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

[22522]

There is a selection going on.

I don't see anyone hanging with Tesla.

Tesla should open a large gap.

 

[adiggs]

This is likely accurate. With low volume each day they shouldn’t have trouble with it.

This is also a weekly options expiration - volume of options is much much lower on weeklies over monthlies (thus not as much energy / investment in getting it just so). Last week was the April monthly expiration. Next monthly expiration is May 15th.

 

[Artful Dodger]

Even the actions that appear to others or even to him to have been mistakes, are not. Every decision he made led him to this very point, where he’s supposed to be. Every decision he will make will lead him to where he’s supposed to be.

So, Gandalf the Grey then?

 

[Artful Dodger]

IMO, no matter how economically hostile things become, Tesla will be fine. The concern I have is the inevitable second China GF could be delayed. If global capitalism doesn't fall apart, I expect an announcement within 3 years.

... while I expect a CONTINUOUS build program in China until they reach their intended capacity (which will include, as a mimium, support for the export market in the greater Asia region).

I expect another Gigafactory announcement for China as soon as GF3 phase 2 (Model Y) is complete. All those cranes aren't gonna sit idle while there's work to be done.

Cheers!

 

[Curt Renz]

I had more to say about this in the Market Politics thread.

Electrek - today: Hey EV drivers: Trump is getting ready to bail out big oil - Electrek

 

[MC3OZ]

Just started watching this:-

EDIT: As expected well worth watching..

 

[Singuy]

I had more to say about this in the Market Politics thread.

Electrek - today: Hey EV drivers: Trump is getting ready to bail out big oil - Electrek

Just let them be. If there's a bail out there's a bail out (any amount of crying is not going to stop it). Trump has a good way of turning anything into something extremely political. Tesla already has a hard time getting marketshare from right wingers, any resistance will cast that die.

 

[Fred42]

This week Germany allowed stores below a certain size to reopen. Does someone in Germany have info on what that means for Tesla stores and car dealers?

 

[Thekiwi]

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.

Apple doesn’t outsource its manufacturing - it designs and owns most of the manufacturing equipment in its assembler factories. It outsources the labour and property which its manufacturing operations sit in.

 

[Artful Dodger]

After-action Report: Tue, Apr 21, 2020: (Full-Day's Trading)

VWAP: $708.28
Volume: 20,219,528
Traded: $14,321,029,885.84 ($14.32 B)

Closing SP / VWAP: 96.93%
(TSLA closed BELOW today's Avg SP)​

FINRA Short/Total Volume = 55.9% (50th Percentile rank Shorting)
FINRA Volume / Total NASDAQ Vol = 53.6% (59th Percentile rank FINRA Reporting)

Comment: "TSLA drops @ 3x Beta vs NASDAQ-100; just shy of -10% circuit breaker"

 

[FrankSG]

For those with a particularly rosy view of TSLA's share price future, I offer an alternative hypothesis. The core of this hypothesis, for me personally, is that Tesla and TSLA have a gloriously bright future. However, in the short term (few months to even a few years), the overall market and economy is going to be disastrous.

You can be a bright spot in a disastrous economy, and drop 50% in an 80% down market, and that would be strong outperformance of the market. You're still down 50%.

America On The Brink? Shocking Images Show "Pennsylvania Militia" Rolling Up To "Reopen America" Rally

And an alternative view of the above link:
Don't Get Fooled by Fake Photos of Coronavirus Lockdown Protests


Stuff like this is but one of many things going on right now that has me thinking that the stock market isn't on an upward trajectory from here. Instead we've been experiencing one of those dead cat bounces within an overall bear market.

Related - I see an increasingly large disconnect between stock prices / stock market, and the real economy. Over time, the stock market is more likely to correct and reflect the real economy, than the real economy correct and reflect the stock market. Or at least this one will.


Oil going negative in the current month delivery, but still priced at $20 just one month later!?! The paper oil market is being crushed. Of course, it'll be oil paper traders that are losing badly, so I'm mostly ok with that.


