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

[AudubonB]

OT:
Good news for SpaceX, very bad news for Boeing:

There have just been a press conference with Boeing and NASA, where it turned out that there were multiple software issues with the Starliner crew capsule. Starliner flew an uncrewed test flight in december, but had multiple failures which meant they couldn't proceed to the International Space Station, and had to abort the mission. Now it turns out that they will, among other stuff, have to review 1 million lines of code, and very possible refly the uncrewed test flight.

So, unless SpaceX has any critical failures (they shouldn't - they have passed all major milestones, but never say never), they should be the first commercial crew program to get to the ISS, and get the flag kept there. It'd be a huge prestige win for them.

Shouldn't take 'em long to hire one million code checkers, each of them responsible for...........

 

[Chickenlittle]

Can you explain a bit more your reasoning on why to sell the lower priced options and buy higher prices ones? I currently have one at $550 and $650 June 2022. No real strategy other than i think TSLA will be about $1500 in 2 years. Thanks in advanced!

I am very risk adverse past few years limited options exposure but with run up with stock in low 500s I used 25K to buy 600 options two weeks away. When it crossed 600 I sold and bought 700 calls with half the sale proceeds for two weeks away. Crossed 700 did the same with 800 calls repeated with 900 calls and then 1000 calls. Lost 25k on the 1000 calls but built up additional 425k in cash. The power of OTM calls with just chump change

 

[BioSehnsucht]

WARNING:

my brother bought $1,880 calls. He doesn’t know how calls work. Every time he’s purchased calls he made 10x-100x. Every time he buys a stock it turns to gold. I don’t understand how it works, but that’s just how it is. So there’s my warning

 

[ZsoZso]

Boy, wasn't that an exciting day of trading!

/s

I don't think that word means what you think it means!

 

[mejojo]

Shouldn't take 'em long to hire one million code checkers, each of them responsible for...........

They need to make sure to check for Y2K bugs......

 

[M3Rider]

Thanks to many of you guys I got so accustomed to riding the TSLA coaster that the ASTONISHING recent roller coaster ride down from the top hardly phased me!

Listening to many of y'all talk about options that expire in such short times as weeks or months has been my biggest WTF!??!? since I bought my first shares. Almost all my options won't expire for about 2 years or so, so maybe I could ride this coaster down to $150 again, wait around, puff on a blunt, take Elon-dance lessons, wait for SP $1,000 and still probably come out OK.

@Causalien or @Nocturnal (?) I think it was mentioned something about desiring some more shares, wouldn't call options that expire in June 2022 be relatively cautious by virtue of their being 2-1/2 years from expiration; so much time to recover in the event of a recession or other severe drop in stock price so that would likely secure his goal? Isn't longer time till expiration a simple, mindless way to remove a little risk?

(Edited many, many times.)

(Am I the only one who needs to see their posted comment before seeing what they need to edit?)

You pay relatively high premiums for ATM or ITM calls with far away expiration, so they won't appreciate very much without some huge stock appreciation. The OTM calls if they later become ITM, of course provide greater return.
My 2022 calls "gains" range is 3x-10x.

With short term calls, your gains can be higher if things work out well. Greater risk, greater reward(or loss). I try to make small bets short term to limit the potential loss. Also, I try to pick events that seem favorable as far as outcome.
For example, we all knew Q4 was more likely to be good than bad, so the bet on that was safer.

Q1 we don't really know what's going to happen, if any quarter has a chance to be worse than others this year, it is Q1. So, super bullishness on Q1 results is probably not warranted and risk is higher.

However, if FCA credits, FSD, or tax allowance thing plays out, then results can be highly unexpected and reward handsomely, although your chance to lose money is higher.

So, up to you to decide on your risk tolerance.

Also, the premiums are a big decision factor too.
I used to buy cheap OTM calls, but with the recent crazy runup the premiums are extra high, so after the last SP fall I decided to buy ITM calls, which have higher cost, but lower premium & somewhat protect you from losing 100%. I'm not super confident on reaching 1000 next week, but hoping there's a higher chance of reaching 800-850 in the next month or two, so betting on that.

 

[JustMe]

Cathie Wood from Ark Investments discussing Tesla this week. Tesla New York on Twitter

She opined that Tesla’s solar roof business is good but that they think their autonomous vehicle development is where the real value growth will come from.

 

[Robertj]

What about this? Predicted the closing price and only missed by .07..?

I was fortunately in the above position and sold all my leaps at $940
Now sitting on cash and nibbling at calls

 

[Cirrus MS100D]

OT:
Good news for SpaceX, very bad news for Boeing:

There have just been a press conference with Boeing and NASA, where it turned out that there were multiple software issues with the Starliner crew capsule. Starliner flew an uncrewed test flight in december, but had multiple failures which meant they couldn't proceed to the International Space Station, and had to abort the mission. Now it turns out that they will, among other stuff, have to review 1 million lines of code, and very possible refly the uncrewed test flight.

