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

[rallykeeper]

It's happened within the financial services industry where the government has learned on stronger institutions to absorb troubled assets or a whole troubled institution. This happened as recently as the 2009 mortgage crisis.

JHM, you're literally my favorite TMC poster, so please don't take any offense, but I think you're assuming the government has more power than it does.**

Banks are regulated by the federal government (the Federal Reserve, the FDIC, etc) and can be compelled/cajoled into forced marriages by the regulator.

Tesla is not regulated by the federal government and there's really no mechanism to force it to acquire another company.

The financial crisis is actually quite instructive on this point. Unlike with BofA/Merrill Lynch or JPM/WaMu, GM and Chrysler got bailed out with emergency loans, but the government didn't make Ford acquire either of them. Later on, the government did "force" Chrysler to merge with Fiat (but importantly, they didn't -- and really couldn't -- force Fiat to acquire Chrysler).

Obviously, if Tesla ran into trouble and needed the government's help, then all bets are off -- but I don't think that was the risk being discussed.


** This is of course limited to our current legal regime -- with SCOTUS, the President and Mitch McConnell, you never know what new powers the federal government will discover over the coming months and years.

 

[graphilwar]

I think we will have hit 1000 at least 5 times before the election.

Can't wait to see how this ages...

as long as it’s an odd number of times...

 

[UncaNed]

As usual Australia has the perfect solution to covid-19, it will only be a matter of time before the rest of the world follows our excellent lead..

Coronavirus COVID-19: Why is everyone buying toilet paper? - ABC Life

But there is a lesson on supply and demand here...

I saw these stories and I'm like "yeah right I'm ignoring that" .....

My wife comes home yesterday, "They are out of toilet paper at X and Y....."

Sure enough I visit my local supermarket today and the shelf is stripped bare....

I know when toilet paper is selling on EBay for $20 per roll, we will have to buy, and the wife will be looking at me....

This is what happens when demand outstrips supply, it is gold rush....

At least we have finally found an investment that might out perform Tesla over the short term..

Perhaps... some sort of recycling program would help alleviate the excessive demand?

 

[KarenRei]

Icelandic media is starting to get their hands on the Model 3. Results are glowing, as usual.

Reynsluakstur Tesla Model 3 – bíllinn sem breytir leikreglunum

Headline: "Test drive of a Tesla Model 3: The car which changes the rules of the game"

Only complaint was the handles. The last paragraph is gold:

"Working as an auto journalist for many years, you end up trying many electric cars in recent years. It's not unusual that one speculates whether it's time to choose such a car, but one can always find a reason to excuse not fully taking that step. It's too pricey, too complicated, or the range is too low, or it doesn't suit because it can't tow, or so on. When one test drives the Model 3 for a weekend it becomes at last clear that there is no longer any excuse. Who can be against such a car which has as much range as a car with a full tank of gas and the same performance as a Porsche 911? This car is simply the car which changes the rules of the game and and there's a risk that other manufacturers will be forced to follow suit in its aftermath. It'll thus be fun to watch the progress in the coming quarters and see what competitors will offer, because one thing is clear, that they'll have to toughen up."

 

[ZeApelido]

his only complaint was (after inspecting everything closely) he found one place that was a couple millimeters off flush.

How very Scandinavian of him.

 

[vikings123]

Normally I'm not a superbull. I couldn't pull the trigger on TSLA until almost 9 years after I started following it (at the IPO). The puzzle pieces didn't "line up" right for me. I look at the risk to reward ratio and call it how I see it. That's why my cost basis is in the low-mid $200's. Yeah, I wished I had bought at the IPO but it didn't fit my risk/likely reward profile at the time.

It might make you feel better to know I haven't been this bullish on any of my stocks since 1998 when I was blown away by the potential I saw in Qualcomm. Yes, over 20 years ago. Don't get me wrong, I've had plenty of great profits since then but I was not a "superbull" on any of them. Fortunately, Qualcomm didn't really take off until more than a year after I turned "superbull" and it had declined by 30%. That gave me time to load up on the dips. I even sold a house and put 90% of the proceeds into Qualcomm (on top of my already large position). When the fuse was finally lit it ended up returning over 3600% in a little over a year. The chart doesn't even tell the whole story because there was the Leap Wireless spin-off which was sold for a tidy profit on top of the insane share price appreciation. I'm less bullish on TSLA in the 1-2 year timeframe vs. 1998 QCOM (it might double) and more bullish on TSLA for the long game, stationary storage, battery manufacturing, autonomy, etc. It has good potential to turn into a financial steamroller. But I could change my mind at any moment.