One of the lessons I learned in the '08 crash is that outstandingly good businesses. Businesses that included resilience to black swan events in their company planning and execution and that weathered that crash just fine, also sold down with the rest of the market. The best explanation I ever found is that over levered individuals, hedge funds, etc.. had to sell stuff to raise cash to pay their debts. When it got bad enough, they had to sell their good stuff as well as their bad stuff. If nothing else, the good stuff could actually raise cash, which made it particularly valuable to sell.

In that case, I found a company selling for $40 which seemed like it was worth $80 to $120 (because the dividend it provided, and the safety of that dividend).


So the answer to your question - I see nothing negative about TSLA. However the ecosystem in which TSLA operates looks grossly negative to me. And I see TSLA being caught in that downdraft and going along for the ride.

I offer this as an alternative hypothesis for people to consider in their investing decisions. I don't know the future, and I hope I'm wrong.

EDIT: fixed a minor typo: off -> offer
EDIT: added an additional link / view of the lockdown protests.

Let me preface this by saying that I'm not an expert in macro-economics, but there are three things that make me question this:

1. I've seen the same "disconnect between the stock market and the real economy" narrative all over CNBC last week, on various YouTube channels, and WallStreetBets is also full of if. If it's all over the news and public information, then isn't the risk of another big drop already priced in?
2. Some of the absolute worst case scenarios regarding COVID-19 we can at this point safely rule out, and there's somewhat more clarity about the future than there was in early/mid March. Even if Q2 will be disastrous, and likely the rest of the year a bit weaker depending on the sector, doesn't it make sense for the market to recover, because it believes there's a good chance things will go back to normal, if not after Q2, then some time next year?
3. Where else are people supposed to put their money other than stocks? Bonds appear to be not so good atm, cash doesn't seem great either with all the money being printed, so even if things turn out somewhat bad and there's a year or 2 year long recession, perhaps stocks are the least bad place to put one's money right now?

 

[FrankSG]

With Shinkansen rail is replaced every 10 years. The rails will wear about 9mm or 0.354 inches in 10 years.

If only Toyota and the rest of the auto industry had the same attitude as JR (Japanese Rail) company, I don't think they'd be at risk of bankruptcy.

JR is disrupting their own Shinkansen (bullet train) with a new, faster Shinkansen, sort of making the old one obsolete. If only Toyota and other OEMs were willing to do the same with EVs to their ICEV businesses... sigh

 

[FrankSG]

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 wouldn't write off options completely based off of that. There are legitimate very low risk use cases for options.

For example, say TSLA reports earnings this month on the 29th, and you'd really like to buy another 100 shares at current prices, but you don't get your paycheck until the 1st of May. Your options are:

1. Wait until the 1st of May to buy 100 shares, but risk a large price movement based on earnings.
2. Buy a call option for the 1st of May. You'll pay a small premium, but you're able to lock in a price close to what SP is now.
3. Sell a somewhat far ITM put option for the 1st of May. You'll get paid a premium, and will be able to buy the stock for slightly less than today's price. However, if the stock rallies so much that it goes above your strike price, you'll only pocket the premium, and you won't get the 100 shares you wanted.

Selling options is indeed very risky, if they're naked. Usually it's a good idea to have money to buy any shares assigned from sold PUTs, and to own shares to sell if any sold CALLs get exercised.

However, buying options can actually be a low risk way to hedge as @KarenRei used to preach. If you're worried about short term downside, rather than sell all your holdings and try to time the market, you could sell a tiny amount and buy a few put options.

Just like buying put options, buying call options risks losing all the money you spend on them, but if you only allocate an amount of your portfolio to it that you're willing to lose, and properly manage risk, it can be a great way to benefit off of bigger price movements than the market is expecting.

 

[EinSV]

This is promising: Governor Newsom has created a Task Force on Business and Jobs Recovery that will be co-chaired by Tom Steyer.

