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

[azaz]

black Monday redux tomorrow for the markets

 

[KarenRei]

black Monday redux tomorrow for the markets

We're so detached from fundamentals right now. There's no reason that Saudi Arabia deciding to sell the world oil on the cheap should make the markets go *down* several percent.

Let me tell you, I so can't wait for WHO to declare COVID-19 a pandemic (aka, "it's everywhere, switch focus to reducing community spread") so the news will stop reporting nonstop on its "spread" (when what they're actually reporting - diagnoses - is only loosely connected with where it's actually spreading).

 

[Stretch2727]

Stopped by the Porsche dealer today. Nice picture of the Taycan next to my Model 3. I prefer the Model 3 and think it looks just as appealing.

Sticker was $206K! The sticker says Air Freight? To think you could buy 4 Model 3's for the price of the Taycan. I think they will sell a few thousand here per year.

 

[MABMAB]

US futs down 4% at the open. Argh!

 

[LJS22]

Oil crashes at market open due to Saudi Arabia launching an oil price war.

Note that generally low oil prices are good for most industries, since they pay out the nose for fuel. Not sure how macros overall will react, however.

I imagine that people who are deeply invested in airline stocks are cancelling their plans to jump out the window.

Typically yes, but since this oil plummet coincides with coronavirus it is believed that people are using less oil globally and trade will also take a hit. This will add to the glut and do little to improve trade as coronavirus continues to dominate headlines. Also many countries rely on oil, I think South America will only further be damaged by this. Russia wants US shale gone, so I think they are ok with this short term.

It will be real for the consumer as gas prices are seen at around $1 per gallon. There could be a huge bounce if the virus is only seasonal and Summer kicks in with cheap transportation, renewed optimism, and companies returning to normal production.

 

[Fobble]

We're so detached from fundamentals right now. There's no reason that Saudi Arabia deciding to sell the world oil on the cheap should make the markets go *down* several percent..

I personally think oil price crash is just an excuse to market sell-off. In reality, it should help with company profits (and thus stock price) if there is no covid-19. So, oil price drop is not the (only) reason for pre-market sell-off

Let me tell you, I so can't wait for WHO to declare COVID-19 a pandemic (aka, "it's everywhere, switch focus to reducing community spread") so the news will stop reporting nonstop on its "spread" (when what they're actually reporting - diagnoses - is only loosely connected with where it's actually spreading).

WHO is as competent as Trump's CDC, where they had over a month to prepare while the virus was still contained within China, and they still find ways to screw up that partially lead to current breakout in the US.

 

[TheTalkingMule]

The Saudi move is literally the perfect stimulus. I think we'll see lots of panic selling them a V recovery. If not, all this free fuel will do the trick and make real earnings look better.

 

[AudubonB]

The rarely seen refenestration

Err...isn't it in fact an undefenestration?
Asking for a confused neologist.

 

[oldTAVguy]

Bloomberg is showing in their Headlines about Zinc gunning for Lithium batter crown. Any thoughts on this?

 

[rxlawdude]

7

Stopped by the Porsche dealer today. Nice picture of the Taycan next to my Model 3. I prefer the Model 3 and think it looks just as appealing.

Sticker was $206K! The sticker says Air Freight? To think you could buy 4 Model 3's for the price of the Taycan. I think they will sell a few thousand here per year.

View attachment 519656 View attachment 519652

That's not a legal Monrooney sticker.

 

[jerry33]

Bloomberg is showing in their Headlines about Zinc gunning for Lithium batter crown. Any thoughts on this?

1. It's Bloomberg.
2. Just another battery of the week. After awhile you get tired of these stories.

 

[abasile]

Stopped by the Porsche dealer today. Nice picture of the Taycan next to my Model 3. I prefer the Model 3 and think it looks just as appealing.

Sticker was $206K! The sticker says Air Freight? To think you could buy 4 Model 3's for the price of the Taycan. I think they will sell a few thousand here per year.

Aside from the weird "openings" below the headlights, clipped below, I think the Taycan has a great appearance. At the same time, it's wonderful advertising for Tesla. Once a car buyer starts looking at EVs, whether drawn in by the Taycan or another model, they'll normally end up learning about Tesla's offerings. My prediction is that it won't be too long before we see significant discounts on Taycans, just as we've seen with other would-be "Tesla killers".

