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

[SageBrush]

I actually don’t entirely disagree. I don’t think we’ll ever see $300 again, and I’d be surprised if it ever dips below $400, but this reeks of a squeeze. And when it runs out of shorts to squeeze, the SP is likely to crash back down(albeit to a level above the previous floor).

In the long run, I don’t doubt Tesla will be a $160B+ company. But today I don’t think it makes sense. (Side note: it feel SUPER weird being the pessimist here)

I share this view, and since I am recently retired I now feel obliged to not be massively overweight TSLA. First world problems, I know.
I'm happy to have witnessed and to a degree participated in this amazing TSLA run but other than the satisfaction of seeing BIG numbers in my stock account (for me, anyway) there is little to justify the risk. I'll remain LONG with a substantial holding for perhaps forever, but some common sense must prevail.

 

[Fact Checking]

That is naive. It is also dangerous to put all your eggs in one basket

2022/06 puts at $300 are trading as low as $25. By giving up $25 of gains per share (a minor percentage of this year's gains alone) you can insure your wealth against tail event catastrophic loss for another 2.5 years.

And that $25 might be coming down a bit more, as right now it includes about 62% of implied volatility, while the normal levels are 45%. Fair value could drop below $10 if these price levels stabilize. (Note: they might not.)

 

[Fobble]

I suspect that almost all of the TSLA weak longs have bailed out during these last two high volume trading sessions. Meanwhile, strong longs are standing pat. These two factors should keep asked prices high and likely continuing to rise.

I am more concerned those who jumped in with margin (aka gambling), which will get very ugly once the tide turns

 

[lascavarian]

You had better put down a reservation for it now. At this rate Roadster demand will be equal to M3 demand because of all the TSLA millionaires that are being created. I'm only half joking.

Well there was a Founders Edition at one time. Might be interesting to have a Teslanaires Edition - very long of course

 

[JustMe]

This week I found out that I am a strong long. I’ll consider taking profits if we hit $2000 in the next month.

 

[LN1_Casey]

41mil stocks exchanged, stock up +$144, and still hours to go before closing bell.

What a Tuesday!

 

[AudubonB]

IME, if all other tax payments have been made as required, they do not expect coverage of capital or ST gains during a tax year. I have never had any question about any gains/losses I have had. However, in my very long US tax filing history I have never been late in filing (luckily for me foreign residents do have automatic extensions.) nor have I had paperwork errors. Since my foreign-source activities have generated quite large piles of documents I have been regularly surprised at having never had a disallowance of anything upon audit. Sadly I have had many audits from a host of jurisdictions.

BTW, in some tax filing jurisdictions the exact timing of income/expenses during a year does have significant importance. Thus, check on your US Local/State tax issues as well as Federal. Of course for non-residents even US-based events can have timing consequences even if the US ones do not.

I hope nobody needs to go through the multi-country agony. Personally I am down to only two countries. Glorious progress, in my opinion.

Knowing you to the extent I do, I have very little concern for whatever pitfalls and pratfalls you have encountered along your varied and interesting path. That said, I find my teeth chattering that you have had to endure audits in multiple jurisdictions, especially as I have a very good idea what some of those may have been. OUCH!

 

[SageBrush]

I am more concerned those who jumped in with margin (aka gambling), which will get very ugly once the tide turns

I presume that is why short squeezes have two sharp sides: one up, one down

 

[neezer]

I am more concerned those who jumped in with margin (aka gambling), which will get very ugly once the tide turns

Sadly got burnt by this too often in the past, and with stellar names. You name it! Apple, Amazon, Facebook, Nvidia, somehow I f'd it up every time (well ok maybe like 8/10 times I was in the red). And of course I did this at a MASSIVE unfortunate level in ... Sept 2008 ... don't need to remind people here what happened that month. Argh. lol

Nope, sticking to HODL this time. Especially with this firm.

 

[SMAlset]

Re: Toyota

I think I read yesterday that the deal they inked with Panasonic is to produce cylindrical batteries same as Tesla but with a different formula and to be used in their hybrids.

