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

[Opus BC fan]

The stated purpose of the pure S&P 500 index funds is move in step with the index. That makes it difficult for them to buy in advance when the price at the actual inclusion day is unknown, or when the inclusion will occur, if ever. On the other hand, the index funds want potential fund buyers to eagerly purchase in hopes of the index rising. In fact the index may now be at been at a record high, if Tesla were included. The fee earned by the fund is quite small, but easy money as long as they do not goof up the purchases of S&P 500 stocks.

Meanwhile, some other funds only buy select stocks in the S&P 500, with the intent to beat the index. It may be that some or all S&P 500 related funds are attempting to persuade the S&P 500 committee to delay the inclusion of Tesla until Tesla presents a subsequent offering of shares.

So, whom does the S&P 500 committee serve?

(rhetorical question. I'll show myself out)

 

[Curt Renz]

So, whom do the S&P 500 committee serve?

The management and shareholders of S&P Global (SPGI).

 

[woodisgood]

So when do we pass “normal S&P lead times” and enter “shenaniganry?”

 

[dl003]

Latest S&P guidance to investors
How Does Passive Investing Work in Uncertain Times? - S&P Dow Jones Indices
"Uncertain Times", as in times when it's uncertain whether a $300B company is going to be part of the S&P 500?

 

[BornToFly]

I picked up 200 shares in the last couple weeks when the stock dipped down to around 1400. I don't plan on keeping them long because I will need that money in the next year. But for now I'm making about $4,000/week just writing 2 weekly covered calls around 1550 SP. If the SP is going to be stuck here, I might as well make around $16k a month without risking any of my core shares (plus another $20k+ on the shares themselves if they get called away at 1550).

 

[generalenthu]

At least, Fred has some pictures to gawk at and is indicating Fremont runrate could hit 10k per week.

Anyways am going to down a beer or 3 scheming how we can get SPGI out of S&P500

 

[wipster]

Rebought the calls I sold this AM. Gonna keep doing this buy right before close and sell at open if no announcement strategy till inclusion is announced.

Kinda like self-flagellation?

 

[ZeApelido]

Wow, we raised 1.35%
That’s huge.
Where are the people? The forum is so empty

In your mom's basement.

 

[M|S|M MYP]

I just went over the companies that last joined the SP 500. Going back a year, the quickest I've seen they act was 2 weeks. Most took around a month from the 10Q date of issuance. Are we sure it's typically 6-10 business days?

6-10 business days in this environment probably equates to a month or so.

 

[Sancho]

CVNA up 20% today even after tepid earnings. I guess the future of Dealerships is not looking good ...

I bought some CVNA options earlier in the week after my daughter bought a car from the platform on Monday. I was super impressed by their website and business. Super easy to navigate. The 7-day trial period is brilliant.

I had never heard of the company until she found it on Monday. With today’s SP run up, I already made several multiples of the cost of the car she bought.

THIS is why you have children.

 

[M|S|M MYP]

I bought some CVNA options earlier in the week after my daughter bought a car from the platform on Monday. I was super impressed by their website and business. Super easy to navigate. The 7-day trial period is brilliant.

I had never heard of the company until she found it on Monday. With today’s SP run up, I already made several multiples of the cost of the car she bought.

THIS is why you have children.

Well....

1. Why didn't you help her buy a Tesla?
2. This is NOT why you have children
3. Congrats..she officially does not have to rely on you for transportation nor have to 'borrow' your car anymore

 

[Fred42]

GM will introduce the first of its new line of EV's at 7:00 p.m. EDT.
LYRIQ Live Reveal

 

[elasalle]

I bought some CVNA options earlier in the week after my daughter bought a car from the platform on Monday. I was super impressed by their website and business. Super easy to navigate. The 7-day trial period is brilliant.

I had never heard of the company until she found it on Monday. With today’s SP run up, I already made several multiples of the cost of the car she bought.

THIS is why you have children.

