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

[dakh]

Yep, I do work a day job and I"m aware of the safe harbor rule. I don't pay a state income tax in WA which is nice. I would like ideally pay nothing as my AGI last year was under $150,000 which is one of the few stipulations of safe harbor besides working your day job and having your income withheld every paycheck.

However, I would like to ask a tax advisor to be certain. Does anyone here have any recommendations for tax advice?

Not a tax pro and didn't even stay at the right hotel, but my understanding is we need to pay 110% of last year's taxes and then we're good. I'm adjusting my W4 now for extra withdrawals. Basically (taxes from last year) * 1.1 / 8 where 8 is the number of pay periods remaining.

 

[engle]

My retirement is up a Model Y just today. And to think I was 2X invested in TSLA about 2 yrs ago, now kicking all sales since. But I also made out on a couple of options recently (still have one at $500 in '22, lol). And here I am debating if I should sell this last one today and just buy shares instead with the money.

My retirement is up more than a Roadster today if the $1,432.26 aftermarket close holds up tomorrow... It is so tempting to pull the trigger on a reservation and forgo the CT since I don't really need all its extra features. However, why tie-up $50K when it can remain invested in TSLA over the next ~2 years until Roadsters are for sale?

I wonder if some hedge funds were large buyers today trying to get in front of the S&P 500 inclusion that will force all those index funds to buy at whatever price somebody will sell it to them?

S&P 500 Future TSLA Addition Analysis

There are actually 505 tickers in the S&P 500 right now.

My rough calculation is that if/when TSLA reaches $1,627 its market cap will exceed PG which is currently ranked #10 in the S&P 500 by market cap. When TSLA is added to S&P 500 it will also get added to the "S&P 500 Top 50" at the next annual reconstitution after the close of the third Friday in June 2021, using a reference date of the last business day of May 2021.

However, S&P 500 rules state that "Weighting. Each index is weighted by float-adjusted market capitalization."

TSLA: Shares Outstanding = 185.48M; Float = 147.62M; % Held by Insiders = 20.51%; % Held by Institutions = 57.93%.
Float-adjusted market capitalization = 147,620,000 x $1,371.58 = $202,472,000,000 ($202B). ("Float-adjusted" removes the shares held by insiders like Elon that are presumably mostly not for sale.)

According to S&P, Mean S&P 500 Float-adjusted Market Cap Weighted today is $53,391.96M x 505 Constituents = $26,962.94B. TSLA would be 0.75% of this, which is its float-adjusted market cap as of 7/6/20 close.

S&P also states there is over USD 4.6 trillion indexed to the S&P 500. $4,600B x 0.75% = $34.5B worth of TSLA stock the indexers will be forced to buy. At today's close, that represents 25,153,472 shares or 17% of the "float". Will that be enough to cause an extreme spike up in the price when TSLA is added? By contrast, today's volume was 20.5M and the average is 14.2M.

Perhaps there will be a huge spike if one can assume that volume will be 14M average plus an extra 25M spread over 5 trading days for ~19M total shares per day. If that drove the price up 10%/day (today it was +13.48%) it would total +61% in a week which is just insane (to $2,208 if TSLA were added today and it happened this week). Of course, I think baring an even worse "Black Swan" event, TSLA will be trading significantly higher when added to the S&P 500. That said, I am always VERY suspicious of a crazy run-up like what we enjoyed today. The market tends to over-react when panic selling AND buying. Remember February 4 followed by the 5th? I think the momentum algorithms all were triggered on the way up today. We shall see what they do tomorrow...

Still, I will go out on a limb and predict that TSLA will exceed $2,000/share within a week of being added to the S&P 500 on 9/28/2020. Remember it will be shortly after "Tesla Battery Day" on Tuesday, 9/15/2020. That scheduling on the part of Elon is pure genius since it will drive up the price the week before the S&P 500 indices will HAVE to buy shares. Do I get to revise my prediction upwards to $2,500?

Everyone, please stay safe so we will all be around to see what happens!

PS. The most recent quarterly rebalancing of S&P 500 was announced on the 4th Monday of June (22). Tyler Tech, Bio-Rad Labs, and Teledyne Technologies replaced Harley-Davidson, Nordstrom (duh), and Alliance Data Systems. I expect TSLA will be added on September 28, 2020.

"Announcements

Announcements of additions and deletions for the S&P 500, S&P MidCap 400, and S&P SmallCap 600 are made at 05:15 PM Eastern Time. Press releases are posted on our Web site, www.spdji.com, and are released to major news services."​

ref: https://www.spglobal.com/spdji/en/d...odology-sp-us-indices.pdf?force_download=true

 

[M|S|M MYP]

My retirement is up more than a Roadster today if the $1,432.26 aftermarket close holds up tomorrow... It is so tempting to pull the trigger on a reservation and forgo the CT since I don't really need all its extra features. However, why tie-up $50K when it can remain invested in TSLA over the next ~2 years until Roadsters are for sale?

