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

[Criscmt]

So how did my predictions for this week go? Major fail on S&P inclusion: didn't happen on Wednesday or Thursday (or today). Looks like volatility scares the committee! Sure got that "Down Tuesday" thing right though, but it wasn't just the morning as it kept going down all day, about twice as much as I expected. And I also called the tech sell-off being over by Tuesday.

Once the Tuesday carnage was over, lack of S&P inclusion doesn't seem to have hurt my portfolio further. Lacking discipline, I did indeed write a short put Wednesday morning (as I suggested above) when TSLA was at 354.50, a 9/11 435 for $81. Then TSLA fell $10 and I wrote another for $91. Just playing around without any real conviction, but what the hell. I closed the position today with TSLA at 374.60 (sadly, not near the top) for about a $5000 profit. Then I opened a small position for next Friday when TSLA was at $369.60 (sadly, not near the bottom) -- I wrote five Sep 18 430 puts for $64. Later I put in an order to sell another five for $74, but it expired without filling.

What has been most useful is my two spreads that I created on 8/31 (sadly, nowhere near the top) that used to be just calls. It's making the drop since then be significantly less painful. Still painful, but I intend to stay invested at my current level for now. TSLA is down 11% this week and my account is down 15.7%, but that's what I expect with leverage. It's more fun when it's going up!

As for predictions, I've got next to nothing. I see TSLA drifting up as battery day approaches with no news, while mostly following the market for the next week. The only news I see as reasonably possible is a leak of an Elon memo talking about record deliveries this quarter.

Very helpful, please keep 'em coming
Are you are writing puts cash covered, or against margin?

 

[tinyrodent]

 

[Artful Dodger]

It appears that Giga Shanghai Phase 2 is getting a new Supercharger station (foreground at 10:33 in this video, just East of the 2nd Floor vehicle ramp), in the style of canopied 24-charger stations like Tejon Ranch:

"(Sep 10) Model 3 of tesla gigafactory 3 will be sold to Asia and Europe" | Jason Yang

 

[Christine69420]

New must-see rant by Gali on HyperChange.

At 0.75 speed it was doable.

 

[CaliBear1]

Bjorn is right. China has a bilateral agreement with Thailand that waives the import duty...for now. I think it may be part of a larger ASEAN pact. I looked into buying an MG ZS EV here because it’s relatively inexpensive due to this waiver and it’s the only viable EV option here other then an Audi “Turd,” which costs more then a nice two bedroom Phuket condo! However, I really want to wait for a Tesla Y rather than settle for the MG, so I’m hopeful this news of China exporting vehicles to other Asian countries will included export of the RHD to Thailand. And sooner rather than later!

And according to Bjorn Nyland, no import tax in Thailand on Chinese-built cars.

I don't understand the Malaysian import tax system, one reading also points to no import tax from China (ASEAN) - Malaysian motor vehicle import duties - Wikipedia

I didn't realise that Indonesia is RHD (LHT - Left Hand Traffic).

A simple view of a map shows that China is a good location for RHD except for UK/Eire and a few (small market) places near Americas.
File:Countries driving on the left or right.svg - Wikimedia Commons

It just seems that if the USA factories can concentrate on North American standards, they can up production and consistency/quality might follow due to less swapping to meet different standards. Same for EU. China might add further factories for domestic and nearby LHD markets with a portion of Shanghai being RHD.

 

[OrthoSurg]

Yeah I was fully prepared to lose a million this week, thinking half of the valuation is probably some s&p spec play. Glad to be wrong because boy did it ruined my labor day weekend knowing Tuesday was going to be a blood bath.

See it the other way, your 2020 year is the best ever since it went up 500%
Tuesday was nothing compared to the run up

 

[jerry33]

Hmmm... Tesla "Dealership". Is this a new concept? Tesla has their own "Dealerships", and therefore there's no stopping them in any state anywhere now?

More likely Google made a mistake in labeling. If Tesla opened up a dealership, it would invalidate many of the agreements they have made in other states.

 

[SarahsDad]

Elon Musk has made two projections about future growth: "50% annual growth" + "500,000 in 2020". Which is most likely to occur?

Is it possible that both projections can be correct at the same time? Or can both projections not be correct at the same time?
How do the numbers work out?

