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

[Artful Dodger]

Me confused by mr. market...please explain to me.

MMs were always going to move the SP to the Mid-BB no matter what the results. I bet some don't even read the Letter or follow the CC. They literally do not care. They must feel like they are unrelated to their business practices or decision making. This is just them enforcing their beliefs in the charts on the SP.

 

[FrankSG]

Seems to me that the funds are going to be able to buy in at bottom prices, so the run up we were all hoping for may not materialize.. It'll merely bring us back where we were last weeks..
Bummer..

Edit: which was double of what we had last month, I am not complaining.. but we'll miss the fireworks at the end, looks like it..

Far too early to call. As @generalenthu mentioned, market makers were able to dump millions of shares yesterday after delta hedging requirements were lowered due to profit taking (and I think also lower IVs).

Furthermore, the amount that index funds will have to buy is enormous. Even if benchmarked funds are mostly positioned already (but they could not be), those 26M shares that will have to be bought by index funds is no small numbers.

And last but not least, don't forget we're talking about TSLA here. Once buying starts, and SP starts to run up, not only will delta hedging mechanisms add fuel to the fire, so will shorts covering, traders, retail FOMO, etc.

I'm not saying there will 100% be a crazy run up next week nor later when S&P inclusion happens, but it's also far too early to say this will not happen. All the things that we've theorized could cause a crazy squeeze are still there. 1-2 red days post ER changes nothing about that. After Q4'19 ER, stock price got pinned to $650 too on Thu and Fri, to be followed by 2 of the craziest days of trading I've ever seen on Feb 4th and Feb 5th.

 

[Green Pete]

MMs were always going to move the SP to the Mid-BB no matter what the results. I bet some don't even read the Letter or follow the CC. They literally do not care. They must feel like they are unrelated to their business practices or decision making. This is just them enforcing their beliefs in the charts on the SP.

You seem to generally be right about these things. I'm curious how confident you are that this isn't actually a reaction to the prospect of a second shutdown/unprecidented bad relations with china.

 

[Runarbt]

MMs were always going to move the SP to the Mid-BB no matter what the results. I bet some don't even read the Letter or follow the CC. They literally do not care. They must feel like they are unrelated to their business practices or decision making. This is just them enforcing their beliefs in the charts on the SP.

Will they, when maximum pain is around 1495 ?

 

[avoigt]

Far too early to call. As @generalenthu mentioned, market makers were able to dump millions of shares yesterday after delta hedging requirements were lowered due to profit taking (and I think also lower IVs).

Furthermore, the amount that index funds will have to buy is enormous. Even if benchmarked funds are mostly positioned already (but they could not be), those 26M shares that will have to be bought by index funds is no small numbers.

And last but not least, don't forget we're talking about TSLA here. Once buying starts, and SP starts to run up, not only will delta hedging mechanisms add fuel to the fire, so will shorts covering, traders, retail FOMO, etc.

I'm not saying there will 100% be a crazy run up next week nor later when S&P inclusion happens, but it's also far too early to say this will not happen. All the things that we've theorized could cause a crazy squeeze are still there. 1-2 red days post ER changes nothing about that. After Q4'19 ER, stock price got pinned to $650 too on Thu and Fri, to be followed by 2 of the craziest days of trading I've ever seen on Feb 4th and Feb 5th.

Often not mentioned but incredibly important is that all share funds need to buy are gone off the market for the long run (like mine ). Regardless of what the actual buying will do to the SP in the next weeks the more important factor is that the available stock count to trade will be reduced in the future dramatically. With fewer shares available to trade, the fundamentals are changing.

 

[H Mak]

Whether or not an index tracker can buy shares in anticipation of inclusion is up to the individual fund, based on its own constitution. Here is an extract from the Charles Schwab S&P500 Index Fund prospectus:

"The fund may sell securities that are represented in the index in anticipation of their removal from the index, or buy securities that are not yet represented in the index in anticipation of their addition to the index."

 

[Sudre]

Yesterdays volume that we were not allowed to see until close....
Above is zoomed in on yesterdays volume. The Calls with the 1540 and 1560 strikes were my hope that things might look up today. We also a lot of Puts trading around at 1550. This morning however after looking at the recalculated open interest those Calls and Puts are not there. They were just bots making money off the volatility. There are no significant Calls basically until 1600. No significant Puts until 1500. Everything between 1500 and 1600 has pretty much been cleaned out.