So, unless SpaceX has any critical failures (they shouldn't - they have passed all major milestones, but never say never), they should be the first commercial crew program to get to the ISS, and get the flag kept there. It'd be a huge prestige win for them.

Yeah, SpaceX may have the lead right now, but they’ve got no unique technology or moat that isn’t easily replicable. Once the established OEM rocket makers decide to make the switch and start building self-landing and reusable orbital rockets, it’s game over for SpaceX. I hear SpaceX loses money on every single rocket launch. How are they going to make THAT up?! On volume?!

 

[JustSaying]

Before my time but what triggered the 13 run?

seemed to me it was just a set up for punning on "Strawberry Fields Forever"

Maybe a new giga factory near Central Park West and the Dakota? " Imagine"that.

 

[pz1975]

I am very risk adverse past few years limited options exposure but with run up with stock in low 500s I used 25K to buy 600 options two weeks away. When it crossed 600 I sold and bought 700 calls with half the sale proceeds for two weeks away. Crossed 700 did the same with 800 calls repeated with 900 calls and then 1000 calls. Lost 25k on the 1000 calls but built up additional 425k in cash. The power of OTM calls with just chump change

I did a different strategy with this run-up (I explained it back before I started it in the short squeeze thread). Bought a whole bunch of way OTM calls for Feb and March between January 20-27. Sold 20% of them when they got to 5x to lock in the original purchase and rode the rest. Total investment in was around $20,000. I sold them all Wednesday morning for total of $800K profit. If I had the power of hindsight and sold at $960, I would have had $1.8 million profit! But I am okay with it because my strategy was to hold until I saw a real drop signifying the peak had been crested (I was looking for a 6-8% drop but it gapped down overnight so I ended up selling around $810-820 or so on average). I didn't touch my core share and LEAPs holdings during all of this. I had been preparing for this since 2013 when I first started following TSLA and read about the VW short squeeze. Once in a lifetime opportunity I figure.

 

[Chickenlittle]

An update on my fidelity saga. They are processing my transfer of shares again. They were refusing to transfer my shares to another broker. It’s an ira account (margin not allowed in iras) was supposedly refused by their margin department although no margin in the account. I suspect they loaned out the shares and are trying to get them back (they’re not allowed to loan out shares on a non margin account. They refused the transfer for bogus excuses for 3 days, the time allowed to return loaned out shares

Ok took 3 attempts but fidelity transferred shares. Transferring another third of my fidelity account to another broker and again refused by fidelity. Like ground hog day. Fidelity is the worst. Told by rep that their transfer computer defaults to refusal if any calls sold regardless of how many more shares owned than those securing the sold calls

 

[Highway2Heel]

Absolutely can’t stand Fidelity. Can’t say what trading platform is the best, but there’s is definitely the worst.

 

[Chickenlittle]

I did a different strategy with this run-up (I explained it back before I started it in the short squeeze thread). Bought a whole bunch of way OTM calls for Feb and March between January 20-27. Sold 20% of them when they got to 5x to lock in the original purchase and rode the rest. Total investment in was around $20,000. I sold them all Wednesday morning for total of $800K profit. If I had the power of hindsight and sold at $960, I would have had $1.8 million profit! But I am okay with it because my strategy was to hold until I saw a real drop signifying the peak had been crested (I was looking for a 6-8% drop but it gapped down overnight so I ended up selling around $810-820 or so on average). I didn't touch my core share and LEAPs holdings during all of this. I had been preparing for this since 2013 when I first started following TSLA and read about the VW short squeeze. Once in a lifetime opportunity I figure.

That’s what I said in 2013 when I made enough to retire on and fund my three kids retirement too. However stay tuned for episode 3. Don’t know when it will occur but I would guess within the next year or two

 

[AlanSubie4Life]

Very interesting. Paging @AlanSubie4Life

Thanks. Yeah, I definitely don't understand fully.

FWIW, the following cycles have been used on MY2020 Tesla cars tested to date per the 2020 data file:

2-cycle: Model 3 SR, MR, LR RWD
5-cycle: Model 3 SR+, LR AWD, P18, P19, P20, Model Y P19, Model S (all), Model X (all)

So comparing the 3 P18 and Y P19 numbers is comparing apples to apples. It would still be interesting to see the individual cycle data, as I'm expecting FTP-75, HWFET, SC03, and US06 to be worse for Model Y, but Cold FTP to be much better.

While I see what you're saying in the EPA datafile, this does not mean that 5-cycle testing was actually used, AFAIK.