Pretty sure it was for prismatic cells...

Toyota And Panasonic Launch Joint Venture To Make Electric Car Batteries

This is the article where I got the info I remembered: Electrek 2/3/20:

"Toyota’s plug-in hybrids in most markets use prismatic cells. But in September 2019, Reuters reported that its plug-in hybrids in China will use the same Panasonic cylindrical cells used by Tesla. Regarding the Chinese plug-in hybrids, Reuters said, “The batteries are the same size as those that Panasonic makes for Tesla, but the composition is different.”

From the Reuters story back in Sept 2019:

"Toyota is using Panasonic’s cylindrical batteries in its new Corolla and Levin plug-in hybrid sedans launched in China this year, one of the people said.

The batteries are the same size as those that Panasonic makes for Tesla, but the composition is different, said the sources, who declined to be identified as the matter is private."

So seems like they are approaching batteries from two fronts. Don't they use the prismatic ones in small EV batteries in hybrids, where as cylindrical would be more cost effective in larger size batteries. The U.S. and Toyota might still be selling people on hybrids as the way to go but China wants range, not hybrids IMO. Also notice that the article you linked to from Forbes mentions that these batteries are to be sold to Other car manufacturers. "The venture, to be called Prime Planet Energy and Solutions, will work on prismatic batteries that they intend to sell to other automakers..."

 

[lklundin]

Have you used a digital camera lately?

I use a digital camera. In order to use my Tesla I bought a smart phone, which has that one app from Tesla on it. (Authentication w. interactivebrokers.com works via SMS).

I chose an iphone, because with my car using Google an Android phone would give Google too much insight into my life.

The polished prison that is Apple will not even let me access my own photos (i.e. any photo that I would happen to take with the phone), other than through some proprietary Apple stuff that I have no intention of buying/using.

Welcome to the age of digital feudalism,
More on Feudal Security - Schneier on Security

 

[Rammstein]

This is getting intense! I have all my friends and family telling me to sell. Everyday they are telling me. I’m getting so sick and tried of it. Some of them are investment analysts so they think they know better. They say I’m not reading the other side (short side). I’m not selling though. Until they give me a legitimate reason why then I won’t be selling my core shares. Anyone else hearing about this from loved ones?

 

[Fact Checking]

I am more concerned those who jumped in with margin (aka gambling), which will get very ugly once the tide turns

I'd absolutely suggest to every Tesla investor who is overextended on margin to invest some of the profits back into going off margin.

(To the shorts I'd suggest naked call writing, on margin - maybe taking hot meals from the soup kitchen would teach them a valuable life lesson.)

 

[Beltsbear]

I use a digital camera. In order to use my Tesla I bought a smart phone, which has that one app from Tesla on it. (Authentication w. interactivebrokers.com works via SMS).

I chose an iphone, because with my car using Google an Android phone would give Google too much insight into my life.

The polished prison that is Apple will not even let me access my own photos (i.e. any photo that I would happen to take with the phone), other than through some proprietary Apple stuff that I have no intention of buying/using.

Welcome to the age of digital feudalism,
More on Feudal Security - Schneier on Security

There are many ways of moving pics out. Most are free and easy. It may be a prison but the walls are a wet paper bag.

 

[Sancho]

I'm still in calls, but I'm reducing my exposure; I rolled calls only at 1:1 today (no new calls with the profit), and I'm converting pure calls to spreads on a cash-neutral basis. Right now the profit is mostly still in cash, burning a hole in my trading account. Need to do something about that.... (e.g. mostly back to shares)

You have posted about your success with call spreads. At what point do you typically roll them over? I have call spreads that now have about 35% of their maximum value, with 2 months to go before expiration. At what percentage of maximum value do you typically liquidate them and buy a higher strike call spread?