 

[KarenRei]

Typically yes, but since this oil plummet coincides with coronavirus it is believed that people are using less oil globally

It's not falling because inventories are rising (e.g. people using less oil globally). It's falling because of Saudi Arabia decided to launch an oil price war. And everybody knows this.

 

[LJS22]

It's not falling because inventories are rising (e.g. people using less oil globally). It's falling because of Saudi Arabia decided to launch an oil price war. And everybody knows this.

It’s falling for multiple reasons. OPEC’s poor meeting last week with no production cuts, they’ve been oversupplied, the Saudi announcement is the cherry on top. My only point is that a crashing oil market will not immediately translate into an economic opportunity as the pandemic is coinciding with its fall. Once the pandemic is over then low oil prices could act as a stimulus to the economy. But I’m getting off topic in here.

As far as TSLA is concerned does anyone feel like model y deliveries can provide a boost to keep Tesla above the market later in the week? Or do new product launches fall flat with the market?

 

[dha]

It's not falling because inventories are rising (e.g. people using less oil globally). It's falling because of Saudi Arabia decided to launch an oil price war. And everybody knows this.

Exactly this. Price wars with the potential to destabilize major economies are not bullish.

Things could get much, much uglier from here on out folks. The yield on the 10-year T Note just dipped below 0.5% which is absolutely unprecedented and indicates a titanic flight to safety.

The fed was extremely premature with its Coronavirus-induced rate cut and has few rounds left in the chamber.

We are in the throes of an election year. One of the candidates is openly hostile to Wall Street and will cause further panic and volatility depending on how things progress. The incumbent candidate has solicited foreign interference in our elections and has intimated that he may refuse to accept certain outcomes. This election has the potential to be very weird and very chaotic.

For those reasons I’ve exited all long positions, including TSLA shares I’ve held since 2012. I am currently 90% in cash and 10% in medium-term SPY puts.

People have been predicting a recession every year since 2011, but there is reason to believe that this time is indeed different. Be careful out there. The economy is highly leveraged right now, the market is richly valued, policy makers have few tools left at their disposal and there are unprecedented things going on globally and domestically. Not an advice.

 

[The Martian]

I am going to come clean now, so you can all go ahead and shoot me. Against the express (non-)advice of several TMC posters, I have become an automotive short-seller. Last week I put together an anti-portfolio of a dozen publicly traded, traditional car makers, short sold them all in more or less equal amounts and bought Tesla shares for all the proceeds. This explains how I could post that I had increased my number of TSLA shares by 10%, in spite of TSLA having gone up so much in recent months.

Why did I adopt this strategy?

First, with all the recent bullish Tesla news (Model Y deliveries about to start, ground-breaking at GF4, GF3 ramping production & extending capacity, massive roll-out of v3 chargers, FSD improvements, solar roof installs increasing), I felt compelled to get more long exposure. So my decision to short-sell traditional auto was compared with buying on cash margin:
1) TSLA is and likely will remain for some time a very volatile stock, so buying on cash margin could bring disconcerting swings to my leverage,
2) A COVID-pandemic could wreck havoc on the stock markets, in which case cash is king - so in that scenario (with its possible investment opportunities) I would like to not be sitting with a large, negative cash balance,
3) By leveraging via traditional auto, I basically hedge against a general down-turn in the auto-industry: If Tesla and every other car maker fares badly, then my leverage changes less - this is in fact what I have seen during this week,
4) The short borrow interest on my chosen stocks is comparable to the cash margin interest - so with dividend payments a possible wild-card, the cost is comparable,
5) I am unsure for how long I will maintain this short position, but a large fraction of the posts on this forum have been bullish on Tesla by describing the poor outlook for the competition. So I feel there is a distinct possibility that my anti-auto-portfolio can outperform the margin interest rate even on a longer time-scale,
6) By short selling a large number of auto makers, I spread the risk of my short exposure, so even if a couple should do very well, I should not end up with catastrophic returns,
7) Most importantly, I have been able to convince myself that I am not investing against traditional auto because of a general sentiment against them (a typical TSLA short-seller mistake), rather I am simply convinced that they will perform rather badly in the coming months and years and that there is a low risk that they will perform well in the same time frame.

