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

[Fact Checking]

I expect the macro to be a roller coaster, but I also think that the US govt will be forced to stimulus as the current plan is a complete failure.

So the problem I see here is that the "U.S. government" which has the power to enact a stimulus of sufficient magnitude is Congress.

But the House (where new legislation is introduced) is controlled by Democrats, the Senate by Republicans. They both have to agree for a stimulus to happen.

But why would Democrats go out on a limb to help reduce the economic fallout of a pandemic response botched up by the Republican administration? Why wouldn't they wait until after November?

Republicans certainly did so in 2009, they only agreed to a small stimulus that generated a slow recovery, which was blamed on the ruling party (Democrats) and Republicans won the midterms in 2010 in a landslide.

I.e. I don't see the political will on the Democratic side to bail out the Trump administration, and I don't see the ability on the Republican side to compromise and make a deal.

Exhibit #1, Senate Republicans today blocked an emergency bill by the House which would have granted paid sick leave during the coronavirus outbreak:

Senate Republicans block emergency sick leave bill as coronavirus threatens widespread need​

How is a stimulus measure going to pass? How is this supposed to work politically?

 

[UnknownSoldier]

I'm uh just going to be over here holding my SPY puts. If these SPY 1/2021 $110P actually reach the money then I'll be able to retire during the bottom of the Great Depression. Wouldn't that be ironic.

 

[EVMeister]

Disclaimer: I specialize in catching falling knives.

 

[Mike Smith]

So the problem I see here is that the "U.S. government" which has the power to enact a stimulus of sufficient magnitude is Congress.

But the House (where new legislation is introduced) is controlled by Democrats, the Senate by Republicans. They both have to agree for a stimulus to happen.

But why would Democrats go out on a limb to help reduce the economic fallout of a pandemic response botched up by the Republican administration? Why wouldn't they wait until after November?

Republicans certainly did so in 2009, they only agreed to a small stimulus that generated a slow recovery, which was blamed on the ruling party (Democrats) and Republicans won the midterms in 2010 in a landslide.

I.e. I don't see the political will on the Democratic side to bail out the Trump administration, and I don't see the ability on the Republican side to compromise and make a deal.

There's stimulus Trump can do without congress. I think he's going to announce a tariff holiday with China any time now.

 

[Singuy]

Well I wear iron gloves so.

Lots of knife dropping when TSLA was sliding down to 180 and AMD going down to 9 bucks. Can't say I regret any of those buys today even after these flash crashes.

 

[Fobble]

It's funny how everyone suddenly need the money when the market crashes but have plenty of dry powder, almost unlimited amount during good times.

Well that's pretty logical, isn't it? We were told to stayed invested. Then, when the market falls, rarely anyone reacts fast enough to loosen up their shares, and here we are ... stuck

May consider going CCL if they start cancelling cruises. I never need the money so plenty of sales going around for me.

SP is more or less on the floor. Waiting might give you better deal, but do in phases is my preference, since we cannot time the bottom ...

 

[gerebgraus]

Maybe some insiders know something big is coming so is secretively accumulating?

I have never noticed any insider info trading with TSLA. This indicates that in spite of all accusations of fraud, etc. Tesla insiders are remarkably honest.

 

[Fact Checking]

There's stimulus Trump can do without congress. I think he's going to announce a tariff holiday with China any time now.

Trump doesn't have the power for a stimulus that is even approximately large enough to counter the coronavirus economic shock.

Republicans want a payroll tax cut - that's 6.5% of GDP ... twice the size of the Obama stimulus.

Democrats would be fools to give it to them - if then they'll agree to a stimulus on their own terms: paid sick leave, free coronavirus testing, unemployment benefits in the hardest hit industries. I.e. a targeted stimulus to counter the negative effects of the coronavirus.

Democrats are in the position of power now: if they do nothing then the default outcome is that Republicans are going to be blamed for the resulting recession and will pay the price at the polls in November. Democrats don't have to do anything for this to happen.