 

[Fact Checking]

This is getting intense! I have all my friends and family telling me to sell. Everyday they are telling me. I’m getting so sick and tried of it. Some of them are investment analysts so they think they know better. They say I’m not reading the other side (short side). I’m not selling though. Until they give me a legitimate reason why then I won’t be selling my core shares. Anyone else hearing about this from loved ones?

I am reading the "short side" regularly, and I am very much recommending you to not read them, as you'd end up buying more.

(Not advice, I could be writing this at a new ATH that sticks with us for months, etc.)

 

[Artful Dodger]

I'm guessing that options holders in particular took profits at open. There's a TON of outstanding options at $800 this Friday, and those went up like 100x in the last 24 hours. As a result of delta hedging, those option sellers probably sold a ton of shares in opening minutes.

Anybody recall that big buy of $800 Jun 21 Calls @ $16 for a total of about $1.8M

How's that trade workin' out?

Cheers!

 

[kcveins]

This is getting intense! I have all my friends and family telling me to sell. Everyday they are telling me. I’m getting so sick and tried of it. Some of them are investment analysts so they think they know better. They say I’m not reading the other side (short side). I’m not selling though. Until they give me a legitimate reason why then I won’t be selling my core shares. Anyone else hearing about this from loved ones?

I just had this exact conversation with my wife... and my response was the same

 

[imherkimer]

In April and May 2019, I started getting calls from family members saying they were worried about me because of my exposure to TSLA.


(Fact: I had average cost basis around 350 and was deep in the red, but carried no margin. Wish now I had used margin to purchase shares @200, but oh well. I was living lean and putting of all purchases.)

Financial advisor also called and strongly suggested that I needed to sell TSLA at around 235. I think that was when some major fund had sold a large interest. I said no thanks, will continue to hold.

Last week my same financial advisor said something like “I bet you feel pretty smart, now.”
he didn’t try to get me to sell any, ha ha. I told him the same thing I said in May. This is the most consequential company in the world right now. No other has this potential, nor is there any other company more vital to our future. It’s not that I’m so smart, it’s just that I recognize how smart, effective, and committed Elon and his Tesla team are!

I just now received a message from one those aforementioned family members. Message read “we just got a call from our broker, saying we should sell some TSLA, but I told him not to sell any, following your lead.”

Shorts are up against an army they can’t understand. We are often small investors but there are a lot of us, and we are holding!
Holding when it’s low and holding when it’s high!

Just a little thought exercise: How many twitter followers does Elon have? Around 31 million, I think.
What if each follower averaged 5 shares, that’s 155 million shares right there. Probably too simplistic, but a large number of passionate, committed “retail” investors is weighing in!

Looks like 420 was key! Tesla not going private seems to have led to an unmanageable disaster for shorts!

TSLAQ now TSLABBQ

“short shorts roasting on an open fire ...”
.... so pleasantly warm on a cold February morning

BTW I have a suspicion that Super Bowl adds by other car companies may have had the unintended effect of showing off just how much better and further ahead Tesla is. And all the players talking about their Teslas!
I suspect some buyers jumped in on Monday, adding fuel to the fire ..... maybe even some players looking for where to invest the money they made playing the big game!

 

[Fact Checking]

I'm guessing that options holders in particular took profits at open. There's a TON of outstanding options at $800 this Friday, and those went up like 100x in the last 24 hours. As a result of delta hedging, those option sellers probably sold a ton of shares in opening minutes.

I'm not so sure about that: delta hedging is not instantaneous, and much of the profits were generated in the overnight gap-up. Options owners taking profits would have reduced the delta hedging requirements of options market makers - but would probably not have required them to sell shares.

Meanwhile the gap-up increased the IV of almost every option series out there, which I believe generated a lot more delta hedging than short-term profit taking for the 02/07 series could consume. I believe the slow but steady rise during the day was helped by this accumulation of delta hedging inventory. (Maybe @ReflexFunds can run the numbers.)

This delta-hedging process is anti-dilutory as well and reduces the float, because options market makers cannot sell this delta inventory to buyers until the options expire or the price drops enough.