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

[Evoforce]

So, you're in the invest now and also pay the loan ASAP group? I hear you on the stock price, but I'm in for the long run with TSLA. I guess I need to strike a balance here. I may put some toward the car and most toward TSLA. Thanks for your thoughts on this!

Invest it all in rocketing Tesla stock. Finance the car at historically low rates....

 

[⚡️ELECTROMAN⚡️]

I'm afraid your unfamiliarity with the meaning of fractions leads me to distrust everything else you posted here. Perhaps your "1/3" is intended as some sort of joke? hyperbole?

I was thinking it was just an exaggeration.

 

[engle]

Agree with you completely. Alameda county learnt a lesson the hard way - NEVER GO AGAINST ELON MUSK

No matter how positively they painted the outcome, they lost the last battle with Elon pretty badly and came out looking foolish in the process. The public backlash was resounding - other than a few idiots like that San Diego congresswoman, no one supported them, not even the City of Fremont or neighboring counties. They had to back down and give him what he wanted. They will not try that dumb move again.

I've lived in Fremont, CA since 1988 [1]. The mayor bought her family home from the real estate broker wife and me, we're good friends, and yes, Lily drives a white Model 3 Dual Motor just like my wife's car.

It *was not* Fremont that shutdown the factory before. It was the former Alameda County health officer, Dr. Erica Pan of Oakland. Our Gov. Gavin Newsome made the astute political move of getting Pan the hell out of Alameda County by hiring her to be California's top infectious disease doctor on June 30, 2020.

Now, the State health department has decreed that "workers at Tesla's California vehicle factory are deemed essential" and are not impacted by the latest COVID-19 restrictions.

Of course the only thing Tesla's Fremont workers are "essential" for is to maintain our collective wealth!

Counties are allowed to impose stricter rules than the State as the Bay Area has already done by announcing an earlier "stay at home" mandate today. Hopefully, with Pan out of the way, that won't happen re: Tesla. The bottom line is I think as long as the Fremont factory does not become a "super spreader" workplace, it will remain open.

[1] The SFO airport I will be using to award travel business class the hell out of California on 12/31/2020 arriving in Taipei on 1/1/2021 has been declared "essential infrastructure" so it won't close, either. I never thought that marrying (and staying married to!) a Taiwanese-American 20-something I met in SF in 1983 would prove so useful, since normal tourist visas to Taiwan are not available during COVID-19. Only 620 hours to go...

 

[CyberDutchie]

Depends on your age and how many shares that represents.

IMO, if selling 1/3 would be enough for retirement, it's worth considering.

However, keep in mind there is every reason to believe the next 5-10 years are primed to be a great run for TSLA.

Selling for retirement is unnecessary. Just get a line of credit with the shares as collateral: 1) you don’t sell your shares so you don’t pay taxes 2) your shares continue to appreciate while you take from the line of credit, very likely they will appreciate much more than the low interest (I pay 2.2% at E*Trade) you pay over the principal balance.

 

[CyberDutchie]

E*Trade just reduced my TSLA margin maintenance requirement from 60% to 40%. I wonder if that is due to the GS upgrade?

I may not be so eager to get rid of my margin balance now.

They are also increasing the percentage you can borrow against your TSLA shares from 35% to 40%, thanks to the S&P 500 inclusion.

 

[EV forever]

I've lived in Fremont, CA since 1988 [1]. The mayor bought her family home from the real estate broker wife and me, we're good friends, and yes, Lily drives a white Model 3 Dual Motor just like my wife's car.

It *was not* Fremont that shutdown the factory before. It was the former Alameda County health officer, Dr. Erica Pan of Oakland. Our Gov. Gavin Newsome made the astute political move of getting Pan the hell out of Alameda County by hiring her to be California's top infectious disease doctor on June 30, 2020.

Now, the State health department has decreed that "workers at Tesla's California vehicle factory are deemed essential" and are not impacted by the latest COVID-19 restrictions.

Of course the only thing Tesla's Fremont workers are "essential" for is to maintain our collective wealth!

Counties are allowed to impose stricter rules than the State as the Bay Area has already done by announcing an earlier "stay at home" mandate today. Hopefully, with Pan out of the way, that won't happen re: Tesla. The bottom line is I think as long as the Fremont factory does not become a "super spreader" workplace, it will remain open.

[1] The SFO airport I will be using to award travel business class the hell out of California on 12/31/2020 arriving in Taipei on 1/1/2021 has been declared "essential infrastructure" so it won't close, either. I never thought that marrying (and staying married to!) a Taiwanese-American 20-something I met in SF in 1983 would prove so useful, since normal tourist visas to Taiwan are not available during COVID-19. Only 620 hours to go...

