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

[jbcarioca]

He started out being a defender of the companies who buttered his toast. But then he realized they might not be around to butter his toast anymore.

Candidly, this assertion is false.
Munro has worked for a wide variety of companies. He and his team do quite excellent work on teardown analysis. He has never been a particular 'defender' or anybody AFAIK, and I've seen his work from time to time for years. To my knowledge he has done the same work for both highly successful and not-so-successful competitors.

The change, a big one, is that retail investors in TSLA will happily consume his products. Until TSLA his products sold to engineers and cost accountants examining their competition and, sometimes, examining their own products from an external perspective.

 

[jkirkwood001]

Market cap of the major auto manufacturers, 2020-04-14:

• TSLA is currently worth almost twice VW (3 years ago, that was reversed)
• TSLA worth almost 4x Daimler (Mercedes)
• TSLA worth over twice all of Detroit combined (GM + Ford + Fiat/Chrysler)

 

[mongo]

You are always buying from the market. The point is that the market is where buyers and sellers meet up. In my example case, the contract expired while still in the money, so all the holders like me exercised at the same time, and all the writers had to somehow come up with shares to deliver. When I have exercised early, someone (I don't actually know who...) randomly (supposedly) assigns the contract among the open contracts, and delivers the shares to me. Even when the market is closed, this happens very quickly. The hardest part about the transaction is calling the broker, who will point out to you that you're losing the time value of the option, so you have to convince them that you know what you're doing. "When will the shares appear in my account?" I ask. "They're there now." I've done this twice, for different reasons.

Help me out here. Yeah when trading stock, you go through the market, buyer, seller, bid ask, trades either go up the ask list or down the bid list. Stock price tracks this movement.
However, when trading options, (assuming they were not naked or cash backed), you are dealing with someone who already has shares they previously bought from the market. If I already have 100 shares, write a call and it get exercised, I don't need to go to the market to get the shares, they come directly from my account and go right to your account. How can that influence the stock price?

In your example of naked calls, if the writers had to come up with shares, then that would drive stock price up due to their purchasing, Which would occur at eh ask price, driving the stock price up.
I think @Artful Dodger's data is either not a direct option trade, or the values are not current share prices.If they were the basis for the trade, that would make sense.

 

[StealthP3D]

bought 50 shares with the calls I sold yesterday

You're doing it wrong.

 

[juanmedina]

You're doing it wrong.

I don't know what I am doing as you can see...

 

[Artful Dodger]

No, when MMs are going to begin their attempt to knock this rally down. Max Pain this week is 590 as of right now.

Three factors for MMs:

1. the goals is to minimize their options payouts on Friday (not Tuesday)
2. the options open interest defines how 'worthwhile' would be any manipulation
3. manipulation only works in a low-volume trading environement

There were 10.6M shares of TSLA traded in the 1st 50 min of today's session (avg > 200K/min) on a Tuesday, with middling options open interest.

TL;dr No.

 

[Chunky Jr.]

It's a set up to be disappointed when you set expectations absurdly high

The key to happiness is low expectations.

 

[StealthP3D]

Tesla is just reminding us why we don't sell or trade all of our TSLA shares are our core shares.

FTFY

 

[Cosmacelf]

His hopes for the wiring improvements are based on Tesla filed patents and the fact that Elon basicly confirmed it will be added to the mY about 2 years ago (guesstimate). So his disappointment is not unjustified in this.
The V2G comment is a less founded, but since other (cheaper) EVs will support this feature it's not ridiculous for him to search for the feature and not finding any indication of the (future) possibility.
Munro has found ALOT of things he likes about the Y, seems like you're not open to some negative comments?

I get all that, and I do get where he is coming from. But a lot of people, especially non Tesla, non technical people will watch that YouTube video in isolation and think the Model Y sucks. If he had explained his words a bit better providing context for his disappointment it would have been so much better.

Also, he is behind the times. While Elon did boast about the upcoming Model Y wiring almost three years ago, he subsequently reversed his position, explaining that his management team had convinced him to do less cutting edge stuff in the Model Y to allow it to be brought to market faster. So Munro, supposed expert, doesn’t even know what the latest info is about the Model Y.

Frankly, I’m impressed they stuffed in a brand new heating/cooling system based on a heat pump. And even that one, they had to rush it, not having had the time to put a noise jacket around the new compressor.

So instead of calling him a dick, maybe I should have said he’s unclear, easily misinterpreted, and unknowledgeable. I think my original wording was more concise, but maybe misinterpreted

 

[larmor]

Despite the massive health and economic crisis around the world, the air is getting cleaner and illustrates the urgent need to transition to clean energy-- and we all benefit from cleaner air.

 

[ggr]

Help me out here. Yeah when trading stock, you go through the market, buyer, seller, bid ask, trades either go up the ask list or down the bid list. Stock price tracks this movement.
However, when trading options, (assuming they were not naked or cash backed), you are dealing with someone who already has shares they previously bought from the market. If I already have 100 shares, write a call and it get exercised, I don't need to go to the market to get the shares, they come directly from my account and go right to your account. How can that influence the stock price?

In your example of naked calls, if the writers had to come up with shares, then that would drive stock price up due to their purchasing, Which would occur at eh ask price, driving the stock price up.
I think @Artful Dodger's data is either not a direct option trade, or the values are not current share prices.If they were the basis for the trade, that would make sense.

