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

[TSLA Pilot]

Um, you're being dense. There is no data that supports that a split causes a stock to rise. Quite possibly a stock rising causes a split. Or they are both due to some other thing entirely. You have presented nothing showing otherwise.

Speaking of wasting time...

No, I'm afraid you have it wrong.

I have presented correlation between stock splits and significant outperformance relative to other, non-split stocks. (I don't care about causation v. correlation: an increased SP is a good thing, regardless of the reason.) Since you appear to have missed the links, I'll post some of them again:

Stock Splits Pay Off—on the Rare Occasions They Occur

And:

Here’s the real reason why buying a stock after it splits can be a money maker

Key point:

Since July 1996, which is how far back the NYSE’s calculations go, the index has beaten the Wilshire 5000 index W5000, +0.33% by an annualized margin of 12.1% to 9.0% (including dividends).

This market-beating performance shouldn’t come as a surprise, since a number of academic studies have reached a similar result. One of the first such studies was authored by David Ikenberry, a finance professor at the University of Colorado. Ikenberry believes the market-beating performance of stocks that have split their shares traces to a “sweet spot” in which the typical company likes to have its stock trade.

Though that sweet spot is not precisely defined, companies will not split their shares, even if the prices of those shares have risen sharply, if management believes there is a significant probability that shares of their company will fall back . . . .

And:

What Do Stock Splits Really Signal? by David L. Ikenberry, Graeme Rankine, Earl K. Stice :: SSRN

We observe significant post-split excess returns of 7.93% in the first year and 12.15% in the first three years for a sample of 1,275 two-for-one stock splits. These excess returns follow an announcement return of 3.38%, indicating that the market underreacts to split announcements. The evidence suggests that splits realign prices to a lower trading range, but managers self-select by conditioning the decision to split on expected future performance. Pre-split runup and post-split excess return are inversely related, indicating that our results are not caused by momentum.

**********
Yet you go on and on as if this is nothing.

I have asked you to either expose the methodological failings in the studies, or present sciential evidence to the contrary; you persist in failing to do so.

Thus, with no facts, your posts simply waste everyone's time.

Please, stop.

Thank you.

 

[StealthP3D]

FWIW I keep CNBC on in the background while I work and trade. I truly don’t see Jim turning back anytime soon.

Turn CNBC off. You will become wealthier and, as an added bonus, you will have more peaceful days!

 

[Bet TSLA]

I have presented correlation between stock splits and significant outperformance relative to other, non-split stocks.

Yes, some minor outperformance. So what? There are semi-infinite things that have some correlation with outperformance. People call that sort of thing alpha. What you are pointing out so laboriously means almost nothing and is likely a statistical artifact. Finding articles by other people who can't tell the difference between minor statistical artifacts and something meaningful doesn't help your case.

If you enjoy that sort of thing, go talk about it on the technical trading threads, where people are fascinated by how they imagine minor statistical artifacts define all trading. See, for instance, the fascination around Bollinger Bands, and how they mean something except when they don't. It's all evanescent vapor in the face of a juggernaut like Tesla. It means so little it might as well be nothing. Give it a rest, on this thread anyway.

 

[ClownMouth]

Is there any artistic soul who can design a cool yet subtle Teslanaire sticker we can slap on the cars?

I purchased the teslanaire.com domain sometime last year. I didn’t have a real plan in mind for it but wanted to keep it within this community. Your comment reminded me & I’ll start kicking around some ideas. Input welcome. Great community here. Hope everyone is doing well, we’re just getting started.

 

[EV forever]

Well, I did something yesterday to guarantee or at least increase my chances to ensure that I have shares at lucky price of $420. I bought an option for 18Oct'20 with strike price of 1850 paying $250 premium. So breakeven price is $2100.

After the split, I will have 5 options with strike price of 370 and cost basis of 50. I can exercise a single option for an overall purchase price of exactly 420 Was that smart or what?
(I couldn't figure out how to get it to exactly 420.69 - I am not that smart)

 

[kcveins]

Can you open a Roth for your kid if they don't earn anything? I was reading the rules yesterday, and the article said that parents can gift an IRA to their children as long as the contribution does not exceed the kid's earned income. My kid is in college and has no income, can I invest for a ROTH in his name?
Second question - Our income level is too high to qualify for ROTH. Our son is dependent on our tax returns. Would he qualify for a ROTH?

Completely related to TSLA since 100% of that investment will be in TSLA

I went through this last year...
The answer is no, but there is a work around if they mow lawns, baby sit, etc
The income does not have to be from a 1099 or W2, but has to be earned
My 13 year old helped build a couple of different computers for his friends
We were able to use the $ from "his business" to put into his Roth - of course it went all into TSLA at 305

 

[Rockster]

In my simple mind the best thing about having money is not having to worry about money accordingly now you can do the stuff you are passionate about.
Time is our most valuable asset and a few extra bucks will allow you to follow your passion.

