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

[replicant]

I really dislike how the media grabbed his stimulus comment and twisted it. The man is for UBI, that's a far bigger deal to the working class than a wasteful stimulus program would be. But regardless of the validity of his beliefs, his full sentiment should be judged, not a snippet.

Don't expect the left to support UBI without social guarantees. Milton Friedman was a supporter of a kind of UBI for good reasons (e.g let's destroy public services and pay minimum income for strict survival before enjoying uber capitalism without the need for solidarity: "no medical service or soup for you, you should have spent your UBI differently, game over, you're now a slave").

Make no mistake: I've been a vocal supporter of universal basic income for two decades now (I'm close to influential people in the movement too) but we can't ignore that UBI can well be used against the working class . Elon seems to mostly want UBI to avoid a socio-political revolution caused by high level of automation and the resulting unacceptable inequalities in wealth and power (alao to ensure he can pursue his transhumanist hubris without worries).

We, Tesla shareholders, should know that well because many of us expect massive profits from the energy and mobility transition. I don't doubt the new rich will have no choice but to implement UBI so the poor don't force force an (long overdue) wealth redistribution. Or the rich can continue to go full authoritarianism to protect their privileges and pretend it's the poor who demand fascism.

 

[hobbes]

Given this forum's penchant for feline friends, a good omen?

Tesla service members save kitten : aww

Nice to see this video again ! It´s from 2017...
https://twitter.com/elonmusk/status/876160515055038464?lang=en

 

[capster]

The question is what we will end on this week... I guess there will be some MM actions if this continue.

Just a guess and assuredly not advice, but the rules changed with the Q2 ER, imo.

The push down on Friday was for show, to scare off the timid and uninformed. That it could not be maintained through today suggests there really isn’t enough strength on the bear side to extend their dramatic set pieces for any length of time.

While I’m skeptical of a sharp, large spike happening and don’t doubt there will be on-going attempts to exert downward pressure, for shorts the steam roller, meat grinder, widow maker, death march or whatever you want to call it is now beginning in earnest.

 

[UnknownSoldier]

So today was the "snap back" from last week's "blow-off top" when everyone "bought the rumors and sold the news" after earnings. And we're pretty much back where we started, except for these still-dead calls I'm diamond handing. Now what? I wonder where we go from here. This ride never stops!

 

[vikings123]

I have been thinking about the S&P index inclusion - there has been talk that the committee might ask Tesla to emit additional shares so the index funds won´t have a problem buying what they have to. If this is true, I could imagine that Elon would not be thrilled of the idea, because it would also make it easier for the shorts to get out. What do you think about that situation? Is there a chance this might become another Elon vs. Wall Street clash?

I think the estimates were that the index funds would need to buy 25-30 million shares. Even if Tesla agrees to a secondary offering it will only help a little bit. As a shareholder I'm against any kind of dilution to help out S&P. For eg: 5 million shares is about 8 billion USD(at 1600 per share) so all it does is dilute our shares by about 2.5-3%, based on my back of napkin calculations at a 300 billion market cap.

I don't see why as shareholders we should be OK with the dilution. Tesla has become very efficient with their capital and improved cash flow. The S&P committee definitely has a major problem on their hands, that's for sure. The clock starts once Tesla files their 10Q.

 

[JRP3]

I'll take the first CT off the line.

I will fight you for it.

I thank you both for your sacrifices.

 

[EVortex]

If you are wondering about the reason for the morning spike look no further. I present to you GLJ!

"Tax" credits lol, I don't think any of these guys really understand what these credits are about.

I saw the opening picture in the video and wondered which one was the talking head.

 

[ggr]

I would sure love to believe that. Amazon has done that for years. But, then why is FSD getting more expensive at the same time? Are Tesla's costs for FSD development somehow going higher?

Elon has explained this many times. It makes the car an appreciating asset, so he wants a share of the buyer's revenue.

 

[TheTalkingMule]

Can’t a mod get some rest? You all know the political talk has no place here. Take it to the Market Politics thread.

Cut their fingers off. They'll never do it again!

 

[The Martian]

Interesting excerpt from this book:

One example within the book deals with separating noise and signal (meaning) within investing. Let’s say you have a dentist that can invest with a 15% average annual return with 10% annual volatility. For reference, the S&P 500 index has a ~10% average annual return and ~14% average annual volatility. The dentist has good thing going, with the portfolio doubling in value every 5 years on average.

An unexpected factor in his success is the frequency upon which he looks at his portfolio balance. Here’s a chart from the book showing the probability of a positive change in value based on how often the portfolio is checked.

If he were to check his portfolio every minute, he would only see a positive return 50.17% of the time. That is basically indiscernible from a coin flip. The problem is loss aversion.

Being emotional, he feels a pang with every loss, as it shows in red on his screen. He feels some pleasure when the performance is positive, but not in equivalent amount as the pain experienced when the performance is negative.

At the end of every day the dentist will be emotionally drained. A minute-by-minute examination of his performance means that each day (assuming eight hours per day) he will have 241 pleasurable minutes against 239 unpleasurable ones. These amount to 60,688 and 60,271, respectively, per year. Now realize that if the unpleasurable minute is worse in reverse pleasure than the pleasurable minute is in pleasure terms, then the dentist incurs a large deficit when examining his performance at a high frequency.

