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

[MP3Mike]

What about the FSD chip, isn't that manufactured in China? I remember this topic here discussed a while ago but too lazy to try to find it.

Nope, the FSD chip is made in Texas. (It may be put on the FSD board in China, I don't know where it is assembled.)

 

[TheGrimSweeper]

Your assertion is laughable.

25,000 dead in Italy. 100,000 in Europe,
US deaths approaching 50,00.
Economic losses in the trillions.
Retribution against China would not surprise me.

Gotta wonder if Tesla will be caught in the crossfire.

Retribution for what? China had by far the strictest lockdown of any country.

Meanwhile in US and A:

 

[adiggs]

Is it a true disconnect or merely a difference of opinion? It's all about valuing assets. How much is a company worth? What would you pay for it?

That's a very good question.

I see a true disconnect between the real economy and the stock market overall. And it's gargantuan. Yes there is a lot more money chasing investments (something like $4+ trillion just in the last month?). There has been negative changes in real economic activity in that same timeframe - big negative changes. So either there was an inadequate supply of claims on economic activity before this happened, or there is now an oversupply of claims on economic activity (I'm voting the latter ).


Also worth noting that everything you had to say about TSLA and Tesla, I share. Which is also why the one stock market position I'm maintaining and haven't seriously considering selling, despite the bumps and bruises I think are coming, is TSLA.

It's the overall market tracking investments such as S&P index fund that I've changed (moved to cash - my strong convictions, weakly held, aren't strong enough nor my education complete enough, to risk serious money shorting the market or individual companies).


So my positioning for this market, and this is radically different from my typical (20+ years) approach to today's market, is roughly 1/2 TSLA, 1/2 cash (plus using that cash selling options using the wheel strategy - see that other thread for details). That's provided not as investment advice (I've got none of that, except to say that I'm a good contrarian indicator over the short run), but for people to weigh one person's opinion and what they're doing about it.

 

[Bobfitz1]

Your assertion is laughable.

25,000 dead in Italy. 100,000 in Europe,
US deaths approaching 50,00.
Economic losses in the trillions.
Retribution against China would not surprise me.

Gotta wonder if Tesla will be caught in the crossfire.

Right. Is the rest of the world going to commit economic suicide by pushing a huge economic contraction to a global economic collapse?
China will take verbal dressing downs and a light rap on the knuckles and wait for the next news cycle and return to business as usual.
Maybe the world will finally get them to close open air wild animal markets.

 

[Dare]

It's a big topic, but I'll try to expand "a little". First let me be clear that I've spent over 50 years in the market. Every penny I have, I have made investing in public companies over that time frame. I can say that as an investor, and a broker/money manager for over 20 years, that options are a losers' game, IMO. I'm not going to get into a discussion about that at this time. The single negative ramification that worries me, with regard to those not totally informed, is the selling of put options. I'll recount a couple of instances: 1) there was a poster here who announced to the board that he had just sold 10 put options, but wished he had sold 100( the stock was around 320-330 ) He didn't mention a strike, but a gave the example based on a $300 strike, what would happen if the SP dove for what ever reason, say a gap down to $250. I asked him if he was prepared to put up $300,000, if he was assigned the 10 options. And then, I pointed out the fact that, if he had gotten his "wish" of 100 options, he'd be on the hook for $3,000,000. I forget the conversation after that, but I could tell it was an eye-opener. 2) There was another situation where a guy had sold 15-20 options, the stock dove and he was surprised to find that he had been assigned 9. He was looking for help, but once you-re assigned, that's it. I don't recall any posts by him after this. Gaps down, as we have found out with TSLA, can be devastating. I have seen it happen: people being on the hook for a lot of money that they didn't have and had no visibility of ever getting it. Another example of a misunderstanding of options, is that many think they have until expiry to buy back a shorted put (or call). They don't!! The holder of that sold option can exercise that option ay any time up until expiry, even if it is out of the money. People can get in a lot of trouble. Bottom line, I wish people would realize that long-term investing in stock is, hands-down, the best way toward wealth. If they can't, then at least be aware of the dangerous game they are playing with options.

Thanks for this. I've considered trading options and have gotten permission to do so from the two brokerage houses I use. However, the prospect of "unlimited downside" gives me...great pause. I prefer to HODL and not have to worry about some horrifying notification that I'm on the hook for money that I can't afford to lose. But I do enjoy reading the stories of those who have the guts and the talent to do it successfully.

