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

[mars_or_bust]

OK, Tesla SP is hemorrhaging, but Tesla's is competition is hemorrhaging much much more actually. So when all this blows over (6-12 months probably) Tesla will be in a much better relative position than now. Long term wise, this crisis is excellent for Tesla, even though we all lost a bunch of (virtual) money (and will likely lose even more in the coming months).

As Third Row podcast tweeted:

 

[Fact Checking]

I hate to disagree, but I'm afraid that's wishful thinking and wouldn't stand up to scrutiny. A car factory simply isn't what the health order means to allow.

What a government order "means to include" is, by law, not included in most cases, unless written down and clearly defined somewhere. Law abiding citizens are not mind readers.

This is a pretty fundamental legal principle and is how the rule of law works in constitutional democracies.

If the county wants to close Fremont they'll have to write more explicit regulations with stricter exceptions. Tesla might also restrict work activities voluntarily, and enact safety measures, like they did in China.

 

[SMAlset]

I called our local city planning office to ask if they would still be open and she said for now yes. As to the work performed by contractors she sent me to the same link for Santa Clara County that @Fact Checking posted: Order of the Health Officer of the County of Santa Clara - Public Health Department - County of Santa Clara

It does say electrical on there so I guess we'll see what our electrician says later tonight when he calls. He'll need to get his stucco guy out after the City okays the work to seal up the area though. Our electrician lives outside of the affected SF Bay counties.

Guessing the Tesla Service Centers in the SF Bay area can still operate under this.

Yep, definitely a new world for what sounds like a few months possibly.

 

[mars_or_bust]

He didn't say the overreaction is stupid, he said panic is stupid.

-like how me being Asian now have people actively staying away from me while I'm at the gym(and in most cases leaving)
-or that my daughter arrived at the playground and people pulled their kids out
-or how all the grocery stores ran out of everything even though they are restocking everyday
-or people stealing any masks at our hospital to the point that it's affecting pt care.

Panic is stupid and always will be.

Nah, it was a very ill advised and ill timed tweet, too open to wrong interpretations.

But we are dealing with a much more mature and wise Elon now, and he backtracked on that tweet magnificently and subtly. In the old days he would have gone into a needless tweet war, doubling down on his stance, and creating a pr *sugar*storm.

 

[MC3OZ]

Me too! Only stick with the big names tho. They are priced for bankruptcy so it's now or never.

Cruise lines are a very brave, and long term purchase IMO...

The "virus effect" on their business model could last 5-10 years IMO.

Still if the price is low enough, the business is ultimately sound, and you can wait long enough, things will turn around...

But do you think they have the cash and/or backing to ride out a long term demand drop?

 

[SOULPEDL]

UK just got locked down. I'm WFH indefinitely.

It's OK. I've been doing it for a decade... ramping up in fact.

 

[aubreymcfato]

Wish they would at least ban short selling for the short term as S.Korea did to settle the markets.

Italy and Spain banned all options (don't know for how much days).

 

[KSilver2000]

Fremont isn't the City and County of San Francisco, so I'm not clear on why you imply SF rules would apply there.

it’s pretty much the same restrictions in all surrounding counties, including city of Berkeley.

Apparently it will be a misdemeanor in SF if you disobey the restrictions.

 

[aubreymcfato]

I don't know, I am really regretting not selling some when it was at 900-800. I have 104 shares at a price of 270.
With everything going as it is, wouldn't you think a price of 350 is in the cards short term? Holy crap, I could have almost doubled my position had I seen this coming.
Do I hold or sell some and buy back in if it gets lower? Its getting hard to lose 10 grand every day.

I'm in a very similar position, slightly worse than yours.
But our train is gone, we didn't sell, so right now TSLA is at 440$ and it's still going down.
Read what @StealthP3D writes about compound interest and chew on it, babble it like a mantra.
I know I can't time the market, so I am 100% sure that I would sell too late and then buy too late or too soon. I would lose 27% of my profit in taxes and thus I would lose shares.
I also know that I would *hate* the feeling of not owning TSLA. Lose some sleep, etc. Don't need that in these days...

So, few days ago I just sold 8 at $540 (with profit) as a psychological trick to fool myself:
I just want to be able to buy more than 8 shares with the dry powder I gained, to feel I didn't wasted this drop.
Just to feel I'm a genius investor ;-)

 

[Sudre]

I sure hope so, because my job requires utility capital projects to continue. (I'm on the software side) FWIW, utility companies are pretty much immune from market downturns. Regulated prices/costs, and people really can't decide to stop using electricity just because the market is down.

In St Louis they are already not shutting off service if you don't pay. That is for water, sewer and electricity. Sure you may have to pay up later (months? year?) but how long can a utility hang on when everyone that can not make an income from home is not paying bills? Serious question.

 

[Chunky Jr.]

thanks to Tesla and Apple my portfolio is only awful instead of f***g awful.

Hopefully when this passes there will be a lot of pent up demand

 

[SMAlset]

it’s pretty much the same restrictions in all surrounding counties, including city of Berkeley.

Apparently it will be a misdemeanor in SF if you disobey the restrictions.

The SF news conference said it involved I think a total of 6 counties including where Fremont is located. Saw SJ Mayor Liccardo speak as well.

 

[mblakele]

What a government order "means to include" is, by law, not included in most cases, unless written down and clearly defined somewhere. Law abiding citizens are not mind readers.

This is a pretty fundamental legal principle and is how the rule of law works in constitutional democracies.

If the county wants to close Fremont they'll have to write more explicit regulations with stricter exceptions.