I wonder if some hedge funds were large buyers today trying to get in front of the S&P 500 inclusion that will force all those index funds to buy at whatever price somebody will sell it to them?

S&P 500 Future TSLA Addition Analysis

There are actually 505 tickers in the S&P 500 right now.

My rough calculation is that if/when TSLA reaches $1,627 its market cap will exceed PG which is currently ranked #10 in the S&P 500 by market cap. When TSLA is added to S&P 500 it will also get added to the "S&P 500 Top 50" at the next annual reconstitution after the close of the third Friday in June 2021, using a reference date of the last business day of May 2021.

However, S&P 500 rules state that "Weighting. Each index is weighted by float-adjusted market capitalization."

TSLA: Shares Outstanding = 185.48M; Float = 147.62M; % Held by Insiders = 20.51%; % Held by Institutions = 57.93%.
Float-adjusted market capitalization = 147,620,000 x $1,371.58 = $202,472,000,000 ($202B). ("Float-adjusted" removes the shares held by insiders like Elon that are presumably mostly not for sale.)

According to S&P, Mean S&P 500 Float-adjusted Market Cap Weighted today is $53,391.96M x 505 Constituents = $26,962.94B. TSLA would be 0.75% of this, which is its float-adjusted market cap as of 7/6/20 close. S&P also states there is over USD 4.6 trillion indexed to the S&P 500. $4,600B x 0.75% = $34.5B worth of TSLA stock the indexers will be forced to buy. At today's close, that represents 25,153,472 shares or 17% of the "float". Will that be enough to cause an extreme spike up in the price when TSLA is added? By contrast, today's volume was 20.5M and the average is 14.2M. Perhaps there will be a huge spike if one can assume that volume will be 14M average plus an extra 25M spread over 5 trading days for ~19M total shares per day. If that drove the price up 10%/day (today it was +13.48%) it would total +61% in a week which is just insane (to $2,208 if TSLA were added today and it happened this week). Of course, I think baring an even worse "Black Swan" event, TSLA will be trading significantly higher when added to the S&P 500. That said, I am always VERY suspicious of a crazy run-up like what we enjoyed today. The market tends to over-react when panic selling AND buying. Remember February 4 followed by the 5th? I think the momentum algorithms all were triggered on the way up today. We shall see what they do tomorrow... Still, I will go out on a limb and predict that TSLA will exceed $2,000/share within a week of being added to the S&P 500 on 9/28/2020. Remember it will be shortly after "Tesla Battery Day" on Tuesday, 9/15/2020. That scheduling on the part of Elon is pure genius since it will drive up the price the week before the S&P 500 indices will HAVE to buy shares. Do I get to revise my prediction upwards to $2,500?

Everyone please stay safe so we will all be around to see what happens!

The most recent quarterly rebalancing of S&P 500 was announced on the 4th Monday of June (22). Tyler Tech, Bio-Rad Labs, and Teledyne Technologies replaced Harley-Davidson, Nordstrom (duh), and Alliance Data Systems. I expect TSLA will be added on September 28, 2020.

"Announcements

Announcements of additions and deletions for the S&P 500, S&P MidCap 400, and S&P SmallCap 600 are made at 05:15 PM Eastern Time. Press releases are posted on our Web site, www.spdji.com, and are released to major news services."​

ref: https://www.spglobal.com/spdji/en/d...odology-sp-us-indices.pdf?force_download=true

Not that it matters...but your signature says P83

 

[FrankSG]

The Shanghai composite launches to a strong start again. Not blowing the doors off like yesterday (yet) but I'll take it.

Nikkei is down 0.56% though.

 

[wipster]

Hey, has it been announced when the 2nd qtr financial presentation will be? Checked the IR site but nothing was posted.

Want to make sure I can take time out of my busy schedule of watching and posting on this and the Klipsch forum to listen in.

 

[generalenthu]

I’m fascinated by “Tesla Facts” theory about contracting float, a positive feedback loop that could cause a Chernobyl Spike (my term, not his) in SP. It sounds like that could happen so fast that there’s no way to react except for a sell limit.

Is anybody thinking about that? Grabbing a spike that may not be surpassed for years?

Yeah, I know - HODL. But at SOME point in the next few years or so I would like to start realizing some non-paper returns. Is there some kind of sell-ladder strategy that maximizes return and minimizes regret?

I have been thinking about this. I have a job that I don't intend to leave for the foreseeable future, though I think I can fund a retirement at current levels with some semi competent portfolio management. Being still under 40 (barely) and with 2 young ones whose college I'd like to fund, I want a bit more cushion. Like 40-50x annual expenses which is not that far. In any case, on to the strategy, which is still a few years away.

