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

[MP3Mike]

TSLA 6-mth Moving Avg Market Cap: $149.81B*
*Nota Bene: $150B 6-mth Mkt Cap will be exceeded on Tue, Jul 21, 2020

Comment: "Elon will earn his 2nd Tranche tomorrow"

I was starting to think about when Elon might exercise these options. Is there a waiting period to exercise them? (I know once he exercises them he can't sell the shares for at least 5 years.)

He could "help" the S&P500 liquidity issue, a tiny bit, by selling some of his existing shares to cover taxes and the cost to exercise the options. But then I was thinking he might not want to incur a large amount of taxes until he moves out of California and can avoid the state taxes. (He has already started that process by selling his California houses.)

Thoughts?

 

[EVortex]

There are cracks in the Tesla story: CFRA senior equity analyst

There are cracks in the Tesla story: CFRA senior equity analyst

At least he has a better price target than that loser Jonas

If there is crack in anyone’s story, it’s his.

 

[FrankSG]

TSLA is actually a VERY rare company. They don't appear very often, especially not when you can see them coming like you could with TSLA. I mean, there are always breakthrough companies that invent a new drug or whatnot and turn into quick 10 baggers but not only are those harder to see coming but they don't disrupt multiple entrenched industries and never become huge. Probably the closest modern example is AMZN and I would put TSLA in a category that is even more rare. This will become more apparent as they make larger inroads into energy storage and battery production (and maybe solar and HVAC as well but here I have less confidence).

This is why I don't trade TSLA, it's too valuable to trade.

I firmly believe TSLA @ $180 in June of 2019 was the best investment opportunity I'll see in my lifetime. And I hope to still be around for at least 50 years or so.

It was near zero risk. The market didn't seem to understand Q1'19 was a temporary hiccup rather than an existential threat. With M3 production up and running, Tesla's survival was pretty much guaranteed.

And unbelievable upside, that was evident to anyone who did the math on the potential of robotaxis following Elon's autonomy day presentation.

 

[mau1010]

Interesting chart of the short long interest on IG.com

Finally it is 50%

Tesla share price: what to expect from Q2 results

 

[FrankSG]

Prudent S&P 500 index related funds would likely hold off buying any TSLA until an official announcement of it joining the index, albeit before the actual inclusion date. However, actively managed funds can buy TSLA at any time, and may have started front-running the index funds. That and short covering may be a couple of explanations for today's surge.

Maybe somebody else can weigh in on the accuracy of this, but I remember @ReflexFunds talking a couple of times about how some funds are limited to buying stocks in profitable companies. If true, this means a fair number of active funds cannot buy TSLA until after a (hopefully) profitable Q2.

 

[FrankSG]

After-action Report: Mon, Jul 20, 2020: (Full-Day's Trading)

Headline: "TSLA Breaks Out w. New ATH Close"

Traded: $27,099,916,138.17 ($27.10 B)
Volume: 17,156,696
VWAP: $1,579.55

Closing SP / VWAP: 104.17%
(TSLA closed ABOVE today's Avg SP)
Mkt Cap: TSLA / TM = $304.735B / $175.962B = 173.18%​

TSLA 1-mth Moving Avg Market Cap: $233.49B
TSLA 6-mth Moving Avg Market Cap: $149.81B*
*Nota Bene: $150B 6-mth Mkt Cap will be exceeded on Tue, Jul 21, 2020

'Short' Report:

FINRA Short/Total Volume = 41.0% (43rd Percentile rank Shorting)
FINRA Volume / Total NASDAQ Vol = 51.0% (51st Percentile rank FINRA Reporting)
FINRA Short Exempt Volume was 2.61% of Short Volume (64th Percentile Rank)​

View attachment 566897

Comment: "Elon will earn his 2nd Tranche tomorrow"

View all Lodger's After-Action Reports

Cheers!

That's surprisingly low volume for such a large gain. Not many seem to want to sell ahead of earnings.

 

[AlMc]

While I whole-heartedly agree almost all analysts except those at ARK have missed the opportunity, current price is not really a factor. They could rightly believe that today's prices are being supported solely by S&P 500 inclusion front-running and that the stock will drop a lot afterwards.

I believe TSLA is going to exceed $2500 before the end of Sept. $3500 isn't out of possibility, either. But, does anyone here really think after achieving those prices on the backs on index funds and short sellers we're not going to drop back to the low $1000s?

I would like to 'disagree' with this post but many of us have been around long enough NOT to bet against back into the low 1000s though I truly hope that it does not happen.

 

[ggr]

I can agree in a bright future for Tesla without believing that the share price will remain on a constant upwards or horizontal trajectory. Tesla's margins may be great, but they're not 20X VW's margins, and VW produces 20X more vehicles (soon to be only 10X, yes). Solar and Energy are the future, too, but they're not going to be big time contributors in the next couple years, and the market rarely looks beyond a few quarters, never a few years.

