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

[StealthP3D]

Well assuming you are selling because you want to transition into something with less volatility. However if you are doing this just for a pure income perspective, then sell deep deep in the money leaps. You get to extract 50% of what you wanted to sell in premiums. And if those shares are never exercised then holy moly you won the jackpot.

There are some holes in this thinking but I'm not going to discuss the specific details here. I'm not saying various options strategies don't have valid advantages when used properly, I'm saying the simplistic presentations I've seen here tend to overstate the facts and dismiss the downsides. Whenever you are being paid a premium it's ALWAYS to accept some risk. If you think the risk/reward is worth it (and your time and energy) than go for it, it can be very profitable. Just understand the broader implications of your actions. That's all I'm saying. The biggest problem I see is people fail to value lost opportunity properly. The second biggest problem I see is people tend to overly discount the chances of unlikely things happening, especially when those unlikely things carry a much bigger cost than the reward if they don't happen. And the less risk you take on, the less reward there is. I'm not anti-risk, I'm about taking measured risks when the odds are in your favor. That often happens with options but you need to have good judgement, it's not automatic and you must consider all implications when calculating risk/reward. A persons individual situation plays into it quite heavily so it's not a simple thing to fully understand (unlike how it is often presented here as a "no-brainer").

Doing repeated options trades and making a thousand here, a few thousand there feels good and it tends to make the trader feel like they are an expert. People lap up the positive reinforcements and bury the mistakes. Even when overall profitable over long periods of time, it may come with lost opportunity to have made even more money. You don't have to explain how options work, I have spent hundreds of hours exploring them starting back in the 1990's and continuing to this day, and occasionally trading them, mostly buying simple calls. I get it. I am highly net positive on the sum of all my options trades (although this does not account for lost opportunity). But based on how various options trades are often described here, even by people who have a good understanding of the basic mechanics, I think it's quite misleading to a beginner because the greater implications are almost never fully explored, and they can't be fully explored without understanding the person's financial specifics.

I'm definitely not "anti-option", I'm anti, "here, let me hold your hand and show you how this is done, it's a no-brainer". And that's coming from someone who recently said buying TSLA at $650 was a no-brainer, a "screaming buy" for anyone who had a two-year timeframe to invest some money in the market.

 

[Kenypowa]

Another 4% push and Tesla will be a 1 trillion company again.

 

[jkirkwood001]

For the most part, you can be really safe selling 20% OTM calls... you might get an instance or two over the course of the year (which is probably on the safe side) where you have to roll a couple times to get out of it... and normally that event is semi predictable. As you creep into 15% and 10%, that is where you can get burned relatively quickly, but the reward is much, much higher. As with any form of trading, it has risks... but 20% out of the money doesn't really have a ton from a standpoint of being called. The main risk there is it tying up shares that could be sold in the meantime at a higher gain... which I doubt many of us here are doing.

Ladies and gentlemen, words of wisdom about options trading, excerpted from @henchman24 :

• "For the most part"
• "you might"
• "which is probably on the safe side"
• "normally"
• "that event is semi-predictable"
• "that is where you can get burned relatively quickly"
• "it has risks"
• "the main risk"
• "which I doubt"

Need I say more?? It seems to me it's very simple: options trading has the potential for higher returns, but at increased risk of negative returns vs. buy-and-hold. Point final.

It is misleading of all those who try and promote options trading as "you can be really safe" and predictable. Stop doing this!

 

[The Accountant]

 

[growler23]

I'm in my early 40s so I'm old enough to have seen the pattern. Gas get's cheap, and people rush out to buy gas guzzlers. A few years later, gas gets expensive again and everyone cries and whines about how they couldn't have known it would go up.

Rinse and repeat every 5 years or so. I'd at least like people to plan ahead more than 1 year, or god forbid start planning on an EV purchase.

It sounds like I have a decade or so on you, and I too have noted this pattern. Cannot disagree there!
That said, some understanding may be in order. A large percentage of Americans effectively live paycheck to paycheck, which also means (personal) financial crisis to crisis. 5-year planning may not be on the radar. In addition, all vendors cannot make enough EVs for demand today or next year at the very least.
As much as I regret it, if oil magically disappeared tomorrow, as a certain Kerosene fan here inflammatorily stated, most of us would quickly starve. We don't yet have electric farm equipment everywhere. We don't yet have solar power grid + batteries everywhere. We don't yet have electric semis everywhere. All would grind to a halt and all the shelves would immediately become bare. We are transitioning at a certain rate, and it has to be faster, and it is really frustrating right now.