Open Interest today with the max pain remaining at 1495 shown below. I was hoping for a rise in max pain. We did not get one. Realistically there is nothing between 1500 and 1700 since there are puts sold at 1600 too. This has been positioned so the close today can be almost anywhere.

Someone is holding onto calls at the 1415 strike range altho not many. It will be interesting to see if the THEY go after those today by pushing the SP down to the point the owner takes what profits they can by selling (closing) them before they go to zero. With any luck we should remain above the Puts with the $1600 strike for the end today but I and not going to hold out for that.... literally.

I am really wondering now if the large number of shares hanging around that can be shorted are going to be used in the coming days to push the price down to prepare for S&P inclusion. Sure that can cause the price to spike back up but at least it will be spiking up from $1000 instead of $1800. This is going to make for an interesting next week.

Next weeks max pain is already at 1510.

Remember. Please remain seated until the ride comes to a complete stop and enjoy your day at volatility city.

 

[RobStark]

SEC Chair Clayton says he's worried about short-term trading in stocks like Tesla

Clayton said the SEC has issued guidance to brokers and investment advisors on how to give individuals proper warning about the risks they face when allocating capital in select stocks.

 

[Sudre]

What do they tell the people in the first fund?.

While I actually agree with you, they tell the owners of whatever fund the same thing ARC tells owners of the fund when they sell, "We are rebalancing." Investors always except that excuse.

 

[Dangerous Fish]

It wasn't that long ago I was buying TSLA at $500 and thinking "there's no way I'll be buying once it goes above $1000".
Then about 2 months later I bought some more at $1000 and shortly afterwards thought "have I made a mistake here"?
Yesterday I bought some more at $1595. That thought hasn't entered my head this time.

With an open mind, anything's possible

 

[Buckminster]

"Tesla's growth is about renewable energy components, not electric cars: Chamath Palihapitiya"

Chamath is being a little bit reductive to get his point across. TE won't be providing the main source of growth for many years. MY, CT, Semi and M2 are all huge.

 

[Christine69420]

Open Interest today with the max pain remaining at 1495 shown below. I was hoping for a rise in max pain. We did not get one. Realistically there is nothing between 1500 and 1700 since there are puts sold at 1600 too. This has been positioned so the close today can be almost anywhere.
View attachment 568326

Max Pain is now $1500 at Stock Option Max Pain

Thank you for very helpful posts about what goes on with this!

 

[Green Pete]

Down 5.6% now in premarket

 

[Yoona]

With current 1465$ we are actually bellow last Friday, and that’s after q2

The daily/hourly SP move is actually meaningless if you are long, and the most important $ figure for me is at retirement time when i cash out. That's one key takeaway I learned in this forum.

 

[CorneliusXX]

Chamath is being a little bit reductive to get his point across. TE won't be providing the main source of growth for many years. MY, CT, Semi and M2 are all huge.

I think he is talking about justifying the next 10x growth to a market cap of $3T+. At $300B a decent chunk of boring old vehicle sales growth is already priced in and if selling vehicles was all that Tesla did then we may not continue to get to 10x growth Chamath is likely looking for. If Tesla didn't expand into energy in a big way or solve autopilot then it would be much harder to justify a future $T+ market cap.

 

[HG Wells]

I believe we are about to see a general market correction.
Whether it will be 5% or 10% is the question.

 

[aznt1217]

I think he is talking about justifying the next 10x growth to a market cap of $3T+. At $300B a decent chunk of boring old vehicle sales growth is already priced in and if selling vehicles was all that Tesla did then we may not continue to get to 10x growth Chamath is likely looking for. If Tesla didn't expand into energy in a big way or solve autopilot then it would be much harder to justify a future $T+ market cap.

Bingo

 

[Artful Dodger]

The linear trend in the Mid-BB may see it near 1,390 at the Open today.

TSLA Pre-Market Low:

• $1,415.98 (07:44:27 AM)
• $1,407.45 (07:48:14 AM)

 

[CorneliusXX]

SEC Chair Clayton says he's worried about short-term trading in stocks like Tesla

Clayton said the SEC has issued guidance to brokers and investment advisors on how to give individuals proper warning about the risks they face when allocating capital in select stocks.

“Here at the SEC, when we think about that investor, we think about someone who’s investing for the long term: investing over time, doing it on a monthly basis,”

lol

 

[Unpilot]

lol

Yeah about as believable as a moody rating.
Snakes and thieves the whole lot.