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

[Singuy]

OK, that's two of you who've made this fundamental error.

The stock market is not the economy.

The S&P index tracks a supposedly representative part of the stock market. The S&P 500 is up 200 points, about 7%, year-to-date. But we're in a solid depression, GDP is down, employment is down, federal debt is up... way up, bankruptcies and bailouts are up, trade and tourism are down. By almost all measures except the stock market, the economy is cactus.

Well take away the Fangs/semi conductors/digitalized stocks and see how represented S&P really is to the overall economy. Disruptors are breaking out while old guards are heading for bankruptcy.

 

[StarFoxisDown!]

OK, that's two of you who've made this fundamental error.

The stock market is not the economy.

The S&P index tracks a supposedly representative part of the stock market. The S&P 500 is up 200 points, about 7%, year-to-date. But we're in a solid depression, GDP is down, employment is down, federal debt is up... way up, bankruptcies and bailouts are up, trade and tourism are down. By almost all measures except the stock market, the economy is cactus.

Not sure why you quoted me while leaving out half of what I said in that sentence. I said it tracks the economy through the 500 companies that comprise the index. These 500 companies are a barometer of the economy. I never said it was a perfect system or an accurate portrayal but it's generally viewed that way. It is what it is.

Not to go off topic, but I don't fundamentally agree with your assessment of the economy and workforce and I think that's a primary reason people underestimated the stock market since March. People read to much into how much the "old" economy is being affected and ignore the "new " economy that has emerged and was always going to happen. Things just got sped up. Green Pete mentioned that ExxonMobil and oil is a barometer of the economy. I don't agree with that. Oil is a dying industry and its relevance to the economy will continue to dwindle.

 

[lafrisbee]

OK OT
So short Shortz, Why haven't they arrived in your mailbox? It is NOT a logistic concern. It just isn't.
Someone is waiting to send them out to us as part of a big event. The only issue I have is will he deliver them to us BEFORE the event so we can appreciate the timeliness of the "clue" so we can somehow use that to our advantage. Or will he get them to us just before the event so we can go fanboi crazy with all the OT photos and references of them. OR will we get them immediately after the event so we can bask in the glow...
He damn well is holding back on delivery for a good reason.
You don't think he is having a hard time ramping up production of them?

 

[kanweg]

Green discovered things in the code that are indicative of monitoring the eyes of the driver. I speculate that this is in preparation of the next FSD release. The better FSD is without being perfect, the more likely it is that people allow themselves to be distracted. People in such accidents will more likely to be blaming FSD over themselves, and that would be bad for the name of FSD and it getting accepted by governments. Cries in European. (Just being a drama queen here; favoring retirement over a car now, no Tesla for me).

 

[ggr]

Not sure why you quoted me while leaving out half of what I said in that sentence. I said it tracks the economy through the 500 companies that comprise the index. These 500 companies are a barometer of the economy. I never said it was a perfect system or an accurate portrayal but it's generally viewed that way. It is what it is.

Not to go off topic, but I don't fundamentally agree with your assessment of the economy and workforce and I think that's a primary reason people underestimated the stock market since March. People read to much into how much the "old" economy is being affected and ignore the "new " economy that has emerged and was always going to happen. Things just got sped up. Green Pete mentioned that ExxonMobil and oil is a barometer of the economy. I don't agree with that. Oil is a dying industry and its relevance to the economy will continue to dwindle.

I agree with most of your post, but you just missed my point again by saying "tracks the economy through the 500 companies that comprise the index." By far the largest part of the economy in the US is the service industry, which is mostly individual workers (some, but not the majority, working for large companies) and small businesses, most of whom are in dire trouble at the moment... and not in the S&P 500.

 

[Green Pete]

Green Pete mentioned that ExxonMobil and oil is a barometer of the economy. I don't agree with that. Oil is a dying industry and its relevance to the economy will continue to dwindle.

Strange how you disagree with me but also agree with me.

I feel like my one post was responded to 8 times and every response states I meant things I didn't or completely misses my point.

For the record:
1 I don't think ANYTHING is the stock market perfectly measures the economy. But it can be one component to gauge it. Much like the barometric pressure is key measuring the weather. But so are temperature and humidity.

2. Totally agree all fossil fuels are being shown the door. But as fossil fuels are TODAY a bear share of the energy we use on earth and energy usage is a frequent component used to gauge the economy - fun fact, thats how china's growth is measured from outside china as people generally don't trust china's reported growth numbers but do trust energy usage numbers.

3. Tesla's growth is as of today - in my opinion - only really good for measuring Tesla's growth. It has been carving out a good chunk of the luxury car market but as a share of the total market today its not much. I 100% believe when TE is in full swing and Tesla is producing millions of cars a year that that will no longer be the case. (edit: this was my key point, but somehow point 1 and 2 which were not meant to be the focus became the focus)

edit: added relevant pic
Why do investors use the S&P 500 as a benchmark?

