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

[Tslynk67]

But isn't almost every fund part of a brokerage/bank or some other entity? So if they are convinced that Tesla will be included in x weeks/months can't they buy stock in some other account and then sell it to their index funds at the exact stock price Tesla has when included in the index? That way the funds would get the 'correct' price to start with and avoid the 'stampede' the week before.

Sure there is a risk that the stock could go down but any stock that looks to be included in an index should be more likely than not to beat the average stock market. And if it goes up that's profit they can keep to themselves instead of giving it to the fund.

I can't really see much negative for anyone doing it this way.

Yeah, logically you're correct, of course - get in early, and all that, but if a fund is based on following the S&P500 then I would have though legally it cannot buy stock until they are part of the S&P500. They'd be breaking their contract with their clients, probably even illegal.

I know, I'm with you on this...

But to to be really correct, we don't know that $TSLA will enter the S&P500. We think it's a given, but what if it's not? What if they have a loss of $1, how would that leave those tracer funds? What if the S&P committee don't meet until July 2021 or put off any decisions "because of COVID"... I'm playing devil's advocate here, but these scenarios are possible.

 

[Tslynk67]

Teslanaires

I see a lot of talk about newly-minted Tesla millionaires. My congratulations to you and to everyone else. A similar phenomenon happened in 2013. Back then, the fortunate ones were referred to as "Teslanaires". It has a ring to it, I think.

Check out this article published in the San Jose Mercury News about Teslanaires back in 2013. Be sure to note who the writer was.
2013: How ‘Teslanaires’ made fortunes on Tesla Motors stock – The Mercury News

Sounds familiar:

“I said, ‘I don’t want to alarm you, but we have hundreds of thousands of dollars more than we did last week,’ ” he told her in May, after Tesla reported its first quarterly profit in 10 years.

Gotchall, who on some days now is a Teslanaire, said the good days for Tesla are far from over.

“The stock is still totally cheap,” he said. “It’s a growth stock. Buy the stock in a retirement account and just let it go.”

 

[goinfraftw]

Well, thanks to TSLA this year -

I'm completing a donation, of a small amount, saved/earned up this year to my old high school's clean-tech club that builds and deploys very small solar boxes to African countries.

Would be interested to hear recommendations of mechanisms of financing for solar deployments to schools, worldwide, if anyone on this forum knows of such apps/sites/orgs that do such things.

 

[Buckminster]

If I had to guess at stock price movements:

Today - $1208
Pre ER (20th July) - $1300
Post ER (30th July) - $1400
Pre S&P announcement (14th August) - $1500
Post S&P announcement (~16 August) - $1600
6 days later (22 August) - Spike to $10k (could last seconds or days) - market cap>AMZN@$1.4Tn
7 days later (23 August) - $5000
15 days later (31 August) - $2500 (I don't expect funds to meet the 7 day requirement)
Pre battery day (14th Sep) - $2000
Post battery day (16th Sep) - $2200
Post P&D (3rd Oct) - $2500
Post ER (1st Nov) - $2700 ($500Bn market cap Vs Facebook at $665)

How are Bailie Gifford for example structured? Do they have limit orders in place where the traders are authorised to sell above? Or would they hold an emergency board meeting to authorise selling?

Who is ready for the rollercoaster of your lives?

So what would I do if this were to unfold?

1. Leverage up (if S&P announced and SP<1500) to higher strike price LEAPs - my FOMO gets pretty bad in these situations.
2. Sell all LEAPs at 3000-5000 and buy stock (reducing the float available interestingly)
3. Aim to sell stock at the peak (if over 5000)
4. Re-buy stock pre battery day whatever the price

 

[Mich]

Sounds familiar:

“I said, ‘I don’t want to alarm you, but we have hundreds of thousands of dollars more than we did last week,’ ” he told her in May, after Tesla reported its first quarterly profit in 10 years.

Gotchall, who on some days now is a Teslanaire, said the good days for Tesla are far from over.

“The stock is still totally cheap,” he said. “It’s a growth stock. Buy the stock in a retirement account and just let it go.”

Why is everyone so focused on retirement? The best time of the life is before you get old!

 

[MP3Mike]

Why is everyone so focused on retirement? The best time of the life is before you get old!

You don't have to be old to retire.

 

[Mo City]

I understand your caution and it's fair. However, your comment that a lot of the good news has already been baked in may not be correct.
Two items that may not in the current $1,208 price are:

- S&P Inclusion: We don't know if the forced buying dirves the SP higher. It may or may not. I think it does drive it higher.
- Q3 & Q4 - These are the "Prove It" quarters. Stock has done well because small profitable quarters during COVID are impressive. But if Tesla delivers 150k to 170k autos in Q3 and Q4, the financials will be explosive. We could see $600m in GAAP income and $600m in Free Cash Flow each quarter. I don't think that is fully baked in.

The only thing tempering my current exuberance is concern about the macro environment.

 

[Tim S]

Well, thanks to TSLA this year -

I'm completing a donation, of a small amount, saved/earned up this year to my old high school's clean-tech club that builds and deploys very small solar boxes to African countries.

Would be interested to hear recommendations of mechanisms of financing for solar deployments to schools, worldwide, if anyone on this forum knows of such apps/sites/orgs that do such things.