Again, this doesn’t go away even if you know about the phenomenon:

Regardless of what people claim, a negative pang is not offset by a positive one (some psychologists estimate the negative effect for an average loss to be up to 2.5 the magnitude of a positive one); it will lead to an emotional deficit.

Now, if he were to check that same portfolio only when his monthly statement arrives, he would see a positive return 67% of the time (2 out of 3). Finally, if he has the patience to check only once a year, she would see a positive return 93% of the time. The time scale matters.

Thought i'd share this with TMC......

Could your profile name means Black Swan which is one of the books from the same author? Great books BTW.

 

[ggr]

I noticed that Fact Checking (Truth_Tesla) on Twitter was offline today too. Hey wait...could Dodger be .......?

You never see them together... hmmm...

 

[StealthP3D]

Is there a chance this might become another Elon vs. Wall Street clash?

If it turns into a clash, Wall Street will lose.

 

[M|S|M MYP]

Could your profile name means Black Swan which is one of the books from the same author? Great books BTW.

You are the first person to figure that out...for that...you get sprinkles and a upgrade of Tesla SP to $5903 in the near term

 

[Nocturnal]

If EM continues to be EM Tesla will not issue additional shares. They appear to be able to self fund and I believe EM would be very happy to give WS the middle finger even if it means they keep TSLA out of the SP500 on some obscure new rule. (like they did with SNAP).

Yes. I've argued this with a few people who assume that Tesla will do what the S&P committee asks them to do in order to be included. I pointed out that Elon would be very likely to tell them to piss off if he didn't want to do a raise. SP500 needs Tesla, Tesla doesn't need SP500.

If it turns into a clash, Wall Street will lose.

Of course. Even Wall Street is being disrupted, and for good reason. I get better analysis from people on Youtube than I get from most traditional Wall Street sources.

 

[RobStark]

Absolutely no other car company deals with customers measuring panel gaps or misalignment......not even the higher end brands. Across my family and friends, I had never seen anyone paying attention to details like that when purchasing a regular car.....even when that regular car was a BMW or Lexus(and I've been on BMW and Lexus lots and have seen plenty of cars with gaps/misalignment).

Because this isn't an issue with other brands with the possible exception of the first few months of an all new model.

Hence the common refrain don't buy the first model year of an all new model.

In 2008-2018 the worst legacy car maker for quality has been FCA. And they don't have these issues years after launch.

Reviewers will keep focusing on Tesla quality until Tesla quality is average or better and there is nothing noteworthy to report.

On the other hand the BEV market is in a land grab rush. New loyalties are being built and transferred from ICEv brand loyalties. Tesla SHOULD build Gigafactories as fast as possible and grab as much market share as possible. Given expansion is a fact, try to get quality as good as possible without sacrificing much growth. Once customers have owned a BEV for 7 years getting them to switch to a new BEV brand will be much more difficult.*

* 2010-2017 LEAF owners may be an exception because so many had a bad initial experience with Nissan BEVs.

 

[mejojo]

Elon has explained this many times. It makes the car an appreciating asset, so he wants a share of the buyer's revenue.

FSD is not inherently revenue-generating.

 

[OrthoSurg]

The stock is back on tracks

 

[ZeApelido]

https://twitter.com/elonmusk/status/1287828284852535301

Karen got a reply from Overlord Musk!

Elon got a reply from Overlord Karen!

 

[Curt Renz]

I have been thinking about the S&P index inclusion - there has been talk that the committee might ask Tesla to emit additional shares so the index funds won´t have a problem buying what they have to. If this is true, I could imagine that Elon would not be thrilled of the idea, because it would also make it easier for the shorts to get out. What do you think about that situation? Is there a chance this might become another Elon vs. Wall Street clash?

If Elon believes he can immediately put fresh cash to work productively to speed more rapidly toward Tesla's goals, sure, present a subsequent offering of shares while the price is near a record high. It could push all competition many more laps behind.

We really shouldn't be overly desirous to hurt short sellers, since mainly the stubbornest are left. They may hang on until Tesla starts paying dividends, and the share price is much higher.

Any dilution argument would be falsified by the fact that the pie would be growing, despite each shareholder owning a lesser percentage slice. New money becomes an asset belonging to all shareholders.

In any event, Tesla inclusion in the S&P 500 may be more important to S&P and the index funds than to Tesla. But if fresh funds could be useful to Tesla's mission, and the investment banks are fair to Tesla and are able to sell new shares at a high price, then go ahead and ring the bell now.

 

[Cherry Wine]

Macro news - Senate Republicans unveiled their COVID relief bill a short time ago (overview below). Senate Minority Leader Schumer has already come out against the bill. It faces some serious headwinds, in my opinion.

I expect macros to respond unfavorably to a rancorous, drawn-out negotiation process, which I think is quite possible at this point (the only question being how quickly will Republicans fold on the Democrats' sticking points; I think Democrats hold the leverage here considering they passed a generous relief bill weeks ago and can hammer the GOP on waiting until the last minute to issue a less-generous package of their own). The July unemployment numbers, due on August 7th, could be quite the market-moving event.

McConnell reveals Senate GOP plan deets:
—$1,200 direct payments, CARES redux
—PPP sequel "to help prevent more layoffs"
—Federal UI bonus, hints at $200/week
—Money for schools
—$ for testing, treatment, vaccines
—Liability shield for biz/hospitals/entities