Once the stock appreciates to more appropriate levels, which is always a moving target (for now it's when Elon gets all the shares on his comp plan) and when it becomes somewhat boring stock, I plan to sell some otm calls as a way to generate income and of course pay taxes. I am sure a few times it might so happen that I need to buy back the options at a loss. The plan is to realize the loss and end of year if there is a net realized loss, sell some stock and take the cash.

You can tune the option sales to be more or less aggressive depending on how much income you want to generate vs letting go of your forever shares to diversify or otherwise.

This is all too far away in any case and all I have is a rough sketch.

 

[Sudre]

Those with money in IRAs or other retirement accounts, and don't want wait to age 60 to use the money, or pay penalties on the money, check out SEPP / Rule 72t distributions:
Rule 72(t)

Simplistically - it lets you setup something like an annuity distribution from the 401k / IRA. Doesn't help much for a big purchase, though it could help by making the monthly loan payments.

Great for getting annual living money from those retirement accounts before 60.


Not advice of course - do your own research. The one concrete thing I'd add is I personally won't try doing the paperwork and setting this up on my own. I'll get a financial / wealth advisor involved, with experience on these, to get it setup.

I have two IRAs for this because you must take the total and divvy it out over the selected years evenly. Rather than have one massive IRA that I will have to divvy up I have two. One IRA is for early retirement to be divvied up and the other is for the real retirement.... not advice here because I haven't looked at it real serious yet but might have too soon if TSLA keeps screaming it's way up the ladder.

 

[Bet TSLA]

A fairly positive piece from Forbes "senior contributor" Enrique Dans:
Tesla's Success Is Good News For Everyone

Tons of links. To all intents and purposes, Tesla is now the most valuable car company in the world, mainly thanks to the fact that it looks very little like its competitors and behaves much more like a technology company.

 

[engle]

Not that it matters...but your signature says P83

"P83" was the $5K reservation sequence number for my 2016 Model X P90D that I made on 2/10/2012 and picked-up on 3/22/2016. Had I instead bought an extra $5K worth of TSLA at $31.10 that day (160 shares) I could have sold them for 160 x $234.24 = $37,478 for a $32,478 gain (before taxes) which would have paid for 16 months of my lease!

That's why I don't make $#,### long-term "deposits" for Tesla vehicles anymore!

 

[Knightshade]

Still, I will go out on a limb and predict that TSLA will exceed $2,000/share within a week of being added to the S&P 500 on 9/28/2020. Remember it will be shortly after "Tesla Battery Day" on Tuesday, 9/15/2020. ....



....PS. The most recent quarterly rebalancing of S&P 500 was announced on the 4th Monday of June (22). Tyler Tech, Bio-Rad Labs, and Teledyne Technologies replaced Harley-Davidson, Nordstrom (duh), and Alliance Data Systems. I expect TSLA will be added on September 28, 2020.

AFAIK they can and do make changes outside of the 4 quarterly meetings too- and fairly often.

This list hasn't been updated in a few years but it shows quite a few add/removes outside those 4 meetings as an example

S&P 500 Changes In Companies, Securities, and Stocks


Here's a more recent list:
List of S&P 500 companies - Wikipedia

Shows companies added/removed in March, April, May, and June of this year for example...and every single month from June through December of 2019 as another example.

 

[mongo]

The most recent quarterly rebalancing of S&P 500 was announced on the 4th Monday of June (22). Tyler Tech, Bio-Rad Labs, and Teledyne Technologies replaced Harley-Davidson, Nordstrom (duh), and Alliance Data Systems. I expect TSLA will be added on September 28, 2020.

Additions do not need to be aligned with rebalancing. Case in point: TWTR joined June 7th.

S&P 1500 Composite Indices. Changes to index composition are made on an as-needed basis. There is no scheduled reconstitution. Rather, changes in response to corporate actions and market developments can be made at any time. Index additions and deletions are announced with at least three business days advance notice. Less than three business days’ notice may be given at the discretion of the Index Committee.

Unless the stock was not in the total index to begin with, then it would be added on the quarterly event and become eligible.

Edit: ninjaed by @Knightshade

 

[engle]

Thanks for correcting my post.

If the S&P Index Committee decides to add TSLA right after Q2 earnings instead of waiting until 9/2020 I wonder if that will be good or bad for us individual investors in terms of price impact?

AFAIK they can and do make changes outside of the 4 quarterly meetings too- and fairly often.

This list hasn't been updated in a few years but it shows quite a few add/removes outside those 4 meetings as an example

S&P 500 Changes In Companies, Securities, and Stocks


Here's a more recent list:
List of S&P 500 companies - Wikipedia

Shows companies added/removed in March, April, May, and June of this year for example...and every single month from June through December of 2019 as another example.


