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

[Gigapress]

Love the enthusiasm but when Tesla makes 20 million cars a huge percent will be selling for much lower prices than the current 50k or so. Are you considering the tremendous slide in average price when looking at 15k profit/car?

Yes I'm looking at declines in price at 20 million volume, but I expect it will be a minor decrease because the average selling price of new cars and light trucks has been steadily rising for years, largely because:

1) Vehicles last longer than they used to and thus retain more residual value when sold

2) GDP per Capita has been rising with economic growth, and thus consumers are choosing to spend more on upgrading safety, performance, luxury and size

Today, average new car prices from companies that sell large trucks and SUVs, not just small cars, is around $40,000. (What Is the Average Price for a New Car?). By 2030 in a robotaxis-have-failed scenario the trend would suggest that the average price may be about $45,000 or even $50,000. If this became Tesla's ASP, then $15 k gross profit would be 30-33%.

 

[Artful Dodger]

The tabless electrode or whatever it is called... is pretty important for high-performance cars, and also for flagship products due to discharging and charging speeds, so I'm assuming 18650 will be seen as a weakness since it can't be manufactured without 2 tabs, old-world style. Am I wrong?

Yeah, that's not really an issue with TE products like Megapack, or Tesla std range cars like the new LFP-based SR+ models. It's all about performance per dollar, and economies of scale. Elon told us to expect 2/3rds of Tesla cars will eventuall ship with iron-based batteries. All means is that Tesla can triple production while still using the same amount of nickel, the supply of which is the real bottleneck.

Cheers!

 

[torifile]

Do you have shares, LEAPS, or short term calls?

If you have shares or LEAPS, it's silly to be selling here. This is clearly breaking it's ATH. Whether that's before earnings or after, it's going to happen.

Shares. Keeping it simple while I get up to speed on various other instruments.

 

[Gigapress]

The tabless electrode or whatever it is called... is pretty important for high-performance cars, and also for flagship products due to discharging and charging speeds, so I'm assuming 18650 will be seen as a weakness since it can't be manufactured without 2 tabs, old-world style. Am I wrong?

18650 is just a size. It could be manufactured with the continuous tab form but I believe that won't happen because it would waste much of the benefits of having the tab like that. Bigger cell is better when you can get away with it.

 

[StarFoxisDown!]

Shares. Keeping it simple while I get up to speed on various other instruments.

I would definitely be holding then. Sure you might be able to trade it within this week and pick up an extra couple of % points if you sell at good times and the stock pulls back a bit. But it could easily just march higher to ATH and then you're forced buy back in higher.

Risk/Reward isn't there to me. Only way there's a significant pullback from these levels is if a recession happens and that's not happening in Q1. So therefore I think the rally to new ATH's is on.

 

[ggr]

Mod: Keep it all polite, people. Not deleting things yet, but finger is poised. --ggr

 

[Webeevdrivers]

This is annoying, and making the rounds on public media. Curious what reasons this owner would need to do this. Maybe he/she had his reasons. Still annoying the way it’s being spun. At least he has chains on. .

 

[H Mak]

I’m tempted to take some off here. Someone talk me down! Jeez. 15% gains in 3 weeks.

Edit: correction 17%

The recent high was $1229. Why don't you wait until it hits that again before deciding. It's often best to do nothing in the stock market.

 

[StealthP3D]

Is this really how paranoid and insular this forum has become? Believing in magical, invisible, monolithic entities that can crash the entire stock market at a moment's notice just to stick it to Tesla? If such godlike entities existed, they would have crushed Tesla long before now.

No, it's a sign that people are still allowed to ask questions. You are responding to someone who simply asked two questions.

The forum could be considered paranoid and insular if people could not ask such questions.

 

[Pezpunk]

I would definitely be holding then. Sure you might be able to trade it within this week and pick up an extra couple of % points if you sell at good times and the stock pulls back a bit. But it could easily just march higher to ATH and then you're forced buy back in higher.

Risk/Reward isn't there to me. Only way there's a significant pullback from these levels is if a recession happens and that's not happening in Q1. So therefore I think the rally to new ATH's is on.

Agree with this. In my early years of $TSLA ownership, i was trying to increase my shares by selling the peaks and buying the dips in my retirement account, but it's impossible to do that reliably. If you add up all your buys and sells, you're lucky if it's a wash compared to just holding (and adding when the opportunity hits). Timing the market is a fool's game. Patience is rewarded.

 

[Artful Dodger]

Edit - @Pezpunk , please don't blame the whole forum for my perceived paranoia.

Mostly I- still but a pimply-faced youth in the ways of the market - was just asking my esteemed TMC elders if this might be a thing or not, and fishing around for thoughts about the effects of the growing, unprecedented significance of one stock to the whole market.

You're not completely off-base. In November, TSLA options volume represent HALF of all Options traded on the NASDAQ. Think about that. TSLA is 2.2% of the Index, but accounts for 50% of the Options trading. That's uncharted territory, and it fair to ask what the effect will be.

"There are no stupid questions, just stupid haircuts..."​

Cheers!

 

[jhm]

I’m tempted to take some off here. Someone talk me down! Jeez. 15% gains in 3 weeks.

Edit: correction 17%

Ask your doctor if a Tesla reduction is right for you.

 

[2daMoon]

I'm pleased about how this aged fairly well.

That silver lining will be the upcoming BIG BOING.

This was the gist of a Big Boing theory I proposed where we might consider Elon's share sale as "artificial shorting" because it winds the spring even tighter than the actual shortzez could or would.

