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

[Krugerrand]

Phhtt.... worthless against anti gravity party barges...even a cat should know that.

See, this is exactly why cats over dogs. Dogs can’t take a hint.

 

[Cherry Wine]

Happy holidays everyone! Sorry for the absence, been a crazy year but should be back for good now. As it relates to Tesla, think this is just the beginning. Lot of good things on the come next year.

PS I was right about this being a generational opportunity at 260! Just turned into a multigenerational opportunity at 180 first.

Was wondering where you went. Welcome back - stick around this time!

 

[StealthP3D]

@StealthP3D says we're in a bull run. If so, every day can be ATH and that doesn't mean SP won't go up again.
Waiting for lows in this scenario to load up may not be the best bet. Not saying a pullback is impossible or won't happen, more like we have two possibilities:
1. That pullback may happen and bring us to SP below today.
2. That the run will continue and the next pullback will bring us to the lowest SP that is above today's SP, i.e. waiting for a pullback may not be the best decision.

Lets say it's 50/50. So, the statement "Never buy ATH" is not absolute truth.

I totally agree, there is a lot of profit to be made buying good companies at their all-time highs. This is why some professionals actually WAIT for new all-time highs before entering a position in a company they have been interested in. I have a dim view of that practice (waiting for a higher price before buying) but obviously, it works for some.

To clarify my many earlier comments (going back to shortly after we crossed the $200 line) about TSLA being on a "bull run". By now, that's not my opinion, it's a fact. TSLA is on a bull run. But it's still my opinion that this will largely continue through 2020 (baring extreme macro events or less than normal and expected performance from TSLA). If TSLA briefly retraces to $385-$395 and then continued higher, that would still be the same bull run. A little volatility is normal but it would be foolish for someone without a full position to wait for a retracement this early in the run. The reason for that is simple: It may or may not happen. Retracements are normal parts of bull runs but their timing is extremely unpredictable because it depends upon the exact balance of new buyers and new sellers entering the space (which in turn is dependent upon human psychology and human perception). If TSLA continues to $440-$460 without a major retracement, you STILL won't have the position you want. And in that scenario, it would be very unlikely (IMO) that it would return all the way to $385-$395. And if Tesla as a company continues growing production and improving margins then arguing or worrying about whether your cost basis was very small or a little smaller will look ridiculous.

As an investor, I always look at the big picture (meaning ~5-year chunks of time) and how I can grab large chunks of profit over those timeframes, not how I can skim pennies and save a little bit. I don't worry about whether my position might temporarily decline in value. My most profitable positions of all time ALL declined at least 15-25% before they went on to create huge capital gains.

Elon Musk is such a good leader because he looks forward 5 years at a time (actually, even longer, much longer). That also explains his desire to go private, to get out of the clutches of the idiots who have no sense of the scale of time and prefer to micro-analyze one quarter at a time. On stock investing forums you will read commentary from knowledgable people crunching numbers and analyzing public companies with a microscope. The amount of knowledge and experience sounds impressive (and often it is).

But I'll let you in on one of my secrets that many successful investors share. That kind of financial analysis is something that is absolutely imperative to the success of a company and it needs to happen internally to the company. The company always has data and up-to-date information that is infinitely better than anything people on the outside have. The most successful individual investors don't try to replicate that kind of detailed financial analysis. They don't need to. The company, if they are to be successful, has already done it, and much more accurately. Either you trust the management or you don't. Most successful investors derive the risk/reward ratio in a much more general way. Perhaps without even glancing at the quarterly financials. Don't get me wrong - it's important that someone on the outside is doing this but it's not the kind of thing that is important enough that it becomes more important than a more general analysis. I was appalled when, many years ago, I learned many successful investors would put down $100's of thousands of dollars (or even millions) on a single company without scrutinizing the financials and growth projections in great detail and calculate how this will correlate to the future share price. But, if that kind of detailed analysis interferes with more important analysis, as it often does, it becomes worse than useless. The bottom line is you want your capital to appreciate. That's the only goal. And, it appears to make sense that detailed financial analysis or studying share price movements in mathematical detail is what will allow you to succeed at the goal.

But that's not what's important. It allows you to see the trees but not the forest. The valuable analysis is more complicated than that, and yet more simple. The truth is often smacking you right in the face.

Good luck and Merry Christmas to all longs.

 

[lklundin]

People forget Elon designed a docking LIDAR for SpaceX, so he knows how LIDAR works...

