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

[M|S|M MYP]

Majors congrats!

You are just getting started

I appreciate it! Im hoping for 5-8x from here by 2030!

 

[AudubonB]

Here's an argument that the runup will NOT be followed by a big pullback, regardless of whether inclusion is spread out:
Two groups of funds are being forced to buy TSLA: index funds and benchmarked funds. The indexers have to finish buying by a certain date and don't care much what price they pay. But the benchmarkers (who need even more shares, according to Rob Maurer) have more time flexibility and do care about the price. What will the latter group do?
What am I missing?

Preamble: As ever, I remain implacable in my recommendation either to hold, or to purchase more. It still is early days, and my Wayback machine showed my memory was correct: this forum’s first conjectures about the prospect for and ramifications of S&P500 were in 2013, by Yours Truly.

Nonetheless, if Rob did say what you ascribed to him, he is mistaken - in his premise, if not his conclusion. And as someone who spent years operating under the Damocletian Sword of the “Need to Beat Benchmark”, I know it first-hand. That is:
No, there is absolutely NO need for a benchmarked fund to purchase TSLA. The manager needs to decide what mix of shares - most of which very likely will be from within the S&P500 if for no other reason than those companies incorporate most of the USA’s market capitalization - in order to attain his or her mandate to Beat the Index. SOME of these managers will purchase TSLA; some will not; some will have an overweight position and others underweight. Some of them already have Tesla for a year or five; others have been initiating positions upon the Committee’s announcement.
In a nutshell: an absolute guaranteed observation is that a benchmarked fund will never have a makeup that is even almost close to its Index’s positions. It could not, as its prospective investors would flee from it to the far lower-fee pure Index funds for the same gross....and far inferior net...performance.

 

[Christine69420]

All moves forward are best accompanied by appreciative and informative looks backward...case in point...

This is a good reminder from SMR about what Cathie said back when the split adjusted price was around $100 - she and ARK predicted that TSLA could reach $1400 in 5 years ie by the end of 2024. Now we're about half way there in $. Her "all in" golden goose scenario was $4400 by the end of 2024.

 

[JustMe]

Ok, I must have missed a meeting or two, but when did ‘we’ moved from owning islands to mountains???

You’ve clearly missed some critical posts!

I recommend reading the past 1,500 pages or so to catch back up.

 

[Prunesquallor]

Ok, I must have missed a meeting or two, but when did ‘we’ moved from owning islands to mountains???

I think @Krugerrand realized that an island would be too difficult to defend against unwelcome guests/invaders, so she took the high ground.

 

[coolmanfever]

who is pick up more Tesla stock on Monday?

 

[Mich]

who is pick up more Tesla stock on Monday?

You mean sell stock and buy calls? I think we are all all-in...;-)

 