Elon needs to sell in order to exercise the options (more specifically, to pay tax) and the way he is doing it could very well add a lot of fuel to the fire when the rebound is released.

The lower the price is driven the more energy will be released when the perfect storm of 2 new factories, 4680 ramp, CT re-reveal, production ramping at Shanghai and Fremont, and everything else Tesla coming soon to a blue planet near you.

 

[insaneoctane]

I don’t see why Tesla would give up the 18650 capacity for Model X and S that quickly. They just redesigned those two and I expect them to keep using 18650 for years

Well....I think it depends on how good the new 4680s actually are. If they charge much quicker (like I think they will) have better longevity, higher energy output, plus offer the option of structural pack that 18650s don't, I don't see how the MS and MX justify staying on 18650s. Like it or not, the MS and MX are still Tesla's flagship products....18650 ought to go into stationary TE products once 4680s are in supply

 

[Knightshade]

Well....I think it depends on how good the new 4680s actually are. If they charge much quicker (like I think they will) have better longevity, higher energy output, plus offer the option of structural pack that 18650s don't, I don't see how the MS and MX justify staying on 18650s.

Because the supply exists without impacting any other products.

And I think the Plaid S demonstrates performance isn't really a concern with 18650.

Like it or not, the MS and MX are still Tesla's flagship products....18650 ought to go into stationary TE products once 4680s are in supply

Everything I know says LFP is a better battery tech for stationary storage- and 18650 production even if they removed it from cars wouldn't be nearly enough to meet all energy demand- and mixing battery formats is counter productive.

So why not keep it in the S/X as long as it remains useful?

 

[UncaNed]

I’m tempted to take some off here. Someone talk me down! Jeez. 15% gains in 3 weeks.

Edit: correction 17%

I don't know who's selling now, but I have to sell something in my taxed account to pay taxes I generated in 2021 from rolling older LEAPS into later-expiring LEAPS. Otherwise come April 15 I'll be owing money I don't have and have to sell something in a rush.

Why didn't I sell more THEN to cover taxes?? Because I made the transaction when the SP and LEAP values were down in order to create a smaller tax bill by rolling when prices are down.

Does this make sense?

Looking to learn, but I'm pretty sure my cautious fascination with LEAPS is mostly a winning strategy.

And just so everyone can sell better tonight... don't worry, my tranches will be a tad smaller than Elon's were.

(Hee hee... "tranche" I wouldn't know a "tranche" if it jumped up and batted me in the face.)

 

[Gigapress]

Just to be clear on that last sentence, a rational valuation for a company with no expected growth would be a P/E of 6-10 depending upon the economic climate. Of course, I can't imagine the company we call Tesla being associated with no growth so...

Depends on the interest rate and how long the profits are expected to be stable.

40 years of steady (inflation-adjusted) earnings at 4% interest rate (above the rate of inflation) has a net present value worth 20x the annual profit.

I applied 20x to Tesla's 2030 vehicle business simply to demonstrate that even if growth ceased beyond then, a $4k share price is achievable based on fundamentals.

I'll add that the only time I think p/e is a good metric to use when valuing a company is when they have very low expected growth.

True. Net present value, from which P/E can be derived (as above), is the only way to make any sense of things. Especially for a company that sometimes runs negative cash flows while making aggressive investments.

 

[Discoducky]

I’m tempted to take some off here. Someone talk me down! Jeez. 15% gains in 3 weeks.

Edit: correction 17%

Your a bit new, so you get a pass. It is simple: If you need money, liquidate, if you don't, then what other investment do you want your money in for a predetermined time at a given price target.

Here's how I see it for me (not advice for anything I say): Trimming profits is normal, but you have to be ok with missing out on gains. We've all done that. With Tesla, it is a rollercoaster. TA (Technical Analysis) does NOT always work, but it looks like we are in a bull trend now with $1400 on the near horizon and Corey has been spot on lately. Pure engineering analysis and first principles DOES. At least for me and some other bloke who rhymes with Frelon.

 

[amolina]

Wanted to congratulate the whole TMC family here. Amazing stuff. I have been busy building products and have not had time to be trading options. I still have a big portion of my net worth in TSLA and will probably continue to do so. So have not been able to catch up with you all. But amazing. This beast is only getting started.
Last year I won a bet with a buddy of mine that TSLA will be above 1000 in the end of 2021, and we made it. He said 500, Ha. The party is on him

 

[Knightshade]

I don't know who's selling now, but I have to sell something in my taxed account to pay taxes I generated in 2021 from rolling older LEAPS into later-expiring LEAPS. Otherwise come April 15 I'll be owing money I don't have and have to sell something in a rush.

Why didn't I sell more THEN to cover taxes?? Because I made the transaction when the SP and LEAP values were down in order to create a smaller tax bill by rolling when prices are down.

Does this make sense?

Looking to learn, but I'm pretty sure my cautious fascination with LEAPS is mostly a winning strategy.

And just so everyone can sell better tonight... don't worry, my tranches will be a tad smaller than Elon's were.

(Hee hee... trench I wouldn't know a "tranche" if it jumped up and batted me in the face.)

This will all depend on the size of your account, size of your tax bill, etc.... but rather than selling ahead of what is likely continued gains, consider if any of the various 1-3% borrowing options to cover the tax bill and leaving your $ invested makes more sense. Again depending on holdings and bill selling CCs against shares now through April might be another way to gather the $ for the tax bill while either keeping your shares or at least getting more-than-today $ for em. Another option would be replacing shares with LEAPs, keeping delta exposure similar to the shares but pulling cash out for taxes.

Probably best to move further discussion over to one of the tax threads though.