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

[vwman111]

It has been just over 1 week since the announcement of Tesla to be added to the S&P500. Since then we have had 3 rather bullish and well spaced out analyst upgrades or SP upgrades. Could this be a coordinated effort by those who have been bullish for awhile? Adding fuel to the fire to keep the rally going, overcoming (or taming) the negative influences of the MM with the objective of having the SP as high as possible when the funds start to buy in December?

Wishful thinking?

Will be interesting to see if we have more bullish well timed upgrades.

 

[StealthP3D]

One consideration is that by holding long term, there is relatively small opportunity to realize cash in the short term. Therefore, there is the opportunity of making the best of this S&P 500 inclusion to generate that cash through the use of calls, while at the same time keeping true to the long-term philosophy of holding one’s shares.

By holding a non-dividend bearing stock long-term, there is NO opportunity to realize cash in the short-term. You would have to sell some.
There is always a time and a place for withdrawing cash from your investment portfolio. But you are fooling yourself if you think it's somehow better to take profits from options trades than from other investments. It's all just cash gains (although tax considerations could play into it).

Let me ask you this: When you hold options that expire worthless do you immediately calculate the loss and make a cash deposit to reimburse your brokerage account? The real question here is not by which method the gains were made but whether you really want to withdraw money from your investment account. Don't get me wrong, I've been withdrawing all the money we live on plus large purchases and real estate acquisitions for over 25 years without ever adding to it (and yet it continues to grow) but it doesn't matter whether the withdrawals come from interest, options trades or stock. It's just cash. The net effect, and the largest consideration, is it reduces our investible capital and the compound returns we get with that capital.

Before you say, "wait a minute, I'm talking about making income by writing covered calls", I'll point out that you are still risking the growth of your capital. There is a cost to everything, nothing is "free" in this world. And if you don't need that cash, then you don't need to risk the growth of your capital. It's easier to spend less than it is to fool yourself that you have devised a way to generate cash that doesn't risk your overall returns.

 

[Causalien]

You all who have been calling for the price spike after S&P announcement have been right.

But I can't help the nagging feeling that it's too easy, too logical. If everyone KNOWS the price has to go up over the next several weeks, doesn't that in and of itself indicate we are missing something? While the number crunching and logic laid out here make perfect sense to me, one thing I do know is the stock market acts very irrationally at times, often zigging when we expect it to zag.

@TheTalkingMule makes sense to 'keep it rational.' While I am envious of those of you who have leveraged your position with options and are making a killing, I am happy to play along with my toes dipped in the water and just stay long shares.

You can tell that some were caught off guard and some weren't.
The capping action before the announcement was very suspicious. However if you look at option premium it means that the majority of the people did not see it coming. And lurking in all these trading chat rooms. Most people do not know that Tesla is getting included in S&P nor the intricacies between the shorted shares and the amount that needs to be bought. They are basically just screaming TSLA!!! because it is going up by >5% a day. This is how ignorant the masses are.

 

[Artful Dodger]

I have calculated that if the current trend continues for the next 173 trading days, I will become the wealthiest person in the world.

Lol, you know that the Mars launch window was Summer 2020, not August 4, 2021 right?

TL;dr Elon will still be on Earth come August...

Cheers!

 

[ClownMouth]

Men & Women, Kings & Queens - I know the stock is minting new Teslanaires every hour lately but allow me to humor you with a tale of a much smaller sum.

Through boneheaded oversight - I was saving in multiple other accounts - I only opened a Roth in November 2018. Every couple years I take a TD rep who calls me every 6 months or so up on his offer to perform some type of Goal Planning portfolio analysis. So when I spoke with him in 2018 I didn't have a Roth.

A few months ago we spoke again and he was quite surprised that my Roth was over $75K in less than 2 calendar years (3 years of contributions though). I asked him a few questions and he made it clear that type of performance is quite unusual for his clients - I am a bit jaded from hanging out here and hearing of everyone's island planning.

Well since August I have checked the balance a little more often than I normally would just because in my head I was wondering if I could hit six figures before the 2 year anniversary of the account opening in November. Well, I did not. But when I checked today I noticed that the balance had gone a few thousand past the mark. So while it is small potatoes overall, $0 to over $100K in 2 years and 1 week in the Roth. In large part due to $TSLA of course.

Wanted to share but not really anyone in real life I could tell.

 

[Discoducky]

My order for two extra Cybertrucks are for robotaxi fleet. ROI is approximately two years!

I have 3 CT's on order for RT's and my conservative case is also 24 months

 

[ZsoZso]

I have calculated that if the current trend continues for the next 173 trading days, I will become the wealthiest person in the world.

Are you claiming to have more TSLA shares than Elon Musk ?
Or maybe you are Elon ?

 

[clmason]

Is anyone considering shorting the company(s) who may get booted from the S&P500?

 

[juanmedina]

I just don’t see us going to the 400 level even after the inclusion. This is not a VW type of squeeze. If anything the 15-20% of float(more actually) that will now be bought by index/benchmark funds which should decrease supply. I can see the shorts completely ignoring this dynamic and dig another hole but regardless I do think we establish a new base, maybe 600 or 700 but not lower than that.

I’m going to wait until the very last day of index buying to sell any covered calls and that too only if IV > 100.

what about buying some puts when we think the stock starts retracing or when we feel we are close to the top? I remember Karen talking a lot about protective puts.