If Republicans want a stimulus, they'll have to be able to convince the Democrats. Do you see today's Republican party capable of doing that? I certainly don't.

 

[Mike Smith]

Well that's pretty logical, isn't it? We were told to stayed invested. Then, when the market falls, rarely anyone reacts fast enough to loosen up their shares, and here we are ... stuck


SP is more or less on the floor. Waiting might give you better deal, but do in phases is my preference, since we cannot time the bottom ...

I just checked my account and it turns out I have exactly as many shares of TSLA as I had a month ago. I've lost nothing.

 

[dl003]

iron gloves

What kind of option strategy is that?

 

[vikings123]

Not advice. Very very risky.

If macros hold Tesla to ~650 entering Friday I will be buying April 17 850C with the money I’ve made in spy puts this week when I feel it is best to enter that position.

I expect the macro to be a roller coaster, but I also think that the US govt will be forced to stimulus as the current plan is a complete failure.

My fear in this position is a factory closure, but the upside is that Tesla may be the one growing manufacturer - a beacon in the light.

So I’ll either set 100k on fire or make another $400,000+.

Why not wait until the end of the month to place this bet? Are you worried that the premium will be higher?

Who knows what will happen the next couple of weeks. News of Model Y deliveries will probably not move the stock much.

 

[gerebgraus]

That would be the definition of insider trading.

I'm not saying insider trading never happens (obviously it does to some degree) but to speculate on it as if that's what's causing today's relative strength is just silly. The strength here is being caused by a favorable balance of buyers/sellers, especially considering that today's trading had the market manipulators fingerprints all over it.

I am happy to live with the theory that the relative strength of TSLA today is the result of Musk twitter speculations about the need of new cybertruck, etc. manufacturing plant. Companies in major trouble do not usually start to build a multi billion dollar new plant.

 

[Singuy]

What kind of option strategy is that?

The I don't gamble type of option strategy. Aka I don't do options or use leverage. I also don't have a mortgage or any other debt while 15% of our monthly cashflow is enough for our living expenses. Also we are under 40 so got plenty of time to weather any storm.

The ultimate iron gloves strategy.

 

[Rarity]

Still meh.

Tesla has been expecting a recession for 6-8 months now and got ready for it.
We are still 2-3 times the TSLA from a ~year ago.

Overall, I agree with this. And part of my thesis with Tesla is that it is not correlated with the market (perhaps becoming more correlated as the S&P 500 joinder becomes sooner).

The only worry I have is that the delivery wave is cresting at the same time as the "social distancing" measures are being implemented in many jurisdictions. It would have been much better had Tesla unwound the wave.

 

[Mike Smith]

Remember Tesla has a giant demand lever they can pull if necessary - advertising.

 

[Singuy]

Remember Tesla has a giant demand lever they can pull if necessary - advertising.

I don't think Tesla is pulling any levers since there are a finite amount of batteries. If Model 3 sales are declining, they will aggressively ramp Model Y. It's all about allocation of resources now.

 

[StealthP3D]

Fortunately the market looks a few months ahead, which is the middle of summer. I think there is a good chance today was the bottom because 1) announcement that it's a pandemic would make a logical bottom and 2) nobody thinks it's the bottom.

You are being way too logical here. A more accurate way to tell:

Does it feel like the market bottomed?

I would say no, it doesn't. That said, at some point soon, I think TSLA will take off and leave the rest of the market behind.

 

[StealthP3D]

Remember Tesla has a giant demand lever they can pull if necessary - advertising.

And they have a lot of demand levers they would pull, if necessary, before that one. Advertising is the last resort in a long line of available levers.

 

[Silentk]

Haven’t seen this posted yet:

https://www.driven.co.nz/news/news/mercedes-benz-ditches-self-driving-car-development/

 

[dww12]

Are all options for the same day and price the same? I have some TSLA Mar 27 500 puts and my Merrill Lynch is saying they were down today and at $12.75 but yahoo says they were up and at $16.45.