We don't normally hear about the devastating losses...unsurprisingly.

 

[Nocturnal]

Well, I was able to buy back the shares I lost on a $720 put for slightly less than what I was paid for them on average. Not bad.

Shout out to Bloomberg for the "oil price is cheap so telsa bad" hit piece. I totally believe that Bloomberg genuinely cares about pollution and climate change.

Thanks for this. I've considered trading options and have gotten permission to do so from the two brokerage houses I use. However, the prospect of "unlimited downside" gives me...great pause. I prefer to HODL and not have to worry about some horrifying notification that I'm on the hook for money that I can't afford to lose. But I do enjoy reading the stories of those who have the guts and the talent to do it successfully.

We don't normally hear about the devastating losses...unsurprisingly.

As long as you are just buying then downside is limited. Options trading is definitely more akin to gambling but it's worked fairly well for me. (knock on wood)

Right. Is the rest of the world going to commit economic suicide by pushing a huge economic contraction to a global economic collapse?
China will take verbal dressing downs and a light rap on the knuckles and wait for the next news cycle and return to business as usual.
Maybe the world will finally get them to close open air wild animal markets.

The markets are open but wild animals are banned. They did the same thing back after SARS so lets hope they don't let it come back again. ​

​

 

[Zero CO2]

Your assertion is laughable.

25,000 dead in Italy. 100,000 in Europe,
US deaths approaching 50,00.
Economic losses in the trillions.
Retribution against China would not surprise me.

Gotta wonder if Tesla will be caught in the crossfire.

I guess we have to blame someone for our leaderships incompetence ... why not china
these disruptions benefit the disruptor (Tesla) ... hurts the incumbents (OEMs)

 

[jbcarioca]

Are you saying Magna Steyr can compete head to head with Tesla in the high volume EV market? Because that's what you appear to be implying. I don't think that's realistic.

That argument might have had merit back when Tesla only had Models S&X.

Magna Steyr is quite versatile and adaptable. I have owned three vehicles built by them. The common denominator is 'low volume'. If volume is high they are not a candidate. They've devoted major attention to BEV issues so they're quite capable to produce low volume BEV, such as I-Pace.

That is it!

 

[Dan Detweiler]

To me it is clear as day. Advertising will make Tesla money. The purpose of advertising is not just to move metal. The purpose of advertising is to guide people into buying more expensive metal. The right advertising, done for maybe 10 million, will move more expensive versions of the cars such as the P versions. The ones Tesla makes huge margins on. Ads would possibly be targeted against the buyers of the most expensive Lexus and Mercedes. And they need a very low take rate to work. Advertising has a bell curve. The first bit of targeted advertising has a HUGE payback. As you throw more money into it, you get less out of it. GM/Ford are throwing that last bit that probably only gives a 10% return. I don't advocate for that. I advocate for just the part of the curve where the payback is LUDICROUS.

Even if this were true, why bother? They are supply constrained not demand. It's a moot point.

Dan

 

[RobStark]

Some of the legislators are also car dealership owners. Abott's request (if he actually makes one-I wouldn't bet more than a Starbuck's hot chocolate on that) won't make a whit of difference to them. Others are short-sighted enough to focus on the amount of campaign contributions only--this includes all the legislators in districts outside of the GF location. If you had been to the legislative session three or four years ago, it was like old home week between the legislators and the dealers. The chairperson even wondered aloud why this was even being brought up.

It was the exact same situation in Nevada pre Gigafactory Reno.

 

[TheGrimSweeper]

Magna Steyr is quite versatile and adaptable. I have owned three vehicles built by them. The common denominator is 'low volume'. If volume is high they are not a candidate. They've devoted major attention to BEV issues so they're quite capable to produce low volume BEV, such as I-Pace.

That is it!

Magna is basically like outsourcing the manufacturing of your vehicle? I mean it would make sense for Apple to go that route since they do that with everything else.

Apple would likely then just do the software.

 

[Buckminster]

On reddit there's a thread asking for tips on how to get hired at Tesla. A manufacturing engineer at Tesla wrote this:

"Covid doesn't give me the warm fuzzies for Tesla, but I think we'll be fine. Other carmakers will pull out of EV development because they view it as an optional side project, so we'll get even longer to dominate the EV industry. Our sales would be shot right now, except all of China is still buying and far from saturation, and we have a BUNCH of Model Y pre-orders. So I think we'll be fine there."

His posts seem legit to me.

Could Freemont build M3s for additional China sales if they really can't enough in any other country?