You're right, if they were covered calls, it doesn't directly affect the stock price. Indirectly, the option writer might also want to re-buy shares. In any case, I was trying to answer a different question than the one you were asking, sorry for my misinterpretation.

 

[Artful Dodger]

How is everyone feeling about earnings? Not sure if I expect a dip or not.

A good problem to have but now I have to decide whether to sell my profitable calls and rebuy on the next dip or holdor until 21/22 and make a fortune.

Wholly unqualified to give this advice, but I think this is how "Uncle Jack" pulled off his "February Miracle": (turned $100k into $2.5M)

1. sell some early to recoup your options costs
2. sell tranches on the way up
   1. break portions based on selling price
   2. lower volume at higher price yields = profit / tranche
3. don't be greedy; get paid

HEAVY CAVEAT: Jack Rickard said he was entering into that trade because 'options were mispriced'. I have no idea if they are mispriced now, or even that they were mispriced then. That's just what Jack stated. I don't have the tools to judge.

NOT ADVICE! *I know nothing about options strategies*

Cheers!

 

[Cosmacelf]

California is starting to talk about a plan to lift some restrictions. This could reduce uncertainty over Fremont.

California, Oregon & Washington Announce Western States Pact | California Governor

I wish this meant they would reopen soon, but I haven’t seen any indications, other than a pact to work together. Anyone else know where Newsom’s thinking is on reopening/lifting restrictions?

 

[Cosmacelf]

The key to happiness is low expectations.

That’s what I remind myself every time I go out to play golf

 

[SOULPEDL]

Tesla is just reminding us why we don't sell or trade our core shares.

Who was trading core shares?
Not me, no... those were just spare shares. *


* Core is defined by remaining shares after all frivilous sales.

 

[StealthP3D]

Candidly, this assertion is false.

Munro started out with a lot of preconceived ideas about Tesla that turned out to be false. It took him a while to understand what Tesla was doing. He literally knew almost nothing of Tesla going into this. AFAIK, he never tore down a Model S or a Model X. He had totally (and unfairly) discounted Tesla as a bit-player. Munro had a strong bias against Tesla before he knew enough about them to have an informed option. It was the "not invented here syndrome" or "What do a bunch of Silicon Valley Tech nerds know about building cars?" As Munro found out, quite a bit!

Which just goes to show, you can teach an old dog new tricks!

 

[SageBrush]

I am not a fan of "technical" investing to put it mildly, so I thought I would share the unwelcome realization this morning that I engage in it in perhaps the dumbest way possible.

I have a TSLA holding I want to liquidate, and I find myself looking at the TSLA stock price in relation to my average stock purchase price. Reasoning tells me that my cost should not play into when I sell ... but I cannot shake the influence. I wonder if the rapid stock price rise over the last couple of days is not the same demented behavior in mass action.

 

[jbcarioca]

Munro started out with a lot of preconceived ideas about Tesla that turned out to be false. It took him a while to understand what Tesla was doing. He literally knew almost nothing of Tesla going into this. AFAIK, he never tore down a Model S or a Model X. He had totally (and unfairly) discounted Tesla as a bit-player. Munro had a strong bias against Tesla before he knew enough about them to have an informed option. It was the "not invented here syndrome" or "What do a bunch of Silicon Valley Tech nerds know about building cars?" As Munro found out, quite a bit!

Which just goes to show, you can teach an old dog new tricks!

You might recall that even Elon took most of Munro's suggestions and implemented many of them. Since Munro is a GTA/MI kind of person, having never lived outside that area, he has and several biases. That said, he mostly was correct, as much as it pains us to admit it.

 

[Cosmacelf]

EVs already have powerful inverters to power the drive motor(s). The Cybertruck will have 120 V and 240V AC outlets in the truck bed to power tools and pumps but Tesla is keeping mum on the Amp rating of these outlets (so far). I would love to see a 20A 120V outlet and a 50A 240V outlet.

The drive inverters are already big enough to handle most homes, the biggest limitation is the storage capacity of the battery (considering it's wise to keep it in the 20%-80% range when used regularly in this application).

I’m with you there. Even a 30A 240v locking plug (that’s what comes standard on job site generators) would be awesome. This would also defacto gives you the ability to recharge any stranded roadside EV. And be a drop in replacement for a critical load panel generator that many people have for their houses. No complicated vehicle-grid stuff needed.

Hopefully Elon/Tesla has realized this and will give us a reasonable high amp 240V receptacle with the Cybertruck.

 

[wooter]

Munro started out with a lot of preconceived ideas about Tesla that turned out to be false. It took him a while to understand what Tesla was doing. He literally knew almost nothing of Tesla going into this. AFAIK, he never tore down a Model S or a Model X. He had totally (and unfairly) discounted Tesla as a bit-player. Munro had a strong bias against Tesla before he knew enough about them to have an informed option. It was the "not invented here syndrome" or "What do a bunch of Silicon Valley Tech nerds know about building cars?" As Munro found out, quite a bit!

Which just goes to show, you can teach an old dog new tricks!

I don't agree. He had already worked on analysing other electric cars like the BMW i3 and Nissan Leaf, and he did found quite a lot of issues in the construction of the Model 3 which Elon agreed with (the infamous "that engineer has been fired" tweet).

But there are things that Tesla does differently and Munro has been positive about them.