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

[Todd Burch]

We are up 50% in a month. There's the reason.

Up 75% in a month is better.

 

[StealthP3D]

The Netherlands is rumoured to go in lockdown this evening. If the lockdown measures prevent Tesla to deliver cars, it could mean about 2000 cars can’t be delivered this year. Germany already announced a stronger lockdown, so Tesla may not be able to deliver cars there too.
Edit: the 2000 cars is my guestimate based on how the delivery graph looks like this quarter so far.

In the US Tesla used a "touchless" delivery service during various statewide lockdowns. They used the same techniques if your car needed servicing. Don't these methods work in Europe?

 

[Knightshade]

I am still not clear on whether those are 3/7 business days or calendar days??

, 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

So 3 business days for them. Rules vary by fund- I'd expect it to be biz days in most cases, but wouldn't be shocked if a few left that out.

 

[TheTalkingMule]

We've been over this exhaustively, many many times now.

Each fund has its own rules.

Some could be allowed to buy today

Some not till 3 days in advance.

Some could've been allowed to buy last week even (though likely a small minority).

MOST funds that have a rule on this in their prospectus seem to be either 3 or 7 days... (and that's both pre and post inclusion date) but even those funds usually have some disclaimers about additional special cases.



All that said- several folks have posted sources in the past suggesting during previous inclusions most funds don't buy until the day before inclusion no matter their own rules.

Of course this isn't a typical inclusion so YMMV.

I'm aware of that, thanks. I was wondering why someone would specifically point to tomorrow(4 trading days out). My guess now is that it's calendar days? My assumption was that funds would be buying at either 3 trading days out or 7.

Ease up on the caffeine, it's going to be a long week and we need to keep the mood celebratory.

 

[FrankSG]

Looks like selling @ $635 dried up. Next stop $640?

Whoever this buyer is, he's really slow and careful about scooping up all last shares available for sale at a certain price point before moving on.

 

[AudubonB]

I love the smell of TSLA in the morning!

Yes, that certainly is preferable to “...of shorts’ shorts”.

 

[dl003]

... how was it not an active choice before but magically is one now?

If you thought it would outperform the index as a whole before you'd have bought it before. ARK sure did.

If you thought it wouldn't you wouldn't.

Active choice.

Same today.


I dunno- maybe my standards are too high...

If I was gonna pay fees to an actively managed fund I don't think I'd accept "we are just gonna add exactly index weight of this new index stock because we're too lazy to make a decision about it" for an answer.

WTF am I paying them for in that case?

It is now a defensive decision. Before, they could just chop TSLA up to "just another unicorn" and there were a lot of unicorns out here beating the SP 500 by miles. Investors wouldn't hold it against them for not buying TSLA, or ZM, or SHOP because there was always a high level of risk associated with them. As TSLA becomes the latest tech behemoth to get the SP 500 badge, it is no longer a unicorn. The decision has to be made with a different set of criteria now.

 

[generalenthu]

One thing I'd like to add about the level2 charts @Cherry Wine helpfully posts is, they're less useful during times like these than other times where there is nothing interesting going on.

Specifically what that shows is the limit order book and if you're a big player, buying or selling via limit orders is akin to playing poker with your cards on the table. Pretty much shooting yourself in the foot. Most of the times what it shows is the smaller retail buy /sell interest.

Even for retail traders, places like IB offer VWAP and iceberg orders that let you hide the real buying and selling demand.

 

[Ipe]

In the US Tesla used a "touchless" delivery service during various statewide lockdowns. They used the same techniques if your car needed servicing. Don't these methods work in Europe?

They probably do. It’s also an essential business for people whose leasecontract expires January 31st. Would be surprised if they have to close down.

 

[kanweg]

... how was it not an active choice before but magically is one now?

If you thought it would outperform the index as a whole before you'd have bought it before. ARK sure did.

If you thought it wouldn't you wouldn't.

Active choice.

Same today.


I dunno- maybe my standards are too high...

If I was gonna pay fees to an actively managed fund I don't think I'd accept "we are just gonna add exactly index weight of this new index stock because we're too lazy to make a decision about it" for an answer.

WTF am I paying them for in that case?

well, with 500 funds you can’t be an expert on all of them. Reading up on TMC x 500; so many funds, so little time. So, it could work if they know a subset well and merely copy the others.

 

[oldTAVguy]

This one made me LOL real hard:

View attachment 617623

Who is this nimrod and why should I care what he/she/them/they says or thinks?