And yet: the US House just passed the biggest EV, solar, and renewables bill ever. Yes, that should have happened in 2000, but we all know what happened in the US that year, and our fossily-conflicted course was set for decades. It is still, IMHO, not certain we will pull out of that destiny given the entrenched forces for staying put, but this IRA bill is huge step. It got passed through our fossil-donated Congress. That still hasn't sunk in for most of us. Everyone in the US here please look back at the last 20 years an marvel at that fact: this bill got through Congress. The US Senate even.
Like most, I am disheartened by the fossil fuel leasing elements of the bill... but I wonder if incredible continued cost reductions in renewables will make those leases never commercially economical, and therefore they will never be used. I say we all push to make that the case. Just imagine if we do that!
Perhaps if Elon keeps saying it enough, I will start to believe: We can solve this. We will solve this.
Bullish.

 

[StealthP3D]

It is misleading of all those who try and promote options trading as "you can be really safe" and predictable. Stop doing this!

Exactly! As the safety of a system trends up, the realized returns trend down.

 

[BornToFly]

This is the actual height of the child VRU (Vulnerable Road User) and can be purchased here (these are specifically designed to meet NCAP/NHTSA testing criteria). I'm going to do some more testing with shorter height and sideways stances as well.

View attachment 841191

Don't forget to dress them up in clothes that look exactly like the road..., and paint their faces to match too. Just in case there are children metro snipers FSD needs to worry about.

 

[StarFoxisDown!]

Macro's rally,........now at what price does capping set in for TSLA?

 

[Nocturnal]

It sounds like I have a decade or so on you, and I too have noted this pattern. Cannot disagree there!
That said, some understanding may be in order. A large percentage of Americans effectively live paycheck to paycheck, which also means (personal) financial crisis to crisis. 5-year planning may not be on the radar. In addition, all vendors cannot make enough EVs for demand today or next year at the very least.
As much as I regret it, if oil magically disappeared tomorrow, as a certain Kerosene fan here inflammatorily stated, most of us would quickly starve. We don't yet have electric farm equipment everywhere. We don't yet have solar power grid + batteries everywhere. We don't yet have electric semis everywhere. All would grind to a halt and all the shelves would immediately become bare. We are transitioning at a certain rate, and it has to be faster, and it is really frustrating right now.

Of course. I'm sensitive to people's financial situations. The people who are always struggling aren't the focus of my derision, but the folks buying full size pick ups and SUVS for 80k and then complaining.

Not to soapbox too much but I also like to remind other EV promoters that our real focus is on carbon. So be careful judging a person in an ICE vehicle when their carbon footprint might be half or less compared to the average EV owner. The tech will get there, I just hope it happens before our way of life is disrupted too much.

 

[Creekstalker]

Let's go ahead and leave any further options risk talk to the options threads.

Post of Particular Merit yo

 

[henchman24]

"Different place in the market" does not justify the crazy amount of stock based compensation they are dishing out and the wildly inefficiencies they have in the current factory. COGS right now is at crazy levels, way way way worst than when Elon even admitted "no one has mass manufactured EVs before so we don't know what we are doing". Rivian managed to blow that out of the water. So the question an investor needs to ask is...are they not going to change trajectory because Tesla pivoted away from using too many robots quickly as they were bleeding. Is Rivian just going to report even bigger and bigger COGs next quarter? Will their totally expenses 20x what it is today as they scale up to 1M cars? Tesla's total cost did, what makes you think it wouldn't happen to Rivian? Because they are front loading all the cost for faster scale? Didn't they guide for 1M EVs by 2030, or 9 years after their first EVs rolled off the lot? How is that different from Tesla's ramp because Tesla hit 1M run rate 9 years after the first Model S delivery?

I'm not making a case to invest in them... they are wildly inefficient with their money right now. But they simply have ~5-10x the cash Tesla did for many years. They can survive inefficiency on cash alone, and they will have the ability to raise more cash. I think they will always burn more cash and be less efficient compared to Tesla. It doesn't seem to be in the company's culture to be nearly as lean. I think it is important to realize though that Tesla is an anomaly in the auto industry... nobody is as lean as Tesla not even close really. The bar doesn't need to be Tesla on margins. The simple fact of how much money they raised and how easily they raised it shows that extreme differences in the market over the course of 10 years.