But the difference you are overlooking is that Tesla is growing, and hurting other manufacturers (including VW), while VW is shrinking, cannibalizing itself, and flailing, all while it's costing money to try to reposition. The market does, in fact, look more than a few quarters ahead. The market looks at the current quarter's performance as a hint for the extrapolated performance, sort of like the movement of a fisherman's hand on the fishing rod. A little movement now (one way or the other) makes a big difference at the other end of the rod.

The market in TSLA today is like a voting machine. In the long run, it'll act like a weighing machine.

Yeah, Ben Graham thinks if it doesn't yield a constant dividend, like GE or GM, you shouldn't invest in it.

I do not believe today's $1000+ prices ($1650 today) are primarily the result of people seeing a bright future for Tesla in the next 10 years. In my (apparently unpopular) opinion, the price rise over $1000 (about when Q2 deliveries were announced) is fed primarily by S&P 500 inclusion. This is a once in a generation opportunity and it would be wrong to underestimate its impact on today's share price.

EDIT: Corrected to 20X volumes today

I disagree; I think it is both.

 

[Zaxxon]

I firmly believe TSLA @ $180 in June of 2019 was the best investment opportunity I'll see in my lifetime. And I hope to still be around for at least 50 years or so.

It was near zero risk. The market didn't seem to understand Q1'19 was a temporary hiccup rather than an existential threat. With M3 production up and running, Tesla's survival was pretty much guaranteed.

And unbelievable upside, that was evident to anyone who did the math on the potential of robotaxis following Elon's autonomy day presentation.

Amen. And I curse myself every day for not having jumped in more deeply at the time. (We instead bought an X that month, which will likely turn out to have been the most expensive purchase of my life).

 

[vikings123]

TSLA is actually a VERY rare company. They don't appear very often, especially not when you can see them coming like you could with TSLA. I mean, there are always breakthrough companies that invent a new drug or whatnot and turn into quick 10 baggers but not only are those harder to see coming but they don't disrupt multiple entrenched industries and never become huge. Probably the closest modern example is AMZN and I would put TSLA in a category that is even more rare. This will become more apparent as they make larger inroads into energy storage and battery production (and maybe solar and HVAC as well but here I have less confidence).

This is why I don't trade TSLA, it's too valuable to trade.

Excellent take on a “once in a generation” kind of investment. I have personally learned the art of TSLA HODL from you so a big thanks to all your posts and your contributions.

If any of the newcomers to these forums want to understand investing and more specifically investing in Tesla I suggest you go back and read all of @StealthP3D ’s posts. I also think there are so many other contributors who have helped me understand the Tesla potential and the financial details; @FrankSG @The Accountant @Artful Dodger

There are also many posters that contribute so much to those forums. I cannot name them all but thanks to everyone and so proud to be part of something special. I truly believe this is just the beginning. Cheers.

 

[JustSaying]

I did have great sex yesterday. I wonder if my wife would believe the two are related?.... "Honey, the longs at TMC are telling me you are needed in the bedroom again!"

Is it that time of the year again?

 

[StealthP3D]

When bears have been wrong about Tsla for its entire inception, I always wonder how much credibility is left when these are the bears that prevented real investors from making all this money?(and potentially losing all this money from shorting/put options).

Exactly, zero credibility.

It was too expensive at $35, too expensive at $100, too expensive at $300, too expensive at $600, too expensive at $1000 and too expensive at $1500. Meanwhile, a decade has come and gone and the moral of the story is buy stocks that everyone is willing to pay a premium to own.

I guess some people think they are getting a better deal if a stock has low price/sales or low p/e. Never mind the reason it's cheap is because no one wants it enough to pay much for it.

 

[dakh]

The "EV’s’ are easy except for the pesky batteries" has been the strategic failure point at a lot of legacy automakers and for EV investors. At this point, you could spot the old OEM’s the batteries and they would still fail.

In the same vein, the "EV’s are like computers and phones so just add wheels" is where we find the failure in the analysis of those who think Apple or Alphoogle or Samsung can just step in.

The automobile market has been its own unique thing for many decades. This new automobile market with highly integrated intermeshing technologies — battery, power electronic, software, wireless, autonomy, charging network, ... — and enhanced business models with network effects — Robotaxi networks, charging networks, extreme vertical integration, ... — is wholly new in its entirety. It will, though, retain some of the characteristics of the previous automobile market, in particular barriers to entry.

It won’t be anything like ‘any market’ for some time, if ever.

