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

[Quesder]

I used to think this is true but it's not.
So if you had 100k gains and paid 25k in taxes.
You use 75k to buy tsla again at 25% off to have the same amount of shares.
However those same amount of shares are now post tax vs before. So you don't have to wait for a 25% off at all to break even money wise. You do if you want the same amount of shares but that doesn't really mean anything.

Sounds interesting, i never think about that

would you mind to give an concrete example with numbers to explain the concept deeper? Thanks

 

[FireMedic]

I enjoy reading all these predictions and conjecture about crazy run ups/dips and bubbles… But I prefer to just focus on the fundamentals. For most of us long term holders I really just don’t think any of this stuff matters.

I’m grateful I have the shares I have, and I know that many here feel the same. No chance I’d sell any shares on the suspicion or hope for a dip. Unless (or until) something fundamentally changes with this business; the overall trajectory is up. I’m not risking any of my precious ownership stake.
The more the MM’s act greedy, the better off us high conviction HODLers will be.

 

[Rarity]

Bloomberg is reporting that the Tripp lawsuit has settled. He will pay $400k and admit wrongdoing.

Ex-Tesla Factory Worker to Pay $400,000 to End Feud With Musk

Something tells me that this won't be the end of the story. Either he won't pay and we will be back in court, or he will turn on the people who paid him for leaking. It would be great to know names and amounts.

 

[Bet TSLA]

Where did I say it was $100? I said 1% - that is a vastly different amount for different people. Note that I have been buying and accumulating TSLA since 2013.

Also, I don’t care about “admiration”. I find when people accuse someone else of a negative trait, they should usually be looking in the mirror. I’ve had some posters thank me privately for posting my strategies and ask me to continue posting them. So that’s what I’m doing.

I must have missed the 1%, probably because you didn't say that. You said a very tiny %. People (including me) do all sorts of crazy ass things with tiny percentages of their portfolios, especially if they're up and believe they're playing with house money. It's when fools see them making a ton of money (you know, up 40x one out of 40 times, but that's the time they talk about) and try to copy them that things go very bad.

I make wild bets with small amounts too, and of course I lose a lot and win occasionally. Whee! It's meaningless unless you can do it often with significant amounts of money. I do it because it's entertaining.

 

[Artful Dodger]

Watching a live ticker probably conveys the TLDR contents of the announcement.

Indeed. Or as Edward Teller once tweeted, "It's a Boy!"

Cheers!

 

[lafrisbee]

Agreed. I am one of those scaredy-cat HODL people. As much as I am tempted to try to play the timing game, I know I am but a tadpole in a river of piranhas. I keep convincing myself it just can't be that easy as everyone else would be trying to do the same.

I hope and expect I will be here again in a month to once again congratulate all of you with the conviction to make big timing bets. Best of luck!

OK OK this is extremely OT but come on the guy was referencing tadpoles and piranhas completely wrong. You're in my pond of expertise here. Skip it if you don't want to know but you might find it if interest...


Piranhas are extremely nervous scared fish. if anything the individual investors are piranhas. You see they do travel in schools and need each other to take down prey. But the worst thing you can be around a piranha is another piranha. They do not fear an animal many times larger than themselves. but what they have to worry about is when a frenzy starts you don't want to be at the front. Well because the piranha behind you is worked up and goes in half blind biting the first his mouth touches... it's a piranha eat piranha world out there... Piranhas will fake rush a target and pull out hoping the next piranha behind em will hit the target first...sounds familiar? Talk about Sun Tzu.

Now tadpoles, Tadpoles are monsters. Most species I know have a weird genetic makeup. As tadpoles some have the "cannibal" gene, not all just some. It's a survival mechanism.
When the tadpoles hatch in a puddle the race is on. They have to evolve into adults before the puddle dries up. And eating a diet low in protein slows their growth, eating high protein accelerates their growth. And if there are sources of high protein food then only some of the tadpoles have their cannibal gene activated. Not all just "some." And the perfect protein source for any animal is identical to its amino acid percentages, which means...ain't nothing better for a tadpole to eat than another tadpole. This increases the likelihood that some of the tadpoles will become adults, but at the expense of some of the tadpoles which are eaten. And yet nature makes sure that only a percentage of tadpoles become cannibals so they don't end up killing each other off by viciously injuring the whole population which would likely happen if they all or a great percentage of them became cannibals. (Sidebar: Sand tiger sharks in the womb have long been known to eat other embryonic sharks in the womb. At first it was believed to be an advantage for the developing shark to become large enough at birth to be able to fend off predation. Now it is thought to ALSO insure that the first male shark to fertilize the female eliminates the younger sharks of another male. But that strategy is limited in scope.)
And even cooler, the cannibal strategy isn't such a high percentage that a majority of the non-cannibal tadpoles are eaten. So nature provides that if the conditions are right that a massive number of tadpoles mature into adults. Thus creating another strategy of survival.
As stock purchasers and sellers perhaps we are both tadpoles and piranhas of various types, using various strategies... I tied it back to the stock market.