And it is a reasonable bet that Elon, Karparthy and the rest of the team know more about what is actually required for FSD than we do. Most of them are professionals working full-time in this area..

Additionally, Tesla apparently also collected direct experience with LIDAR since a Tesla Model S modified with what was identified as LIDAR was spotted 3 years ago,
Modified Model S spotted - additional sensors. : teslamotors

So I believe Tesla's decision to not use LIDAR was very well informed.

 

[T@oo]

In the 1960's, cloud seeding was the new big thing. Too bad it hasn't really panned out for everyday use.

It has. They use Silveriodide to let the clouds rain down. Hail prevention for fruit growing areas.

 

[Zhelko Dimic]

Hyuck hyuck hyuck ok man go ahead and DON'T buy calls right now, and you and I can compare notes next christmas

Yeah, it can turn like this

or like this

or like this

 

[Buckminster]

Happy Christmas all!

I showed this video to the wider family today. Only my wife and I found it funny. Is there something wrong with us or them?

 

[Steve m]

Well, that's a cat for you. I had one that had had enough of my shenanigans and tackled me from behind, digging his claws into my calf to bring me down like the big meat animal that I am.

We may love cats and they may purr and all that, but at the end of the day they are not social animals -- they are solitary predators. To them, we're just future meals.

Uhm we also are responsible for opening doors upon command.

 

[StealthP3D]

On the other hand I’ve really wanted someone to ask Elon how many of his personal shares are being lent out to shorts, as based on the rules I am familiar with, if you have margin or loans(as Elon has said he does) against your shares, your lender can then loan out your shares for profit.

I imagine as someone with billions of dollars of shares, and huge loans against them, Musk can choose who gets to loan him the money and what the rules are. The only way Musk's shares are borrowable is if the loan deal (with the stipulation they could lend out his shares) was too good to pass up. In otherwords, in that case, he would be benefitting from the loaning of his shares with a lower interest rate.

Nothing nefarious about that, if it were the case, but I do wonder what the truth of the matter is.

 

[RFernatt]

Happy Christmas all!

I showed this video to the wider family today. Only my wife and I found it funny. Is there something wrong with us or them?

Something wrong with the rest of your family. My wife and I thought it was funny if a little short. But we liked Chicken Run when everyone else says they don't get it. Meh, no accounting for good taste!

 

[RFernatt]

Uhm we also are responsible for opening doors upon command.

 

[S3XY]

Seems great until you realize that would devastate the other ecosystems just like the Colorado getting stripped and the famous and beutiful Colorado delta becoming a desert. You never want to shift water from one watershed to another. Period. Every part of the ecosystem is dependent upon those moisture conditions.

The answer is to move to where the water is, not to bring water to the F'ing desert. Chicago has lots and lots of water. That's a good start but hardly unique.

One of the earliest environmental lawsuits was regarding the Chicago river when St Louis sued Chicago because Chicago had turned the river around backwards and had it run from Chicago to the Mississippi instead of Lake Michigan. It kept the lake clean enough to drink and polluted the Mississippi which was the source of St Louis drinking water. They lost but Chicago eventually cleaned up the river. Lake Michigan is to this day very very clean and Chicago has a near endless supply of clean potable water. St Louis got revenge (ok, here comes a joke) they opened a bottle plant, put the Mississippi water into dark brown bottles and shipped it back to Chicago- they called it Budweiser.

*** Warning: Rough language ***

(You'll need to unmute this on the bottom right)
Sam Kinnison on World Hunger

 

[KarenRei]

Are people seriously back to the whole "GF1 cannot expand because of water" thing?

1) Truckee water rights are traded on the open market; you just buy them (in perpetuity). Even the most expensive they've ever gotten is eminently affordable to Tesla. They're much cheaper now.

Ag simply cannot compete on water pricing with municupal usage. Period. Ag consumes water by the acre foot (an acre of land flooded to a foot's depth). The value of the crops isn't remotely close to what municipal consumers will pay for that water.

2) Forgetting that, you can also get water via desalination. There's multiple local saline sources, including a nearly limitless one at Pyramid Lake. Even desalination from seawater can be justifiable at high municipal (not ag) rates, but Pyramid Lake is only 1/6th as salty as the ocean. And desalination would ecologically *help* the lake, so long as the waste brine isn't returned to it.

3) Water access can also be gotten via partnerships with local municipalities to fund water conservation and recycling programs.

4) It can even be gotten to some extent via rain catchment off GF1's roof if you have somewhere large enough to impound it. On average, 33500 cubic metres of rain falls on GF1 per year. 27.2 acre feet.