Tesla itself is already demonstrating the direction I'm predicting by using CATL batteries. Yes they sure have the rest of the puzzle all to themselves at the moment, nobody so far is close to Tesla in efficiency. But there's a law of diminishing returns, they can only squeeze this much efficiency and the further we go, the harder it is going to be to maintain a big enough lead that effectively prevents any major competition from entering the space. There are non-market forces in the picture as well: China will not be shy to make sure domestic competition shows up, Japan and Germany are in the same boat, Korea is already having some better than average EVs coming. There will be some major shenanigans happening in US, the states with UAW factories are a major election force and given the current motto of treating national budget as an unlimited resource to be tapped in, what are the chances they'll get a major rescue package? None of these entities stand to make a lot of money/have good margins any time soon, nothing close to Tesla.

 

[smorgasbord]

But the difference you are overlooking is that Tesla is growing, and hurting other manufacturers (including VW), while VW is shrinking, cannibalizing itself, and flailing, all while it's costing money to try to reposition. The market does, in fact, look more than a few quarters ahead. The market looks at the current quarter's performance as a hint for the extrapolated performance, sort of like the movement of a fisherman's hand on the fishing rod. A little movement now (one way or the other) makes a big difference at the other end of the rod.

Yeah, Ben Graham thinks if it doesn't yield a constant dividend, like GE or GM, you shouldn't invest in it.

I disagree; I think it is both.

I'm not overlooking that Tesla is growing, it's just that the share price has grown faster. Much faster. The current stock price is not a recognition of Tesla's future by Mr. Market, but a perfect confluence of unique events that we'll likely never again see.

Look at my TMC join date. I bought a Roadster from Tesla in 2011, then put my "Battery Warranty" money into TSLA stock instead. I have added since. Best. Decision. Ever.

Tesla has a great future in front of it, but Mr. Market isn't bidding up shares these days solely or even mostly because of that.

 

[Intl Professor]

have them all pulled out and go for dentures?

And replaced with implants for firmer grip should you decide to take up a side talent as an aerialist.

Recently you've become so conventional. I'm next. Planning to upgrade from a three to an S if it is revamped in September. (I can't drive, but covet the air suspension.) I still think TSLA will hit $2,000 this year and double the next. Just a feeling, no data, just a hunch. Not an advice.

 

[BornToFly]

Is it that time of the year again?

24 years in and we are still like newly weds

 

[capster]

Tesla itself is already demonstrating the direction I'm predicting by using CATL batteries. Yes they sure have the rest of the puzzle all to themselves at the moment, nobody so far is close to Tesla in efficiency. But there's a law of diminishing returns, they can only squeeze this much efficiency and the further we go, the harder it is going to be to maintain a big enough lead that effectively prevents any major competition from entering the space. There are non-market forces in the picture as well: China will not be shy to make sure domestic competition shows up, Japan and Germany are in the same boat, Korea is already having some better than average EVs coming. There will be some major shenanigans happening in US, the states with UAW factories are a major election force and given the current motto of treating national budget as an unlimited resource to be tapped in, what are the chances they'll get a major rescue package? None of these entities stand to make a lot of money/have good margins any time soon, nothing close to Tesla.

syn·er·gy
/ˈsinərjē/
Learn to pronounce

noun
noun: synergy; plural noun: synergies; noun: synergism; plural noun: synergisms

1. the interaction or cooperation of two or more organizations, substances, or other agents to produce a combined effect greater than the sum of their separate effects.
   "the synergy between artist and record company"

 

[MC3OZ]

Tesla itself is already demonstrating the direction I'm predicting by using CATL batteries. Yes they sure have the rest of the puzzle all to themselves at the moment, nobody so far is close to Tesla in efficiency. But there's a law of diminishing returns, they can only squeeze this much efficiency and the further we go, the harder it is going to be to maintain a big enough lead that effectively prevents any major competition from entering the space. There are non-market forces in the picture as well: China will not be shy to make sure domestic competition shows up, Japan and Germany are in the same boat, Korea is already having some better than average EVs coming. There will be some major shenanigans happening in US, the states with UAW factories are a major election force and given the current motto of treating national budget as an unlimited resource to be tapped in, what are the chances they'll get a major rescue package? None of these entities stand to make a lot of money/have good margins any time soon, nothing close to Tesla.

The big opportunity for Tesla is seizing "Peak Opportunity", essentially around now...

The "Peak Opportunity" is rapidly scaling EV production at price approaching ICE car prices.

It doesn't matter if others can eventually do it, market share is on the table right now... first in, best dressed.

There will be a limit to how big Tesla can get and how much of the market they can satisfy, in terms of the mission other carmakers will readily fight over the crumbs in any segment Tesla doesn't tackle and offer consumers a bit more variety.

After the car sales "land grab" comes toe Robotaxi "land grab" and Tesla is well placed there as well.