So far a lot of people have disagreed with things I didn't say. But Ill finished with with something that hopefully gets some loves and ill give up this very frustrating thread I created.

so without much further ado

TESLA TO THE MOON!

2nd edit:
FWIW I think some day there is a good chance there will be a Tesla Energy Index and a Tesla Transportation Index much in the same vein of the big mac index. Just not today
Big Mac Index - Wikipedia

 

[StarFoxisDown!]

I agree with most of your post, but you just missed my point again by saying "tracks the economy through the 500 companies that comprise the index." By far the largest part of the economy in the US is the service industry, which is mostly individual workers (some, but not the majority, working for large companies) and small businesses, most of whom are in dire trouble at the moment... and not in the S&P 500.

The service industry which makes up a large part of US GDP is not the service industry you're implying, at least I think. Most of the job loss over covid has been the food service/hospitality sectors...which do contribute to the "Services" sector...but the Service sector as a whole contains real estate, financial services, etc....I find what's been proven through this Covid recession is how important tech has become to the workforce and how flexible it can be. Thats the primary reason the S&P is near an all time high.....

I think the Covid recession has in a way, really shown what jobs are crucial to keep the economy going and which ones aren't. Not saying that its not important that millions of people are out of jobs. But just that those jobs were not contributing as much as everyone thought into the economy/GDP

 

[Fobble]

LMFAO. Elon must drive his financial guys nuts.

And I feel bad for those who try to compete with him ...

 

[ggr]

And I feel bad for those who try to compete with him ...

It was absolutely brilliant marketing. All that free media coverage! What can any competitor do? Most can't drop prices because they're already unprofitable on gross margin, and/or can't deliver for a few years. What traditional auto maker could even do this within 12 hours, since they would have to negotiate with a network of dealers who never offer the cars at MSRP anyway?

 

[StealthP3D]

I see people say stuff like this a lot. I feel like people don't understand what the s and p is. It's not a fund or like ARK or something. It's an index that exists to function as a barometer for measuring the health of the economy. They aren't actively seeking the best return on their money or investing money on behalf of clients. It's designed to reflect the economy on the whole. To be honest it would make sense for them NOT to include Tesla until they think it has come to the end of it's amazing growth. If the s and p includes Tesla and then it 10xs while the rest of the economy is crumbling then the index isn't serving it's purpose. Including Tesla after it's growth has ended is more reflective of the economy on the whole.

That's not quite right. The market is not the economy (although the two tend to share direction most of the time). The S&P 500 is designed to measure the returns of the largest public American companies that are profitable. If it were designed to measure the state of the broader economy, it would need to include a lot of different metrics.

The fact is, the profits are shifting away from the old guard like P&G, GE, ExxonMobil, etc. and towards innovative and disruptive companies that are harvesting the fruits of a cost-lowering of technology and breakthroughs in genetics, new energy, computing, etc. This is why the S&P is becoming less relevant every month. It's happening quickly. The S&P's inaction on Tesla reminds me of the band playing on as the Titanic sank.

A few years back I was a big proponent of individuals harnessing the power of Index funds to build wealth. I can no longer recommend that strategy and I have to assume others are seeing the same things I'm seeing. If there is a mass exodus from passive investing, it will actually be a net negative to own companies listed on the major indexes (and the S&P in particular). Because S&P Index funds would need to be sold off to transfer capital to active managers and this should cause the valuations of companies listed there to decline. This might sound far-fetched, but I don't think we are too far from that point. The S&P is not dynamic enough to remain relevant in a world changing so rapidly.

 

[Artful Dodger]

After-action Report: Wed, Oct 14, 2020: (Full-Day's Trading)

Headline: "TSLA Bucks Macros amid FOMO "

Traded: $21,901,502,548.83 ($21.90B)
Volume: 47,657,112
VWAP: $459.56

Close: $461.30 / VWAP: 100.36%
TSLA closed ABOVE today's Avg SP

Mkt Cap: TSLA / TM $429.843B / $185.000B = 232.35%​

TSLA 1-mth Moving Avg Market Cap: $399.47
TSLA 6-mth Moving Avg Market Cap: $263.66
Nota Bene: 4th tranche of CEO comp. likely unlocked last week

'Short' Report:

FINRA Volume / Total NASDAQ Vol = 51.5% (56th Percentile rank FINRA Reporting)
FINRA Short/Total Volume = 39.8% (44th Percentile rank Shorting)
FINRA Short Exempt Volume was 0.35% of Short Volume (43rd Percentile Rank)​

Comment: "TSLA volume picks up as Earnings draws closer"

View all Lodger's After-Action Reports

Cheers!

 

[Green Pete]

That's not quite right. The market is not the economy (although the two tend to share direction most of the time). The S&P 500 is designed to measure the returns of the largest public American companies that are profitable. If it were designed to measure the state of the broader economy, it would need to include a lot of different metrics.

