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

[StealthP3D]

I lightened up to the tune of 1/3 of my holdings this morning (covered some 8/21 short puts). Not because I don't think it's going up more, but because I've reached all my reasonable goals so having everything at risk seems just plain stupid.

Not ensuring your retirement due to greed seems like a bad idea. We're in a volatile time and the truth is that the market could quite possibly crash at any time. Seems obvious what to do.

That's (mostly) true.

On the other hand, most people vastly under-estimate the amount they will need to retire in the fashion they are envisioning. Everyone's situation is different so there are no cookie cutter formulas that actually work. The better your fiscal discipline, the less you need but, even then, it's nice to have a generous cushion because no one knows how much the dollar will be worth in a few years time or what kind of unexpected challenges might present.

Also, greed is just as likely to cause someone to sell too early as it is to cause someone to hold too long. With a company growing and innovating as quickly as Tesla what does it mean to "hold too long"? I can see this perspective if you thought the company had a decent chance of crashing and burning (or going stagnant) but I really don't see that happening. Nobody can time the market with any regularity so I don't think anything is obvious here.

I'm a huge believer in picking individual stocks for superior returns but a huge skeptic of timing the market for superior returns. The data I've seen over the years supports this view.

 

[RobStark]

GM Shares Soar on Electric-Vehicle Spin-Off Speculation

This to me is just financial engineering. What is there to spin off? They don't even make most of the key components for the Bolt.

The truth is if GM had fully dedicated to an electrification plan when the Model S first came out they would be realizing the benefits now. They sat on their hands for too long.

They could do this after the first Hummer EV is delivered to a customer next year.

They can spin off at least one fully dedicated BEV factory in the US and another in China, 1 30 GWh battery cell factory in Ohio (they own 50%, LG Chem the other 50%) plus the intellectual property for Ultium and the 12 BEVs coming. And all the engineers and managers affiliated with the new Ultium BEV program.

They can give the new company Pontiac,Saturn, and Hummer brands without any legacy franchise dealer obligations. Without UAW pension/healthcare liabilities for GM retirees. They would only be responsible for the current and future employees.This would be a massive help. This would not be about the past LG Bolt program but the future.

Ultium Motors would be worth ~$100B and GM ~$10B. Distribute Ultium shares to current GM shareholders. You just created an additional $70B in shareholder value.

 

[StealthP3D]

Today I just had to remind the elderly relative that had they listened to me their investment would now be worth around $1.6MM

Yeah, I know. But I recommend not bringing that up (at all). People don't like to feel foolish and it can only generate bad feelings between the two of you. Some people can handle it, most can't.

 

[bigsmooth125]

OK. Don't want to hijack this thread but with all the talk of retirements, what's your retirement number?

 

[MTL_HABS1909]

The only way I could by more shares here would be to sell my existing shares here. The problem of being all in.

I am also currently all in. But that’s why I work. To get more money to invest in TSLA

 

[printf42]

What’s the more devastating thought to you? Selling and watching the stock run, or holding and watching it go down?

The right question is which is more devastating:

1. Sell and never find a good enough price to get back in.
2. Hold and see it go down then took almost a year to recover.
3. Tesla files bankruptcy.

Bonus question:

1. What is the probability for above scenarios.

Not advice

 

[Singuy]

OK. Don't want to hijack this thread but with all the talk of retirements, what's your retirement number?

3 million with paid off house, we scale down to 32hrs <--we are here
5 million with paid off house, we scale down to 24hrs
10 million, we fully retire

I actually like my job and my wife makes pretty good money with hers so it's kind of hard to let it go. Plus what are we suppose to do all day when the kids are in school? They are not even in kindergarten.

 

[StealthP3D]

I plan on retiring next year and I do worry about a market collapse.

Market collapses are over-rated - I've been through a bunch of them. Modern markets have far less vulnerability today than they did during the great depression. We are in the midst of a multi-decadal bull market. Yes, there will be sharp and scary seeming crashes along the way but these events happen at a much accelerated pace due to a number of factors including rapid and broad flow of information, faster innovation, modern economic theory, etc. etc. There will even be bona-fide bear markets that might last a year or more. But companies like Tesla will re-group and continue to innovate and grow to serve future needs. The share price will follow.

Never invest money you need to spend in the next 2-3 years and these collapses all of a sudden seem tame and nearly harmless. I've been retired over 20 years and always keep a healthy cash buffer. These crashes don't bother me. The worst investment decision I ever made was to not invest for the better part of a decade after I sold everything in 2000 shortly after I retired at age 37. That cost me more in lost potential profit than any investment that EVER went bad on me.