For Tesla Energy, Tesla is competitive, but the competition is more competitive, more prepared and more ready. But Battery Day may reveal an edge in Energy Storage batteries, and some advantages from scale, marketing and brand image would not surprise.

Finally I expect to see Tesla diversify into a lot of home energy, grid energy and domestic appliances,

So there are 2 key aspects:-
1. Being well placed to seize rapid growth opportunities when they exist
2. Maturing into a much more diversified company...

Given this, by the time competition belatedly shows up, I'm not seeing a problem.. 1. above is complete, and Tesla is moving on to 2.

Due to the mission, I think Tesla will eventually tackle difficult markets like India... the mission and local desire for a better life will ensure Tesla gets help everywhere...

China has ambition, and will be competitive.
VW+Apple might eventually be able to match Tesla in all areas including FSD, but I can't see how they will get the data needed in time to be relevant..

But what every car maker needs at "Peak Opportunity" is battery packs, and they only have them if they know where the raw materials are coming from. It takes 5-7 years to spin up new mines and raw materials processing, it can't be left to the last minute. As always, Tesla is 2 steps ahead of the competition.

 

[StealthP3D]

I believe TSLA is going to exceed $2500 before the end of Sept. $3500 isn't out of possibility, either. But, does anyone here really think after achieving those prices on the backs on index funds and short sellers we're not going to drop back to the low $1000s?

No doubt, the time will come when TSLA loses 30-60% of it's value, perhaps in short order. Look at the Corona dip that started Feb. 19, 2020 - TSLA lost over 50% of it's value in one month. But now it's nearly 80% higher than when the dip began. And guessing when the stock might go down is just that - a guess. And trying to get back in at the bottom is even more difficult. The next dip might happen Thursday morning after earnings or it might run up to over $3000 before it happens - no one has any idea. That's why I don't sell when the stock appears to be ahead of itself. Because I know it can potentially go a lot higher. If it does, the inevitable dip might not even bring it to current levels - or it might - no one knows.

We lost a lot of shareholders last December as it ran up, before it peaked at $435. It did a little head-fake dip to $402 before powering up to over $900 and many didn't get back in and those who did paid more for fewer shares. At $435 it seemed "priced for perfection" to many people here. Some were sure it would go back down. They lost. That's why trying to "value" a fast growing company so you know when to sell is an exercise in futility.

The solution is to become comfortable with big fluctuations and not fantasize about how you could have sold at the peak and bought in at the trough (because no one knows where those points are until well after they have already happened). With most companies there is sometimes a point where I'll say "this is ridiculous, I'm confident it will trade below this point in the near future" and I'll sell, even though I like the company. Not often but it does happen. Half the time I'm wrong. Not only is it harder to guess what a "ridiculous" top for TSLA might be, the consequences of guessing wrong are more disastrous than more ordinary companies.

So I plan to ride 'er down and back up when the inevitable dip happens. Even if it takes two years. So a good plan is to not have all your liquid assets in one company. Because you might want to spend some money when Tesla is in a dip and that way you won't have to sell at the low.

 

[Curt Renz]

The big opportunity for Tesla is seizing "Peak Opportunity", essentially around now...

The "Peak Opportunity" is rapidly scaling EV production at price approaching ICE car prices.

It doesn't matter if others can eventually do it, market share is on the table right now... first in, best dressed.

There will be a limit to how big Tesla can get and how much of the market they can satisfy, in terms of the mission other carmakers will readily fight over the crumbs in any segment Tesla doesn't tackle and offer consumers a big more variety.

After the car sales "land grab" comes toe Robotaxi "land grab" and Tesla is well placed there as well.

For Tesla Energy, Tesla is competitive, but the competition is more competitive, more prepared and more ready. But Battery Day may reveal an edge in Energy Storage batteries, and some advantages from scale, marketing and brand image would not surprise.

Finally I expect to see Tesla diversify into a lot of home energy, grid energy and domestic appliances,

So there are 2 key aspects:-
1. Being well placed to seize rapid growth opportunities when they exist
2. Maturing into a much more diversified company...

Given this, by the time competition belatedly shows up, I'm not seeing a problem.. 1. above is complete, and Tesla is moving on to 2.

Due to the mission, I think Tesla will eventually tackle difficult markets like India... the mission and local desire for a better life will ensure Tesla gets help everywhere...

China has ambition, and will be competitive.
VW+Apple might eventually be able to match Tesla in all areas including FSD, but I can't see how they will get the data needed in time to be relevant..

But what every car maker needs at "Peak Opportunity" is battery packs, and they only have them if they know where the raw materials are coming from. It takes 5-7 years to spin up new mines and raw materials processing, it can't be left to the last minute. As always, Tesla is 2 steps ahead of the competition.

Well stated. It's a good argument for raising more capital, and putting it to work in even more rapid growth, especially with the share price at an all-time high.