I think there is a slight misunderstanding on what my post intended to say - likely my fault for not articulating properly. I am actually also saying the same thing you are - it was the idiotic decision of Alameda county to refuse to allow Tesla to re-open. The City of Fremont, the Mayor and even the police force did not support the Alameda county decree

Agree with you completely. Alameda county learnt a lesson the hard way - NEVER GO AGAINST ELON MUSK

No matter how positively they painted the outcome, they lost the last battle with Elon pretty badly and came out looking foolish in the process. The public backlash was resounding - other than a few idiots like that Sandiego congresswoman, no one supported them, not even the City of Fremont or neighboring counties. They had to back down and give him what he wanted. They will not try that dumb move again.

In my quote above, the "them" I am referring to is Alameda County officials. The City of Fremont and the neighboring counties did not support Alameda County officials. If I remember correctly, the Mayor actually openly supported Elon on Twitter. The public backlash was against Alameda county officials. The crazy San Diego congresswoman posted "F**K Elon" on Twitter - she faced severe backlash immediately.

Alameda county will not make this mistake again. Tesla factory will not shut down.

 

[RobStark]

Tesla sells 100% of the cars they build....

Every automaker sells 100% of the cars they build.

 

[astrotoy]

Every automaker sells 100% of the cars they build.

Sometimes it takes a year or two on the dealer's lot.

 

[RobStark]

Sometimes it takes a year or two on the dealer's lot.

The automaker already sold the car.

The dealer may hold onto cars because they demand prices above market prices. They don't do this very often or they would be out of business.

 

[astrotoy]

The automaker already sold the car.

The dealer may hold onto cars because they demand prices above market prices. They don't do this very often or they would be out of business.

I actually have seen dealers keep lowering the price as the car gets older and older on the lot. I understand they finance the cars, so they are losing money every month that goes by, hence lowering the price to get rid of it.

 

[RobStark]

I actually have seen dealers keep lowering the price as the car gets older and older on the lot. I understand they finance the cars, so they are losing money every month that goes by, hence lowering the price to get rid of it.

A car depreciates every month. Even brand new on the lot.

IF an old inventory(90 days plus) car is on the lot by definition the price the dealer puts on the car is above the market price.

 

[StealthP3D]

Every automaker sells 100% of the cars they build.

The big manufacturer's have more production capacity than they can use. That means they can't sell all they can make. If they build as many as they can, they run out of buyers. Even with production throttling they often end up with huge lots filled with new cars (in addition to full dealership lots). Yes, they eventually get sold but only because they stop making them, often for weeks at a time. They also offer incentives to help move them that are often $5K-$7k below the normal selling price. But they try to slow production before that is necessary.

Tesla is constantly increasing production capacity and, other than the delay in getting the cars matched up and delivered to buyers, sell them as soon as they can make them.

 

[wipster]

TSLA +1.0%

An all-time closing high for my 75th birthday present

Curt, Happy Birthday my friend! I really appreciate the information you provide for all of us and especially your musical celebration of the many all time highs the SP has had lately. Just for you I guess it's time to start posting again... my fingers have been burning lately!

Enjoy your 75th and I can't wait for your 80th, where we celebrate an SP of 1,000... after a 10 for 1 split that is...

 

[Artful Dodger]

After-action Report: Fri, Dec 04, 2020: (Full Day's Trading)

Headline: "Low Volume Day w. Closing Rally to ATH"

Traded: $17,522,128,299.24 ($17.52B)
Volume: 29,517,668
VWAP: $593.61

Close: $599.04 / VWAP: 100.96%
TSLA closed ABOVE today's Avg SP
TSLA MaxPain (7:00 A.M.): $570

Mkt Cap: TSLA / TM $567.831B / $193.733B = 295.32%
Note: Yahoo Finance updated TSLA Mkt Cap for shares issued Sep 9th (per 10-Q)
​

CEO Comp. Status:

TSLA 30-day Moving Avg Market Cap: $470.02B
TSLA 6-mth Moving Avg Market Cap: $347.42B

Mkt Cap req'd for 6th tranche ($350B) tracking for Mon, Dec 07, 2020
Nota Bene: Operational milestones are req'd for next tranche.
​

'Short' Report:

FINRA Volume / Total NASDAQ Vol = 52.3% (52nd Percentile rank FINRA Reporting)
FINRA Short / Total Volume = 55.7% (54th Percentile rank Shorting)
FINRA Short Exempt Volume ratio was 0.29% of Short Volume (45th Percentile Rank)​

QOTD: @Singuy "For those who believe in TA, this is the signal..."

Comment: "One bitch of a morning has turned into a hell of a day

View all Lodger's After-Action Reports

Cheers!

 

[Khamul]

[Tesla] U.S. Diversity, Equity and Inclusion Report

Minorities and others from underrepresented communities make up more than half of Tesla's employees in the U.S. and a third of its directors and vice presidents.

 

[RobStark]

The big manufacturer's have more production capacity than they can use. That means they can't sell all they can make. If they build as many as they can, they run out of buyers. Even with production throttling they often end up with huge lots filled with new cars (in addition to full dealership lots). Yes, they eventually get sold but only because they stop making them, often for weeks at a time. They also offer incentives to help move them that are often $5K-$7k below the normal selling price. But they try to slow production before that is necessary.