Heard and was on list to invest for a while now .. But all monies in Tesla

 

[larmor]

Latest S&P guidance to investors
How Does Passive Investing Work in Uncertain Times? - S&P Dow Jones Indices
"Uncertain Times", as in times when it's uncertain whether a $300B company is going to be part of the S&P 500?

Or "uncertain" how oil becomes gas in one's car tank when there is global disruption of supply chain and supply chain workers but an EV can fill up at home every night...

 

[Off Shore]

I just turned 40 and I will be ecstatic if I'm as sharp as some of you in my 70s and 80s.

We can thank autocorrect for most of that.

 

[mrmage]

Although TSLA has been a bit slow, call premiums are still high. Taking advantage of this in spreads, the short leg (higher strike call) can finance a disproportionate amount of the long leg (lower strike call).

Earlier this week, I placed call spreads that are partially ITM. If TSLA remains flat, these will profit > 50%. If TSLA goes up just $15-20, profit >100%. If TSLA falls below the low strike, the trade loses everything.

The trade is like a loaded coin that flips heads 70% of the time. You wouldn't want to wager your house on a single flip, but placing many of these trades should average out with a nice gain.

I usually favor option trades that expire further out (presumably Tesla goes up over time). However, this reduces ROI so I tried spreads with near term expiration (2-3 days). Examples from Tue/Wed when SP was around 1480-1485:

Paid $4.70 for 6Aug 1470/1480 call spread (buy 1470c, sell 1480c). Max profit 112%, or 100% if SP = $1480.
Paid $48 for 18Sept 1400/1500 call spread (buy 1400c, sell 1500c). Max profit 108%, or 77% if SP = $1485.

When the SP changes, I'll open new positions if the call premiums still make it worthwhile.

Not advice.

 

[tinm]

So when do we pass “normal S&P lead times” and enter “shenaniganry?”

If it’s remotely Wall Street-related, assume shenanigans.

 

[mblakele]

Joining the S&P 500 may not be as big a boon as often assumed
New research suggests that the share-price premium for entering Wall Street’s flagship index isn’t what it used to be

Summary: TFA pours cold water on the idea that S&P inclusion will boost TSLA, citing an NBER working paper which is available online for the sum of five United States dollars:

NBER Working Paper No. 27593
Benjamin Bennett, René M. Stulz, Zexi Wang
Does Joining the S&P 500 Index Hurt Firms?

The article speculates about increased passive ownership undermining management and governance. Maybe. I think it could be explained in other ways — for example by the market pricing in and speculating on index inclusion.

 

[Christine69420]

In Germany they have started on the roof of Giga Berlin - video by Tobias Lindh:

 

[AlMc]

Thing is, Curt, what are they waiting for? It's not like Tesla qualifying for S&P was unforeseen, it was a very possible to happen. So any reasonable management would have made plans in advance for various what-if scenarios. The fact that we're nearly 2 weeks after the filing of the 10-Q, with no news at all, reeks of either incompetence or arrogance

The stated purpose of the pure S&P 500 index funds is to move in step with the index. That makes it difficult for them to buy in advance when the price at the actual inclusion day is unknown, or when the inclusion will occur, if ever. On the other hand, the index funds want potential fund buyers to eagerly purchase in hopes of the index rising. In fact the index may now be at a record high, if Tesla were included. The fee earned by the fund is quite small, but easy money as long as they do not goof up the purchases of S&P 500 stocks.

Meanwhile, some other funds only buy select stocks in the S&P 500, with the intent to beat the index. It may be that some or all S&P 500 related funds are attempting to persuade the S&P 500 committee to delay the inclusion of Tesla until Tesla presents a subsequent offering of shares.

My guess is that @Lycanthrope reference to the 'plan' management would have pertains to a large family of funds: EX; Vanguard, where one or more of their non index funds buy up TSLA slowly so they have enough shares to sell ( ostensibly at a small profit) to their 'brother' Index funds that will need them.

I can find no reason that management of a family of funds could not do this.