I'm a strange mix of very cautious investor and a "break all the conservative rules" investor. I don't go in big unless all the puzzle pieces line up right. I've turned down more excellent investments than you can count on your fingers and toes. But on the other hand, I rarely lose much money. I have very few minor disasters under my belt considering how many times I've jumped in big. I like to scoop up the money in big piles when the gettin' is good, when I see the opportunity to do it with great odds on my side. And riding the long "slow" appreciation of solid stocks like MSFT and SBUX, often for 5-10 years at a time. Scalping a few bucks here and there before slinking off in the shadow is not my style. If it's not going to move the needle, I'm not interested.

All that said, let's take a look TSLA share price history after the election, assuming a bear market isn't happening. BTW, elections are weak market medicines (bad or good). Look at Obama's first four years vs. Trumps first four years. Or Obama's second four years vs. Trump's first four years. Although polar opposites, the markets responded very similarly through it all.

Thanks for sharing. What are some other stocks you follow?

 

[PeterJA]

GM's PR machine at work....

Hummer Electric Pickup - 2022 GMC Hummer SUV Details, News, Photos

Actually, the RWD cybertruck is for later. If the Hummer EV gets released on time it will be competing with the AWD and tri-motor variants. And, according to car and driver[1] it will start at $70k -- unlike the cybertruck which starts at $40k. Instead it is priced against the tri-motor which is rated for >500 miles.

1) 2022 GMC Hummer EV SUT: What We Know So Far

I was about to snark that Cybertruck will do to Hummer EV what Model S did to Cadillac ELR.
GM ends output of Cadillac ELR
But I suspect that's wrong.

I suspect that Cybertruck, like Model Y, will ship 6 months ahead of its sandbagged release date, so it will do to Hummer EV what Model S did to Infinity LE -- send it back to the drawing board.
https://www.cars.com/articles/infiniti-cancels-electric-car-plans-1420662986218/

 

[wipster]

Got a VIN about 2 weeks ago.
VIN shows up as registered in our transport department's license plate lookup as of... Monday I think?
Waiting on the call to set up a delivery date.

A coworker got his on the first day. He mentioned that there were a lot of minor hiccups in the delivery process, which is unsurprising for the first day. He mentioned that the car's great, though he does have one bug where occasionally the window will roll down on its own. I suggested he make a service appointment, but he wants to see if they can remote diagnose it, so he's waiting for it to happen again so he can record the time. Fit and finish he seemed quite happy with; his only complaint was (after inspecting everything closely) he found one place that was a couple millimeters off flush.

Whenever I check out the delivery centre, I often look at the cars outside up close. Quality IMHO looks great. I've seen again a couple places where there might be something a millimeter or two out of alignment, but it boggles the mind that anyone would nitpick something like that (esp. since it can be adjusted). The paint is what I'm most impressed with; I haven't seen a single flaw. And when I say "flaw" I don't just mean paint chips or stuff like that; I hold up a flashlight from the side to look for any imperfections (swirl marks, etc) in the clear coat. Nothing - just perfection. And the more I look at the paint close up, the more I love it; they have such lovely paint!

Thanks Karen! I'm sure we'll be able to hear your happy yell over here in Eastern Washington... if we're not sheltering in place that is ;-)

Enjoy!

 

[vikings123]

@EVNow I think you are underestimating how much work can now be done remotely. Technology is making a huge impact.

I agree there will be short term impacts to supply chain and manufacturing but that could be overcome by how quickly we can get back on our feet by leveraging technology.

 

[Krugerrand]

Serious question:

Can anyone explain to me the consistent TSLA moves in the last days compared to the Nasdaq and the sudden change to today?

Serious answer:

Bridge trolls.

 

[hacer]

So, putting my software testing cap on: it is possible to construct a tick-tock ladder down, coordinating a short seller(SS) and not a non-short seller (NSS).
SS: 650
NSS: 645.
SS: I see a low bid and going to sell at 645.01
NSS: 640
SS: 640.01

The question is how fast can it "see" a NSS price? In a coordinated system - even before the order is placed.
It looks like an exploit of a timing issue.
Since computers are fast, i am sure HFT guys would be able to whip up a down ladder like this even with an uptick rule in effect.

