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

[Nightshifter]

Apple is not an auto manufacturer, they are barely a manufacturer at all in fact. Almost everything they sell is built by someone else. If Apple had the perfect car, and started to work towards building it, it would take at minimum two years before anything was sold. Real world would be three or more years. I don't hate Apple, in fact I own Apple stock. They just are zero threat to Tesla at the moment.

Ever heard of Magna Steyr in Austria?
Magna Steyr

 

[SpeedGoat]

I think it's this. If anyone could take on Tesla it would be Apple. Don't get me wrong, I'm still TSLA Bull. But I think weak bulls and bears would see this as a big big deal.

Apple is clearly working on a car and this will clearly hurt TSLA.

The auto industry is manufacturing. What exactly does Apple manufacture?

There is no reason to expect Apple to be any faster to crack the code on how to build large volumes of high quality cars at an affordable price than Tesla. Of course they could do it given enough time and money, but it is a 10+ year process if things go well.

 

[hiroshiy]

High speed rail requires frequent and perfect maintenance. I read some time ago that in Japan, they refresh (polish and repair) ten percent of the Shinkansen rails every day. I don't know if that's still true, but I can't see that level of maintenance happening in North America. Hyperloop requires little maintenance.

With Shinkansen rail is replaced every 10 years. The rails will wear about 9mm or 0.354 inches in 10 years.

 

[StealthP3D]

Ever heard of Magna Steyr in Austria?
Magna Steyr

Aren't they the ones that manufacture that non-Apple "Tesla killer", the Jaguar iPace?

 

[Bobfitz1]

What if, a legitimate if, Tesla owners becomes less enthusiastic about Tesla to their friends and families as Tesla becomes *mainstream* by advertising? Who wants to remain part of the mission if their participation can be replaced with an ad? Who want to rave about a hole in the wall if the whole world know about it?

Reasonable people can disagree on whether some modest level of advertising makes sense (sometime later this year).
What anyone who owns a Tesla will agree on is that we will never become less enthusiastic in showing friends, relatives and strangers why once you drive a Tesla you'll never consider buying an ICE vehicle again.

 

[jerry33]

With Shinkansen rail is replaced every 10 years. The rails will wear about 9mm or 0.354 inches in 10 years.

Right. But they have to be maintained during that period, which is what I was referring to. Sorry I didn't make that clearer.

 

[Nightshifter]

Aren't they the ones that manufacture that non-Apple "Tesla killer", the Jaguar iPace?

Yes, and a lot more:
BMW5 series
Mercedes-Benz G-Class
BMW Z4
Toyota Supra
and a long list goes on...

Its not about that they do, its about what they can. ;-)

 

[CyberDutchie]

Indeed, ten minutes ago TSLA got shoved down through $700, and undoubtedly triggered the stop limits of weak longs, which created a cascade dropping it further down to $673. Once the low was hit, dip buyers appeared. The attack was made easier to accomplish in the midst of falling macros.

Curt is right. MM attempted to get closer to 700 in premarket. Once it was close enough they could launch their attack (helped by bad macros) and trigger stop limits. The opportunity is there at every hundreds multiple, because of the psychological effect.

 

[LJS22]

Not sure what’s going to happen but I like buying shares here. We just need a good earnings to look like short term genius. We are already smart long term

 

[adiggs]

So concludes today’s zen session. Buy the oil dip.

I'm laughing. And I particularly like your dry sense of humor @Krugerrand.

 

[Drax7]

Post pandemic, world relations with China will be strained.
Gotta wonder if that will affect Tesla.

 

[adiggs]

Could you expand on this a little?

For an introduction to options, that is quite approachable, and that can answer the question about the risks in options, I commend the education on www.optionalpha.com. For this particular question, I think that the first track is all you'll need - about 10 hours of videos / material.

A grossly shortened version being that you risk 100% or worse losses on single leg trades (purchases put everything at risk, with 100% losses quite frequent; sales of options risk worse than 100% losses, and are theoretically infinite). That leaves a lot of detail out. There are also mechanisms for managing risk; that's where some education comes in.


There are a couple or 3 options related trading threads in this forum that might also help (trading, options trading and advice, trading the wheel in TSLA).

 

[Hock1]

Could you expand on this a little?

It's a big topic, but I'll try to expand "a little". First let me be clear that I've spent over 50 years in the market. Every penny I have, I have made investing in public companies over that time frame. I can say that as an investor, and a broker/money manager for over 20 years, that options are a losers' game, IMO. I'm not going to get into a discussion about that at this time. The single negative ramification that worries me, with regard to those not totally informed, is the selling of put options. I'll recount a couple of instances: 1) there was a poster here who announced to the board that he had just sold 10 put options, but wished he had sold 100( the stock was around 320-330 ) He didn't mention a strike, but a gave the example based on a $300 strike, what would happen if the SP dove for what ever reason, say a gap down to $250. I asked him if he was prepared to put up $300,000, if he was assigned the 10 options. And then, I pointed out the fact that, if he had gotten his "wish" of 100 options, he'd be on the hook for $3,000,000. I forget the conversation after that, but I could tell it was an eye-opener. 2) There was another situation where a guy had sold 15-20 options, the stock dove and he was surprised to find that he had been assigned 9. He was looking for help, but once you-re assigned, that's it. I don't recall any posts by him after this. Gaps down, as we have found out with TSLA, can be devastating. I have seen it happen: people being on the hook for a lot of money that they didn't have and had no visibility of ever getting it. Another example of a misunderstanding of options, is that many think they have until expiry to buy back a shorted put (or call). They don't!! The holder of that sold option can exercise that option ay any time up until expiry, even if it is out of the money. People can get in a lot of trouble. Bottom line, I wish people would realize that long-term investing in stock is, hands-down, the best way toward wealth. If they can't, then at least be aware of the dangerous game they are playing with options.

