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

[Green Pete]

I closed this position either 1 day later or 1 year earlier than I should have but I want to thank everyone who I interacted with individually and everyone whose contributions I have benefited from. Converted about 25% of this to a true long position.

See you at 25k

I want to follow up on this because I recieved some DMs thanking me and suggesting they will take my future advice. Take anything a post with a massive grain of skepticism. I am an average Joe with some good life experience and interesting perspectives. I was also tossing and turning in bed about the Corona virus and this week was giving me serious anxiety. I'm happy with the results, and nobody should EVER be considered an ultimate source of truth. I'll still be cruising the options chain for sub 1 dollar contracts that make sense to me because that's been a trading strat that's worked well for me on Tesla and Nvidia but by no means do I know anything about ~investing~ trading. I may be getting some leap puts on Uber, Lyft or some traditional car companies but trust me when I say this, I know absolutely nothing about trading other than the fact that I have done ok taking a step back and looking at the big picture waaaaaaaay out and trying to win off of that. It blows my mind how well some people can anticipate next weeks stock price moves, and I am ABSOLUTELY NOT the person to look to for that kind of thing. I do hope to continue contrubuting to this forum tho because you all rock.

 

[FrankSG]

It appears as if CNBC panels have become TSLA supporters. What a contrast with a few months ago.

Two most interesting parts:

6:35:

But Jeff! The technology is so far ahead of everybody else! You look at Porsche, and I'm not knocking Porsche, but the Taycan... I get every car magazine, and all the reviews are:

"Well... looks nice, but it doesn't have the range of a Tesla. If people can't go from here to grandma's house on one charge, or a quick charge, they're not gonna buy the car."

Tesla's technology somehow is better than Audi! And Porsche!

9:30:
Stupid lady argues the entire video for TSLA being over valued, but then at the same time acknowledges the float is small and therefore the stock is easy to manipulate.

Hello!?! Why to do you think the float is so small? Because a lot of people are not willing to sell at current price levels.... smh.

 

[Artful Dodger]

By crash out do you mean crash up? Crash up for us, crash down for them?

By that I mean Shortzes will duck and cover. Like a heard of turtles.

Cheers!

 

[FrankSG]

I can't say I understand bond/credit markets well, but

0:58
We think being short the TSLA credit at the moment, is not very risky.

Sounds like famous last words to me.

Also, how does this guy get to be CIO? He's still a believer in fuel cells...

 

[LJS22]

It appears as if CNBC panels have become TSLA supporters. What a contrast with a few months ago.

Two most interesting parts:

6:35:



9:30:
Stupid lady argues the entire video for TSLA being over valued, but then at the same time acknowledges the float is small and therefore the stock is easy to manipulate.

Hello!?! Why to do you think the float is so small? Because a lot of people are not willing to sell at current price levels.... smh.

Bethany makes plenty of appearences when her finances start going down. She can either borrow from her daddy Chanos or write some more misleading articles about Elon Musk, but regardless it appears her short interest in Tesla did not work out.

 

[Electroman]

Sorry if this is a repost, but this is a great video explaining the benefits of Maxwell DBE tech for Tesla.

 

[Svetlin]

Stumbled upon this documentary today that get me started investing in TSLA 7 years ago. Highly recommended if you have not seen it. Smarty shorts couldn’t pick a tougher guy to mess with.

Thanks for digging this up. I remember watching it in early 2013. Towards the end, my girlfriend (now wife) walked in and finished watching it with me. At the end she said, "I hope Tesla makes it". I said they have already made it. Now the rest of the world has to realize it. Two months later the stock started the famous run. Unrelated to that (I think ), six months later we got married.

 

[Artful Dodger]

I'm a fundamentals kind of guy --- or at least I like to think of myself that way. Months ago I modeled Tesla gross profit from growth as being worth a share price of ~ $800 in two years. Let's just say my wife was amused. Fast forward to these last couple of days, and if I I wish to be consistent with myself I conclude that SP > $800 is over-valued today. Since I was waaay overweight in TSLA it was an easy decision to take advantage of this week to rebalance my portfolio.

Haha, good guess for 2 mths ago!

Here is the simplywall.st current valuation for TSLA: (Last Updated 2020/02/05 23:35 UTC)

"our estimate of fair value ($895.80)"​

Also notice that Earnings are forecast to grow 53.63% per year

Where else can you move your money into a company with that kind of forecasted growth?

Unless you think CNBC/Financial Media isn't playing you....

 

[Causalien]

Do any of the more senior members here have context for when the IV might subside? Or alternately, would we expect IV to remain relatively high (elevated above the ~45% baseline) from now through S&P inclusion? Are MMs already pricing in S&P inclusion into options prices?