So no reason at all they can't decide to add Tesla almost immediately after Q2 earnings show a profit- no need for them to wait over 2 more months.

 

[MP3Mike]

If I am doing my math correct if the stock price were to hold at the current closing price Elon would vest the second tranche of his incentive plan on 7/16(9 days), and the third tranche on 8/19(43 days). (The three necessary operational targets have already been hit, so it is just the 6-month average holding him back.)

Is that anywhere near close to correct?

@The Accountant How much will that impact the Q2 financials? (In terms of how much they have to recognize for his pending incentive?) Is that going to be enough to screw the profit and S&P 500 inclusion for Q2?

 

[Knightshade]

Thanks for correcting my post.

If the S&P Index Committee decides to add TSLA right after Q2 earnings instead of waiting until 9/2020 I wonder if that will be good or bad for us individual investors in terms or price impact?

I think depends a bit what you're looking for.

One way to consider:

There's a run now on stock covering short positions, and in anticipation of positive earnings new later this month.

Then maybe an August inclusion for S&P drives further run-up

Then maybe September brings a run up toward battery day

(and maybe another bump from announcing a site for the new CT factory in there someplace too)

Then we're into October where we get Q3 deliveries early in the month and earning late in the month to maybe help out?

That seems pretty solid holding up a stock some are worrying is overbought at current for a while.


But it probably doesn't generate quite as much of a HUGE SPIKE as smushing some of that nearer together does that folks who want to sell on a spike then rebuy when it comes back to earth (if it does) might like.


I imagine folks way smarter than me on this stuff will have smarter things to say on one versus the other though.

 

[Bet TSLA]

Thanks for correcting my post.

If the S&P Index Committee decides to add TSLA right after Q2 earnings instead of waiting until 9/2020 I wonder if that will be good or bad for us individual investors in terms or price impact?

As an old chess playing friend of mine used to tell me, "The threat is stronger than the execution." I imagine that's exactly right in this situation, but I think it can't happen soon enough.

 

[engle]

Tesla Short Shorts are Back in Stock in the US!

When I noticed this all sizes were still available. I tried to order a small for my wife. By the time I got it into the cart with credit card payment, S and M (S&M anyone?) were sold out again, so I settled for an "X-S" as a collector's item! At least that is what I shall tell my wife!

$TSLAQ will spin this as "Unexpected Short Short availability due to Tesla experiencing thousands of order cancellations due to numerous reports of poor workmanship, dye defects, and unsatisfied customers. There is also the threat of impending undergarment launches by German incumbents with superior designs including a black leather short shorts and whip set from BMW M GmbH that will take market share away from TSLA."

 

[CaliBear1]

It is amazing how many friends and acquaintances who knew I was heavily invested in TSLA and a staunch proselytizer for the mission in the face of widespread FUD have come out of the woodwork asking if I'm still holding TSLA. For years most of them either mocked the company, its mission or what they viewed as my foolhardy investment. Now, the envy and astonishment in their voices is so satisfying, though I refuse to gloat. That will manifest itself in the non-verbal communication of a new Roadster and vacation home in Marin for use when the rainy season strikes Phuket, Thailand.

Thanks again to all of those here at TMC who have helped me and so many others HODL in the face of extreme FUD and volatility through the use of logic, facts, common sense, expertise and unflagging humor. And of course thanks to the Tesla team and the greatest industrialist of the 21st Century.

Everyone who's been around this forum should know what's happening.

I'm just sitting back, thinking "Finally. Told ya!" (I'm imagining saying that to all the naysayers in my personal life that doubted TSLA).

 

[dakh]

Fidelity won't let me set a sell order at $4,269. Says it's too far out from current close. WTF? Is that something I can call and have changed?

I called with the same question a couple years ago, they said no absolutely not.

 

[Artful Dodger]

Are you coming out with a "Greatest Hits" in the next year or two Lodger?

Lol, already done'n'dusted, bruv: (for the past 5 yrs at least)

#176698​

Cheers!

 

[Causalien]

Tesla Short Shorts are Back in Stock in the US!

When I noticed this all sizes were still available. I tried to order a small for my wife. By the time I got it into the cart with credit card payment, S and M (S&M anyone?) were sold out again, so I settled for an "X-S" as a collector's item! At least that is what I shall tell my wife!

View attachment 561426

$TSLAQ will spin this as "Unexpected Short Short availability due to Tesla experiencing thousands of order cancellations due to numerous reports of poor workmanship, dye defects, and unsatisfied customers. There is also the threat of impending undergarment launches by German incumbents with superior designs including a black leather short shorts and whip set from BMW M GmbH that will take market share away from TSLA."

Weird, I can't change the shipping country from US to Canada.