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

[T1989]

Made some really good gains the past few months/weeks. I know market timing is impossible, but really want to secure some of my gains. Just set a stop-loss for 500 dollars. If it dips below that, I would happily buy back in at around 450.
Still super bullish long term, but this run-up has been crazy.

 

[Thekiwi]

How do you know what price the stock would be at??? Someone cited another company (IBM maybe) where buying back stock was a total waste.




From a mathematical perspective there is not reason why buying back stock should impact the value of the stock. The money is worth $1 for each dollar spent. The stock bought back is worth $1 for each dollar spent. So the remaining stock value is still even-steven. The passage of time doesn't change that. Without the cash there can be a significant opportunity cost from not being able to do things with the money later. Then it is always useful to pay down debt. Debt is just a drain on the company's finances.




Tesla generating cash is not something that will continue without profit. They are a long way from having enough profit to burn cash on a stock buyback.




You've still failed to show any advantage to buying back stock.

I think you may be missing some info, as to why buybacks add value to share price (all else being equal). Having covered Apple for over a decade, It is obvious it had a huge impact on share price, even without necessarily moving the market cap.

The most obvious is that each share bought back means that shares portion of company earnings is redistributed to every other share, when done at scale this raises the EPS significantly. For instance Apple has removed more than a third of its share count, which means earnings per share has increased by 50% over where it would have otherwise been if the share count had remained static.

(However I don’t think Tesla will be doing buybacks any time soon as every dollar will be valuable for expansion in coming years. At most I think at some point they may use buybacks to prevent dilution from employee stock grants.)

 

[AlexS]

Indeed - they know that the quarterly registrations are delayed and that they've left off the end-of-quarter rush; it's in their own freaking graphs:

Cross-Sell on Twitter

I cannot see how this is an accident.

What I don't get is why this is supposed to even matter. What, are they implying that Tesla's delivery numbers will be bad in Q4? We already have delivery data for Q4 data, they weren't.

so Cross-Sell guys are crazy Tesla short sellers based on their twitter account. I have a feeling we will have a nice recovery today or tomorrow, when people realize that.

edit: don't forget what happened last time after we had 30pts correction

 

[Fact Checking]

Made some really good gains the past few months/weeks. I know market timing is impossible, but really want to secure some of my gains. Just set a stop-loss for 500 dollars. If it dips below that, I would happily buy back in at around 450.
Still super bullish long term, but this run-up has been crazy.

If you have multiples of 100 shares then another approach is to buy protective puts for whatever price level you want protected, but do this on the way up, when puts are decreasing in value. For example at $540 levels March $450 puts were trading as low as $17 - which is 1 month of profit protection in exchange for $17 in gains (4% of the gains), with unlimited upside beyond that, but $433 profits locked down.

Shorter term puts were much less expensive - Q4 earnings is a big IV barrier of around ~$10: 01/24 puts were trading as low as $1.

 

[JBRR]

Morgan Stanley Cuts Tesla To Underweight From Equalweight, Raises PT To $360 From $250 $TSLA

$TSLA: MS DOWNGRADES BASED ON VALUATION, UNFAVORABLE RISK-REWARD, RISKS TO LONG-TERM CHINESE BUSINESS THAT MAY NOT BE FULLY APPRECIATED BY MARKET

 

[Tslynk67]

One approach that many have articulated (and I'm thinking of adopting for myself), is to establish a core position (presumably in shares). The idea is those are your long term buy and hold - don't touch 'em for nothing.

Outside of that you have a (small or big) pot of money / shares that you use to trade the swings in the stock.

One reason to do that - it's sort of a game you play with yourself where you make the 30% on the pot for swing trading, knowing that the core shares will be there for the big move. The purpose of the game - protect the core shares while giving a target to one's desire / inability to avoid trading the swings


Mostly, the short term trading sounds like a lot of energy and time I don't have, so that helps.

This is my approach. I have core shares that I bought with my own money, which I accumulate as-and-when I can. These will not be sold until retirement (exception would be a sudden short squeeze), but I still don't think this will happen and don't want it either, too stressful IMO.