 

[StealthP3D]

“Formerly Stanphyll Capital, which was forced to change its name and look for new investors when both Stan and Phyllis filed for bankruptcy obtained a cease and desist order preventing their son, Mark Spiegel, from commercial use of the name "Stanphyll"."

FTFY

 

[Artful Dodger]

What’s S&P?

Good point. Many noobs may not actually know that:

"S&P Dow Jones Indices LLC (/daʊ/) is a joint venture between S&P Global, the CME Group, and News Corp that was announced in 2011 and later launched in 2012. It produces, maintains, licenses, and markets stock market indices as benchmarks and as the basis of investable products, such as exchange-traded funds (ETFs), mutual funds, and structured products."​

Cheers to the longs!

 

[lafrisbee]

I don't see this as physically possible. Nothing has changed.

SP still ratchets up any time more than a handful of orders are placed with any modest volume. No indication there's been significant buying yet from the institutional side. This should all still happen....in the buying window.

Will anyone be selling in a window where we spike from $650 to $900 or more? Perhaps, but not nearly enough to overwhelm buyers needing 8-16% of the float.

How are these institutional buyers gonna sell after the peak when the entire purpose of buying was to simply mimic TSLA's position in the S&P500? They're holding the shares forever, should be a post peak slide, but by definition it can't be back to the pre-window high. Unless of course things get really really out of control in the next 2 weeks.

I knew I had NOT figured it out. But YOU just made it worse.
Would you guys get together and figure this out. All of it.
Logically figure it out. identify all the parts, and the issue, and get to work a la Frank SG.

 

[Knightshade]

The have until Dec 18th to complete their buying.

No, they really don't.

This has been explained like 50 times lately, not sure why folks keep repeating the claim.

There are conflicting opinions on this. Personally, I fall into the camp that believes that Index funds are limited to buying within three business days of the inclusion date. Source, SPY prospectus:

Conflicting opinions- but only one set of facts.

The time any fund has to buy the shares are set by the rules of that fund.

Each fund has its own rules.

SPY- as you cite, has 3 days before and after the inclusion date to buy.

Other funds have 7 days either way.

Other funds have other windows.

Some also include specific disclaimers allowing the managers to briefly deviate from the normal rules in situations they think appropriate.


That said-

Furthermore, why would an index fund buy early? Their purpose is to simply track the index, not beat it. They should be agnostic to the share price, and could be placing their jobs in jeopardy by purchasing outside the days surrounding the inclusion date.

In other words, I think all of this run-up can be attributed to speculators, benchmarked funds, and others hoping to dump shares to index funds at as high of a price as possible.

Absolutely... most of the larger funds I'm aware of at least would not, and in fact by their own rules could not be buying this early... and no earlier than Dec 14... (and potentially as late as Dec 28).

Does that mean the Index funds cannot start buying TSLA before Dec.11, since they do not know what to sell to free up the money ?

See above.

Most can't buy because their own rules don't allow buying that far ahead of inclusion date.

Who they're dropping doesn't really matter that much, it's not like they're dropping someone with the same weighted market cap as Tesla where it'd be dollar for dollar anyway- they'll need to sell down some of EVERYTHING.

Remember that index funds are not the only big buyers for this event. Funds benchmarked to the index might buy even more than the indexers. (Benchmarked funds have $6.6 trillion in assets versus $4.6 trillion in the index funds, according to Rob Maurer.)

It is not even clear that indexers will be done buying on Dec 21, according to several sources cited by Rob. But even if the indexers are done then, when will the benchmarkers buy? While the indexers are gobbling up shares?

This argument is really perplexing.

Since you're not an index fund you can buy or sell whatever shares you want whenever you want (within the bounds of your fund rules- like if you're a real estate fund you probably can't buy Boeing or whatever)

If your goal, as the benchmarkers goal is, is to BEAT the returns of the S&P 500, you'd already own a bunch of Tesla and would have for a while now

You'd have no need to buy a bunch more during a price spike.... on the contrary the spike would make the bunch you smartly bought 6 months or a year ago look fantastic on your results...

