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

[Words of HABIT]

OT (only sort of)
Having a *sugar* load of hardcore dollar sitting in your ROTH 401K (Jeez I don't even know if that's the right name for it) makes the money real as *sugar*.
It isn't like it is "only paper" any longer. It is a shock to the mind, and cool too....sorta. I did not think it would be this strong a feeling. Now I go, "I could buy a Cubertruck and still have enough left over for groceries for life."

@lafrisbee, What is a Cubertruck? Is this another new vehicle segment Tesla is now getting into, triangular cube vans perhaps? /s

 

[dww12]

Did some more fieldwork today. Below are flyovers of 47700 Kato, South Fremont Factory and North Fremont Factory (Gigacast). Seems that they're still installing the Gigacast machine. What a beast.....

View attachment 581155

Nice pilot work! That crane next to the press would have me sweating my balls off. It looks like a total drone magnet. Oh to see a casting birthed out of there. Freemont is so effing busy. How long before your Tesmanian article?

 

[PeterJA]

...What I am more interested in is preserving the gains if the market and the stock go south hard...

...Do believe 2 to 3 times from where we are now is reasonably optimistic. If the execution continues as it has of late, will most definitely happen. Wild card is the FSD. That will give us a 3x all by itself....

With respect, I think you don't fully understand where this company is headed. You think you do, but you don't. For example, FSD is worth far more than 3x the current share price.

If you understood where Tesla is headed longterm, you would not care about preserving short-term paper profits. You would care about preserving shares.

Therefore, my sage advice is to invest more time in studying the company. Short summary:

1) Tesla's global market for automotive products is barely tapped.
2) Tesla's global market for FSD is untapped (and bigger than most people currently imagine).
3) Tesla's global market for energy products is essentially untapped (and bigger than automotive, yet not priced into the stock).
4) Tesla has the best engineers in the world (because they want to work for Elon and change the world).
5) Tesla has the best corporate culture in the world for rapid innovation (which will keep them years ahead of all competition, even if well-funded).
6) Tesla is unstoppable now, unless civilization collapses. Black swans (earthquake, terrorism, recession, etc.) could slow them down, but not stop a company with factories and design teams on three continents.
EDIT: 7) Tesla is about to unleash new battery technology that Elon said is "mind-blowing," to end the only thing that has held back sales until now: constrained production.

Longer summary by @FrankSG:
My Tesla Investment Thesis 2.0: Tesla's Monopoly Potential

 

[AudubonB]

I was thinking more along the lines of "I Can't Get No Satisfaction," but I have no idea how to sing it in Latin...

It’s good, but it doesn’t have lines like “Everything dissolving into ashes”.. Oh yeah. Burn baby burn

 

[S3XY]

So.... now the sources of profit matters
Tesla’s earnings quality could pose dilemma for S&P overseers - BNN Bloomberg

«
Specifically, Tesla would not have made money on a generally accepted accounting principles basis the last several quarters without the sale of regulatory credits to carmakers that need help complying with toughening emissions standards around the world. In the first half of this year, the company booked US$782 million of revenue from the sale of those credits, which are pretty much all profit, according to Nicholas Colas, DataTrek’s co-founder. That compares with US$220 million posted in GAAP net income.

“This puts the S&P committee in charge of adding names to the 500 in a real bind, because while to the letter of their ‘law’ Tesla qualifies for inclusion this is purely due to regulatory arbitrage -- not fundamental profitability from designing, manufacturing and selling cars,” wrote Colas, who in the 1990s spent nearly a decade as an equity auto analyst at First Boston. »

This person needs to explain to me how Tesla would receive these credits if they didn't design, manufacture and sell (EV) cars.

 

[BornToFly]

I bought back the 2500 SP covered calls for this Friday, that I had sold earlier in the week to stop the slide below 2000, for a small profit. I'm 99% sure I could have held them until expiration and they would have been safe, but I didn't want to risk losing my shares at $2500 if the S&P announcement came today or tomorrow for just a few thousand dollars. Next week, if the SP is dropping after the split, I can use my super powers again....