I wish I could agree, but I can’t. The order makes its own intent clear:

http://acphd.org/media/559658/health-officer-order-shelter-in-place-20200316.pdf

The intent of this Order is to ensure that the maximum number of people self-isolate in their places of residence to the maximum extent feasible, while enabling essential services to continue, to slow the spread of COVID-19 to the maximum extent possible. When people need to leave their places of residence, whether to obtain or perform vital services, or to otherwise facilitate authorized activities necessary for continuity of social and commercial life, they should at all times reasonably possible comply with Social Distancing Requirements as defined in Section 10 below. All provisions of this Order should be interpreted to effectuate this intent. Failure to comply with any of the provisions of this Order constitutes an imminent threat to public health.
​

Tesla might also restrict work activities voluntarily, and enact safety measures, like they did in China.

Absolutely, and I hope that’s how it works out. But Tesla would be wise to coordinate, not assume.

 

[Cherry Wine]

Here's the County of Santa Clara order:

Order of the Health Officer of the County of Santa Clara - Public Health Department - County of Santa Clara
​

Tesla factory might be exempted:

For the purposes of this Order, "Essential Businesses" means:

• Newspapers, television, radio, and other media services;
• Gas stations and auto-supply, auto-repair, and related facilities;
• Banks and related financial institutions;
• Hardware stores;

If hedge funds, business rags and car dealerships can stay open, Fremont certainly looks essential as well as an "auto-supply" facility.

While the order's verbiage leaves wiggle room, I think the spirit of the order would apply to Tesla's service centers, not factory. With that said, the factory would be needed to supply the service centers. There is an argument to be made.

 

[StealthP3D]

Put bluntly - working capital leverage deterioration is possibly going to create some big negative headlines for Tesla (and many other companies)

That's only an issue in those cases where there is not enough working capital to cover the disruption.

1) The government will almost certainly offer loans for companies that would be overly stressed by this.
2) Tesla is in such a strong cash position it is a complete non-issue.

 

[Krugerrand]

FYI - I was discussing the Tesla factory being in danger of shutdown over a week ago because of the virus, but it was deemed not an appropriate subject for this main investment thread.

just saying, stifling conversation about Coronavirus in the main investor thread was a mistake.

Look, it’s not the end of the world. Whether they shutdown for a bit or not is inconsequential at this point.

The market is insane and the SP was going down a lot regardless if Tesla delivered 60,000, 83,000 or 100,000 cars this quarter.

Tesla will be fine. They’ve planned and prepared for a recession and the like. They are as well situated as any non-toilet paper company could be.

Everybody needs to chill out and quit stirring the righteous indignation and fear-mongering pots. Shut your phone, laptop, Internet device off and go have copious amounts of sex, walk around the block for some fresh air, save a stray cat, and reflect on all the things you should be thankful for.

 

[Singuy]

Cruise lines are a very brave, and long term purchase IMO...

The "virus effect" on their business model could last 5-10 years IMO.

Still if the price is low enough, the business is ultimately sound, and you can wait long enough, things will turn around...

But do you think they have the cash and/or backing to ride out a long term demand drop?

Well there will 100% be a working vaccine, and once that happens this virus will be old news. People in the U.S are not the type that lingers around old history.

Also the banks will never allow these cruiseliners to go bankrupt. They will do everything in their power to bail them out because it's one thing to have foreclosed houses, it's another to have foreclosed cruise ships and the only companies that know how to run them are bankrupt. It's a lose lose situation no one dare to allow.

 

[clp1]

I'm in a very similar position, slightly worse than yours.
But our train is gone, we didn't sell, so right now TSLA is at 440$ and it's still going down.
Read what @StealthP3D writes about compund interest and chew it as a mantra.
I can't time the market, so I am 100% sure that I would sell too late and but again too late or too soon. I would lose 27% of my profit in taxes and I would lose shares.
I also know that I would *hate* the feeling of not owning TSLA. Lose some sleep, etc. Don't need that when in these days...

So, few days ago I just sold 8 at $540 (with profit) as a psychological trick to fool myself:
I just want to be able to buy more than 8 shares with the dry powder I gained, to feel I didn't wasted this drop.
Just to feel I'm a genius investor ;-)

I did end up selling 35 shares, hated doing it, but hated not doing it more when it was higher. I have 69 left...I should have done this before and I'd have all my of my initial investment back, then "losing" a huge amount short term wouldn't be so bad.

I'm not rich and have been buying a few shares every month for the last 4 years, up until it got above $350. The Fremont factory closing will hurt the share price I think, the market lost it's mind and I don't know how to buy puts, spreads and such. Just a simple investor trying to make a buck or 2. I'll ride the storm out and jump back in when people calm down some.
Hopefully, I'll be able to buy more than I sold and I'll think I did the right thing. Taxes should be minimal as they are all long term gains.

 

[Thekiwi]

UK now also advising people to stay home - not a full lockdown yet, but I would expect it soon. Hopefully quarterly UK deliveries can be completed before it comes in.

 

[Thekiwi]

Look, it’s not the end of the world. Whether they shutdown for a bit or not is inconsequential at this point.

The market is insane and the SP was going down a lot regardless if Tesla delivered 60,000, 83,000 or 100,000 cars this quarter.

Tesla will be fine. They’ve planned and prepared for a recession and the like. They are as well situated as any non-toilet paper company could be.

Everybody needs to chill out and quit stirring the righteous indignation and fear-mongering pots. Shut your phone, laptop, Internet device off and go have copious amounts of sex, walk around the block for some fresh air, save a stray cat, and reflect on all the things you should be thankful for.

The longer they shut down, the worse the working capital situation gets. Tesla may need another large cap / debt raise.