 

[StealthP3D]

I see an increasingly large disconnect between stock prices / stock market, and the real economy. Over time, the stock market is more likely to correct and reflect the real economy, than the real economy correct and reflect the stock market. Or at least this one will.

Is it a true disconnect or merely a difference of opinion? It's all about valuing assets. How much is a company worth? What would you pay for it?

People who think the stock market is overvalued (now or anytime) are typically looking at next quarters earnings or perhaps they're using valuation methods developed decades ago that they think are sensible or have passed the "test of time". But people with money or savings need to buy something or remain invested in cash. They can buy real estate but that comes with a tax burden and potential other liabilities like maintenance or tenants. It can also crash in value. Cash has it's own issues (namely inflation and the fact that cash is non-productive).

For these reasons, I take a more liberal view of valuing the overall stock market. It's worth whatever someone is willing to pay for it. You can argue that the market is over-priced because it will probably never be worth more than that in the future. But for those investing for retirement, that can be a long time. So the only useful argument that the market is overvalued must show that it's unlikely to appreciate over the expected life of the investment or that there is an investment that is likely to give better returns (even if that is cash).

In the end I think most of these "market is overvalued arguments" come down to the reality that money isn't worth what it used to be worth. Yes, things like food, clothing, TV's and even entertainment have been getting cheaper (relatively speaking) over time while real wages have been falling. The value of labor isn't what it used to be (even if a laborer can make $25/hour). Money just isn't worth much anymore because there is so damn much of it. And it's all looking for a home. And the fact that the workers of the world are not in possession of all this money doesn't change that reality.

Having said all that, yes, I do think the overall market will be bumpy for a while. But I think in the bigger picture the long-term trend is up. And it's even more difficult to forecast the movement of an individual company such as Tesla. Which is why I'm not selling any shares even though I believe it may drop substantially from here. Tesla is highly likely to outperform the broader market by a very substantial margin. Which is why the market is applying a nice premium relative to it's expected near-term earnings.

 

[Mo City]

Post pandemic, world relations with China will be strained.
Gotta wonder if that will affect Tesla.

There is a humongous amount of American manufacturing in China. One advantage Tesla has is the Shanghai GF is geared to the domestic Chinese market as opposed to exports (particularly to the USA). If Trump decides to lower the hammer with additional punitive tariffs, Tesla's growth shouldn't be affected.

IMO, no matter how economically hostile things become, Tesla will be fine. The concern I have is the inevitable second China GF could be delayed. If global capitalism doesn't fall apart, I expect an announcement within 3 years.

 

[StealthP3D]

Yes, and a lot more:
BMW5 series
Mercedes-Benz G-Class
BMW Z4
Toyota Supra
and a long list goes on...

Its not about that they do, its about what they can. ;-)

Are you saying Magna Steyr can compete head to head with Tesla in the high volume EV market? Because that's what you appear to be implying. I don't think that's realistic.

That argument might have had merit back when Tesla only had Models S&X.

 

[Intl Professor]

Post pandemic, world relations with China will be strained.
Gotta wonder if that will affect Tesla.

Only while Trump is prez. We see this with every Republican campaign. With Bush II it was war with Iraq. With Trump in 2016, it was Mexico. With no friends, you gotta have enemies. It's one of the big three in FUD. It's international relations 101. To paraphrase the great Jess Unruh, "It's the mother's milk of McCarthyism."

Young people understand this stupid dance with Lucy and the football. Don't be a dope on the rope. An advice.

 

[MartinAustin]

Model S 0-60 just got shortened to 2.3 seconds. Still improving the product even before Plaid comes out!

 

[Drax7]

Only while Trump is prez. We see this with every Republican campaign. With Bush II it was war with Iraq. With Trump in 2016, it was Mexico. With no friends, you gotta have enemies. It's one of the big three in FUD. It's international relations 101.

Your assertion is laughable.

25,000 dead in Italy. 100,000 in Europe,
US deaths approaching 50,00.
Economic losses in the trillions.
Retribution against China would not surprise me.

Gotta wonder if Tesla will be caught in the crossfire.

 

[CyberDutchie]

There is a humongous amount of American manufacturing in China. One advantage Tesla has is the Shanghai GF is geared to the domestic Chinese market as opposed to exports (particularly to the USA). If Trump decides to lower the hammer with additional punitive tariffs, Tesla's growth shouldn't be affected.

IMO, no matter how economically hostile things become, Tesla will be fine. The concern I have is the inevitable second China GF could be delayed. If global capitalism doesn't fall apart, I expect an announcement within 3 years.

What about the FSD chip, isn't that manufactured in China? I remember this topic here discussed a while ago but too lazy to try to find it.