If we assume that there were (at least) 32,000 Tesla Model S deliveries in 2014, then "50% annual growth" would imply:
2013 - 22,477 Tesla Model S deliveries
2014 - 32,000 Tesla Model S deliveries
2015 - 48,000 Tesla Model S deliveries
2016 - 72,000 Tesla Model S deliveries
2017 - 108,000 Tesla Model S deliveries
2018 - 162,000 Tesla Model S deliveries
2019 - 241,000 Tesla Model S deliveries
2020 - 361,500 Tesla Model S deliveries

it’s worth reviewing Elon’s goals from 5 years ago - here’s a post from 2015 - 50% yoy growth rate and 500K vehicles by 2020. He’s right on target. Keeping this theme over the next 10 years reveals the following:

Vehicles per Year


2020 500K

2021 750K

2022 1125K

2023 1687K

2024 2531K

2025 3796K

2026 5695K

2027 8543K

2028 12824K

2029 19221K

2030 28832K

Be aware that there are ‘only’ 70,000K (70M) vehicles sold globally each year. Elon’s MO in the past has been to set a target and then do whatever it takes to reach that target. I think we’ll see these numbers will be a pretty accurate prediction, at least for the next few years.

 

[Singuy]

If TSLA volatility 'ruins your day', you have sized your investment improperly. Otherwise, your comments are just what, to evoke sympathy? All us longs went through the same events last week, yet some of us enjoyed our weekend.

#WHINE'N'CHEEZE



Yeah, it would be on a SATURDAY... the weekend?

Whatever man. To each their own. I remember people left the forum for months to take a breather after q1 2019 P&D. It was all fun and games when Tesla moved my portfolio tens of thousands back in the days, now it move in millions, and I don't exactly have that many millions. I'll get used to it in due time. The comment was to agree with Lycanthropy. If you don't agree then move along.

 

[OrthoSurg]

Whatever man. To each their own. I remember people left the forum for months to take a breather after q1 2019 P&D. It was all fun and games when Tesla moved my portfolio tens of thousands back in the days, now it move in millions, and I don't exactly have that many millions. The comment was to agree with Lycanthropy. If you don't agree then move along.

The beauty of a online forum is that you can agree to disagree.
Or ignore someone who disagree is he doesn’t agree to disagree.
You don’t have to go to the same bed every night

 

[dc_h]

This could be about RHD markets being served from Shanghai but I also expect it would allow Tesla to supply a lower cost version of the SR+ into those markets, ie the version that uses the CATL LFP batteries.​

Margins should be much higher with LFP from Shanghai. The new batteries should be creating more capacity in Shanghai as well. There could also be some planned updates in Fremont and this could free up space to refresh some production processes. They have needed to squeeze every ounce of production out of Fremont, until now, but that may be hurting longer term productivity and quality. Moving some 3 production to Shanghai may allow more higher margin Y production or a new product like a Roadster.

 

[Unpilot]

You don’t have to go to the same bed every night

Explain further...sounds fun......possibly

 

[Mike Ambler]

OT - weekend chat

Now, my PT is 2k (post split, I know lofty goals, but as a dead investor that's the best I could do ), so taking stock of my anti-dilution homework, I have:

5b cap raise - > 1.3-1.4 % to buy - ok can handle that (pours dollars into the bucket)
Elon's pay - > 11% to buy (20.3 on 180-190M pre split shares, correct?).

That second one is gonna be a challenge! Where does one find the coins when already 100% in!

On a side note...It certainly is hard to buy at 3xx when you used to do it at 2-3xx...for 5 shares

 

[lascavarian]

Rationale for considering DITM calls and not the common stock

• (DITM) Calls allow me to later switch to ATM or OTM calls, without tax implications. If I switch to stock, and if there's any appreciation in the value, I will end up paying taxes from sale (to raise cash to buy ATM or OTM calls later)

Thanks for posting your thinking.

I have some LEAPs that I (at least today) intend to become shares. My understanding (not a pro) is that LEAPS purchased when out of the money and then over a year later converted into stock will result in stock that is considered long term capital gains immediately. There are no tax implications in conversion into shares as I understand it. The purchase date is the date of the LEAP purchase as I understand it. I am less clear as to the tax basis of the shares but it is probably the strike price (again not experienced here).

A consideration I have is to have the highest basis for the shares since a high basis is helpful in tax considerations. This is tax basis thinking is not often discussed but it has implications for taxes down the road.

I also note that the split is very helpful for LEAP holders (or others) since it expands what can be managed into smaller but more numerous pieces reducing the "all or nothing" scenarios. Here's hoping for more splits going forward.

 

[MP3Mike]

More likely Google made a mistake in labeling. If Tesla opened up a dealership, it would invalidate many of the agreements they have made in other states.

No, Tesla has many dealerships, it is what allows them to sell, and register cars in many states. It has no impact on their agreements. Now if they allowed/opened a franchised dealership, that would be a different story.