See this document - 2020 Model 3 P -> Clearly, unambiguously 2-cycle testing; definitely, definitely not 5-cycle testing:

https://iaspub.epa.gov/otaqpub/display_file.jsp?docid=48712&flag=1

Looks like they might be using option "3" in the document linked below, hence the "5-cycle" calculation "Calc Approach Desc" in the EPA datafile. But it appears to clearly be incorrect to take this to mean a 5-cycle test was used. It does mean that they received EPA approval for the chosen scale factor (I think), but the factors taken into account when using this higher scaling factor are very unclear and a mystery to me.

https://www.fueleconomy.gov/feg/pdfs/EPA test procedure for EVs-PHEVs-11-14-2017.pdf

As far as I can tell, all this 2-cycle vs. 5-cycle column entry in the EPA datafile correlates well with is the presence of an (apparently) arbitrary scalar other than 0.7 when converting from 2-cycle results to the "expected" 5-cycle results. You can see here it correlates pretty well:

So far, it seems like the higher value just makes the results look better - and there is no indication of the rationale for the increased numbers. I'm not saying that a valid rationale does not exist. I just wish I knew what exactly the rationale was for coming up with a scalar that is 7% higher and increases all the label numbers by 7% relative to a factor 0.7. What is it, for example, about the 19" & 20" 2020 Model 3 P which warrants a more optimistic scaling of their much lower (due to tires) 2-cycle results to 5-cycle results, relative to the 18" 2020 Model 3 P? These should be extremely similar vehicles, and I don't know what would not be captured in the coastdown measurements which would need to be factored into the conversion scaling.

Anyway, I track this scalar in my spreadsheet, even though I don't understand its source:

2020, 2019, 2018 Model 3 Battery Capacities & Charging Constants

Does anyone know why EVs are not required to use the 5-cycle test? Seems like it would be a lot simpler, and would incentivize better cold weather results!

 

[electrichapp]

Found this pretty good investing vid from youtubers with substantial followers that has potential to encourage more people to invest in tesla.
I think the future is looking brighter and brighter

 

[elasalle]

So when does the 1st delivered MY hit the streets? before end of Q1?

 

[Foghat]

Cathie Wood from Ark Investments discussing Tesla this week. Tesla New York on Twitter

She opined that Tesla’s solar roof business is good but that they think their autonomous vehicle development is where the real value growth will come from.

She doesn't quite get it about solar yet since her investment house thesis doesn't include the future of the utility industry. One of the top 10 wealthiest men on the planet says he's doesn't invest in utilities to see growth, he invests in utilities to make money.

TeslaEnergy is not to make money on SolarRoof margins (although they may very well with the astronomical scale they can achieve)... they make money off the sale/consumption of kwhs. They will make a lot of money in providing peaker plant services, demand response services, as well as neighborhood to neighborhood markets, which ultimately reduces the cost of homeownership (as well as vehicle ownership) along the way. Now add commercial energy market sales to that, etc...

I haven't seen how many customers they have under TeslaEnergy, but they should be approaching a million customers in 2020, and it could be argued they are all open to adding a battery to the home or commercial site.

If Tesla starts achieving anywhere near 1-2twhs of battery capacity, and it seems they are moving there with the surge of gigafactory construction added to the excitement of battery day announcements, they will very much be scaling powerwall, power pack, and mega pack, to ramp up with solar deployments.

I hope that she starts to venture into exploring this since it will only further support her bull case in 2024. She should look into how many twhs utilities sell a year, project how many twhs will be required to support 23 million electric vehicles in 2024, and give a rough estimate of the market share Tesla might begin to take at that point and beyond and give an alternative stock estimate given different penetration levels of TeslaEnergy into energy sale market domestically and globally.

 

[Thekiwi]

She doesn't quite get it about solar yet since her investment house thesis doesn't include the future of the utility industry. One of the top 10 wealthiest men on the planet says he's doesn't invest in utilities to see growth, he invests in utilities to make money.

TeslaEnergy is not to make money on SolarRoof margins (although they may very well with the astronomical scale they can achieve)... they make money off the sale/consumption of kwhs. They will make a lot of money in providing peaker plant services, demand response services, as well as neighborhood to neighborhood markets, which ultimately reduces the cost of homeownership (as well as vehicle ownership) along the way. Now add commercial energy market sales to that, etc...

I haven't seen how many customers they have under TeslaEnergy, but they should be approaching a million customers in 2020, and it could be argued they are all open to adding a battery to the home or commercial site.

If Tesla starts achieving anywhere near 1-2twhs of battery capacity, and it seems they are moving there with the surge of gigafactory construction added to the excitement of battery day announcements, they will very much be scaling powerwall, power pack, and mega pack, to ramp up with solar deployments.

I hope that she starts to venture into exploring this since it will only further support her bull case in 2024. She should look into how many twhs utilities sell a year, project how many twhs will be required to support 23 million electric vehicles in 2024, and give a rough estimate of the market share Tesla might begin to take at that point and beyond and give an alternative stock estimate given different penetration levels of TeslaEnergy into energy sale market domestically and globally.

I was under the impression that SolarGlass roofs is the main focus of solar efforts now, and that is not really a subscription/generation product (that lacks upfront profit/revenue) but instead is a one off high margin sale product with an average selling price equivalent to a car, and they want to ramp this up to thousands of sales a week (with high attach rates for powerwalls).

 

[printf42]

Interesting people seems to agree Tuesday was the top, and started to brag about timing it just right.

But, all shorts older than a few weeks are still deeply underwater not covered yet.

So we are saying that’s it, short burn not coming after all?

Or was it meant to burn naked call writers not stock shorts all along?