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

[Cirrus MS100D]

Are you straight "locked into holding," or are you (like me) obligated to "disgorge profits from closing a position under 60 days" to charity?
Fortunately or unfortunately, it prevents me from day trading, week trading or even Month Trading... protecting me from my own damn self a lot of the time. It has a definite calming effect as I hold and hold.

...It strikes me, that disgorging a too-quick profit to charity wouldn't be the worst thing. Especially since shorts would be paying it.

Fellow raising hand here in the same boat. Very restrictive personal trading policies AND TSLA has been on our internal blacklist for weeks. If I plead a case, I MIGHT be able to sell, but they dictate when that sale occurs. Once sold, I may “never” be permitted to re-buy, thus, I sit and hold with a time-horizon of “until I leave this job that I love,” retirement, or infinity.

 

[bzbee]

ARK Invest’s Cathie Wood on CNBC
Wall Street's biggest Tesla bull thinks automaker can hit $15K in 2024

 

[sundaymorning]

When VW was in the squeeze, did people _know_ it was a squeeze or think it was a case of valuation becoming what bulls though was right? VW was a unique situation in regards to shorting and float available. TSLA doesn't have that, so I'd think this is likely to stick, though some squeezing effect would seem a likely component in this rise and thus some drop at some point would be likely, though god knows at what price and timeline.

people knew it was a squeeze because the high short interest in VW combined with a “buyout rumor.” It was a two day ever.

The current situation with Tesla is like 2013, a slow burn taking the company into a new valuation Freon $30 to $180. The current burn has been propelled via profits since October. Short squeezes generally don’t last for months like the current situation. Just pay attention to Tesla’s valuation, most analysts have us at $600-800 with ridiculously brain dead bearish analysts giving us $350.

 

[Curt Renz]

Any1 has access to this article? Just curious to see what haterz say:
Firm That Called for Tesla Stock at $7,000 Recently Slashed Its Stake

That was an excited click-bait headline, and a pathetic (ignorant?) attempt by Barron's to spread FUD. They referred to ARK ETFs selling some of their TSLA shares during its run-up in the fourth quarter. Much ado about nothing.

As most ARK investors and many TMC members are aware, TSLA is easily the largest holding in three of ARK's funds. They have a rule not to buy any more of a stock that comprises more than 10% of a fund, and to perhaps shave some of it for cash to buy stocks that have slumped. Fund investors expect such prudence.

The person who actually makes these decisions is ARK CEO & CIO Cathie Wood, who maintains that TSLA is her highest conviction stock. Cathie's own personal account recently has profited handsomely from TSLA LEAPS call options.

 

[mejojo]

Right. Wish they do not pay 35-40% tax (fed+state+city) on the gain.

Don't look at these as raw rates....long term still gets taxed, so the hit is only like half of that.

 

[WarpedOne]

Who are the biggest bears on TMC?

Me! Me! Take me!
I'm even white!

/sarcam off

 

[SoGA Fan Club]

For those talking about selling in the 900s and buying back now - you don't want to go down that path. It seems obvious in hindsight, but when you're looking at it in real time, it's a hell of a lot more stressfull and way more difficult to make that decision.

I mean, what would have kept you from selling Monday at around $750 if you were playing that game? There's NO WAY anyone had any clue at that point that it would run up above $950 the next day. So, you sell at $750. What did that get you?

And heck, I'm sure a TON of people sold at $500, thinking that it was overbought and would correct - and have been kicking themselves since. It's not a game you want to play unless you are doing it with play money, and can handle the disappointment of making very bad decisions, very often - most people do.

 

[lascavarian]

Cramer explaining Tsla action yesterday now.

 

[Prunesquallor]

Any1 has access to this article? Just curious to see what haterz say:
Firm That Called for Tesla Stock at $7,000 Recently Slashed Its Stake

It’s a hit-piece headline. They asked ARK for comments. Their answer:

“Except in rare and specific cases, ARK’s investment strategy does not allow us to purchase a security beyond a maximum position size of 10% for a portfolio. If appreciation occurs that takes the security past that threshold, the portfolio manager will use discretion to trim and reallocate assets appropriately.

“As TSLA shares appreciated approximately 70% between October 1, 2019 and December 31, 2019, ARK trimmed the position and reallocated assets according to our investment strategy.”

And that’s about it. Stupid.

 

[StealthP3D]

I'm all for holding, but there is no reason those that sold in this specific instance at 900 could not buy back in now and have more shares, and thus more gains next year.

Actually, there is a very good reason why that might not work for most people.

If your TSLA shares were purchased less than 12 months previous they are short-term holdings and get taxed at whatever tax bracket you are in. For many here, that would be 37% (the other common rates are 35%, 32% and 24%).

Let's say you could have sold shares purchased in May 2019 for $240 for $950 yesterday and you would be in the 35% tax bracket. You can't really use all of your gains to buy back today at a lower price because you need to withhold $248.50 per share sold to cover the capital gains tax that will be due for 2020 taxes. You would need to be able to buy back in at $701.50 in order to get the same number of shares after paying tax on your profits.

If you were able to do this (sell at $950 and buy the same number of shares back at $701.50), you would be in exactly the same financial position as had you simply held with one small difference. You would have raised your cost basis from $240/share to $701.50/share. That's the only benefit you would realize. Furthermore, this is a benefit that doesn't compound. In fact, if you eventually sell the shares at $6000 in your retirement, when you are taxed at a lower rate, the savings will seem almost insignificant.