Not sure if we are using the same reference to IV.

I haven't seen TSLA below 40% IV in all its life. Maybe it did dip below from time to time, but I don't recall noticing it. We are currently at about 90%. The day it peaked was 125% or so.

 

[dakh]

We have the exact same objective. All I'm trying to do is accumulate as many shares as I can, while not taking on any crazy risks.

All of the long term option plays I make, I've calculated potential pay offs in # of shares, rather than in $ gained.

Therefore, I expect to sell my Jan'22 $500s around the time we hit $1,000 or $1,100 per share, and buy shares with the proceeds.

I think there's way more money to be made by holding onto them longer, but even if stock is $2,000 upon expiration, that'd only translate into less than 20% upside in terms of how many extra shares I'll be able to convert them into.

At $1,000 tomorrow or next week, those options will likely trade for ~$600 each, and can be converted into ~60 shares each. At $2,000 upon expiration, they would be worth $1,500 each (2.5x), but can only be converted into 75 shares, which is less than 20% upside.

So I plan to exchange those for shares around $1,000-$1,100, and then if there is another dip, recession, Q1 turns out to be a disaster, or something of that nature, I could leverage up a bit again through different options.

Yep. So for example selling hugely profitable calls at say $800 instead of $900 is not necessarily a bad thing, if you then managed to buy stock at $700 with the proceeds instead of at said $900. With a run-up so high I'm willing to not only deleverage but also be comfortable going cash with some % of the capital. In my view likelihood that it'll go much higher and stay there is not so high as to justify holding on to every bit of exposure. Plus at least for me the whole thing has already played out to the number of shares I wanted to hold long term so I can sit around and contemplate selling puts or some such antics. I know that's not the case for a lot of people here, but a few years of managing highly leveraged position trying to avoid getting burned takes a toll, I'm super happy to not have to deal with that crap anymore. Still a bit of leverage left but it's simple and not mission critical anymore.

 

[Artful Dodger]

If there are entities that manipulate the stock price downwards by short selling in huge amounts, why aren't there entities, particularly those that are bulls, that exploit the manipulation by aggressively buying up shares thus driving the stock price back up?

If you were accumulating, would you want to pay more, or pay less, to build your share holdings?

Big whales benefit from short shenanigans because they have a long view. IMHO, we all should.

Spoiler: How many TSLA shares did Ron Baron sell this week?

ZERO. Same as last year.

 

[Tslynk67]

fyi...may have market impact tomorrow.

I just received a safety update/voluntary recall email from Tesla covering early Model X's to replace power steering components (bolts).

This applies to Model X's built before October 2016.

There was a similar recall in the past for MS, it was a fault from Bosch, the pump supplier. Bosch covered all costs.

 

[Jack6591]

Tesla's surge inspires fans to buy, skeptics to dig in, drives fear of missing out

 

[gerebgraus]

New cell job listings: Search for Jobs | Tesla
Previous jobs talked about Pilot line. New ads talk about setting up cell manufacturing. Location : Fremont.

 

[Tslynk67]

It appears as if CNBC panels have become TSLA supporters. What a contrast with a few months ago.

Two most interesting parts:

6:35:



9:30:
Stupid lady argues the entire video for TSLA being over valued, but then at the same time acknowledges the float is small and therefore the stock is easy to manipulate.

Hello!?! Why to do you think the float is so small? Because a lot of people are not willing to sell at current price levels.... smh.

In case you aren’t aware, “stupid lady” is one of Chanos’ sock-puppets...

 

[StealthP3D]

We just had a run where the stock price tripled in a matter of weeks.

You could say TSLA tripled in a matter of hours, days or weeks. But the absolute highest intraday price was 968.99, and it hasn't been as low as 1/3 that price since 10/25/2019, over three months ago.

As Cathie Woods pointed out on CNBC, TSLA had created a multi-year base and the longer the base stays in effect, the bigger the breakout. Yes, the stock has appreciated quickly but it's simply catching up to make up for lost time.

 

[Fact Checking]

Do any of the more senior members here have context for when the IV might subside? Or alternately, would we expect IV to remain relatively high (elevated above the ~45% baseline) from now through S&P inclusion? Are MMs already pricing in S&P inclusion into options prices?

Not sure if we are using the same reference to IV.

I haven't seen TSLA below 40% IV in all its life. Maybe it did dip below from time to time, but I don't recall noticing it. We are currently at about 90%. The day it peaked was 125% or so.

I suspect you mean out-of-the-money Implied Volatility? Deep-in-the-money options regularly gain IV well below 10%.

