produce than ICE equivalents simply because they are not made with the same economies of scale

* Mercedes-Benz may be slow-walking the EV transition to protect the ICE side of their business

* There could be a bit of price gouging going on if MB assumes “greenies” are willing to pay a premium for an EV

I think this will evolve rapidly over the next 1-2 years.

 

[Maitri982]

That's worse than I thought it was.

Let me extend my statement:

• Tesla's cars are 5 years ahead,
• Tesla's factories are 10 years ahead,
• Tesla's software is 15 years ahead.

I'm not joking.

Well funded, huge financial institutions like Deutsche Bank have failed with 10 year projects to get rid of heterogeneous software platforms. (A large part of Deutsche Bank's downfall was the lack of control over their software platforms, which forced them into a destructive spiral of compensating lack of internal efficiencies and lack of scale with riskier financial bets.)

The quirky physicist-economist software nerd with a mild Twitter addiction understands this very well. He is one of Tesla's most valuable assets going forward, as Tesla's business plan starts branching out for real ...

Yes...the software stack is much more of a long pole for competition than people realize. And it’s not the kind of problem that just throwing more bodies at it will solve.

 

[AudubonB]

Well, it's nice to have those kinds of idiots around because they help create a much higher floor for the share price should disaster strike (earthquake, fire, world recession, etc.).

Why do I call them idiots? Let's take the classic example of Microsoft. It was well recognized to have near-monopoly status in an exploding market of PC's for years before the DOJ slapped their wrist. From about 1988 all through the 1990's MSFT was considered so over-valued that value investors couldn't take a stake. I made a killing because I closed my eyes and bought the "over-priced" piece of sugar.

You need to look at a logarithmic chart to see the magic:

View attachment 496272
Yes, that's 10 cents a (split-adjusted)) share down there in 1986. It rose sharply to around 40 cents a share (split-adjusted) in 1998 (the plateau before 1990 on the chart). This is when people started saying it was "too over-priced". Remember, it was not actually selling for 10 cents or 40 cents a share, it was $30 or $80 depending upon where it was in the split schedule. People who didn't pull the trigger because it was "over-priced" missed out on becoming MSFT millionaires. As did most of the people who took money off the table as it doubled, then tripled, then became a ten-bagger and went on to be worth more than 1000 times as much.

Never hesitate to buy a great company because it's "over-priced". If it really is a great company it will be "over-priced" for years. But there is a reason people pay a premium for companies like this. Gorillas with room to grow. To my way of thinking, MSFT was never really "over-priced" (until near the end of the century), it was a screaming buy. That's how I see TSLA right now. Only a person who thinks small would call it "over-priced".

MSFT may be over-priced right now (but what do I know, I sold all mine the second time at $120-$130, purchased in the very low $30 range), whether it's over-priced now or not depends upon the size of the markets they are entering and their success in them. It might be a very good investment or they may be near the peak of thier growth. I'm not buying - I like TSLA a lot more.

Moderator date-corrected

One of the reasons I like this post is that it demonstrates why I am so much in favor of using only log-10 price charts.
I also am happy, however, to use this telling history as a reason to bear down on one of my reasons to dislike - for the mom&pop retail investor - any sort of derivative product (aka options, although there are others). First of all, I hope it is clear to everyone that here on TMC we rarely have had as much exuberant discussion of the use of them as in the past several weeks....when TSLA finally has been re-enjoying a great run. The last time I remember as much enthusiasm toward derivatives was back in the heady days of early 2013. You do, I hope remember what then occurred.

Now, to me, that correlation is a dangerous one: going for the lottery tickets because - holy smokes! With TSLA rising so much so fast look what one can do with calls! But I'm not going to play the wet blanket much more on this, not today. Rather, take another look at MSFT. From its 1999 peak it was a long!!!! time - 17 years - before it finally regained those levels. Not only is that a lot, but in the interim it also dropped from $60 to, at the '08 market collapse nadir, about $10 - oof. Eventually, of course, the price surpassed the old highs; few have held for that long but yes: a very long-term investor in MSFT also is going to be sitting pretty indeed.