Tesla is constantly increasing production capacity and, other than the delay in getting the cars matched up and delivered to buyers, sell them as soon as they can make them.

Tesla doesn't make every Model S they can make. Probably doesn't make every Model X they can make. A year ago they reduced capacity from 100k to 90k per year. Even as Tesla increases footprint globally.

Every so often Tesla also reduces prices, adds equipment without raising prices or has promotions when production runs ahead of demand. Even for Model 3.

Huge parking lots full of cars is the business model for large OEMs. Have large selection available to purchase on the spot. Not having to order and wait weeks/months.

The Detroit business model is also to pad the MSRP and then discount. Buyers of Detroit brands expect a sizeable discount from MSRP. It doesn't mean the Detroit companies are receiving less money than they expected for their vehicles.

Ford/GM/FCA doesn't have to idle pickup truck production. Even during the pandemic.

The Europeans also don't have to idle production on their money makers.

Some companies like Nissan are in trouble and have to idle many plants over the world.

Then there are companies like Subaru. That are trying to make every car they can make and sell them quickly once they do.

Yes, operations are different when you have .1%,1%,or 10% market share.

 

[TSLA Pilot]

A reason alluded to, but not directly stated or explored, is that car insurance is a low margin / high competition business. That 1% underwriting profit is a good indicator of that - actual profits come from investment of the float (and understanding this concept in more detail is a good reason to be reading Buffet's Annual Letter to Shareholders - I've been reading them for a couple of decades now, and they're all available on the Berkshire investors site).

The problem with a 1% underwriting profit of course is that is an aggregate value over the industry, over the years. Some years are better, some are worse.


That thin margin is also our protection as car owners. An insurance company that is badly misplacing Tesla car insurance to the high side will earn some incremental underwriting profit, and will lose business to other companies that aren't.

One of Geico's strategies, talked about 1 year by Buffett, was to make their premiums easy to see, and to keep them low (which puts heavy emphasis on their ability to price correctly). The way they see it, it's a win either way. Showing lower premiums will bring in customers. Accurate pricing of those contracts at low prices, where the customer goes elsewhere even cheaper, will be losing contracts for their competition.


That doesn't mean that Tesla can't develop a lower priced insurance using superior information at the individual consumer level and their individual driving habits. Only that I don't see it as a no-brainer (mostly because the loss of privacy will be an impediment for many potential consumers).

Then again, I think I'm personally closer to $1200/year on our Model X insurance with State Farm, partially due to having our entire collection of insurance coverage with State Farm. So maybe I'm just happy with the rates we're getting, and don't feel a need to go looking for something better.

You're missing a key component: MARKETING COSTS.

One reason for the supposedly thin margins in the insurance business is because we've seen about 9,582 Geico commercials, 7,922 Liberty Mutual commercials, and 2,689 "other" car insurance commercials in the past month or so . . .

The cost for all those impressions boggles the mind--GEICO even pays to have banners flown in the sky by small aircraft. It's never ending, and a massive cost.

Tesla Insurance will have ZERO advertising expense.

That should provide for massive cost reductions/margin enhancement.

 

[StealthP3D]

Tesla doesn't make every Model S they can make. Probably doesn't make every Model X they can make. A year ago they reduced capacity from 100k to 90k per year. Even as Tesla increases footprint globally.

Every so often Tesla also reduces prices, adds equipment without raising prices or has promotions when production runs ahead of demand. Even for Model 3.

Huge parking lots full of cars is the business model for large OEMs. Have large selection available to purchase on the spot. Not having to order and wait weeks/months.

The Detroit business model is also to pad the MSRP and then discount. Buyers of Detroit brands expect a sizeable discount from MSRP. It doesn't mean the Detroit companies are receiving less money than they expected for their vehicles.

Ford/GM/FCA doesn't have to idle pickup truck production. Even during the pandemic.

The Europeans also don't have to idle production on their money makers.

Some companies like Nissan are in trouble and have to idle many plants over the world.

Then there are companies like Subaru. That are trying to make every car they can make and sell them quickly once they do.

True, luxury cars have a limited market.

Yes, operations are different when you have .1%,1%,or 10% market share.

Yes, and especially when you have a superior product in high demand.

 

[dgodfrey]

When I bought into Tesla it was like a 4bn mkt cap so I’m up x 100 on initial investment, do people really think the shares can still rise x 10 !!?? 6 trillion mkt cap ?????

Certainly, they gained X7 in the past year alone.

 

[dgodfrey]

Selling for retirement is unnecessary. Just get a line of credit with the shares as collateral: 1) you don’t sell your shares so you don’t pay taxes 2) your shares continue to appreciate while you take from the line of credit, very likely they will appreciate much more than the low interest (I pay 2.2% at E*Trade) you pay over the principal balance.

I’ve often wondered about this because that’s how Elon generates income but maybe I’m missing the obvious. How do you pay off the loan if you never sell the shares?