But even with DOTM options, there's historic precedent of below 40% volatility. Here's the historic IV of a very popular long-term LEAP contract, the 2020/01/17 500c's:

​

See that dip below 30% in the summer of 2018? Effects of the $420 buyout offer crashing the prices of long-term DOTM options above $420.

But even outside such special events, there were a few dips just below 40% IV, and 40-50% was the historic baseline, until 2019, when IV first increased due to speculative buying: far out of the money options often have slightly elevated IV due to constant lottery ticket buying, which expire worthless most of the time.

Then early this year IV blew out.

Now this options series ended on 01/17, here's a more recent IV chart of the 2021 January LEAPs at $500 strikes:

Note that these too had an episode of below 40% IV - I believe this might have been the effect of either naked or shares covered call writing near the old ATH of $390. There was a lot of conviction by the shorts (and by some bulls like @neroden too) that $360 is a permanent barrier until the convertible notes mature.

Then IV blew out to above 60% after Q4 (rather rare for options still 1 year from maturity), and came down to still elevated 57% levels yesterday.

As to the question of @kalefranz - no idea when IV is going to normalize back to the historic baseline of 40-45%.

As a comparison, the most volatile stock in the S&P 500 in 2018 and 2019 was AMD, with ~5% daily volatility and a big breakouts and crashes. Here's the historic IV of a popular AMD option chain, the 2021 $50 calls:

End of 2018 features a big increase in IV - I suspect due to dip-buying of long term calls by investors who were bullish on AMD and (correctly) thought the China trade war and the other factors crashing the Nasdaq would pass. Most of them scored 5-baggers if they waited long enough for the breakout to materialize.

But other than that the AMD recovery from $17 to $30 and the subsequent breakout to $50 and slightly above didn't elevate AMD IV beyond the 45-55% baseline.

What is going on with TSLA in the options space right now is unprecedented and I have no idea where it'll go.

 

[RobStark]

Model S in 17th sport with 86 registrations while Model 3 had 67.

EV Sales: Sweden January 2020

 

[Causalien]

I suspect you mean out-of-the-money Implied Volatility? Deep-in-the-money options regularly gain IV well below 10%.

But even with DOTM options, there's historic precedent of below 40% volatility. Here's the historic IV of a very popular long-term LEAP contract, the 2020/01/17 500c's:

View attachment 508822
​

See that dip below 30% in the summer of 2018? Effects of the $420 buyout offer crashing the prices of long-term DOTM options above $420.

But even outside such special events, there were a few dips just below 40% IV, and 40-50% was the historic baseline, until 2019, when IV first increased due to speculative buying: far out of the money options often have slightly elevated IV due to constant lottery ticket buying, which expire worthless most of the time.

Then early this year IV blew out.

Now this options series ended on 01/17, here's a more recent IV chart of the 2021 January LEAPs at $500 strikes:

View attachment 508823​

Note that these too had an episode of below 40% IV - I believe this might have been the effect of either naked or shares covered call writing near the old ATH of $390. There was a lot of conviction by the shorts (and by some bulls like @neroden too) that $360 is a permanent barrier until the convertible notes mature.

Then IV blew out to above after Q4, and came down to still elevated 57% levels yesterday.

As to the question of @kalefranz - no idea when IV is going to normalize back to the historic baseline of 40-45%.

As a comparison, the most volatile stock in the S&P 500 in 2018 and 2019 was AMD, with ~5% daily volatility and a big breakouts and crashes. Here's the historic IV of a popular AMD option chain, the 2021 $50 calls:

View attachment 508825​

End of 2018 features a big increase in IV - I suspect due to dip-buying of long term calls by investors who were bullish on AMD and (correctly) thought the China trade war and the other factors crashing the Nasdaq would pass. Most of them scored 5-baggers if they waited long enough for the breakout to materialize.

But other than that the AMD recovery from $17 to $30 and the subsequent breakout to $50 and slightly above didn't elevate AMD IV beyond the 45-55% baseline.

What is going on with TSLA in the options space right now is unprecedented and I have no idea where it'll go.

Ya, what he said.

I am often impressed by FC's patience in digging out the info, format and presenting them.

I am too hot headed to sit through such fact gathering and presentation process.

 

[Fact Checking]

Model S in 17th sport with 86 registrations while Model 3 had 67.

EV Sales: Sweden January 2020

BTW., just to make sure the Tesla context if fully explained: these are not really "January Tesla sales" statistics, but "end of Q4 Tesla leftover inventory" statistics: all the cars left over to deliver or sell in January for one reason or another. There was a ~1.5 months pause in European production at Fremont (last ship left late November), and the first European ship with new Fremont production left in mid-January and is only reaching Europe tomorrow.