With Rivian's production guidance... I don't think the 2030 numbers are really at all relevant. 2022 and 2023 are the most important. 25k in 2022 would be similar to Tesla in 2013. If they even hit 50k in 23 (and they keep saying 150k), they'd be at where Tesla was in 2015. The 150k would be more than Tesla in 2017. Not that they are 'better' than Tesla here, but the ramp that they are pushing for is more aggressive and the markets will give them a break on cash burn if they can execute even close to those levels. I do think this throw money at the problem will cause longer term issues within the company and could keep them from ever being an investment I would want... but if they can execute even in the realm of what they are saying, the market will throw money at them hoping for the next moonshot.

 

[elasalle]

Ladies and gentlemen, words of wisdom about options trading, excerpted from @henchman24 :

• "For the most part"
• "you might"
• "which is probably on the safe side"
• "normally"
• "that event is semi-predictable"
• "that is where you can get burned relatively quickly"
• "it has risks"
• "the main risk"
• "which I doubt"

Need I say more?? It seems to me it's very simple: options trading has the potential for higher returns, but at increased risk of negative returns vs. buy-and-hold. Point final.

It is misleading of all those who try and promote options trading as "you can be really safe" and predictable. Stop doing this!

No one is promoting anything.
Blame the carpenter, don't blame the tool.

If you are interested in other ways to trade, learn more, risk/rewards, trade along with invest etc etc give options a try, learn the fundamentals.
Don't get caught up n get rich quick schemes, options ain't that. If it's not for you, so be it.

BUT, don't hold the HODL bible and say everything else is a sin cheers!!

 

[Open Interest]

Need I say more?? It seems to me it's very simple: options trading has the potential for higher returns, but at increased risk of negative returns vs. buy-and-hold. Point final.

It is misleading of all those who try and promote options trading as "you can be really safe" and predictable. Stop doing this!

I would say the number one rule of options should be KNOW THYSELF.

Every trader needs to understand their own risk tolerance and act accordingly. Options trading is not for everybody.

 

[Krugerrand]

Tesla was at a very different place in the market. I don't think comparing the investment market in 2012 and 2022 is valid. The expectation was that EVs were always going to be a failure and there wasn't a market for them... Tesla proved that very wrong. Very little big money was available to fund in 2013/14/15/16+... now we have not only a ton from names like Amazon, but from investors looking for that 'next Tesla.' They can secondary a number of times and find plenty out there to fund the company as there is a proven winner in the field.

Rivian currently only has a few billion less cash on hand than Tesla does today. At ~15b they basically have the same cash as Tesla did after a $5b raise in Sept 2020. That is an enormous war chest and should fund everything they have at least through 2024. Which is a longer timeline than Tesla had at any point prior to 2020. Rivian is burning cash like it is going out of style and I don't think that is building a very good culture for longer term margins (I despise the Georgia factory plans)... but it gives them a long leash. If at any point in the next 18 months, they can get production ramped and show improvement in margins... they'll be able to sell the bill of goods that they are past the worst and pretty much any stock can handle some secondary offerings.

My back of the napkin math at IPO was that Rivian really needed at least 23b to get ramped and survive... so I think we are in the same realm there. I think they were/are about 5b short and that was prior to the Georgia plans, so I'm more in the 8b short range now. The 8b will have to come from either improvements in FCF in the near term( ), external investment, or a secondary offering (likely a combo)... in this market that is willing to prop up Lucid to a 30b market cap, I don't see how they can't raise 8b if absolutely needed... I mean Nikola is looking at a ~1b offering and finding some traction. That doesn't make them a great investment... but surviving, I think the odds are growing they'll survive.

No. No. No.

Again you insist on flogging the false narrative perpetuated by the liars and cheats of this world. How gullible you remain.

There absolutely ALWAYS was a market for EVs PROVEN by the EV1, proven by individuals who’ve been converting cars and ATVs and motorcycles and bicycles etc… for decades. The market existed, it was the technology that needed to be created.

Tesla’s success or failure had everything to do with starting a NEW car manufacturer and next to nothing that the vehicles would be powered by electrons vs other fuels. THAT former remains the primary challenge for ALL newcomers.