 

[Curt Renz]

CNBC - hour ago:

 

[mejojo]

Media works for those that pay. Old media works cleverly for ad dollars vs new media works cleverly for clicks as I see it. Old media like CNBC is trolling EM for appearances and ad dollars and he does neither so they keep trolling. New media works off the need to have a discussion topic regularly to get click revenue. For EM, new media seems to work just fine for him since it is a relatively small audience he would like to reach and they will seek him out via their own effort and it is more fun for him. Interesting that StarLink potentially gives EM the possibility of a globally distributed media channel should he want it but that is for another day.

New Media you say?

 

[Prunesquallor]

.


You have 2 lots. When selling you can assign which lot is being sold. My brokerage's web interface (Fidelity) allows this assignment after the sale but before the trade settles. I can also look up which lot was used, but the default in Fidelity is to sell the earliest one. It isn't always optimal. Say if all of the lots are short holding period, might make sense to sell the latest so that the next time you want to sell, you might have a long holding period lot available. Or say if everything is long holding period might makes sense to sell a lot with highest cost basis to delay paying taxes on lower basis/higher profit lots.

E*Trade is the same. Your portfolio can be broken into tax lots and you can place individual sell orders for each lot.

 

[Nocturnal]

Any1 has access to this article? Just curious to see what haterz say:
Firm That Called for Tesla Stock at $7,000 Recently Slashed Its Stake

Same old short nonsense about Ark having a target but selling shares. It's comical that people think this is an intelligent observation. Letting a single stock take over the fund defeats the purpose.

IIRC, Wood's invested her own money into TSLA and has done very well.

 

[generalenthu]

So, if you're are a long term buy and holder, how do you take advantage of the current situation, and play it in a bit less risky fashion? Here's what I am doing in an IRA (no tax consequences, and no margin).

I had 300 shares, which I sold and bought 3 deep in the money calls. So, practically no time premium. With the freed up cash, I bought 4 more deep itm calls, and sold 800 strike calls expiring 2/21 for about 50 bucks. (When SP was ~750). This is a crazy sum for 2.5 weeks in any world except the one we find ourselves in.

So, if the share price is over 800 on 2/21, i make about $100 per contract on the spread. The breakeven is 700 on this spread. If it does break down below 700, I can simply roll it forward and get another 20-30 per contract. One can keep doing this until the stock gets over 800 which I think will happen at some point.

Once you make money on the spread, you can convert back the the ditm calls to stock, and have money left over.

Goes without saying, this is complex, and depending on what happens, there may be a need to adjust.

Putting this out there as I am bullish long term and prefer to be on the side of short near term options.

In my taxable account, sold a couple of 700 puts, and called it a day. Cash will be coming if there's a need to take delivery.

 

[lascavarian]

Cramer explaining Tsla action yesterday now.

So this would be an interesting clip to view if it gets online.

Cramer said the brokerage houses (I think) knew on Monday about Ron Barron appearing on CNBC on Tuesday. He mentioned something about "natural buyers" being moved into the stock knowing that Barron would tell a compelling case for TSLA. He says they expected the results from Barron's appearance to move the stock up and then they cashed out.

It would be worth listening to the video because I mostly likely did not convey this perfectly.

 

[woodisgood]

Actually, there is a very good reason why that might not work for most people.

If your TSLA shares were purchased less than 12 months previous they are short-term holdings and get taxed at whatever tax bracket you are in. For many here, that would be 37% (the other common rates are 35%, 32% and 24%).

Let's say you could have sold shares purchased in May 2019 for $240 for $950 yesterday and you would be in the 35% tax bracket. You can't really use all of your gains to buy back today at a lower price because you need to withhold $248.50 per share sold to cover the capital gains tax that will be due for 2020 taxes. You would need to be able to buy back in at $701.50 in order to get the same number of shares after paying tax on your profits.

If you were able to do this (sell at $950 and buy the same number of shares back at $701.50), you would be in exactly the same financial position as had you simply held with one small difference. You would have raised your cost basis from $240/share to $701.50/share. That's the only benefit you would realize. Furthermore, this is a benefit that doesn't compound. In fact, if you eventually sell the shares at $6000 in your retirement, when you are taxed at a lower rate, the savings will seem almost insignificant.

It's always this analysis that keeps me from the allure of swing-trading, and it can certainly apply to LEAPs too.

 

[wipster]

A question please...
I buy a share for 100 dollars.
A year later I buy another for 50 dollars.
The next day I sell half (one) for 200 dollars.

Gain is 100 or 150 dollars?
Did I hold investment for more than one year (for capital gains tax purposes)?

Depends which one you sold. First $100 long term, second $150 short term.

It's not that hard...

 

[wipster]

So this would be an interesting clip to view if it gets online.

Cramer said the brokerage houses (I think) knew on Monday about Ron Barron appearing on CNBC on Tuesday. He mentioned something about "natural buyers" being moved into the stock knowing that Barron would tell a compelling case for TSLA. He says they expected the results from Barron's appearance to move the stock up and then they cashed out.

It would be worth listening to the video because I mostly likely did not convey this perfectly.

I would like to hear Kramer explain it to Jerry...

 

[Evoforce]

ARK Invest’s Cathie Wood on CNBC
Wall Street's biggest Tesla bull thinks automaker can hit $15K in 2024

Thanks for reintroducing sunshine!