Then I have my corporate trading account and this I consider "play money". I use it for trading and options, I don't really care if I lose it all and it entertains me. That being said, I started with about €4k here and it's currently €50k, so maybe I wouldn't want to gamble all that away - the plan now is to use it to buy my wife's MY, or at least put down a massive first-payment on a lease so the monthly cost is peanuts.

 

[Tslynk67]

So you are saying if I want to add some more to my position, Friday would be the best day to do so this week?

Without making any stats, it's my perception that on Fridays the SP is usually manipulated down and on Mondays it bounces back. I think the swing amounts tend to be low, so for long-term accumulation it doesn't change much, but for option plays it can be a good, if not 100% reliable strategy.

 

[ev-enthusiast]

$TSLA: MS DOWNGRADES BASED ON VALUATION, UNFAVORABLE RISK-REWARD, RISKS TO LONG-TERM CHINESE BUSINESS THAT MAY NOT BE FULLY APPRECIATED BY MARKET[/QUOTE]
Thanks for posting.
Did MS ratings have a short term impact on SP lately?

 

[Fact Checking]

Morgan Stanley Cuts Tesla To Underweight From Equalweight, Raises PT To $360 From $250 $TSLA

$TSLA: MS DOWNGRADES BASED ON VALUATION, UNFAVORABLE RISK-REWARD, RISKS TO LONG-TERM CHINESE BUSINESS THAT MAY NOT BE FULLY APPRECIATED BY MARKET

Just a reminder, this is Adam Jonas of Morgan Stanley spouting nonsense again, in a totally accidental coincidence with a bear attack. As a refresher, this is what Adam Jonas asked Elon on the August 2018 Q2 earnings call, when Elon proudly disclosed their AI chip:

Operator: "Thank you. Our next question comes from Adam Jonas with Morgan Stanley."

Adam Michael Jonas - Morgan Stanley & Co. LLC: "... a fully autonomous car is essentially like a Terminator that is programmed to save lives in highly complex terrestrial environments and that this same technology with a few tweaks have some pretty obvious military capability. Do you see any risk that U.S. companies will ultimately not be allowed to operate weapons grade AI-based technology in a market like China and vice versa?"​

Understandably Adam Jonas was kicked off Tesla's future earnings calls after that stunt of wasting Elon's time with boneheaded questions: this was his last earnings call.

This is one of Jonas's many rounds of revenge - the other infamous one was the "$10 bear price target" he uttered in June last year.

Tesla is over-performing that price target by a factor of 50x, not that Jonas is giving them any credit for that.

 

[Fact Checking]

or at least put down a massive first-payment on a lease so the monthly cost is peanuts.

Generally the rule of thumb is to purchase appreciating assets and finance depreciating assets.

A future robotaxi is arguably a tough call in that regard , but financing it with a fixed price buy-to-own purchase option at the end of the 3 years lease is a good compromise IMHO.

 

[RobStark]

Detroit 3 labor costs to ‘rise steadily' over next 4 years under new UAW contract

 

[Evoforce]

Generally the rule of thumb is to purchase appreciating assets and finance depreciating assets.

A future robotaxi is arguably a tough call in that regard , but financing it with a fixed price buy-to-own purchase option at the end of the 3 years lease is a good compromise IMHO.

Especially if you can finance near 3% and stay invested for higher returns.

 

[ReflexFunds]

View attachment 500765


Detroit 3 labor costs to ‘rise steadily' over next 4 years under new UAW contract

I think this chart is important because people very often underestimate the labour cost COGS % in autos.

I've seen many people plug in a $30-35 per hour cost into their models and then are surprised at how quickly Tesla is achieving COGs reduction.
As noted in this report, all in labour costs includes wages, wage taxes, profit-sharing payments, bonuses, health insurance, pension contributions and other, and is likely >$60 per hour.

So labour is a significant % of Tesla's COGs and if it can produce more cars on the same equipment with the same number of staff and hours each quarter, they will keep getting gross margin gains.
But this is only part of the picture.

Tesla also uses a lot of contract manufacturing. I get the impression Tesla designs nearly all its components in-house, but then outsources production of some of these components to a third party, likely on dedicated Tesla production lines and likely with close to cost plus pricing. Similar in principle to an Apple/Foxconn arrangement.

