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

[Krugerrand]

This doesn't really bother me much. Because it's just building steam pressure under the cap. Remember, the same sugar was happening last year and into this year until they couldn't keep the lid on it and then it exploded to over $900 in short order.

The pot is starting to simmer, woe to those who think they can keep the lid on tight! How high will it go this time?

Do you not think the steam can be completely released if/when we hit THE recession? If they keep the lid on until then, then TSLA falls with the market and they pile on making a killing on the way down yet again and then hold it down through the entire subsequent bear market and we’re stuck in another several year long trading range well below fair market value.

No skin off my back, but a lot of less convicted people are going to get frustrated and be conned out of their shares as a result and as has already happened many times here. (It’s Wednesday so it’s show a little empathy day.)

Or, do you think S&P inclusion will negate that for the most part?

 

[jerry33]

I haven't found Munro's insights in to electronics to be all that cogent.

I think you have to pay him money to get the cogent insights.

 

[replicant]

What do you mean market supporting the digitization of the economy? Are you talking about if there are data out there proving that the market is transitioning to stocks that are primarily digital companies?

Not very hard to find examples of digital companies surviving as others are collapsing, in fact digital companies caused their collapse for the main part. Netflix vs blockbuster, Amazon vs malls

I'm asking for data that show how Big Tech stocks can continue to grow while the rest of the economy collapses. I bet they'll exit the recession **relatively** stronger than the rest of the economy, I just can't imagine how their valuation doesn't depend on aggregate demand and how the stock market can justify its historical level when most companies are preparing for a recession. Big Tech's strength isn't enough IMO.

NB: I still have 99% of my financial assets in TSLA (the rest being real estate -- my home). I expect some serious deflation before hyperinflation but I've never been able to time the market so, HODL.

 

[StarFoxisDown!]

Do you not think the steam can be completely released if/when we hit THE recession? If they keep the lid on until then, then TSLA falls with the market and they pile on making a killing on the way down yet again and then hold it down through the entire subsequent bear market and we’re stuck in another several year long trading range well below fair market value.

No skin off my back, but a lot of less convicted people are going to get frustrated and be conned out of their shares as a result and as has already happened many times here. (It’s Wednesday so it’s show a little empathy day.)

Or, do you think S&P inclusion will negate that for the most part?

S&P but also Q3 and Q4, which will be incredibly strong quarters, I think would shield the stock from going anywhere close to the 400 range if the market crashes again from a recession

But yes, I've always thought that the goal of the manipulation wasn't to push the stock down in big swings, but to cap rallies and limit upside potential. Everyone points to the incredible rally from 300 to 900 but if you extend the trading chart to the beginning of the 5 year trading range, the annual returns aren't that spectacular. Wall St made its money by playing the peaks and bottoms of that 5 year trading range and they'd love to get the stock in another multi year trading range to do the same thing again. I'd put money on Wall st trying to cap the peak here in hopes of macros retracing and taking tesla stock down with it so that they can make money on both sides. Because we all know the stock will then bounce back to this level. Rinse and repeat

 

[scaesare]

I think you have to pay him money to get the cogent insights.

lol...


Based on the inaccuracy of what he's published, I'll pass.

I might by a piece of model 3 trim for a paperweight, however...

 

[Singuy]

Market is going up on hopes that: (1) the Fed is not going to let America default and (2) things are going back to normal. Things are not going back to normal. Jobs, businesses, consumer confidence yada yada yada. We're still stuck thinking about the recovery of the supply chains while demands will ultimately be the deciding factor. I'm not talking about demand for Tesla but demands in general. don't know what's going to shake our confidence in the Fed. Maybe a massive wave of bankruptcies and mortgage defaults? I'm scared of thinking about what a $2k monthly check is going to do to the deficit.

Plenty of winners out there and your sentiment only apply to losers.

Who is a loser?

Any company that has the majority of market share of x, y, and z are the losers while companies trying to gain market share from the incumbents are the winners.

Tesla has 1% market share. Toyota and Volkswagen has 60% marketshare. Who do you think will shrink and who do you think wouldn't be phases by all the economic contraction you are talking about? It's basic math and people like Warren doesn't seem to get it. Plenty of winners where this economic downturn wouldn't do crap to a company with such small market share. More than likely these companies will grow despite of impending doom. Mix that with no other alternatives and you'll find that winner.

 

[dl003]

Plenty of winners out there and your sentiment only apply to losers.

Who is a loser?

Any company that has the majority of market share of x, y, and z are the losers while companies trying to gain market share from the incumbents are the winners.

Tesla has 1% market share. Toyota and Volkswagen has 60% marketshare. Who do you think will shrink and who do you think wouldn't be phases by all the economic contraction you are talking about? It's basic math and people like Warren doesn't seem to get it. Plenty of winners where this economic downturn wouldn't do crap to a company with such small market share. More than likely these companies will grow despite of impending doom. Mix that with no other alternatives and you'll find that winner.