 

[Quesder]

The Bullish Case for Nio Stock Is Greatly Misguided

Anyone having stakes in Nio?

from that article, it seems like they will not have a similar thing to a giga factory for mass production. Will they only be making “roadster” like EVs?

Not sure why you are looking at this article from April 10th. Totally out dated information. Maybe some is right at that time, but totally outdated.

NIO is $20 today while at that time it is probably only $4 or less. A lot has changed.

 

[S3XY]

I'm glad I'm not alone here. My GF also hates hearing me talk about Tesla. In 2019 she didn't want me buying my 3, and thought I was stupid when in June I traded in the 3 for the Y. And every time the SP hit a multiple of $100 earlier this year she implored me to sell.

She's still finds this all unsettling with the SP >$2000, but at least she stops bugging me to sell it all. And now she's more of a fan of Tesla cars than I am, and is always happy to share her Tesla experiences/knowledge with others. Frankly, she's a much better advocate/ambassador than I am because she's very attractive and people connect well with her.

You know what would be funny. If you could give me her phone number and I could text her about the price of TSLA.

 

[smorgasbord]

Again drawing from Apple, the iPhone was revolutionary, and unique — for about a year before the copycats started. And they were good copies. I’m sure a lot of you unfortunates have Android phones (that have collectively outsold iPhones). There are plenty of companies that will give Tesla real competition. A couple of them will be spun out of the traditional automakers, and many will be startups, most of which probably don’t exist yet.

Even with phones, the real competition for the iPhone didn't come from the phone leaders of the day: Nokia, Motorola, Ericsson. Only Blackberry sort of survived. It is now companies like Samsung that compete. It may be similar for the automotive world - the real competition will not come from the current leaders.


As for TSLA's current value, all the talk about 2025's production and Tesla Energy eventually being bigger than automotive, etc. is all true. But, Wall St. doesn't keep that long a view on stock valuations. 20 some odd years ago, a fellow named Henry Boldget put what were then astronomical price targets on AMZN, correcting predicting they were going to own eCommerce. Amazon promptly rose to those prices right away, even though Blodget said that was years away. Those prices didn't last, and it took a decade before AMZN recovered to its previous level:

So, I have caution that while I strongly believe in Tesla's long term value, I have grave concerns that the market in which stocks are valued will eventually realize that the long term potential is indeed years away, and reduce the price they're willing to pay accordingly. Are you willing to wait potentially a decade for the market to re-recognize the future potential?

 

[StarFoxisDown!]

Even with phones, the real competition for the iPhone didn't come from the phone leaders of the day: Nokia, Motorola, Ericsson. Only Blackberry sort of survived. It is now companies like Samsung that compete. It may be similar for the automotive world - the real competition will not come from the current leaders.


As for TSLA's current value, all the talk about 2025's production and Tesla Energy eventually being bigger than automotive, etc. is all true. But, Wall St. doesn't keep that long a view on stock valuations. 20 some odd years ago, a fellow named Henry Boldget put what were then astronomical price targets on AMZN, correcting predicting they were going to own eCommerce. Amazon promptly rose to those prices right away, even though Blodget said that was years away. Those prices didn't last, and it took a decade before AMZN recovered to its previous level:
View attachment 581192


So, I have caution that while I strongly believe in Tesla's long term value, I have grave concerns that the market in which stocks are valued will eventually realize that the long term potential is indeed years away, and reduce the price they're willing to pay accordingly. Are you willing to wait potentially a decade for the market to re-recognize the future potential?

Are you really comparing the stock chart of a company within it's first 2-3 years from IPO'ing??????

Practically all stocks of companies usually experience a huge run up after IPO'ing from wild price targets and then reality sets it.......because it's a small...growing company. If you're comparing Amazon and Tesla's charts....at least compare them at similar points in their lifecycles of both the charts and time on the market and the stage at which the company was at.

You conveniently left out the part that happened after 2009. The part where Amazon as a business was growing year over year at scale and the stock price never looked back

 

[vikings123]

The ridiculous number of calls open around $2100 cannot be explained by spreads; there' almost as much open interest in those five strikes as the entire rest of the options pool. It seems like the same strategy that someone had a couple of weeks ago: buy a lot of calls and force the market makers to buy to delta hedge them.