As a friend of mine once said, “I just want to be wealthy enough to own my own time.”

 

[phantasms]

Turn CNBC off. You will become wealthier and, as an added bonus, you will have more peaceful days!

As I’m an inferior being to you I day trade and invest. It helps to get a pulse of things. There’s been breaking news that I’ve made pretty solid gains with. What else would I listen to Fox Business?! lol

Honest question though....is there a better network to have at a low volume in the background? FWIW every day is a peaceful day my friend.

 

[Bet TSLA]

Perhaps it's worth noting that today we skipped right over closing in the 1900's. Just as on Monday we skipped the 1700's. Both days on volume of over 20M shares. We also had a new all-time high intraday low, which argues that there were no effective attempts to push TSLA down, not even temporarily. Can't complain.

So will tomorrow be more up? Last Friday was only a little up on relatively light volume. But monthly options expire tomorrow so that may concentrate people's minds a bit more.

Perhaps more significant is that tomorrow (8/21) after trading is when the first action relevant to Tesla's stock split occurs. It is, of course, invisible and meaningless for all practical purposes. But among the ignorant and foolish there is likely to be some reaction. I'm guessing that the ignorant and foolish are more concentrated among Tesla shorts than among Tesla longs, so I'm thinking their actions will on the whole provide an upward bias to TSLA. We can hope this is the case.

 

[lafrisbee]

I am watching the lakers beat the Blazers. An e-tron commercial just had a kid sitting in the backseat as mommy turned on the car. And the kid looked like they were in the SpaceX Dragon...coincidence?
2019 Audi e-tron TV Commercial, 'The Next Frontier of Electric' [T1]
Not their first etron astronaut commercial

 

[JayNT]

As a friend of mine once said, “I just want to be wealthy enough to own my own time.”

I just want to be wealthy enough to live as well as my wife and kids.

 

[Artful Dodger]

Just a couple of percent up tomorrow, and Tesla will be twice the market cap of the #2, Toyota! (Or a couple of percent down for TM.)

Fun Fact: TSLA ($373B Mkt Cap) is now equal in value to the largest Automakers from each of the following Countries:

• Japan (Toyota) $185.3B
• Germany (VW) $86.2B
• U.S.A. Big 3 (GM) $41.6B
• China (SAIC) $31.0B
• Korea (Hyundai) $30.7B

If I may channel Chris Rock, "That tiger ain't go crazy; that tiger went tiger!" Now that Tiger is eating other Countries 1st-Born...

Cheers!

 

[samppa]

Could next week be the announcement of s&p500 inclusion?
Could it be that that's why there's a week between stock split and when shares will show up in accounts?
Just wondering if this makes sense..

 

[astrotoy]

I watched the Jim Cramer Rob Mauer interview last night. I think it served a couple of very useful purposes. First, it got Rob exposure to Jim's very large audience of followers, since Cramer featured the interview on his website. This means that many more people will understand how little almost all of the analysts they see and hear on CNBC and other places really know about Tesla and that someone like Rob and a fair number of people on TMC really do know and understand Tesla. The fact that Cramer ended up interviewing Rob was quite the sight to behold. Second, it may move some of Cramer's audience to also include Rob's Tesla Daily podcast in their listening. Great job by Rob.

 

[astrotoy]

Yes you can open for minors but they need earned income. I pay my kids for household chores etc and that is their income.

Also, you can contribute the max to a traditional IRA (post tax money) and immediately convert it to a ROTH regardless of your income. It then grows tax free like a ROTH (unless they change the rules some day...)

In addition to conversions of pretax IRA, 401(l), 403 (b), 457 to ROTHs (with taxes paid up front in the conversion - best from other sources of funds) there is the so called backdoor ROTH which allows you to convert after tax IRA's to ROTHs. As you get older, you will appreciate that ROTHs have no requirement for RMD's when you reach 72, and so can grow tax free for as long as you or your spouse (if you name your spouse as the primary beneficiary) live - the longest lived one. Then the next beneficiary (like your grandchild) gets another 10 years of tax free growth after the second death. Of course, if you need the money, you can always take whatever you need out (after certain lengths of time) totally tax free. I haven't researched it, but you may be able to use your ROTH as collateral against a loan, so you wouldn't necessarily have to take it out, if you can pay back the loan with other funds.