You're preaching to the choir here. You're describing the behavior of sensible investors and yet the market is anything but sensible right now. This ..., whatever you want to call it, is keeping people like Buffett out. Only 10% of fund managers think this rally will last. I know some may think WB is old news; I'm neutral on him. How about Chamath Palihapitiya? Here's his stance
Chamath Palihapitiya on Twitter
"Just not enough USD in the world (unless you print infinite money and render it valueless) to keep buying / threaten to buy assets like this. This bubble, like others, will burst."
Chamath outperformed Buffett by a large margin. He's also representing a different class of investors: new, growth oriented, and socially responsible. And yet they both are saying the same thing. Well, WB, not so much. He would have tanked the market if he said this was a bubble but his action spoke volumes.
When that bubble bursts, I bet you anything, anything, that winners will also go down. So what's in it for these people to get in now?

 

[Singuy]

You're preaching to the choir here. You're describing the behavior of sensible investors and yet the market is anything but sensible right now. This ..., whatever you want to call it, is keeping people like Buffett out. Only 10% of fund managers think this rally will last. I know some may think WB is old news; I'm neutral on him. How about Chamath Palihapitiya? Here's his stance
Chamath Palihapitiya on Twitter
"Just not enough USD in the world (unless you print infinite money and render it valueless) to keep buying / threaten to buy assets like this. This bubble, like others, will burst."
Chamath outperformed Buffett by a large margin. He's also representing a different class of investors: new, growth oriented, and socially responsible. And yet they both are saying the same thing. Well, WB, not so much. He would have tanked the market if he said this was a bubble but his action spoke volumes.
When that bubble bursts, I bet you anything, anything, that winners will also go down. So what's in it for these people to get in now?

The bubble burst because my million are in CDs. It's the cause and effect. Market will transition from high risk assets that has high PE to safer alternatives with high returns. 2.3% is inflation. People start divesting out when returns is higher than inflation and taxes.

 

[goinfraftw]

So, I dunno if anyone's keeping track from an investment perspective, but in the past 6 months we've seen:

- Continent-wide wildfires take over Australia
- Massive locust swarms in East Africa
- COVID-19 worldwide Pandemic / Lockdown
- Siberia w/ 80° F heat wave (when it should be 20° F)
- Super Cyclone in East India
- "Megadrought" in California
- Snow, in May, in the Northeast USA
- POTUS taking Hydroxychloroquine w/o having COVID-19

Meanwhile, Tesla has skyrocketed and fluctuated significantly in these same months.

I'd say we're in a new normal now and up-ending the electrical grid, transportation, and reducing all carbon emissions, in general, would be a good thing ASAP...

 

[adiggs]

So what's Friday's close price then? $820, perhaps? Jeeze...

Still it's good for weekly options having all this advance warning!

My max pain calculator has max pain this week at $800. The OI walls are at 700 and 900 (with a pretty big one at 850). More importantly, there is amazingly large volume today (seems to be typical for TSLA the final week to expiration, week after week) at:
- 900 calls (over 8k contracts traded today)
- 850 calls (nearly 11k contracts traded today)
- 820 calls (largish volume at 4k contracts today)
- 800 and 820 puts (largish volume at 3k each)

I expect OI walls to spring up at 800, 820, 850 and 900 (call side), and 700, , 750, 760, 790, and 800 (put side), with much bigger OI walls on the call side. Also more calls this week than puts.

There are some big bets north of $850, and some largish (but much smaller) bets at a 800-820 finish for the week, with max pain currently 800 (it can and will change throughout the week).


All data from Stock Option Max Pain.

Previous conversation indicates this data is different from opricot.com. I can't compare them as the machine I'm using to grab this data has opricot flagged as a no fly zone for me, and it hasn't been worth the energy to me to access the site from another machine.


My interpretation - 800-820 closing range for Friday, with option sellers looking for as close to 800 as they can get.

 

[dl003]

The bubble burst because my million are in CDs. It's the cause and effect. Market will transition from high risk assets that has high PE to safer alternatives with high returns. 2.3% is inflation. People start divesting out when returns is higher than inflation and taxes.

But the bubble didnt form on 0% rate. In fact it dropped massively (there might have been some sell the news going on). It only went up because of QE and got into overvalued territory on hope of normalcy. I think it will take much more than 2% CDs to pop it while deterioration of confidence can get the job done more quickly.

 

[adiggs]

This doesn't really bother me much. Because it's just building steam pressure under the cap. Remember, the same sugar was happening last year and into this year until they couldn't keep the lid on it and then it exploded to over $900 in short order.

The pot is starting to simmer, woe to those who think they can keep the lid on tight! How high will it go this time?

Agreed on the steam pressure building.

If nothing else, trading in this 800ish window is helping to move the 'Overton window' (I realize that's a political concept - I'm using it by analogy to a trading window concept) for TSLA from the 300's to the 800's.


I realize this doesn't apply to you @StealthP3D (you're going to hold through this range, whether we're here for weeks or years) - for others, keep in mind that the market can be irrational for way longer than anybody can be solvent. I thought, many times, that we should have been out of the 280-380 trading range back when that was a thing FOR YEARS (trading in that range).