Live and learn (or learn from those who did it less than optimally). Don't take my word for it - look at the data. Time in the market beats trying to time the market. Greedy people who sell early have left trillions on the table (myself included). That said, I also don't believe in being 100% invested in anything unless you have the highest conviction that the near-term upside is huge. This is probably not one of those times (with any public stock I am aware of).

 

[StealthP3D]

I actually like my job and my wife makes pretty good money with hers so it's kind of hard to let it go. Plus what are we suppose to do all day when the kids are in school? They are not even in kindergarten.

This might be instructive:

 

[Xepa777]

OK. Don't want to hijack this thread but with all the talk of retirements, what's your retirement number?

I could retire right now honestly in the Philippines. Gorgeous views, cheap beachside property, daily fresh seafood, amazing adventure activities. And that's what takes the pressure off me, knowing that financial independence is a relative term. For many people around the world, even having $100k USD can mean you live like a damn KING. Get all the attention of everyone locally and be a celebrity with life stories of America to share. And they speak english well in the Philippines but this also applies to many countries like India, SE Asia, Latin America, etc.

For the US? I could honestly do it on $1 million with a family and a modest retirement job. Most people could. It's amazing how little so many people live with in America paycheck by paycheck.

Retirement is a mindset. You can choose to be "financially free" anytime you want, and that's a pretty powerful mentality to have in the back of your mind to relieve yourself of stress. You just need your inbound cash to even or exceed your outbound cashflow.

At $2.5 million I could pay for childrens' college, go on vacations whenever I want, live in a decent house (not in a major city), and live stress free. That's the goal.

Of course, my target is $10 million+ and I have an active plan for that. Then again, my equivalent plan is to live until I'm 100, so want to make sure the $10 million plan doesn't come at the expense of the 100 year old plan.

It's all just an optimization equation.

 

[Rexjamo]

Hey all, here's another drag race video, this time with a difference.

It's filmed by the Australian Broadcasting Corporation, the government owned media organisation in Australia. Absolutely no Murdoch influence. The host is a well known Australian TV host, comedian/satirist turned semi serious reporter. His focus is now on environmental activism through the mainstream media. One of the good guys. I think you'll be able to tell that through the video.

Here he tests the Model S against the most powerful production vehicle built in Australia, a variant of the V8 Commodore. General Motors Holden was the manufacturer, before they shut down operations in Australia recently. V8 Commodore's have a cult following and they're about the most common 'performance' car you'll see in Australia.

The video does a great job at showing the ICE car fans making fun of the Tesla before the race, and quickly changing their opinion after seeing what it's capable of. Just another reason to be bullish!

How Fast Is An Electric Car? | Fight For Planet A

 

[vikings123]

I actually don't need any of it NOW. I can sell covered calls using just half my shares with 3500 SP for Jan 2022 and have more money per month than I'm earning now. BUT, if the stock tanks between now and Jan 2022, then I can't sell them again for the following year, and the stock won't be worth enough to sell at that point. That is why I feel the need to lock in gains and put some money in real estate so I have reliable income for the rest of my life (selling 1/3 of my shares now puts me in that position). I'm literally all in on TSLA right now and have been for years. So while I'm obviously pretty confident that TSLA will rise over time, I'm having trouble with the thought of retiring while owing only one stock that could go down for one reason or another and leave me with no source of income.

P.S. - The other strategy is to sell those covered calls, and not sell any shares. I can actually make the money last three years. It would just be really hard to watch the SP tank for an extended period of time, with no job, and hope that it rebounds in 3 years to sell calls again. I think most of us would agree that the probability of the SP being no lower than it is today in three years is over 95% (maybe 99%). But remember, I have magical powers - What ever I say or do brings about the opposite move of what I'm expecting in the SP....

Do whatever makes you sleep better at night.

Yep I’m more interested in your magical powers which have been proved a few times already. Just post here when you sell and I will go all in.

 

[Singuy]

This might be instructive:

You know we Asians just do it once to have a kid right? And if the kid doesn't become a doctor, then maybe we go for a second round.

 

[Cherry Wine]

Do whatever makes you sleep better at night.

Yep I’m more interested in your magical powers which have been proved a few times already. Just post here when you sell and I will go all in.

And let us know if you hold...

 

[UnknownSoldier]

You know we Asians just do it once to have a kid right? And if the kid doesn't become a doctor, then maybe we go for a second round.

Doctor, Engineer, and Lawyer are the valid Asian careers. Ask me how I know.

 

[M|S|M MYP]

3 million with paid off house, we scale down to 32hrs <--we are here
5 million with paid off house, we scale down to 24hrs
10 million, we fully retire

I actually like my job and my wife makes pretty good money with hers so it's kind of hard to let it go. Plus what are we suppose to do all day when the kids are in school? They are not even in kindergarten.