The five strikes from $2090-$2110 have a total open interest of around 54,000 contracts, representing 5.4 million shares, worth north of $10B dollars. It isn't Porsche-Volkwagen levels but it's a lot.

There is definitely something off about the open interest numbers. I don’t know what is going on with the OI Updates but the 2100 weekly strike has been pretty much stuck at 27K for the past 3 days and also the same for most of the contracts I’m tracking through a third part website. I also just reviewed @generalenthu ‘s delta hedging report for Aug 26th and the delta hedging requirement went up quite a bit as compared to Aug 25th.

@generalenthu : I assume you use the OI numbers to calculate the delta hedging requirements. How can we explain the fact that OI has not changed for any of the contracts but the delta hedging requirements are telling a different story? Thanks.

 

[st_lopes]

I think US 401k is the same as Canadian RRSP. Tax question for Canadians: Does it make sense to over-contribute an RRSP, even if there is 1% penalty per month? For example to keep it simple:

My annual contribution limit is $100,000.

My actual allowable limit is $100,000 + 2% (grace) = $102,000.

Contribution made “by mistake” was $110,000 (ie, excess of $8,000). Got too excited buying TSLA.

Penalty per month is 1% of over-contribution = $8,000 x 1% = $80/month. Total penalty = $80/month + 5% of that = $84 per month

If my TSLA trading account is growing by just 10% per month, my RRSP growth would be $11,000 per month.

The question is, if I am gaining $11,000/month, what does it matter if I have to continually pay $84/month over-contribution penalty?

Does it make sense to just keep on paying the penalty? Or sell $8,000 worth of TSLA to stay away from Canada Revenue Agency’s radar?

On the surface, this seems like a no-brainer. But maybe I am missing something? Potential tax audit?

Help!!!!!!!!

What happens if you go over your RRSP/PRPP deduction limit? - Canada.ca

You also have a filing obligation to declare the over contribution. Not filing it adds 5% plus 1% per month in late filing penalties.

So 12% tax, plus 17% late filing fee (calculated on tax amount), plus 5% interest on both. Blends to about a 15% annual penalty of the over-contribution amount.

Nice thing is you’re only required to withdraw the over contribution and not any gains attributable to that contribution. Other nice thing is that the bank should not withhold any amounts on your withdrawal of an excess contribution (assuming you file the right paperwork). Otherwise they do withhold up to 30% Federally (more in Quebec).

Also suggest double checking the exact timing of your contributions. You may not actually be over your limit if some of your contributions were made in the first 60 days of the next calendar year. This is based on how the over contribution test doesn’t actually align with your deductible contributions (it’s an off calendar year for reporting, but calendar year for over contribution test). Refer here for how the mechanics of the over contribution are calculated: RRSPs and Other Registered Plans for Retirement - Canada.ca

I generally tell clients to withdraw the excess contribution because paying 12% tax plus interest is ridiculous when you can get a loan at much lower interest rates elsewhere... but this is not advice

 

[Boomer19]

There is definitely something off about the open interest numbers. I don’t know what is going on with the OI Updates but the 2100 weekly strike has been pretty much stuck at 27K for the past 3 days and also the same for most of the contracts I’m tracking through a third part website. I also just reviewed @generalenthu ‘s delta hedging report for Aug 26th and the delta hedging requirement went up quite a bit as compared to Aug 25th.

@generalenthu : I assume you use the OI numbers to calculate the delta hedging requirements. How can we explain the fact that OI has not changed for any of the contracts but the delta hedging requirements are telling a different story? Thanks.

missed the first part of this conversation but i’ts possible buy side is MM exercising them and then selling the stock to lock in the PnL

 

[gabeincal]

Nice pilot work! That crane next to the press would have me sweating my balls off. It looks like a total drone magnet. Oh to see a casting birthed out of there. Freemont is so effing busy. How long before your Tesmanian article?