Of my one dozen stocks, I already decided this week to cut my profits in the case of Mazda, I simply could not stomach the 20% borrow fee on the stock. So I am down to 11 stocks. I never considered shorting any Chinese auto maker, not only do they seem further wrt. BEVs but I also don't understand the market there, especially how their government may intervene in case a company has trouble. I also did not short Porsche, given the obscene price of their Taycan it should have a healthy gross margin, and VW seems to prioritize cells for it over etron and ID.3 (also the borrow fee is quite high). Lastly, no shares could be located for Hyundai, so I didn't have to wonder how their Kona will work out for them.

The first couple of days I guess my unusual step brought about some anxiety - also because I am now betting on the poor performance of the employers of several of my neighbors. But to be honest, a bet on Tesla is already a bet against traditional auto. Now I feel very much at ease - I realize now that before I made this investment, I had a nagging feeling that by _not_ directly investing against traditional auto, I was leaving money on the table. Time will tell if this is true. I am not going to ask anyone to wish me luck.

TL;DR: I bought more TSLA by shorting these stocks: VOW3, DAI, BMW, RNO, UG, FCAU, GM, F, TM, HMC, NSANY.

PS. Edited for clarity + typos.

What an interesting idea! I’m seriously consider doing the same. Anyone can think of any reason not to do it? As long as TSLA can outperform other car manufacturers plus interest, you make money.

 

[Pras]

Multiple market shocks happening already. Oil, rates, gold, PMI, GDP (potentially) etc. But the worst is the interest rates.

Not sure how TSLA will weather the storm but overall market seems to have tough time ahead... unless a few things happen.

1) coronavirus spread starts to level in US and EU. China it already has and generally it should have been a rallying moment except for global spread.
2) Opec sets another emergency meeting. This is key that oil recovers as there is a lot of oil related bad debt already with the banks. Downgrade will happen leading to higher reserves in banks.
3) interest rates recover to 0.8-1.0 level. Again key for banks as they will have a double whammy of higher downgrades and lower interest rates. Although banks do stress tests for this reason so they will be fine but under that macro condition, equities take hard beating.
4) and the last and potentially biggest counter will be a fiscal bailout announcement (a mix of infrastructure and tax rebate).

potential tailwind for TSLA will be good China delivery numbers.. US / EU was turning out good but not sure how it will be in March.

sit tight, it is going to be rocky. (Personally I am cursing myself to have dipped in a whole lot a bit too early, even bought a mining stock...ha!)

 

[CyberDutchie]

Predictably, instead of repeating the article’s original headline:

Tesla is ‘better run’ after leadership tumult, says top investor

MarketWatch came up with the following headlines:

Elon Musk ‘was getting things wrong’, says top investor

and:

Tesla chairwoman gives Elon the ‘emotional support’ he needs, says top investor

Shows how much they hate Elon at MarketWatch...

 

[KarenRei]

What an interesting idea! I’m seriously consider doing the same. Anyone can think of any reason not to do it? As long as TSLA can outperform other car manufacturers plus interest, you make money.

The risk is that right now, movements are mainly macro dominated, so you're really making a bearish macro bet.

If you're wanting to make a bearish macro bet, go ahead. Do realize that you're doing so after there's already been a significant selloff. There could of course be more sell-off. Or the market could decide we've hit bottom at any point and scramble to buy up discounted stocks before the price rises. Your risk.

 

[StealthP3D]

In wheel hub won't work, road conditions is going to kill the motor faster than you can imagine

No. Electric motors are very easy to seal from the elements and can be designed such that road shock is not a problem.

Refer to Michelin Active Wheel technology:

Also, Lightyear One, currently being developed with 4 in-hub electric motors sealed from weather and designed to withstand road shock.

Also, Elaphe Propulsion Technologies are deep into development of in-wheel electric motors:

Currently, a number of e-bikes and scooters have in-hub e-motors.

It's best to refrain from saying something that is already in widespread use and being developed further by thousands of engineers at multiple companies "won't work". In-hub motors are the future of EV's.