Enjoy them?? In all honesty.....mine are 10 and 8 and I have been fortunate to be able to be remote for the last 2 years to see them grow daily. I would have loved it even more if I was remote while they were babies.

 

[StealthP3D]

Ultium Motors would be worth ~$100B and GM ~$10B. Distribute Ultium shares to current GM shareholders. You just created an additional $70B in shareholder value.

That assumes Ultium could successfully compete against the likes of Tesla. They would have to become more adept at innovating at manufacturing. More problematic, they would need to be able to secure (or manufacture) batteries in sufficient volumes to allow the kind of volume manufacture of vehicles that compete head to head with Tesla and/or with gas cars/trucks.

The only way I see this working is if they concede Tesla's market to Tesla and somehow make a business out of it by gutting ICE sales. And that's ignoring the battery supply problem. Then there is the legal question of whether GM could create an entity that could ignore the dealership covenants. There would be lawsuits. If they use the existing dealerships then they have most of the same problems GM has now with going electric.

The only real advantage I can see over the current status quo with GM is they could raise money easier and change corporate culture easier. But this path would be certain and eventual death for the remaining GM so I'm not sure why that portion would be valued more than zero (remember, they have big debt). Essentially, this amounts to a massive restructuring and raising of new capital while simultaneously writing off bad debt and writing their most valuable assets (engine and transmission manufacture and design) down to zero.

Dreaming of how wonderful things could be is nice but in the process of making all this happen it's not a good idea to pretend the business case will just work itself out. Just like the current situation, it all has to work from a dollars and cents perspective.

 

[CaliBear1]

Possibly?!

As a golfer, I appreciate your intergalactic optimism!

Can you imagine:

"I've seen things you people wouldn't believe. A par 5 with a carry over a river of fire off the shoulder of Orion. I watched c-beams glitter as my 9-iron found the dark at the 140-yard par 3 12th at the Tannhäuser Country Club. All those moments will be lost in time, like tears in rain. Time to die."

Has anyone else played golf at the lowest golf course in the world? (Possibly even the universe?)

 

[RobStark]

They could do this after the first Hummer EV is delivered to a customer next year.

They can spin off at least one fully dedicated BEV factory in the US and another in China, 1 30 GWh battery cell factory in Ohio (they own 50%, LG Chem the other 50%) plus the intellectual property for Ultium and the 12 BEVs coming. And all the engineers and managers affiliated with the new Ultium BEV program.

They can give the new company Pontiac,Saturn, and Hummer brands without any legacy franchise dealer obligations. Without UAW pension/healthcare liabilities for GM retirees. They would only be responsible for the current and future employees.This would be a massive help. This would not be about the past LG Bolt program but the future.

Ultium Motors would be worth ~$100B and GM ~$10B. Distribute Ultium shares to current GM shareholders. You just created an additional $70B in shareholder value.

One more thing. Ultium Motors would have 200k Federal EV credits.

Volvo and Polestar each get 200k Federal EV credits since they have different tax ID numbers.

They can have make a deal where GM buys CARB/CAFE credits from Ultium Motors at 50% face value for the next 20 years. Or until GM goes bankrupt.

 

[Oveeus]

With all the cringe stories shared, I want to share something that I personally use to kinda mitigate that.

Why do we want to sell something that we are in for the long term and we foresee future growth?

In my personal opinion, unless you need the fund, it's for that adrenaline rush of you just made x based on y amount of investment. It's a huge accomplishment after all.

But then reality kicks in, it continued to climb and you feel bad or stupid.

The way I do is, with any long term investment I make is to make sure I layout some milestones/nice surprises, and award myself with "impulse".

I'm sure you all have a list of material stuff that you have the mean for it and wanted to own/do it for the longest time. You might even have saved up toward that, but once you reach the funding goal, you just aren't 100% sure to pull the trigger.

So, like today, TSLA jumped 11%. I've thought about buying a Leica camera for a long time, saved the money, but never quite committed to that final step.

Today I pulled the trigger. After maybe delaying it for 10 times after the "milestone" I originally set for this award was met. More on this later.

The way I see it is that for the sake of psychological health for long term holding, if you don't get yourself something meaningful... something that would make yourself happy... all that nearly 100x climb from IPO until today would be just a number.

There were times that I still couldn't quite pull the trigger on something... even with the fund ready and milestone reached. Like the case of my Leica camera purchase. In those case... I just put every cent I saved for that something into more TSLA stocks. And start saving again for that fund and see if by the next milestone, I'd finally pull the trigger.

The important thing is... if you are in TSLA for the long term, reward yourself in some way that you enjoy the achievement of your TSLA holdings than just a number. I use these "rewards" instead of selling my TSLA holding to get that sense of achievement.

These rewards are those things that I can certainly live without, but definitely nice to have them in my life.