It makes not a wit of difference what is or is not under the hood of a Rivian. What matters is that they can make more money than they spend. That’s the bare bones, brass tax of it all. To date, the ONLY OEM not to go bankrupt (besides Ford) in the last CENTURY is Tesla. Rivian, Lucid, Fisker, Bollinger etc…. STILL have to beat those odds that have not suddenly changed. They’re going to need all the luck they can muster AND a lot more money than they all have combined in the bank to succeed unless they heed Elon’s warning.

It’s stupid to start an OEM and it takes a special kind of crazy and intellect and fortitude to pull it off. No other newcomer possesses the desired combination of traits to be successful, IMO.

 

[lafrisbee]

Yup. No need to order a Plaid as there are plenty available here. Since Tesla seems to be dumping excess Plaids here, I wonder if dates can vary by location. Puzzling. Even with your date range, that’s only a backlog of a few thousand cars. Did you order white/ black? Makes a difference too. If I order a Plaid, I get August delivery. Probably one of the cars already here. Maybe the difference we’re seeing on LR is related to cars already in the pipeline or refused at delivery.

I've been reading waaaay too much about this...
Here's a simple insect's consideration. Perhaps Tesla's sales department is smart enough to develop more than one distribution plan in order to capture multiple segments of the Market, and identified Florida as one area to have a few Plaids for sale immediately. Some people in certain areas may not be willing to wait for a vehicle when they want or need to buy one. And if the sales information is out there, this group could be identified by region/state by looking at areas where competitors' cars are selling better than in others?
That would be the smart thing to do.

 

[kbM3]

Are you saying short babies don't deserve to live?

/s

I had the same thoughts as you, so I looked up the height of babies at walking age. At 14 months babies are still measured by "length" not "height". Girls average 30" long, boys 31" long. I would say the garden gnome was perhaps shorter than that. But it doesn't matter much, I'm sure there are toddlers that height.

Tesla did not train the neural net using video taken at a racetrack, with no lane markers save for a double line of cones, no shoulders or curbs and no oncoming lanes. The scene has no context, and the garden gnome is not moving. I would not be surprised if the FSD version tested really did mow down the garden gnome in such a scenario. How many real babies in the real world is this particular "weakness" going to kill or injure?

The answer is a big fat zero! Tesla is very data driven. That means their effort is focused on making FSD work in the real world such that it is much safer than the average human. It won't work in all scenarios and the fact that it fails in a scenario that one can conceive of but that doesn't really exist in the real world, at least not exactly like that one, doesn't really matter. It might sound cold and heartless to the average person, but FSD is a statistical problem. Does it kill and injure more or fewer people than the current status quo? FSD will never be 100% perfect and it doesn't have to be to save hundreds of thousands of lives.

You can devise artificial scenarios in which humans will fail almost 100% of the time as well. Just put that garden gnome in front of a 4x4 2022 F150 then lead a human driver into the cab and tell them to drive to the far end of the empty parking lot. They will run over the gnome every time! Should we outlaw human drivers? Better yet, should we outlaw vehicles with tall hoods that have no view of small children in front of the vehicle?

Dan O'Dowd is the modern-day laughingstock, equivalent of the horseless carriage company owners who thought automobiles were too dangerous to replace horse-drawn carriages and should be outlawed. He simply doesn't matter. You cannot stop an idea whose time has come.

I think for Tesla to eliminate the need for supervision, it really needs to be able to detect a driveable path. Any extreme deformation of the road surface, any foreign object in the road which is dangerous to hit, should render the path undriveable.

Some objects are relatively safe to hit, but obviously the car can’t know that unless it recognizes the object, or has some other method of determining it is safe to hit. So unless the object in the road is known to be safe to hit, then the car should never hit it.

Possibly Tesla can identify so many objects, that the chance of running across an unidentified object is vanishingly small, but I would think this unlikely.

If I’m right, then the questions become why can’t Tesla ALREADY not strike objects in the road? What’s needed to get there?

 

[henchman24]

Ladies and gentlemen, words of wisdom about options trading, excerpted from @henchman24 :

• "For the most part"
• "you might"
• "which is probably on the safe side"
• "normally"
• "that event is semi-predictable"
• "that is where you can get burned relatively quickly"
• "it has risks"
• "the main risk"
• "which I doubt"

Need I say more?? It seems to me it's very simple: options trading has the potential for higher returns, but at increased risk of negative returns vs. buy-and-hold. Point final.

It is misleading of all those who try and promote options trading as "you can be really safe" and predictable. Stop doing this!