Thank you. I was a little worried about the crane purely because the signal was breaking up and I sometimes cannot see feed for a second or two. That can be fatal to the drone and frankly, I might have been a little too close to people today also.

 

[dww12]

I bought back the 2500 SP covered calls for this Friday, that I had sold earlier in the week to stop the slide

Even with phones, the real competition for the iPhone didn't come from the phone leaders of the day: Nokia, Motorola, Ericsson. Only Blackberry sort of survived. It is now companies like Samsung that compete. It may be similar for the automotive world - the real competition will not come from the current leaders.


As for TSLA's current value, all the talk about 2025's production and Tesla Energy eventually being bigger than automotive, etc. is all true. But, Wall St. doesn't keep that long a view on stock valuations. 20 some odd years ago, a fellow named Henry Boldget put what were then astronomical price targets on AMZN, correcting predicting they were going to own eCommerce. Amazon promptly rose to those prices right away, even though Blodget said that was years away. Those prices didn't last, and it took a decade before AMZN recovered to its previous level:
View attachment 581192


So, I have caution that while I strongly believe in Tesla's long term value, I have grave concerns that the market in which stocks are valued will eventually realize that the long term potential is indeed years away, and reduce the price they're willing to pay accordingly. Are you willing to wait potentially a decade for the market to re-recognize the future potential?

So where exactly do you think we are on that chart? The top of 99? I think we are more in 1998. Nobody values FSD, Solar Roof, Autobidder, or the alien tech coming out of battery day.... The real value of Tesla. None of those are going to take 10 years to slap you in your face for their real value.

 

[vikings123]

missed the first part of this conversation but i’ts possible buy side is MM exercising them and then selling the stock to lock in the PnL

I get that but it’s stuck at the same number and only for those particular strikes...just very odd given how the stock has moved this week. First image is Aug 28 2100 expiry. Second image is Sep 04 2200 expiry.

 

[smorgasbord]

Are you really comparing the stock chart of a company within it's first 2-3 years from IPO'ing??????

Practically all stocks of companies usually experience a huge run up after IPO'ing from wild price targets and then reality sets it.......because it's a small...growing company. If you're comparing Amazon and Tesla's charts....at least compare them at similar points in their lifecycles of both the charts and time on the market and the stage at which the company was at.

You conveniently left out the part that happened after 2009. The part where Amazon as a business was growing year over year at scale and the stock price never looked back

The distance from IPO does not affect the validity of my comparison. AMZN jumped not because it IPO's, it jumped because some people recognized its future potential and wrote about it and then lots of people jumped on that bandwagon, even as many others doubted the company. That's very similar to the situation with Tesla, except there was no AMZNQ back then, at least there was no social media for them to form.

And, I didn't leave out the part after 2009 - that's my whole point. There was a lost decade of AMZN's price, and I literally asked if you were willing to wait out a similar decade or thereabouts for TSLA. I guess you are. I'm not.

 

[Knightshade]

There's a part of me that fears we are in the midst of the holy mother of all buy on rumor and sell on news for battery day.

I suspect that'll be the case for battery day too, especially with it having been postponed multiple times already- and a fair bit of the stuff to be discussed being technical stuff that'll be lost on the average person.

It's why last time I sold any calls I only sold covered calls out to Sept 15- I expect a nice runup in what I'll be able to sell em for again between then and battery day, with a sell on news dip soon after.

Now, I don't know the dip in question will last terribly long, since a little over a week later well have Q3 delivery numbers which should be excellent... so I'm not gonna try and do anything clever with actual shares (especially the ones in accounts I'd have to pay cap gains on).

(and of course if S&P waits till then for inclusion or something could throw a wrench into things- ideally in my plan that's already happened before I resell those calls)

 

[Knightshade]

And, I didn't leave out the part after 2009 - that's my whole point. There was a lost decade of AMZN's price, and I literally asked if you were willing to wait out a similar decade or thereabouts for TSLA. I guess you are. I'm not.

The counter-argument is TSLA already had its lost decade and it ended a few months ago.

 

[Paul_SF]

He’s trying to tell us something!

https://twitter.com/elonmusk/status/1298827537645285376?s=21

/s