I really don't see what you're thinking here. The 650 by SS is an ASK; then the NSS (is a long seller??) sells at the then bid of 645, meaning the SS could have already posted 645.01. Or possibly the NSS sells at various prices from 649.9459 until the bid is driven down to 645. Then the SS can post at 645.01 but it won't trade unless someone bids it up. However with your scenario, that doesn't happen because the long seller steps in and sells into the bid, driving it down to 640.

If instead your NSS is actually buying instead of selling they of course are allowed to buy from the SS's ask.

Short answer: long sellers are allowed to sell into the bid whether there are circuit breakers or not. That can drive the price down. You have to have a net long stock position after the end of the sell to be allowed to do that when the circuit breakers are triggered.

 

[Thekiwi]

Coronavirus has a "proofreading" mechanism that results in low mutability. The worst case scenario we would be looking at is most healthy individual in the 0.2% death rate age group catching the disease and providing herd immunity at which point the virus should die off. (herd immunity only work for virus that doesn't mutate too much too often)

For virus circulating in human population, the weakest survive i.e. virus, bacteria, or animals who play nice with human survive in the long term.

Therefore, even for the worst case the market will probably still be fine. In fact, the faster the virus spread the faster we reach herd immunity. I see this event as a non-issue to Tesla's long term success. They have enough cash to weather couple quarters of demand issues, if any.

People would also likely realize that this virus is mostly a non-issue for healthy individual and the fear should subside after a while when they see people around them recovering, instead of listening to out-of-context death rate quoted in the media due to the bias introduced in underreported confirmed cases, from which a nonsensical death rate are derived.

coronavirus as a family and their proofreading mechanism: Coronaviruses: An RNA proofreading machine regulates replication fidelity and diversity

Interesting stuff. I agree that Tesla long term future is unaffected, but unfortunately nothing you mentioned above contradicts the likelihood we are going to have a recession in the short term.

 

[TNEVol]

JHM, you're literally my favorite TMC poster, so please don't take any offense, but I think you're assuming the government has more power than it does.**

Banks are regulated by the federal government (the Federal Reserve, the FDIC, etc) and can be compelled/cajoled into forced marriages by the regulator.

Tesla is not regulated by the federal government and there's really no mechanism to force it to acquire another company.

The financial crisis is actually quite instructive on this point. Unlike with BofA/Merrill Lynch or JPM/WaMu, GM and Chrysler got bailed out with emergency loans, but the government didn't make Ford acquire either of them. Later on, the government did "force" Chrysler to merge with Fiat (but importantly, they didn't -- and really couldn't -- force Fiat to acquire Chrysler).

Obviously, if Tesla ran into trouble and needed the government's help, then all bets are off -- but I don't think that was the risk being discussed.


** This is of course limited to our current legal regime -- with SCOTUS, the President and Mitch McConnell, you never know what new powers the federal government will discover over the coming months and years.

This administration considered forcing utilities to buy coal as a national security issue. And don't forget the president's threat to force US companies out of China. Normally you are absolutely right but an unchecked authoritarian leader might simply nationalize an industry based upon national security. I have no confidence that anyone would tell him no.

 

[oldTAVguy]

When you charge at home you don't have to touch a handle at the gas station.

 

[Artful Dodger]

After-action Report: Wed, Mar 04, 2020: (Full-Day's Trading)

VWAP: $745.30
Volume: 15,050,277
Traded: $11,216,930,646.15 ($11.22 B)

Closing SP / VWAP: 100.56%
(TSLA closed ABOVE today's Avg SP)​

Comment: "Bears pounced on the Open then macros-multiplied capping all day long"

 

[ammulder]

Covid-19 is more contagious than the Flu (as well as more fatal), and without a vaccine containment is the primary way to beat it, which invariably is leading to a large slowdown/contraction in a lot of sectors of the Global economy. That’s not speculation - the official data showing a contraction is already being released, even as the virus has only begun to spread in many countries. The odds of a recession (2 quarters of contraction) are fairly likely at this stage.