The fact is, the profits are shifting away from the old guard like P&G, GE, ExxonMobil, etc. and towards innovative and disruptive companies that are harvesting the fruits of a cost-lowering of technology and breakthroughs in genetics, new energy, computing, etc. This is why the S&P is becoming less relevant every month. It's happening quickly. The S&P's inaction on Tesla reminds me of the band playing on as the Titanic sank.

A few years back I was a big proponent of individuals harnessing the power of Index funds to build wealth. I can no longer recommend that strategy and I have to assume others are seeing the same things I'm seeing. If there is a mass exodus from passive investing, it will actually be a net negative to own companies listed on the major indexes (and the S&P in particular). Because S&P Index funds would need to be sold off to transfer capital to active managers and this should cause the valuations of companies listed there to decline. This might sound far-fetched, but I don't think we are too far from that point. The S&P is not dynamic enough to remain relevant in a world changing so rapidly.

It's official. I'm outing you as cathie wood

https://twitter.com/CathieDWood/status/1316577205489721344?s=19

 

[Artful Dodger]

There's zero difference

There is one difference: back in 2005, over 50% of all Options trading done on the NASDAQ wasn't placing bets for or against AMZN.

Adding TSLA to the S&P 500 will cause a dramatic contraction of the effective 'float' since Index funds don't need to trade daily to track the index (just after qtrly 'rebalancing' announcements).

My take on this situation is that the S&P Committee has been unduly infulenced by large MMs and Hedge Funds who are currently benefitting from TSLA volutility, and wish to extend their run of outsized profits as long as possible.

Ironically, it is this Hedgy "Purple Patch" that is causing the S&P Committee to ignore their own published guidelines. Instead, they've substituted their own 'judgement' to keep TSLA out, and come up with hollow-sounding PR statements as post-hoc justification.

I could go on. I likely will. Stay tuned.

Cheers!

P.S.

It's significant to remember that, back in January before Co-vid shook up 2020, the talking heads on CNBC were saying that TSLA would be added to the S&P 500 at the end of the year. This is insider information revealed casually as if it was common knowledge. My take is that the S&P Committee decided what they would do at least a year ago, and 'events-be-damned' their plan is more important than mere 'events'.

 

[Intl Professor]

the economy is cactus.

Love the language!

 

[MC3OZ]

the economy is cactus.

Time to make Teslaquila

 

[Criscmt]

Lol Elon is such a sick man!. I’m struggling to understand this 4D chess move though after the 3K price drop on Monday. I guess this is him showing the power Tesla has over any of the new comers? Or is this personal?

Are they not selling enough model Ss? Did they achieve some amazing Manufacturing efficiencies that suddenly will allow Tesla to increase their output considerably? Is this purely a play to get to 500K for the year? Very interesting.

Another data point that comes to mind, Battery Day reveal of MS Plaid range was just above 517.
Even if not personal, it appears Elon is closely watching Lucid, or any player who's getting close to beating or claiming to beat Tesla specs.
That's certainly not a bad thing.

 

[Quesder]

Frankfurt tl0 price dropped by $10 ? What’s going on? 451 usd

 

[Artful Dodger]

Lol Elon is such a sick man!. I’m struggling to understand this 4D chess move though after the 3K price drop on Monday. I guess this is him showing the power Tesla has over any of the new comers? Or is this personal?

Are they not selling enough model Ss? Did they achieve some amazing Manufacturing efficiencies that suddenly will allow Tesla to increase their output considerably? Is this purely a play to get to 500K for the year? Very interesting.

You missed some news from Lucid Motors. They announced that their base model of the Air sedan would be priced at $69,900 (after the $7500 Federal Tax Credit).

Musk responds to Lucid Air, Model S price cut $5,570 ​

Elon is spanking Lucid hard, undercutting them on price with a better car that is available today, not in 2+ yrs. That is, if Lucid doesn't go bankrupt in the mean time. Their Saudi masters will be pissed...

But really, who would place a preorder for a $70K Lucid now?

Cheers!

 

[NicoV]

Frankfurt tl0 price dropped by $10 ? What’s going on? 451 usd

In Europe, the second Corona wave is in full swing. Every country is introducing new contact limiting measures, with partial shutdowns like closing bars and restaurants and evening clocks. In Belgium there are regions with 1000 cases per 100K inhabitants over the last 2 weeks. Or in other words, 1 out of every 100 people got Corona in the last 2 weeks.
You may not be aware of this because the USA doesn’t have a serious second wave (yet?).
You don’t think this will have an impact on the stock price?

 

[WarpedOne]

Lol Elon is such a sick man!. I’m struggling to understand this 4D chess move though after the 3K price drop on Monday. I guess this is him showing the power Tesla has over any of the new comers? Or is this personal?

Are they not selling enough model Ss? Did they achieve some amazing Manufacturing efficiencies that suddenly will allow Tesla to increase their output considerably? Is this purely a play to get to 500K for the year? Very interesting.

Yes to all the above.