 

[StealthP3D]

Nice morning pop to $626, but we better watch out, those FUDsters are trying to throw everything they got at us! Look at this article that just showed up on my feed, really stretching if you ask me:
The Rise and Fall of Nikola Tesla and....

At the bottom it says:

This post originally appeared on Smithsonian Magazine and was published February 3, 2013. This article is republished here with permission.

 

[H Mak]

Up 75% in a month is better.

One is certain, the other is uncertain. If a person or an institution took a punt on Tesla on the back of the S&P announcement and were able to cash in a 50% gain in a month, I wouldn't call that dumb, as you suggested. I'm not saying we would do it, but you said you couldn't understand why anyone would sell. I can.

 

[Cherry Wine]

One thing I'd like to add about the level2 charts @Cherry Wine helpfully posts is, they're less useful during times like these than other times where there is nothing interesting going on.

Specifically what that shows is the limit order book and if you're a big player, buying or selling via limit orders is akin to playing poker with your cards on the table. Pretty much shooting yourself in the foot. Most of the times what it shows is the smaller retail buy /sell interest.

Even for retail traders, places like IB offer VWAP and iceberg orders that let you hide the real buying and selling demand.

Agreed 100%. There is obviously a lot of buying pressure, but whoever is doing the buying isn't tipping their hand by letting their orders sit on the book. I find the chart still somewhat informative even today in that it's showing significant sell-side sentiment for the moment, and if that changes I will get much more bullish on today's potential. But as always with Level II info - it can change at a moment's notice. Definitely not a crystal ball.

 

[ggr]

I would've thought it'd be more like Wednesday, the 3 trading days prior to inclusion?

There are three hard things in computer science, naming variables and off-by-one errors.

 

[Highway2Heel]

Next stop $660...

 

[Bet TSLA]

I think you're misunderstanding what benchmarked against means.

It means they want to beat the results of the index.

Why would you mirror something you are trying to do better than?

They held 0 TSLA because they felt it would not help them BEAT the index results.

If a managed fund that charges significant fees were to report "Hey we exactly matched the returns o a passive S&P index fund!" their customers would wonder WTF they're spending their money on with those fees.

Buying into stocks NOT in the index is literally the only way to beat it





Again- how does that make any sense?

At that point they're just a passive index fund- not an actively managed fund trying to beat the index.

If you want to BEAT the index, mirroring it is exactly the way to insure you fail at your one job.



So pre-inclusion, an active fund manager either thought TSLA would do worse than the index as a whole, and bought 0.

Or she thought it would beat the index as a whole and bought shares (see ARK as the most obvious example of such a fund).

The same is true post inclusion.

Um, er, what? You're confused. Of course I want to beat whatever I'm benchmarked against. What that means is that my 0 (no win, no lose) is whatever that benchmark does. So before inclusion the benchmark was doing it's thing without TSLA, and after inclusion it is doing it with TSLA. That means that, as a fund manager, having no opinion and going with the flow means owning the same percentage of TSLA as the index. Most fund managers have no opinion and go with the flow on the things they don't understand. Most put TSLA in that category. You can tell because they didn't own any TSLA.

On inclusion day they will want to continue to have no opinion on TSLA. So they'll buy it. That keeps them at 0 variance from their benchmark. These people get fired if they don't manage to do decently against their benchmark. Why would they take unnecessary risks?

You just need to properly understand 0. It's not a constant in this game.

 

[M|S|M MYP]

Gordo's latest dums**t rant:

Why one analyst says Tesla investors should expect a ‘significant selloff’

"I think its a demand problem...."
"We're the biggest bears on the street and our est for 4Q deliveries is 180K?" Since when did they est 180K?"
"I think fair value is somewhere between $60-$80"

This would explain $TSLA SP rise this morning...thanks Gordo!

I bet Gordo does not have any short position and never had one....he's just sounds dumber and dumber with every interview.
At least he did not say 'essentially'....

 

[Sudre]

This one made me LOL real hard:

View attachment 617623

Actually the easiest reply to that is, "I heard that exact statement !!7 years ago!!", and just leave it at that.

 

[redrover]

Noobie here - I'm not understanding why the SP500 index funds would make their 'TSLA inclusion' buy at any time other than the close on 12/18:

If the index funds are trying to replicate the index exactly, and the index will include TSLA at the closing price on 12/18, then why wouldn't the funds simply make their entire buy at the close on 12/18? Wouldn't that guarantee exact same performance as the index, and thus is the ideal strategy to minimize variance from the index?

Thanks for any light you can shed on this...