 

[Artful Dodger]

Yes, I know I am not being brave in my predictions, but the low volume leaves stocks more vulnerable than usual to shenanigans. A ridiculous move in either direction would not shock me. If the market makers smell weakness and do not get push back they could get very aggressive punishing call holders.

I am betting on a move up due to relentless buying pressure we are seeing and will continue to see as the inclusion date approaches. I have seen crazy moves on Black Friday. Point I am making is that Friday could see a helluva lot of action for a half day.

Agreed. Many here thought we'd see the typical 4th of July bear raid, leading to a Summer lull in TSLA trading.

2020 proved exactly the opposite: The Forth kicked off this amazing Bull run which has yet to slow it's pace.

One thing we can say for certain is that many traders will NOT be travelling for Thanksgiving, and will in fact be at their desks on Friday A.M. (even if that desk is now a WFH).

TL;dr Starlink beta can't come fast enough...

BTW, the next launch is in about 3 minutes (9:13 PM)

EDIT: Mission succeeded beautifully. Also 7th launch and recovery for that F9 booster.

Cheers!

 

[ZeApelido]

Knock knock.


Who's there?


Orange


Orange who?








Orange you glad you bought Tesla stock?

 

[1101011]

Congrats Spacex. Recovering a first stage seven times? Terrific!

 

[vikings123]

what about buying some puts when we think the stock starts retracing or when we feel we are close to the top? I remember Karen talking a lot about protective puts.

I’m not a big fan of buying puts but might think about if if stock is volatile going into the actual inclusion date . If I expect the stock to go down in the short term I may try to keep some cash and buy LEAPS. This is such a unique situation that HODL and enjoy the show might not be a bad idea.

Futures are looking awesome so I’m fully expecting another gap up. Let’s see if MMs want to fight the max pain this week. Damn it’s tough to get any work done when TSLA keeps doing this.

 

[new_sneakers]

*JAPAN CONSIDERS ADDITIONAL SUBSIDIES FOR EV PURCHASES, NHK SAYS

A little more detail:

Next month, Japan’s tax commission will announce tax code changes to take effect in April 2021. The linked article says that it is likely that tax breaks will target lower lithium ion battery costs, to encourage electric cars.

Japan weighs tax incentives to reach PM's goals on digital, zero emissions - ET Auto

 

[TheTalkingMule]

By holding a non-dividend bearing stock long-term, there is NO opportunity to realize cash in the short-term. You would have to sell some.
There is always a time and a place for withdrawing cash from your investment portfolio. But you are fooling yourself if you think it's somehow better to take profits from options trades than from other investments. It's all just cash gains (although tax considerations could play into it).

Let me ask you this: When you hold options that expire worthless do you immediately calculate the loss and make a cash deposit to reimburse your brokerage account? The real question here is not by which method the gains were made but whether you really want to withdraw money from your investment account. Don't get me wrong, I've been withdrawing all the money we live on plus large purchases and real estate acquisitions for over 25 years without ever adding to it (and yet it continues to grow) but it doesn't matter whether the withdrawals come from interest, options trades or stock. It's just cash. The net effect, and the largest consideration, is it reduces our investible capital and the compound returns we get with that capital.

Before you say, "wait a minute, I'm talking about making income by writing covered calls", I'll point out that you are still risking the growth of your capital. There is a cost to everything, nothing is "free" in this world. And if you don't need that cash, then you don't need to risk the growth of your capital. It's easier to spend less than it is to fool yourself that you have devised a way to generate cash that doesn't risk your overall returns.

Everybody's different. Some can handle the lunacy of working with options, some can't or don't want to. I can tell you for sure if I knew 4 years ago everything I now know about options, learned entirely here, I'd have a LOT more money.

There have been at least a half dozen opportunities to lever up with options over the last handful of years where I would've been "right" maybe 1/3 of the time and made 10-20x on that 1/3. Plenty of other periods were simply selling safe puts for 6 month stretches would have added shares to my pile.

I'd be willing to bet some of the fattest piles of cash on this forum are sitting with people who did it relatively conservativley with options. It's not easy, but if you're rational and we'll schooled it almost seems like a waste of all this deep insight to not lever up when appropriate.

Like now.

 

[computerchuck]

Latest Rob video

 

[Curt Renz]

Reuters - this morning: Ford’s new CEO tackles warranty costs in bid to boost profit

What is barely mentioned is that the long established automakers must pay their franchised dealerships to make warranty repairs. I once had my car recalled to have an 80-cent part replaced in two minutes. I asked the service writer how much the dealership would charge General Motors. He answered, "About $200."

Tesla circumvents this by owning its sales and service centers. And unlike its competitors, it makes many of its own parts.

 

[Criscmt]

S&P decision announcement on 11/30. Is it after hours or pre or during market hours?

1. Is there certainty on the time on 11/30 when the announcement of the decision would be made?
2. Are you guys preparing with some protections for surprises post the announcements?

 

[M|S|M MYP]

S&P decision announcement on 11/30. Is it after hours or pre or during market hours?

1. Is there certainty on the time on 11/30 when the announcement of the decision would be made?
2. Are you guys preparing with some protections for surprises post the announcements?

1. No
2. I'm preparing on what to buy myself for Christmas this year

 

[MP3Mike]

S&P decision announcement on 11/30. Is it after hours or pre or during market hours?

1. Is there certainty on the time on 11/30 when the announcement of the decision would be made?
2. Are you guys preparing with some protections for surprises post the announcements?

They make most of their announcements at 5:15 PM EST. (So after hours.)