 

[jerry33]

No, Tesla has many dealerships, it is what allows them to sell, and register cars in many states. It has no impact on their agreements. Now if they allowed/opened a franchised dealership, that would be a different story.

In common usage, dealership means franchised dealerships. That's why Tesla is very careful to not use the word dealership. The "dealer" in dealership implies a middleman. Tesla has stores and galleries.

 

[bkp_duke]

I've driven between chicago and Seattle/sf a number of times in my model 3. The vast majority of the superchargers in the US are almost never used. I don't know about the east coast but it's only within the bay area and the Seattle metro area where I've seen more than 15% used at any given time.

SoCal is always packed. I would kill for 15% utilization when I travel from SD to the Bay area.

 

[ggr]

IV of DITM Leaps

I am looking at options to deleverage LEAPs.
I am considering writing a vertical spread against these long calls rather than selling the calls, helps with taxes (LTCG, rather than STCG).

I want to continue positioned in TSLA. I am wondering whether I should

1. Switch to the common stock or
2. Switch to DITM LEAPs. In this case, at least for some amount, I have some short calls DITM I would like to buy back. (Buying back too many might be suboptimal amount losses for the tax year, but taxes aspect is a different story). For the remaining amount, I will be buying DITM long calls, all LEAPs.

IV effect if I switch to DITM LEAPs?

• When I cash out my LEAPs (ATM, OTM) through vertical spreads, the IV is likely going to be high
• If I switch to DITM LEAPs, when IV goes down, will my DITM calls also loose value due to IV crush?
• For ATM, OTM calls, IV crush tends to be very significant. For DITM calls how significant does this tend to be?

Rationale for considering DITM calls and not the common stock

• (DITM) Calls allow me to later switch to ATM or OTM calls, without tax implications. If I switch to stock, and if there's any appreciation in the value, I will end up paying taxes from sale (to raise cash to buy ATM or OTM calls later)

If they are deep enough in the money, say strike is less than half of current price, volatility and time value are proportionally very low, so not much effect from approaching expiry or after-earnings crush.

You wrote "(DITM) Calls allow me to later switch to ATM or OTM calls, without tax implications." I don't believe this is correct. How do you think you can do that? If you mean by "rolling" the calls, that's just a bookkeeping convenience; it's a sell followed by a buy, and the sell is a taxable event.

A better place to continue this conversation would be
Advanced TSLA Options Trading

 

[The Accountant]

Impact of CEO Performance Award on Q3 2020
Linking to the financial projections thread to avoid cluttering this thread with accounting discussions.

Two main points I will make here:
1. Cap raise this month may have been designed to avoid Elon's tranche 4 from being achieved in Q3.
2. Deeming tranche 6 as probable may trigger the favoarble tax allowance reversal.

More details in the post

Near-future quarterly financial projections

 

[Tslynk67]

Whatever man. To each their own. I remember people left the forum for months to take a breather after q1 2019 P&D. It was all fun and games when Tesla moved my portfolio tens of thousands back in the days, now it move in millions, and I don't exactly have that many millions. I'll get used to it in due time. The comment was to agree with Lycanthropy. If you don't agree then move along.

Indeed, I have a lot of empathy here.

When I first put some decent money into $TSLA (€60k in 2016), my wife and I had the hope that it would grow enough to buy a summerhouse in Denmark, so 3x, 4x would be enough. In fact for much of the last 4.5 years it hung around 1x-2x the original investment, even dropped into the red last June, but wifey and I always said "if we lose it all, it doesn't matter" - let's face it, €60k, or more like €100k with additional purchases, isn't life-changing money, plus we both have well-paid jobs.

Then, in the space of a year, not only has the core-shares account jumped to around 15x initial investment, but my stupid trading account went from $3500 to $1.2m, yes, I kid you not, 35,000% gains, 350x. Total portfolio value as of close 31st August, $2.7m, pre-market 1st September we were at $540, I said to the wife "if this holds we'll be above $3m".

This is now serious money. This is life-changing. This was enough money not to buy a summerhouse, but to buy a house in Brussels, and for me to consider retirement.

So then to see that drop, over 5 days, due to the a-holes at the S&P and the a-holes speculating the stock, was galling, it hurt. It hurt for a lot of us, I'm sure, not all. The pure HODL-ers, who likely have tens-of-millions, are fine, but as I have some short-term needs, it was a stomach-punch blow, regardless of how crazy the run-up was, and I spend most of last week feeling physically sick as a result.

It hurt lots.

Yes, I know we were probably over-valued, but still. And yes I know it will recover and go higher, probably.

But it still hurt, even after nearly 5 years of being in this game.

Did I sell, hell no!