The pressure finally built (over years) and last fall we traded from that range up to $900 (and back down to $400). We might be in this range for a few days or weeks (nearly ready to take off to the next trading range); and we might be here for years.


I don't yet have any as strong an opinion I'll trade whether we're in a $400-$900 trading range, a $700-900 trading range, or just taking a pause that refreshes on our way to a new trading range > $1000. To the extent I have an opinion today, I think we're in the $400-900 range (which, yes, means that I think we'll see something under $700 before we see something over $900 in the very short term - weeks or a few months).

 

[StealthP3D]

They say a watched-pot never boils. Maybe we should start punishing on-thread discussion to keep our eyes off the pot.

I assume you mean "on-topic" discussion which I'm in favor of. It does seem the thread has an unhealthy and impatient fixation on the exact share price at any given moment though. It's almost as if we have a bunch of nervous Nellies with no confidence in their ability to pick a winner without constantly looking towards the market to confirm their conclusions.

IMO, it's perfectly OK for the market to disagree with me. When it comes to investing, time is the great equalizer. In fact, without the dimension of time, there would be no investing.

 

[replicant]

The bubble burst because my million are in CDs. It's the cause and effect. Market will transition from high risk assets that has high PE to safer alternatives with high returns. 2.3% is inflation. People start divesting out when returns is higher than inflation and taxes.

I haven't research past market crashes, but I could imagine a recession without inflation or without safe laternative investments (with high interest) that makes the stock market tank. People only some data showing the start of a recession story, some worrying comments and a panic to sell to the bottom. One does not care about 2.3% of yearly inflation while fearing a 33% drop in asset price.

 

[StealthP3D]

Would it be a good idea for Tesla to round up all inventory left over from Q1 and send it to Europe in April? This would eliminate the "under the gun" situation we have now where RoRos will arrive just few weeks/days before Q end and the delivery logistics will be tough

Q: How does that fly using first-principles thinking?

A: It doesn't.

 

[Singuy]

But the bubble didnt form on 0% rate. In fact it dropped massively. It only went up because of QE and got into overvalued territory on hope of normalcy. I think it will take much more than 2% CDs to pop it while deterioration of confidence can get the job done more quickly.

What do you mean? Stock dropped for a total of 2 weeks and at the same time rates dropped to zero, before rebound

Same with last financial crisis. Look at the time when rates hit zero, that was when stock hit bottom.

 

[ggr]

Would it be a good idea for Tesla to round up all inventory left over from Q1 and send it to Europe in April? This would eliminate the "under the gun" situation we have now where RoRos will arrive just few weeks/days before Q end and the delivery logistics will be tough

Can't. Different lights, charge ports, other homologation stuff.

 

[StarFoxisDown!]

Agreed on the steam pressure building.

If nothing else, trading in this 800ish window is helping to move the 'Overton window' (I realize that's a political concept - I'm using it by analogy to a trading window concept) for TSLA from the 300's to the 800's.


I realize this doesn't apply to you @StealthP3D (you're going to hold through this range, whether we're here for weeks or years) - for others, keep in mind that the market can be irrational for way longer than anybody can be solvent. I thought, many times, that we should have been out of the 280-380 trading range back when that was a thing FOR YEARS (trading in that range).

The pressure finally built (over years) and last fall we traded from that range up to $900 (and back down to $400). We might be in this range for a few days or weeks (nearly ready to take off to the next trading range); and we might be here for years.


I don't yet have any as strong an opinion I'll trade whether we're in a $400-$900 trading range, a $700-900 trading range, or just taking a pause that refreshes on our way to a new trading range > $1000. To the extent I have an opinion today, I think we're in the $400-900 range (which, yes, means that I think we'll see something under $700 before we see something over $900 in the very short term - weeks or a few months).

Despite the fact that I think there's clear evidence that Wall st wants a trading range to make money on both sides of the trade, I do think if Tesla executes on their business and growth, there will be no trading ranges going forward. Wall St got lucky that the Covid outbreak happened when it did and even then Tesla executed so well that they still had huge revenue growth over Q1 2019 and was profitable. The 5 year trading range we were stuck in was definitely aided by Tesla's missteps with the 3 ramp, Giga1 ramp, etc..... which made revenue growth very lumpy and uneven and losses lingered on much longer into the ramp than initially thought. The tax credit reductions were constantly used as fear mongering about demand. I for one am very glad the EV tax credit is gone at this point.

It will be much harder to keep a trading range on a stock when the company is executing on profitability and revenue growth consistent. If I had to guess we're lacking any real buying volume because buyers are worried that a outbreak could happen at the factory at any point in Q2.

 

[pyromatter]

 

[dl003]

What do you mean? Stock dropped for a total of 2 weeks and at the same time rates dropped to zero, before rebound

Same with last financial crisis. Look at the time when rates hit zero, that was when stock hit bottom.

I only said that because the Fed announced 0% interest rate on 3/15 (Sunday). On Monday, market dropped another 5%
On 3/23, it expanded QE to cover corporate and mortgage lending with JPow announcing "whatever it takes". 3/23 was the bottom.
Maybe it's just unfortunate timing.