So as Tesla ramps its production and reduces labour hours per car, so does its suppliers. They also reduce labour hours per car and much of this saving is immediately passed on to Tesla through lower pricing.

 

[MABMAB]

I believe somebody here recently was wondering what happened to Tencent's TSLA investment? Looks like they're still in:

View attachment 500761

That info is not easy to find, where did it come from?

 

[Sancho]

Just a reminder, this is Adam Jonas of Morgan Stanley spouting nonsense again, in a totally accidental coincidence with a bear attack. As a refresher, this is what Adam Jonas asked Elon on the August 2018 Q2 earnings call, when Elon proudly disclosed their AI chip:

Operator: "Thank you. Our next question comes from Adam Jonas with Morgan Stanley."

Adam Michael Jonas - Morgan Stanley & Co. LLC: "... a fully autonomous car is essentially like a Terminator that is programmed to save lives in highly complex terrestrial environments and that this same technology with a few tweaks have some pretty obvious military capability. Do you see any risk that U.S. companies will ultimately not be allowed to operate weapons grade AI-based technology in a market like China and vice versa?"​

Understandably Adam Jonas was kicked off Tesla's future earnings calls after that stunt of wasting Elon's time with boneheaded questions: this was his last earnings call.

This is one of Jonas's many rounds of revenge - the other infamous one was the "$10 bear price target" he uttered in June last year.

Tesla is over-performing that price target by a factor of 50x, not that Jonas is giving them any credit for that.

Remember a few years ago when the Wall Street Journal ran a bogus article about a potential federal investigation they published online during Friday trading hours and it appeared so shamelessly manipulative that many of us wrote the SEC and members of Congress complaining? Many of us copied the WSJ legal department on the complaints.

It’s time to do this against Jonas. He’s not the only manipulative TSLA analyst, but he has become the most reprehensible and has a very big MS brand behind him.

We could just ignore him, as I believe his impact is already waning (I wouldn’t be surprised if the SP turns positive today, ignoring him entirely), but I’m so pissed at his brazen behavior that I’m going to spend my morning sending off some missives.

Don’t tread on me.

 

[RobStark]

Volkswagen Will Be World's Largest EV Manufacturer By 2030, Claims New Report | CleanTechnica

In 2010, Volkswagen Aimed To Become The World's #1 EV Producer By 2018 | CleanTechnica

 

[ev-enthusiast]

$TSLA: MS DOWNGRADES BASED ON VALUATION, UNFAVORABLE RISK-REWARD, RISKS TO LONG-TERM CHINESE BUSINESS THAT MAY NOT BE FULLY APPRECIATED BY MARKET

Thanks for posting.
Did MS ratings have a short term impact on SP lately?[/QUOTE]
I only remember the downgrade on 18th December 2011, SP declined during the folowing days (link).

 

[KarenRei]

Volkswagen Will Be World's Largest EV Manufacturer By 2030, Claims New Report | CleanTechnica

In 2010, Volkswagen Aimed To Become The World's #1 EV Producer By 2018 | CleanTechnica

Meanwhile, Diess calls the notion of 30% EV adoption by 2030 to be a "painful revolution" that must be avoided.

“There’s a misperception about the automotive industry.”

His main focus was trying to scare lawmakers into changing their minds. "A transformation at that speed and with those implications is barely manageable, because it would mean approximately a quarter of the jobs at our plants would disappear in a good ten years – a total of around 100,000 jobs.”

 

[Fact Checking]

Meanwhile, Diess calls the notion of 30% EV adoption by 2030 to be a "painful revolution" that must be avoided.

“There’s a misperception about the automotive industry.”

His main focus was trying to scare lawmakers into changing their minds. "A transformation at that speed and with those implications is barely manageable, because it would mean approximately a quarter of the jobs at our plants would disappear in a good ten years – a total of around 100,000 jobs.”

BTW., Diess and the auto lobby (somewhat surprisingly) failed in torpedoing the ZEV legislation - and the result are the much stricter emissions standards in Europe, and Tesla's €1.8b ZEV pooling deal with FCA ...

But yes, VW aren't the good guys here.

 

[Tslynk67]

Don't be afraid; it's hapening, and soon.*

Three months, maybe, six definitely!