If Apple makes a car, it means they believe the legacy car manufacturers are toast. The can make far more profit (with far less investment and risk) by selling Apple Play etc. to the existing manufacturers. The world they must envision is one with Tesla and Apple sharing about 90% of the market. I don't see them bringing a car until the legacy car manufacturers are no longer viable. This is just a contingency research project. (my opinion)

If Apple enter the market, consumer habits would change.

1. Apple would completely legitimise Tesla vehicles for 99% of the population. You don't need to be an old OEM to make a new EV.
2. Consumers would have the choice between Apple and Tesla. Other OEMs would become old hat instantly.

I don't think Apple perceive it as a backup. They are holding back because they don't have a design yet that won't embarrass them. Tesla is a moving target and they know Model 2 could be out ahead of theirs.

Apple need a new product - what else have they got in development? Glasses will be equally high risk in the near term.

 

[Singuy]

@Drax7
Exactly retribution for what?
I thought we were at “_war_” with SARS-CoV2

Right wing media is pushing that Covid 19 was made in a Chinese lab and was purposely released to damage the world's economy or something like that.

 

[thx1139]

Right wing media is pushing that Covid 19 was made in a Chinese lab and was purposely released to damage the world's economy or something like that.

So insane. Lets harm our customers so they stop buying from us.

 

[JRP3]

The markets are open but wild animals are banned.

I've heard, not confirmed, that some wild animals were reclassified as domestic to get around the ban.

 

[Boomer19]

Thanks for this. I've considered trading options and have gotten permission to do so from the two brokerage houses I use. However, the prospect of "unlimited downside" gives me...great pause. I prefer to HODL and not have to worry about some horrifying notification that I'm on the hook for money that I can't afford to lose. But I do enjoy reading the stories of those who have the guts and the talent to do it successfully.

We don't normally hear about the devastating losses...unsurprisingly.

i agree with hock, it’s not for the faint of heart or those not willing to learn the way they work.
however unlimited downside isn’t exactly true unless you sell calls. even selling puts has a finite cost when stock price = 0

point is that many suggest cash backed stock investing over
- leveraged stock positions
- cash backed options positions, or worse
- leveraged options positions
- or worst, leveraged futures

how about the idiots who bought may oil futures on margin when the price approached 0 yesterday unaware that negative pricing was a ‘thing’ and then it settled at negative 37 or whatever....don’t forget these particular WTI futures have a 1,000 multiplier on the cash- settled contract
and the other has a 500 multiplier
...we’ll see if the cftc and cme let the settlement price hold up

disclosure - i do trade options but not day trading or top expert. however, i have worked closely with them for 17 years. so i’m at a higher level, but not the highest, and not the lowest - and by no means does any of that mean i never lose money trading them. but i also don’t over-extend my means, use margin... or in the few cases i’ve sold puts, i had the cash to buy the 500 shares when i was short 5 contracts.

 

[Dare]

Any predictions on the closing SP today?

 

[Causalien]

It's a big topic, but I'll try to expand "a little". First let me be clear that I've spent over 50 years in the market. Every penny I have, I have made investing in public companies over that time frame. I can say that as an investor, and a broker/money manager for over 20 years, that options are a losers' game, IMO. I'm not going to get into a discussion about that at this time. The single negative ramification that worries me, with regard to those not totally informed, is the selling of put options. I'll recount a couple of instances: 1) there was a poster here who announced to the board that he had just sold 10 put options, but wished he had sold 100( the stock was around 320-330 ) He didn't mention a strike, but a gave the example based on a $300 strike, what would happen if the SP dove for what ever reason, say a gap down to $250. I asked him if he was prepared to put up $300,000, if he was assigned the 10 options. And then, I pointed out the fact that, if he had gotten his "wish" of 100 options, he'd be on the hook for $3,000,000. I forget the conversation after that, but I could tell it was an eye-opener. 2) There was another situation where a guy had sold 15-20 options, the stock dove and he was surprised to find that he had been assigned 9. He was looking for help, but once you-re assigned, that's it. I don't recall any posts by him after this. Gaps down, as we have found out with TSLA, can be devastating. I have seen it happen: people being on the hook for a lot of money that they didn't have and had no visibility of ever getting it. Another example of a misunderstanding of options, is that many think they have until expiry to buy back a shorted put (or call). They don't!! The holder of that sold option can exercise that option ay any time up until expiry, even if it is out of the money. People can get in a lot of trouble. Bottom line, I wish people would realize that long-term investing in stock is, hands-down, the best way toward wealth. If they can't, then at least be aware of the dangerous game they are playing with options.