Back to TSLA: we have had a number of posters discussing their options plays....and in general, they did not fare well during the years this stock has wandered in the 200-350 channel. Fortunately, it seems clear that TSLA will not have to endure much more than the 5 years from late 2014 to the present. Whether the exogenous factors - a war with Iran, a deficit-driven increase in national debt to unsustainable levels or what have you - will also lead to a replay of the '08 meltdown may wreak havoc....even then, however, I will assert TSLA should fare far better than the market in general.

 

[M3Rider]

He explains what he's done:

* "I'm expecting lots of volatility going forward."
* He's bracketing way OTM - he's bought 300x $600 Feb '20 ($67500) and 40x $600 Mar '20s calls ($19400), but also 70x $300 Feb 20 puts ($7070) and 30x $350 puts ($12330). E.g. short $19400 and long $86900, for a net of $67500 long. Sold 801 shares at $404 (= $323604; 300 shares remaining) to fund it and some other plays and take out cash.

Dangerous bracketing, Jack... a holding pattern is very much a possibility, where profit takers and shorts piling back in due to the stock price are countered by renewed optimism and analyst upgrades. Not much time on those puts and calls...

He later admits that he knows what he's doing is dangerous and gambling, and the best strategy is generally just buy and hold, "but I can't help myself". That these sorts of playable swings are just too tempting.

600 in Feb/March with tons of money on it? Wow.
I think this beats @anthonyj ...

 

[dl003]

One of the reasons I like this post is that it demonstrates why I am so much in favor of using only log-10 price charts.
I also am happy, however, to use this telling history as a reason to bear down on one of my reasons to dislike - for the mom&pop retail investor - any sort of derivative product (aka options, although there are others). First of all, I hope it is clear to everyone that here on TMC we rarely have had as much exuberant discussion of the use of them as in the past several weeks....when TSLA finally has been re-enjoying a great run. The last time I remember as much enthusiasm toward derivatives was back in the heady days of early 2013.

Now, to me, that correlation is a dangerous one: going for the lottery tickets because - holy smokes! With TSLA rising so much so fast look what one can do with calls! But I'm not going to play the wet blanket much more on this, not today. Rather, take another look at MSFT. From its 1999 peak it was a long!!!! time: 17 years, before it finally regained those levels. Not only is that a lot, but it also dropped from $60 to about $10 - oof. Eventually, of course, the price surpassed the old highs; few have held for that long but yes: a very long-term investor in MSFT also is going to be sitting pretty indeed.

1999 was near peak of dot com bubble though. Its hard to imagine what the last 20 years would look like without the 95-99 run-up and the subsequent crash

 

[printf42]

WTF!
Haven't watched yet but WTF!

Probably taken a page from Doug’s playbook:

1. Say something good about Tesla
2. Say something bad about Tesla
3. Generate clicks from both sides
4. Profit

 

[JustSaying]

(i'd rather walk)

I think the NHTSA blamed that bus fire on auto pilot, as the bus driver said he was only "resting his eyes" while driving through the intersection.

 

[defc0n]

600 in Feb/March with tons of money on it? Wow.
I think this beats @anthonyj ...

that doesn’t sound like a very wise thing to do...

 

[anthonyj]

600 in Feb/March with tons of money on it? Wow.
I think this beats @anthonyj ...

Yeah that’s some steel balls... for the record I have 1,100 shares @ $254 (ty shorts) and $12k in way OTM calls. Cashed out a lot of calls because this is already WAY too much money to have in one stonk for me

TT007 has millions in calls and will likely be TMCs second billionaire

 

[printf42]

Yeah that’s some steel balls... for the record I have 1,100 shares @ $254 (ty shorts) and $12k in way OTM calls. Cashed out a lot of calls because this is already WAY too much money to have in one stonk for me

TT007 has millions in calls and will likely be TMCs second billionaire

Let me ask the question you are asking us to ask, who is the first?

 

[RobStark]

it’s a compliance car, and the strategy of calling it a mustang while looking not like a mustang is likely anti selling to the existing ICE customer base so they can sell more high margins high maintenance legacy cars to them.

In 2018 Ford sold 113k Mustangs Globally. We find out Monday how many they sold in 2019.

Ford has capacity to build 100k Mach-E but has secured enough cells to manufacture 50k Mach E in 2020.

If Ford made the Mach E a 2 door sports coupe like the Mustang potential sales would crash to maybe 15k units.

In 2018 Ford sold 544k Escapes/Kugas globally. Making the Mach-E a compact crossover with good performance is the best chance for big mainstream sales success.