You can find charities in different categories, including Environment and Technology, all over the world here... GlobalGiving: donate to charity projects around the world

 

[goinfraftw]

You can find charities in different categories, including Environment and Technology, all over the world here... GlobalGiving: donate to charity projects around the world

Awesome - thanks, never seen that before!

 

[ByeByeJohnny]

Yeah, logically you're correct, of course - get in early, and all that, but if a fund is based on following the S&P500 then I would have though legally it cannot buy stock until they are part of the S&P500. They'd be breaking their contract with their clients, probably even illegal.

I know, I'm with you on this...

But to to be really correct, we don't know that $TSLA will enter the S&P500. We think it's a given, but what if it's not? What if they have a loss of $1, how would that leave those tracer funds? What if the S&P committee don't meet until July 2021 or put off any decisions "because of COVID"... I'm playing devil's advocate here, but these scenarios are possible.

But I'm not saying the index fund is buying now. That would be a huge risk and not what their index fund investors would want. And yes possibly gonna get you sued. But the same firm probably have 50 other funds. A couple of them suitable to buying more Tesla any time. They probably have a few internal funds. And some money in cash too. They buy in one of those and have an agreement that the accumulated shares will be sold to the index fund on the day of the inclusion at that days average stock price or something. The index fund gets their Tesla stock at the exact neutral price for following the index.

Unless there is some legal reason for not doing this it seems like a nobrainer compared to waiting until the week before inclusion.

Of course there is a small risk for them buying Tesla stock now instead of later. But they are investing in something and the risk should be smaller in a company likely to join an index than in almost any investment. Even if we end up not getting in until after Q3 it'll probably be a very good investment.

Even if every index fund had some of this going on they would never be at 100% of the number of stocks they'll need. To begin with the percentage of Tesla stocks needed in the funds is a moving target that won't be known until the announcement or day of inclusion, not sure how that is decided. And as (if) the price goes up they'll need more.

We'll never know but I'll be surprised if not at least half the stocks needed hasn't already been bought or has some agreements made. That'll leave many billions still needed to be bought though.

 

[Intl Professor]

Why is everyone so focused on retirement? The best time of the life is before you get old!

Not always. In my case the body is a wreck, but the soul lingers on due to a wife who is a gerontology major about to graduate from college.

She's becoming a serious nag, and worse, almost always right!

 

[dl003]

Tesla doesn’t advertise, because it gets all kinds of free advertising like this one:
View attachment 560323
I know, I know, that’s Kimbal, but still Tesla didn’t pay, right?

well no but he's on the BOD lol

 

[Fobble]

Weekend OT:
Anyone has the reservation number so far on Nikola Badger? Just curious if they even get a single reservation with $5000 deposit on a photo shopped

 

[M|S|M MYP]

Tesla just needs to go up to $2k/share and ill join the millionaire club....so....check back with me in August/September . This is a marathon and not a sprint and we all have seen the highs and the lows. Honestly, i am glad to be part of Elon's vision, if we all can make some $$$ along the way, that is just icing on the cake.

 

[chrsk]

better than I expected. Dont forget tesla has 3rd party suppliers. You only need one company making one vital plastic doohickey that is impacted badly by coid and you are at a standstill.
I'm amazed they produced anything

The only thing tempering my current exuberance is concern about the macro environment.

I also find the macro to be the big unknown. Leaning towards buying a geared VIX ETF for 5% of my total investment to hedge that. Still think there is room for Tesla to continue its run, keeping macro out of the equation.

 

[Compton]

English is not my native language so could you help me interpret why Elon chose to use the verb "would" rather than "will"? To express uncertainty, i.e. that the said features are aspirational [but not necessarily achievable]? Previously he has spoken about FSD with pretty certain terms.

 

[M|S|M MYP]

View attachment 560404

English is not my native language so could you help me interpret why Elon chose to use the verb "would" rather than "will"? To express uncertainty, i.e. that the said features are aspirational [but not necessarily achievable]? Previously he has spoken about FSD with pretty certain terms.

If he uses 'will', that would set off alarms and frenzinesss that robotaxi is a reality in the near future. He used 'would' so that he is leaving the door open for this to be a reality sometime. How long before it does? No one knows except Baby Yoda Elon!

 

[Compton]

If he uses 'will', that would set off alarms and frenzinesss that robotaxi is a reality in the near future. He used 'would' so that he is leaving the door open for this to be a reality sometime. How long before it does? No one knows except Baby Yoda Elon!

Ok, appears to be a change of tone.

 

[HG Wells]

Not always. In my case the body is a wreck, but the soul lingers on due to a wife who is a gerontology major about to graduate from college.

She's becoming a serious nag, and worse, almost always right!

Those are the worst nags. When they are right they repeat the NAG for decades.

 

[CHGolferJim]

@tinm, yes in principal that's it, withdraw funds once annually until end of life. N=1000 may be sufficient for most within one to three years, with appreciating share price and no debt. Make minor tweaks each year, however essentially, keep my skin in the game and enjoy the ride.

What are pros and cons of using the method with Jan 1 dollar value vs. shares to reduce fluctuation of income? You could withdraw ~4% + CPI with minimal long-term impact on principal?