5) Tesla could even afford to truck in water indefinitely (shipped from wetter places, like northern California or further north). During the last big CA drought, it was common for residences to buy water for $0.04-$0.12/gal. Tesla could probably get it on the low end, maybe even cheaper than that. Not limiting.

I'm not sure why we need to keep rehashing this conversation, but apparently we do. So once again: water will not be limiting at GF1. Water would be *cheaper* elsewhere, but every location has its ups and downs, financially.

 

[LN1_Casey]

A great little summary for Q4/November numbers. I really like this channel, but for some reason it only ever gets 1-2k views per video.

 

[UncaNed]

It has. They use Silveriodide to let the clouds rain down. Hail prevention for fruit growing areas.

There must be a way that all the water vapor passing over a dry farm field or low body of water be instantly be harvested to irrigate and fill reservoirs, lakes and streams to the desired level. Solving that problem would be an enormous gift to humanity.

Oh, and of course to provide however much water Sparks needs. (I'm on topic- GF1 growth -here!)

Are people seriously back to the whole "GF1 cannot expand because of water" thing?

I'm not sure why we need to keep rehashing this conversation, but apparently we do. So once again: water will not be limiting at GF1. Water would be *cheaper* elsewhere, but every location has its ups and downs, financially.

OK Karen, no more water hashing from me. (My bad, irrelevant tangent. Sorry, all. I'll stop now)

 

[JustMe]

Something wrong with the rest of your family. My wife and I thought it was funny if a little short. But we liked Chicken Run when everyone else says they don't get it. Meh, no accounting for good taste!

Chickens go in - pies come out!
Ooh! What kind of pies?

 

[RFernatt]

Chickens go in - pies come out!
Ooh! What kind of pies?

"Apple."

Another fan I see!

 

[dc_h]

Keep in mind that the amount of unrecognized FSD revenue continues to build up as more cars are sold with FSD (minus any amounts recognized each quarter). It wouldn't surprise me if it was building up faster than it's being recognized. We will have to wait until 4Q results are released to know for sure. If the amount recognized is very high the shorts will probably accuse Tesla of recognizing the revenue too quickly for the sole purpose of burning them. They will probably lose any such claim if they try to take it to court.

They guided about 1/4 if reserve to accrue each quarter going forward. So likely 100-125 million each Q for the next year.

 

[lklundin]

When I cautioned against buying at ATH, I was referring to call options, not stock. If you buy stock and the SP tanks for a couple years, you can hold until it recovers because there is no time decay. I got excited by the end of 2018, and I loaded up with deep in the money LEAPS to a level that I never would have dreamed of doing a year earlier (1/3 of my portfolio). The stock was around 360 and the Model 3 was ramping well with deliveries scheduled to start in Europe and China in Q1 2019. Another profitable quarter was expected for Q4. I bought Jan 2020 LEAPS with 250 strike price (SHOULD have been a safe bet). The problem with reading posts here everyday when the stock is doing well is that we feed off of each other and the stories of big profits from options. We are also ahead of the curve when it comes to seeing Tesla's potential, and we can get ahead of the market's perception. There was no reason to think in December 2018 that the stock would drop from 360 to below 200 in June 2019, but it did, and several of the members here including myself got badly burned. I just don't want to see other Bulls here suffer our same fate. If you want to gamble on options with a little play money right now, that is fine. You might get lucky. Obviously, if the stock keeps climbing, you will make more money with Calls than you will with stock. But don't think that even deep in the money LEAPS are safe, because they are not.

Off the record, do I think the SP will go below 300 ever again? I don't, but nobody here knows for sure, even though some sound really intelligent and can pull out stock charts for days to back up their opinion.

At the same time and for the same reasons I bought a large addition to my TSLA portfolio. In hindsight I guess it was FOMO and for many months that trade looked terrible. I still does compared to my other TSLA buys, but now it is up 15%, which is a lot better than call options that expire worthless.

PS. Edited for clarity

 

[dc_h]

Good thought -- I had forgotten about them.
They certainly have cash, a desire to diversify holdings, and past interest in TSLA.
The Norwegian Sovereign fund would be another candidate for similar reasons and it has cash related to exit from unacceptable stocks.

I’d guess some inside baseball people in Silicon Valley may be buying. If margins are on track to rise 2-3% each quarter for the next year profits should be above current estimates. Once rumors start moving it could cause a lot of smaller billionaires and well paid valley people to acquire shares.