(Emphasis mine both above and below) I feel like I first read this on the BBC, but a quick Google turned up this source instead:

WHO Director-General Tedros Adhanom Ghebreyesus [...] said both COVID-19 and influenza cause respiratory disease and spread the same way, but COVID-19 does not transmit as efficiently as the flu.​

We can also hope that the coming warmer weather will help limit the economic losses... in the northern hemisphere, anyway.

 

[PeterJA]

Go to the blackboard and write 100 times: Paper losses are not losses.

Serious question: Do you consider “paper gains” not gains also?

Serious answer: Yes, except paper gains increase the cushion in my margin account, so I can buy more shares with little risk. That's a real gain in the general sense.

I don't want to sell my TSLA shares until they are a 10-100 bagger from here, so this is almost like not having them. Can't touch them, can't spend them. Except again, I can borrow against them, and relax about my financial future.

I understand that's how billionaires live -- rarely touch their assets and live on loans -- and pay little in taxes for a long time.

 

[LJS22]

Once Tesla is added to the S&P 500, the manipulators may need to seek an alternative target.

Those dummies at WSB Reddit had puts against SPY all week and have been hosed. They found out they don’t control anything. It refused to go under 300 yesterday afternoon even after things kept tumbling. Never seen anything like it. But long story short manipulators will find Tesla. It’s too much fun

 

[ammulder]

Would you encourage everyone to post their individual transaction on this thread?

Only the successful ones that make you look like a genius.

Isn't that the same LG that can't produce enough batteries for the e-Tron?

Well, in fairness, GM and LG Chem are working on a new and presumably dedicated factory. The 30 GWh battery capacity of that plant isn't that fantastic for a 5 year plan including 200 kWh vehicles -- when you look at it as a max production of 200K-500K vehicles per year across 10+ models in 5 years. But at least you can have confidence that LG Chem won't shortchange GM because they sold those batteries to someone else.

Wait, if Tesla keeps growing at 50% CAGR, doesn't that mean Tesla will be at 4M in 2025 when GM is best case at 500K? Wow, that's some serious competition.

I was about to snark that Cybertruck will do to Hummer EV what Model S did to Cadillac ELR.
GM ends output of Cadillac ELR
But I suspect that's wrong.

I suspect that Cybertruck, like Model Y, will ship 6 months ahead of its sandbagged release date, so it will do to Hummer EV what Model S did to Infinity LE -- send it back to the drawing board.
https://www.cars.com/articles/infiniti-cancels-electric-car-plans-1420662986218/

It would help to have at least a hint of where the Cybertruck could be produced...

 

[jhm]

JHM, you're literally my favorite TMC poster, so please don't take any offense, but I think you're assuming the government has more power than it does.**

Banks are regulated by the federal government (the Federal Reserve, the FDIC, etc) and can be compelled/cajoled into forced marriages by the regulator.

Tesla is not regulated by the federal government and there's really no mechanism to force it to acquire another company.

The financial crisis is actually quite instructive on this point. Unlike with BofA/Merrill Lynch or JPM/WaMu, GM and Chrysler got bailed out with emergency loans, but the government didn't make Ford acquire either of them. Later on, the government did "force" Chrysler to merge with Fiat (but importantly, they didn't -- and really couldn't -- force Fiat to acquire Chrysler).

Obviously, if Tesla ran into trouble and needed the government's help, then all bets are off -- but I don't think that was the risk being discussed.


** This is of course limited to our current legal regime -- with SCOTUS, the President and Mitch McConnell, you never know what new powers the federal government will discover over the coming months and years.

Wow, I didn't know I was anyone's favorite.

My comment as partly in jest, but I actually work at one of these SIFIs. I can tell you that financial institutions have become much more heavily regulated, largely in response to the financial crisis that forced these bailout mergers. Could such a thing happen with auto makers? I can't rule it out. Crises can lead to abrupt policy changes.

If Tesla becomes nearly monopoly in this country, especially a monopoly for robotaxis, it may find itself deeply regulated. The political risks go up, the more economic distress and worker displacement there is. Vehicle autonomy could kill off large numbers of job, while becoming a technology of strategic importance to national security. If enough people are upset and frightened, politicians will arise to try to fight for them.

So I'm not saying any of this will happen. These are just scenarios. But with scale comes political risks.