Steyer is a huge proponent of clean energy as a major source of job creation. This has the potential to be a strong positive for Tesla's auto, solar and storage businesses. Residential and commercial solar in particular is very labor intensive and seems like an obvious place to focus to put a bunch of people to work quickly.

The LA Times' interview of Steyer suggests green energy will be a priority for the Task Force, although the details need to be worked out by the Task Force. Clean energy can be a 'huge job creator' as economy recovers, Tom Steyer says

 

[PeterJA]

The subject was China, not the virus. The virus is real despite those weak Republican governors and Trump. That hostility with China is being drummed up as our "Great Satan" is inflated by the administration as a weapon against Biden is self-admitted. That is the rope Trump hopes to hang the Democrats. Designed to appeal to the dope vote.

This is politics, but maybe Tesla-related because of China.

When Biden's campaign learned that Trump planned to link Biden to a demonized China, they hit back with the following ad. The "dope vote" will ignore it, but everyone else may be less willing to rewrite history.

 

[Nocturnal]

Let me preface this by saying that I'm not an expert in macro-economics, but there are three things that make me question this:

1. I've seen the same "disconnect between the stock market and the real economy" narrative all over CNBC last week, on various YouTube channels, and WallStreetBets is also full of if. If it's all over the news and public information, then isn't the risk of another big drop already priced in?

I expect more drops in the broader market myself. I think the market has rebounded on the pandemic itself somewhat stabilizing, but despite this stimulus I don't know how the economy can bounce back. We have entire segments of our economy that are shut down or nearly so. In general I don't believe that "the market" is very smart at all. I'm lucky to have a pretty stable job with a good income, and some decent assets but I've started looking at expenses and cut a little fat the other day. If people like me are questioning spending then that doesn't bode well for the economy. (it's possible I'm just a pessimistic weirdo but I'm betting not)

That said, there are two things that might resolve the disconnect between the market and economy.
1. The people being harmed are broke anyway so they won't be a big drain on the economy. When we recover the "haves" may wind up not suffering at all, and in fact gaining ground. Not trying to interject politics here but there is an increasing divide between the upper and upper middle classes vs everyone else.
Or
2. Money printer going "brrrrrr" is triggering or expected to trigger real inflation. If high inflation is likely then you don't want to be in cash regardless of drops that may happen in the near term.

Those are the two things that have kept me from taking a big gamble in shorting the market. There is also a fair sized risk that we get another rebound of infections as we open up that we have to shut down again.

 

[Artful Dodger]

Tesla Daily Podcast with Rob Mauer | "Tesla's Director of AI Discusses Artificial Intelligence in Pursuit of Full Self-Driving"

 

[MC3OZ]

Let me preface this by saying that I'm not an expert in macro-economics, but there are three things that make me question this:

3.Where else are people supposed to put their money other than stocks? Bonds appear to be not so good atm, cash doesn't seem great either with all the money being printed, so even if things turn out somewhat bad and there's a year or 2 year long recession, perhaps stocks are the least bad place to put one's money right now?

This is what I keep coming back to, if stocks are the least bad place to put your money, and Tesla is one of the better stocks to be in...

Things are unpredictable now, what is valuable is, a safe place to store money that out performs other places...

Cash seems another option.... it will not earn much but will not go backwards, over a longer time horizon I'm backing Tesla to out perform cash... There is plenty of discussion on timing, but perfect timing is difficult, and my impression is, timing is a coin toss...

 

[mblakele]

Apparently the See’s Candies factory in San Mateo county is ramping back up. Might seem OT, but I take this as another positive for Fremont production.

Staying true to our values, Quality Without Compromise | See’s Candies

 

[MTL_HABS1909]

Cash seems another option.... it will not earn much but will not go backwards, over a longer time horizon I'm backing Tesla to out perform cash... There is plenty of discussion on timing, but perfect timing is difficult, and my impression is, timing is a coin toss...

The cash not going backward part is incorrect. Cash loses value over time as even the best savings accounts do not match inflation.