[AudubonB]

~~~~A very strong recommendation - plea, even - from your Moderator:

PLEASE convert ALL “Price Target” or other such prognostications regarding TSLA’s future price levels to split-adjusted numbers. At the very, very least, indicate whether each number to which you refer is pre- or post-split.

If you think this is in any way pedantic, just wait until the next....or the next two....stock splits and you instantly will see the wisdom of doing so. Who wants to determine what some 1990 prediction of MSFT hitting $28 by 2010 really means, or how well that analyst fared?

Thank you~~~~~

 

[vikings123]

According to this wsj article there is apparently support for a third option to spread the inclusion over two quarters. No idea what this means but it came across in my news feed so just sharing.

It could just be another last ditch attempt to shake some shares loose before the S&P decision tomorrow AH.

Tesla’s S&P 500 Debut Is Set to Put $100 Billion in Trades in Motion

 

[Runarbt]

According to this wsj article there is apparently support for a third option to spread the inclusion over two quarters. No idea what this means but it came across in my news feed so just sharing.

It could just be another last ditch attempt to shake some shares loose before the S&P decision tomorrow AH.

Tesla’s S&P 500 Debut Is Set to Put $100 Billion in Trades in Motion

This is what I was afraid of, and why I closed all short term calls friday..

Need S&P to announce their plans.. and then we know.

Would suck if they go for this 3rd option.. at least for those with short term plays.

This would hurt the common option player the most, so I assume they choose such an option. Shake out, MM win again..


But for any long HODL, this is just as fine. Will most likely give an even higher SP, which might be stable?

 

[ByeByeJohnny]

According to this wsj article there is apparently support for a third option to spread the inclusion over two quarters. No idea what this means but it came across in my news feed so just sharing.

It could just be another last ditch attempt to shake some shares loose before the S&P decision tomorrow AH.

Tesla’s S&P 500 Debut Is Set to Put $100 Billion in Trades in Motion

In general a good idea when posting articles is to check the timestamp.

Nov. 29, 2020 5:30 am ET

What are the odds that an article posted on WSJ with an important story about Tesla more than 8 hours ago hasn't been posted and discussed all day?

 

[Runarbt]

In general a good idea when posting articles is to check the timestamp.

Nov. 29, 2020 5:30 am ET

What are the odds that an article posted on WSJ with an important story about Tesla more than 8 hours ago hasn't been posted and discussed all day?

It has? I have been on here a lot today, didnt notice these discussions.

Which post # are we talking about? was away a few hours, and might have missed those pages.

 

[ByeByeJohnny]

Tesla’s S&P 500 Debut Is Set to Put $100 Billion in Trades in Motion

"Asset managers and trading desks across Wall Street have held virtual summits to debate the matter. The vote from many appears to be for the two-day option, partly because of Tesla's size, along with the potential for elevated volatility in the stock market........"

"Investors who had shared their opinion with S&P have offered another suggestion that appears to have earned broad support: breaking the trades up over two different quarters, according to people familiar with the discussions.
A longer break between the trades would help asset managers digest any sharp moves related to Covid-19 or other news the market doesn't take well and help keep funds in line with benchmarks, investors said.
"A stepped approach over multiple quarters helps with the liquidity challenges. There's good precedent for it," said Chris Johnson, head of ETF capital markets at Charles Schwab Corp., referring to MSCI's two-phased inclusion of China A-Shares to its emerging-markets index in 2018........"

It was posted only minutes after published and has 49 informative klicks as of now. Which is very high. There's been a number of posts since commenting on it.

 

[PeterJA]

...Nonetheless, if Rob did say what you ascribed to him, he is mistaken - in his premise, if not his conclusion. And as someone who spent years operating under the Damocletian Sword of the “Need to Beat Benchmark”, I know it first-hand. That is:
No, there is absolutely NO need for a benchmarked fund to purchase TSLA. The manager needs to decide what mix of shares - most of which very likely will be from within the S&P500 if for no other reason than those companies incorporate most of the USA’s market capitalization - in order to attain his or her mandate to Beat the Index. SOME of these managers will purchase TSLA; some will not; some will have an overweight position and others underweight. Some of them already have Tesla for a year or five; others have been initiating positions upon the Committee’s announcement....

Yes, I oversimplified what Rob said. He said pretty much what you just did: Benchmarked funds need to buy TSLA if they want to be equal weight in it with S&P500. Some won't but probably some will.

(minute 11:04)

 

[StealthP3D]

I think @Krugerrand realized that an island would be too difficult to defend against unwelcome guests/invaders, so she took the high ground.

Good news. That's going to save me a lot of money! Everyone knows boats are holes in the water you throw money into. On top of that, mercenaries charge considerably more for attacks by sea so this mountain news is a good thing. I just added pre-orders for 400 Cybertrucks. Hopefully I won't need heavy-lift helicopters because I'm planning the worlds first major near-zero carbon land assault since horses and chariots. 400 Cybertrucks is probably excessive but it's hard to tell when @Krugerrand is bluffing.

 

[Todd Burch]

According to this wsj article there is apparently support for a third option to spread the inclusion over two quarters. No idea what this means but it came across in my news feed so just sharing.

It could just be another last ditch attempt to shake some shares loose before the S&P decision tomorrow AH.

Tesla’s S&P 500 Debut Is Set to Put $100 Billion in Trades in Motion

What?!? And spread the mandatory buying out along a longer period, allowing more people to front-run and enjoy the gains?!?

That would be horrific! /s

 

[⚡️ELECTROMAN⚡️]

Hopefully it became final before the stock split and later stock catalysts!

No it didn’t. That’s what made it so exciting er uh painful. I had been telling her for years to buy more TSLA with her Roth. She would just say I had enough for both of us. Her Roth actually went down in value while mine went up eight times. I think she was gambling on some pharmaceutical stocks.

Oh well as long TSLA doesn’t crash too hard I’m ok with it. I’ve found my peace. I still have most of my stocks. I just had to give her everything else to keep them. Lost half my net worth and most of my diversification. But diversification is overrated when you’re holding TSLA shares, right?

 

[Runarbt]

It was posted only minutes after published and has 49 informative klicks as of now. Which is very high. There's been a number of posts since commenting on it.

I didnt doubt you.
Just wanted to find the post to read the comments, and a post # is the best way.
I am in my phone, and hard scrolling through pages.

 

[PeterJA]

Speaking of Rob, he said in July that, according to multiple sources, even index funds have more flexibility in when they buy TSLA than commonly assumed. So their buying could be spread out also, even if the inclusion dates are not.

This too suggests a sharp pullback after inclusion is unlikely.

(0:46)

 

[Robocop]

Has this been posted yet?

The Only Electric Car Stock Worth Buying | The Motley Fool

Some gems:

"Yes, Tesla does more than make cars. And yes, there's a cult following and intense loyalty surrounding the brand. But ultimately, Tesla is much more an automaker than a tech company. It's valued like Google when it should be valued more like Ford."

and

"If you want to invest in electric cars but don't want to be exposed to what looks like a massive bubble, there's still a very good option available: General Motors"

Edit: And the ending "If you want to gamble, buy one of the bubble EV stocks that have gotten so much attention this year. If you want to invest, buy GM stock." I am dying.