Love how you pull things out of context.

I'm not trying to convince anybody to sell options. The vitriol that covered calls get here is a bit over the top, the data is out there if people want to go through it. All things are a risk/reward balance... choose what works for you. Remember though, buy and hold has risks too and doesn't always work. Tesla barely escaped bankruptcy a few times... buying a holding a company that goes bankrupt leaves you with liquidation costs. Apple, one of the greatest success stories in the history of the market was a dog for well over a decade and nearly died in the late 90s. We've had plenty of bankruptcies over time where normal investors get screwed on buying and holding. No strategy is perfect and all have a risk/reward balance.

 

[insaneoctane]

…If there's any one takeaway from Tesla's story is just how much of a miracle you need to succeed as new manufacturing company. I feel like the takeaway everyone got instead is...if the company produces a product like Tesla the stock will 100x from IPO. That is totally the opposite lesson to be learned here.

In principle, I totally agree. But, I do think that the environment has changed in Rivian’s favor though….Tesla had to survive without any significant help. The industry, investors and spectators were all ready to gather, celebrate and watch Tesla crash and burn, metaphorically. In today's environment, with Tesla proving success, Rivian will receive many lifelines allowing them to make many mistakes along the way. They'll still have to figure it out eventually, but they've got help and an easier more tolerant path than Tesla ever had. Ironically, Tesla's survival is what guaranteed that they're scrappy and now are so hard to catch.

 

[henchman24]

No. No. No.

Again you insist on flogging the false narrative perpetuated by the liars and cheats of this world. How gullible you remain.

There absolutely ALWAYS was a market for EVs PROVEN by the EV1, proven by individuals who’ve been converting cars and ATVs and motorcycles and bicycles etc… for decades. The market existed, it was the technology that needed to be created.

Tesla’s success or failure had everything to do with starting a NEW car manufacturer and next to nothing that the vehicles would be powered by electrons vs other fuels. THAT former remains the primary challenge for ALL newcomers.

It makes not a wit of difference what is or is not under the hood of a Rivian. What matters is that they can make more money than they spend. That’s the bare bones, brass tax of it all. To date, the ONLY OEM not to go bankrupt (besides Ford) in the last CENTURY is Tesla. Rivian, Lucid, Fisker, Bollinger etc…. STILL have to beat those odds that have not suddenly changed. They’re going to need all the luck they can muster AND a lot more money than they all have combined in the bank to succeed unless they heed Elon’s warning.

It’s stupid to start an OEM and it takes a special kind of crazy and intellect and fortitude to pull it off. No other newcomer possesses the desired combination of traits to be successful, IMO.

it doesn't matter what you or I think of the 'false narrative' it is what the overall market thinks... and the market clearly didn't believe there was an EV market. They were proven very wrong.

You're spreading a false narrative on the only OEM not to go bankrupt... only US OEMs to not go bankrupt are Tesla and Ford. That is a key difference. Toyota, Honda, BMW, and plenty others have avoided that fate. That isn't saying that all of them are due to survive, they aren't... just that it can and has been done. Tesla doing it gives weight (and funding) to those trying to follow.

 

[jkirkwood001]

No one is promoting anything.
Blame the carpenter, don't blame the tool.

If you are interested in other ways to trade, learn more, risk/rewards, trade along with invest etc etc give options a try, learn the fundamentals.
Don't get caught up n get rich quick schemes, options ain't that. If it's not for you, so be it.

BUT, don't hold the HODL bible and say everything else is a sin cheers!!

Yes, yes, I agree with you, @elasalle, to each their own.

I never said options trading was a sin (nice putting moralistic words in my mouth), nor for those who choose that level of risk to stop. I merely asked people to stop promoting options trading as "safe", a no-brainer, and what every smart investor should be doing. It is by definition adding risk / reward to stock investing:

"It is misleading of all those who try and promote options trading as 'you can be really safe' and predictable. Stop doing this!"

For every one who made money on an options trade, we have evidence of others who lost big time. Was it ___ (edit: it wasn't Pezpunk - sorry for calling you out!) who said that they were now almost in the black since starting to invest trade options in ~2015 since when TSLA has done a 10-bagger? (a reply to a post of mine about 6-8 months ago. Sorry if I can't recall who posted that.) By contrast, NO HODL-er is in the red since 2015. Zero. 100% of them made money if they held til today.