That line of thinking is very similar to the wacko wsb reddit sub. If you find yourself thinking that way, you are not meant for options. As someone who've had about a decade worth of consistent options profits (more successful in selling than buying for some reason) if what Hock1 described is true and most people who trade options have no basic knowledge like that, then I really do not think that the majority of this board is ready for it.

 

[scaesare]

Look at VW. They are in big trouble with their ID.3 software development. They do not even see light at the end of the tunnel. I think they already asked Apple for help, could be a marriage in heaven, by these two broad consumer anchored brands. Apple could make easy money on VW but thats not what Apple is heading for, if they would, they could. But Apple is up for the big win building the complete EV by itself. Pulling the rabbit out of the hat anytime and not helping "competitors" because VW is toast anyway.

And, in the end, its good to have a competitor to Tesla. I'm very long and bull and have not sold a share since 2013!

I don't think Apple would necessarily succeed in being able to turn the ID.3 situation around in very short order. The ID.3 hardware architecture is likely comprised of dozens, if not hundreds, or differing electronics components supplied by many different vendors. This is assumedly what gave VW it's heartburn, and it isn't Apple's forte either.

Apple does platforms well with they engineer them from the ground up themselves, and can tightly control the interaction between hardware and software. Thay won't have anything close to that wading in to the ID.3.

It's one of Tesla's great strengths too... lots of vertical integration, especially in the electronics/computer stack.

 

[StealthP3D]

I see a true disconnect between the real economy and the stock market overall. And it's gargantuan. Yes there is a lot more money chasing investments (something like $4+ trillion just in the last month?). There has been negative changes in real economic activity in that same timeframe - big negative changes. So either there was an inadequate supply of claims on economic activity before this happened, or there is now an oversupply of claims on economic activity (I'm voting the latter ).

I don't see it as an "either or" situation. What you see as the market failing to price in next quarter's (or next years) drop in economic productivity, I see as the market averaging the economic activity over a long enough period that it only knocks 15%-23% off the value of the market (depending upon the index) from where we were sitting at the beginning of the year, well before CV had any effect on the market. Those numbers are based on the DJIA (-19.24%), SP500 (-15.23%) and NYSE (-23.00%). In other words, I think the negative changes to economic activity have been fairly priced in if one assumes companies are valued for their expected long-term performance. "Long-term" means different things to different people but the market averages it all out. That said, the market also prices in short-term fear which is why I expect a short-term drop in market valuations which we will (again) quickly recover from.

I chose to not worry about these corrections and bear markets because they are happening on an ever-accelerating time-scale. Meaning they work through quicker than ever. I don't think we are going to see anymore decade long bear markets. This is a function of the speed and wide availability of information coupled with modern economic policy and the willingness to print money. If anything, this should make one scared to be in too much cash. In a modern world, it's more important than ever to have productive assets to protect against the devaluation of money.

So my positioning for this market, and this is radically different from my typical (20+ years) approach to today's market, is roughly 1/2 TSLA, 1/2 cash (plus using that cash selling options using the wheel strategy - see that other thread for details). That's provided not as investment advice (I've got none of that, except to say that I'm a good contrarian indicator over the short run), but for people to weigh one person's opinion and what they're doing about it.

I've never believed in having a broad exposure to the market because I don't equate portfolio volatility with long-term risk. I'm willing to have a volatile portfolio as long as the long-term returns are good. So I've always invested in technology and innovation and left housing, real estate, clothing, food, and popular fashions and fads to others. Because technology and innovation is not going away. Innovation is where true VALUE is created by making things faster and cheaper with less. It's also where the best returns lie if you know how to avoid most of the dead-ends and non-profitable business plans. So this is another reason I am long-term bullish on the market - I actually tend to agree with you that much of the market is becoming less relevant and less valuable.

But the technology and innovation that businesses depend upon is not going away. It improves the lives of even people who eschew technology by making the products they buy less expensive and more easily available. I did invest in the early days of Starbucks but that was because the business model was simply too compelling. And I do have some BP oil (which is a disaster in terms of capital depreciation) but it has almost covered its losses with the dividends it's paid over the years. But, in general, I stick with technology and it's served me well over the last 30 years. And, yes, I consider Tesla a tech company as they innovate and push the cost of manufacturing down.