(see ARK funds results vs an S&P500 index fund for some examples).

 

[Artful Dodger]

They won't know how much to buy until the 11th. (Or which stock they have to sell.)

True. (Oh, its XXOM...)

Cheers!

 

[Tim S]

Not sure if it matters to TSLA tomorrow, but it can't hurt... futures are up almost 1%

 

[ZeApelido]

Bloomberg is reporting that the Tripp lawsuit has settled. He will pay $400k and admit wrongdoing.

Ex-Tesla Factory Worker to Pay $400,000 to End Feud With Musk

Something tells me that this won't be the end of the story. Either he won't pay and we will be back in court, or he will turn on the people who paid him for leaking. It would be great to know names and amounts.

 

[Green Pete]

After all that it's only $400,000?

 

[Artful Dodger]

Hmmm, when is the %age weighting of $TSLA in the S&P being set, is that today after market close? If yes, might this be the reason behind the immense effort to keep it down?

Just wondering...

I think that gets announced on Fri, Dec 11. Does anybody know what the S&P schedule is for it's Dec rebalancing announcement? Are these two events going to both occur on Dec 11? TIA.

Cheers!

 

[StealthP3D]

There are conflicting opinions on this. Personally, I fall into the camp that believes that Index funds are limited to buying within three business days of the inclusion date. Source, SPY prospectus:

"Specifically, the Trustee is required to adjust the composition of the Portfolio whenever there is a change in the identity of any Index Security (i.e., a substitution of one security for another) within three (3) Business Days before or after the day on which the change is scheduled to take effect."

There shouldn't be conflicting opinions on this.

Every fund is unique and has their own rules. S&P has no say in the matter. For example, the Schwab SPY fund allows considerable leeway to the fund manager to buy early or late due to circumstances. This gives them a potential leg up on funds that have less discretion. I assume Schwab isn't the only one that allows this. It could also cause them to underperform the Index if they misjudge so the natural inclination is to stick closely to the inclusion date.

The bottom line is the S&P 500 Index fund buying will be concentrated towards the inclusion date and 3 days on either side. The funds benchmarked to the S&P typically have unlimited discretion. This is what will help create a floor for TSLA share price before and after the inclusion event. If the price drops, a lot of benchmarked funds that didn't want to pay what they considered "nosebleed" prices will jump in.

 

[Artful Dodger]

Gary did lookup the last big addition to theSP500 which was FB and he did mention that the bulk of the buying was on the last day.

Given the liquidity concerns, Dec-18 might be a bit lower compared to the FB last day %, but I think it will still be the biggest volume day of the inclusion period

https://twitter.com/garyblack00/status/1329082599755501568
https://twitter.com/garyblack00/status/1329060291045371915

I don't think there was $28B shares sold short against FB, artificially inflating their float, and about to go 'poof' on by Dec 11-ish...

Cheer!

 

[MP3Mike]

Bloomberg is reporting that the Tripp lawsuit has settled. He will pay $400k and admit wrongdoing.

Ex-Tesla Factory Worker to Pay $400,000 to End Feud With Musk

Something tells me that this won't be the end of the story. Either he won't pay and we will be back in court, or he will turn on the people who paid him for leaking. It would be great to know names and amounts.

Where is he going to come up with $400k? Is the short seller that was funding his law suit going to pay?

This might make Tesla employees think twice about leaking information to reporters... (Which I think is a good thing.)

 

[Causalien]

Bloomberg is reporting that the Tripp lawsuit has settled. He will pay $400k and admit wrongdoing.

Ex-Tesla Factory Worker to Pay $400,000 to End Feud With Musk

Something tells me that this won't be the end of the story. Either he won't pay and we will be back in court, or he will turn on the people who paid him for leaking. It would be great to know names and amounts.

Yes. 400k is peanuts for TSLA. I want to know the ppl behind Tripp

 

[Curt Renz]

The drop before close today should be a sign for everyone on what will happen after Dec. 21st. I will be shocked if we have less than a 30% drop between the 21st and the end of the year. (Not advice, since I'm often wrong...)

There has not been an automaker in the Dow Jones Industrial Average since the General Motors bankruptcy in 2009. Now that the committee will be putting Tesla in the S&P 500, I suspect the next consideration will be for the DJIA. However, since the DJIA is share price weighted, I assume a requirement for Tesla inclusion will be another stock split.