We did this in 2011 when the ROTH conversion was allowed. Both my wife and I had put away our maximum pretax savings during our working lives into 403(b) and 457 and some IRAs. We fortunately had other after tax assets that we used to pay the taxes on the conversions. Since we had been quite conservative in our investments over the years (index funds mostly) and my wife had considerably more in her account, we stayed with the index funds with her ROTH and decided to play a bit with my ROTH. We had solar panels installed on our home by Solar City in 2009, then bought our Model S in 2012 with delivery in early 2013 (we were 43XX). I saw how great the Model S was and thought about buying TSLA, but dawdled until late 2013 before sinking half of my ROTH into TSLA on a big dip (after some big FUD) and got it at 130. In early 2016 after my other half of my ROTH hadn't done much, I sold it and sunk the other half into TSLA at 190, after another dip (after some other FUD). I just left to slowly grow over the next years until I took notice of the jump over 300 and then 400 late last year. After it jumped in January, I realized I still had $1000 cash in the account. When the crisis hit and the stock plummeted below $500, I put in a buy order for 2 shares, which I got for $440 each. I now have a 15 bagger on my first half and 10 bagger on my second half and a nice more than quadrupling of my last 2 shares in 5 months. What is most remarkable is that on Monday the increase in my TSLA shares on that day was more than the total of my original ROTH balance in 2013. At 75, I haven't had to do any required minimum distributions and all the growth is tax free. If we don't have to use it and we live another 15 years, our heirs will have 25 more years of tax free growth without having to take out any money. If we have to use it, it will tax free. My wife's ROTH has grown reasonably. It started at about 2.5x as much as my ROTH. It has grown almost 70% in 7 years and now is 1/3rd the value of my ROTH.

 

[FrankSG]

Fun Fact: TSLA ($373B Mkt Cap) is now equal in value to the largest Automakers from each of the following Countries:

• Japan (Toyota) $185.3B
• Germany (VW) $86.2B
• U.S.A. Big 3 (GM) $41.6B
• China (SAIC) $31.0B
• Korea (Hyundai) $30.7B

View attachment 578888

If I may channel Chris Rock, "That tiger ain't go crazy; that tiger went tiger!" Now that Tiger is eating other Countries 1st-Born...

Cheers!

Looks like Tesla will surpass the rest of the industry combined at a share price of $3,700.85

 

[ZeApelido]

Breaking News

Nikola ($NKLA) announces a 10 to 1 stock split.

Founder Trevor Milton proclaims "We are really excited about crossing $4.20 per share. Given our great success and track record, we expect the S&P** 500 to announce our addition any day now."


** Sad & Pathetic

 

[UkNorthampton]

I purchased the teslanaire.com domain sometime last year. I didn’t have a real plan in mind for it but wanted to keep it within this community. Your comment reminded me & I’ll start kicking around some ideas. Input welcome. Great community here. Hope everyone is doing well, we’re just getting started.

Possibly FAQs to de-FUD?

Encourage new Tesla car buyers to buy some TSLA stock as well?

List out who has made bad-faith claims and follow the money?

Some economics, but especially physics of hydrogen and why / who is promoting it as a 'well when hydrogen is here, all these EVs will be scrapped, toxic waste in landfill, cobalt....'

Explain that cobalt is mostly used in fossil fuels and where does it actually end up.

Pollution, health links.

 

[kanweg]

Got the Jun'22 $1,400s for $64.486 in April

Well, I sure hope it is at least $1400 by then. I guess we all do.

 

[Criscmt]

Options strikes with better returns, higher leverage?

This might not be the best forum to ask this question.
However, I believe many here might have a good answer to this.

It appears many go for "lottos" through strikes furthest OTM. @Lycanthrope ?
I believe that's for high leverage.
Anyhow, whether anyone here does that or not, I have been doing this

I was of the view that for a given expiry date, theoretically the leverage is higher for higher strike contracts.
Leverage is ratio of contract-price-percent-change / share-price-percent-change.

Let's take options expiring in September-2021, strikes 2000 and 2400.
The contract prices of each of these compared to their prices the previous day should've grown unevenly. 2400 should have grown at a higher %.
However, I noticed that the contract price for strike $2000 had higher returns than for the contract price of 2400.
Today, 08/20, 2000 strike grew by ~16%, 2400 strike grew by 13.3%.

One explanation I can think of is the % change on the brokerage page likely is comparison between the last sold price at yesterday's close with last sold price at today's close.
I plan to track the bid/ask at closing time for a few days and see if this is the case. Assess the % changes through mid point at closing time.

Do mid-point (bid/ask) price changes not follow this lower/higher leverage pattern? That is, mid-point for 2700 strike not expected to grow faster in % points, than that of 2000 strike?