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

[nightfly]

Nonsense, TSLA was undervalued even at $900 levels, discounted cash flow based fair value is $943:

Tesla (NasdaqGS:TSLA) - Share price, News & Analysis - Simply Wall St​

And that's a look-back valuation that ignores all the growth potential of Tesla...

But yes, "Tesla is only a bubble" is a common care-bear narrative.

Was not referring to TSLA specifically but markets in general. But strictly on a valuation basis if Tesla were ever able to generate ~$5 EPS, then fair value is ~100/share (actually, less than that now they diluted with the recent offering)

In bear markets, fundamentals matter again: Tesla EPS - Earnings per Share 2009-2019 | TSLA

 

[samppa]

Just think when was the last time stock was at these levels. Not long ago at all.
I'm comfortable riding this out, wish I had some cash to buy.

 

[FrankSG]

I don't think I've seen this Rob interview with Ihor posted here yet:

A few interesting parts, especially that according to Ihor placing a high price sell order for your shares will not stop brokerages from lending them out to short sellers.

I've personally never done this, but I've seen others talk about this 'strategy' on here before.

 

[30seconds]

Hey man. Not trying to fear monger. Just pointing out the opposite of statistics. I am pretty sure there are so many stats out there that I can find one that says 20% icu.

And if I just isolate IRAN, it's what? 14% death rate?

Anyway, no need to panic, but don't let these "just a flu" stats fool you either.

sure, why believe “scientists” with their predictions based on “data” about climate change, whoops I mean a potential deadly new strain of flu when I can run my own stats?

I mean why should I believe it when the World Health Organization says that this has a higher case fatality ratio and higher reproduction number than influenza?

Joking aside this is pretty serious. Which is why Japan just closed schools for a month and every national level health organization IN THE ENTIRE WORLD is on high alert.

The good news is that there are early signs that infection can be contained somewhat.

But that doesn’t mean anyone should be an idiot about this because you are worried about stock prices.

And if you are about to talk about how you this mostly only kills sick people or people over 65 you should should put you phone down and go for a very long walk.

 

[Fact Checking]

Was not referring to TSLA specifically but markets in general. But strictly on a valuation basis if Tesla were ever able to generate ~$5 EPS, then fair value is ~100/share (actually, less than that now they diluted with the recent offering)

In bear markets, fundamentals matter again: Tesla EPS - Earnings per Share 2009-2019 | TSLA

While I agree wrt. overall markets, but bringing up EPS to value Tesla is another nonsensical argument, Tesla EPS is artificially depressed by various significant growth and GAAP artifacts.

Like with AMZN, cash flow metrics work better with TSLA. (But they still seriously undervalue it.)

If you ever seriously believed in EPS based valuation metrics for high-tech companies then you'd have shorted AMZN at $30 and would still be holding it short today at $1,800+ levels, grumbling about how stupid everyone else is.

"Amazon is just an online bookstore" used to be a thing, just like "Tesla is just a carmaker".

 

[Buckminster]

Tesla's biggest product yet is launching in two weeks and the media isn't mentioning it at all. Their bias against Tesla is annoying but it sure makes for easy trading sometimes.

Teslaquila is happening in 2 weeks? - woohoo!

 

[kyzhk]

Was not referring to TSLA specifically but markets in general. But strictly on a valuation basis if Tesla were ever able to generate ~$5 EPS, then fair value is ~100/share (actually, less than that now they diluted with the recent offering)

In bear markets, fundamentals matter again: Tesla EPS - Earnings per Share 2009-2019 | TSLA

I was awestruck by how brilliant, simple, and effective your valuation model is, please share more of your success story with us.

On another note, I am delighted to offer you 1 share of a company with $1000 EPS declining at a constant rate of -90% year over year. I am sure you will be happy to offer me $1000*20 = $20000 based on your valuation model for my share. Heck, I will throw in a 10% discount to sweeten the deal.

 

[PeterJA]

...retesting Jan 2018 levels is likely in the next few months.

Why pluck Jan 2018 from thin air? Why not Jan 2011? If you ignore the phenomenal progress that Tesla made in the last two years, why not ignore all of it?

...In bear markets, fundamentals matter again...

Funny how bears who warn that "fundamentals matter" ignore the fundamentals that matter.

 

[Fact Checking]

A few interesting parts, especially that according to Ihor placing a high price sell order for your shares will not stop brokerages from lending them out to short sellers.

I've personally never done this, but I've seen others talk about this 'strategy' on here before.

I believe it was @Curt Renz whose broker confirmed that they are not lending shares that have active sell orders?

I'm pretty sure this depends on the broker: they'd want to lend out shares from customers who are less likely to sell them, and an active sell limit order (irrespective of the limit price) might be part of the account sweeping heuristics that determines the amount of shares the broker lend out.

 

[FrankSG]

While I agree wrt. overall markets, but bringing up EPS to value Tesla is another nonsensical argument, Tesla EPS is artificially depressed by various significant growth and GAAP artifacts.

Like with AMZN, cash flow metrics work better with TSLA. (But they still seriously undervalue it.)

If you ever seriously believed in EPS based valuation metrics for high-tech companies then you'd have shorted AMZN at $30 and would still be holding it short today at $1,800+ levels, grumbling about how stupid everyone else is.

"Amazon is just an online bookstore" used to be a thing, just like "Tesla is just a carmaker".

EPS is also really hard to model into the future. Small mistakes in predicting Tesla's provisions for taxes can make huge differences in bottom line EPS.

I personally like to look at EBIT, because it gives a good overview of how well the core business is doing, and it's relatively easy to model out into the future.

@Fact Checking , are there any advantages of looking at cash flow over something like EBIT? I feel like cash flows (at least on a quarterly basis) are too easily affected by things like inventory, and they're harder to predict.

 

[EVFan888]

Frankfurt opened at 559.60 EUR, looks like another red day.

 

[Papafox]

Earlier this month, Goldman Sachs and Morgan Stanley sold shares of TSLA at $767. We watched how the stock price ran up to 800 then 804 and stayed there while the transactions were wrapped up. Those big dogs showed what their trading departments can do when they set out to make money.

Now Morgan Stanley's analyst Adam Jonas is trying to talk the stock down to $500, which is his base price target. In theory, the part of Morgan Stanley that sells stock offerings is not communicating with analysts such as Jonas, but I don't think many of us believe that. Still, it seems disingenuous for a big investment bank to be selling a stock at $767 while the company's analyst is trying to knock it down to $500. Many of us believe that TSLA took off before Jonas could get MS clients onboard and then announce a price upgrade, and so MS clients missed the boat and he's pissed. The trading room at MS might be able to gork TSLA sufficiently to eventually get it down to $500 with all this coronavirus disruption, where MS clients could then load up and Jonas could give his price target blessing for the stock to run higher. His trading room, working with that of Goldman Sachs clearly demonstrated an ability to hold TSLA around $800 for a couple of days during the stock sale. Is there any doubt they could also exert downward pressure with similar effectiveness?

The obvious counter to such a conspiracy theory would be that Morgan Stanley's clients who bought TSLA at $767 would be mad as "sugar" if they knew the company was now pressuring the stock to trade well below the stock's selling price.

We live in interesting times.

 

[Singer3000]

While I agree wrt. overall markets, but bringing up EPS to value Tesla is another nonsensical argument, Tesla EPS is artificially depressed by various significant growth and GAAP artifacts.

Like with AMZN, cash flow metrics work better with TSLA. (But they still seriously undervalue it.)

If you ever seriously believed in EPS based valuation metrics for high-tech companies then you'd have shorted AMZN at $30 and would still be holding it short today at $1,800+ levels, grumbling about how stupid everyone else is.

"Amazon is just an online bookstore" used to be a thing, just like "Tesla is just a carmaker".

You may think it a bad way of valuing Tesla, and I would agree. But I think the OP’s point it more that the market may for a time make that shift in its valuation methodology regardless of what you and I think of it. And it’s that kind of shift that saw AMZN lose was it 95%?

A question I haven’t seen posed here but is worth asking, even if you still consider it tail risk. Where do people suppose TSLA would be trading if Fremont production went through a period of suspended production, as has been happening in major manufacturing plants across Asia (Hyundai the latest)?

If you are really taking a super long view then as I’ve said many times, it’s just noise. But depending on your circumstances, it may be that portions of your investments have a shorter timeframe to required divestment than others.

A good time for everyone to think about things clearly for themselves and not get swept up in either perma bull mode or mass hysteria.

 

[Fact Checking]

@Fact Checking , are there any advantages of looking at cash flow over something like EBIT? I feel like cash flows (at least on a quarterly basis) are too easily affected by things like inventory, and they're harder to predict.

I like @ReflexFunds's "working capital invariant cash flow metric" the most, which removes inventory, payables, receivables and financing (convertibles, equity sales) fluctuations from the raw cash flow.

This "real" cash flow metric can be calculated the following way:

"Free cash flow" minus "Changes in operating assets and liabilities, net of effect of business combinations"​

 

[NicoV]

The ships started days later so first deliveries are later too. Earliest I've heard is people getting their TM3 March 4th in Norway. Since usually shipped trough the Netherlands I guess first deliveries even earlier there.

For some of the countries look here: EV registration statistics for The Netherlands, Norway and Spain

Somebody on the Benelux FB groups reported a delivery appointment for yesterday, although this isn’t visible in the registrations yet.

 

[AlexS]

So where are the MM now? Surely they can't be paying out all these puts contract by tomorrow closing right?

They were forced to delta hedge downwards, sell stocks.

 

[MD70]

The boss who put everyone on 70K

Note the car they got for him. Stories like this show me how Tesla is becoming more and more mainstream.

 

[chrsk]

615$ in Frankfurt... I have reduced my position by 70% over this week...

 

[ev-enthusiast]

-10% during early trading in Germany.

Update: -11%

 

[loky]

Can someone confirm Opricot $TSLA Max Pain for today? Also any recommendation (subscriptions) for a reliable source for Option Chain Open Interest on Friday morning?
Thanks!