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

[unk45]

My situation is very similar to yours. Many on this forum can't understand why someone in retirement would be "all in" on TSLA.
Your comment "Even if we lost 3/4 of our investment, we would still be able to live comfortably" nails it.
Many retirees have done so well with buying and HODLing TSLA, that they will never spend all of their wealth in their lifetime.
TSLA could drop to $250 and I would still live comfortably. Your mindset changes from "how do I attain wealth?" to "what am I going to do with this wealth?". I am sure there is another thread that discusses this question.

Also working in the auto industry your entire life likely gave you the insight that Legacy auto was not going to catch up to TSLA and with that the confidence to go all in. I worked at 3 different Legacy organizations within Consumer Products, Pharma and Retail and it was this experience that gave me the insight that Legacy Auto would never catch TSLA due to resistance to change, failure being penalized, wrong skill set, weak middle management, yes men, internal politics, quarterly earnings pressures, senior management with the incorrect vision, etc.

Congratulation on your successful retirement.

I just gave an obscene nest egg to each of my seven closest relatives. All were offered the option of cash vs Tesla shares. Only two chose shares. OTOH, at my age I need to be disposing of weath when it can be structured to avoid taxes almost completely. Corollary: You've probably never seen regressive taxation until you come to Brazil!..or can use 'carried interest' if in the US. In neither place can they really find a way to tax unearned income. TSLA puts many of us in such a boat, as have more than a few others for non-BEV fanatics.

 

[Curt Renz]

Today TSLA has moved nicely above its 200-day SMA (simple moving average) of $908.68. That's encouraging. Even more promising would be a surpassing of the August high of $940.82 set on the 4th. That could happen this afternoon. Stay tuned.

 

[Right_Said_Fred]

Normally a mod would say: take the Rivian discussion to the Rivian thread, take the options discussion to the Be The House thread. But both are so enlightening that I feel I should be lenient. And today’s stock movement even makes the bickering bearable.

 

[TSLA Pilot]

I would think, when getting to retirement age, the thing to do would be to liquidate enough to establish a reliable income stream. At that point you can’t really have your entire net worth tied up in a volatile stock, no matter how much you believe in it.

Why not just sell deep out of the money covered calls?

 

[Max Plaid]

One person is not statistically significant. You could also point to someone who became rich shorting TSLA, that doesn't mean it has a superior risk/reward ratio. And I'm not saying you can't make money selling covered calls, obviously, plenty of people do. It can also greatly impact your ability to make larger amounts of money by risking your position. That's all I'm saying. If you don't understand this, I'm not going to show you the math. If you can beat the system, more power to you. Just be honest with your boo-boos that cost lost opportunity.

@Yoona has back-tested $TSLA prices, I don't recall the exact scenario, but along the lines of Monday opening price to give the maximum %age up/down on Friday close, and essentially it never exceeds 20%, as @Knightshade mentioned, once it was on the limit, and that was the C19 crash$

This isn't to say that it won't happen in the future, of course not, but it's very unlikely, very rare and as mentioned, it's pretty easy to roll sold options, especially those sold that far OTM

Not my approach, I have to say, I cherish my insomnia and chronically high cortisone

 

[henchman24]

Today TSLA has moved nicely above its 200-day SMA (simple moving average) of $908.68. That's encouraging. Even more promising would be a surpassing of the August high of $940.82 set on the 4th. That could happen this afternoon. Stay tuned.

The May 4th, 955 breakdown is in sight too. Running to the point where all of the big technical resistance numbers are about to be crossed.

 

[TheTalkingMule]

I haven't seen anyone say every trade except for buy/hold is a sin!

But I have seen people promoting options trading here. Not that there's anything wrong with that (other than it belongs in a different thread) but I'll tend to speak up if I think it's presented in a misleading manner to those with less options knowledge. It's hard for me to overlook the fact that some people promoting options trading have only been doing it themselves for 3 or 5 years (or even less)!

All someone suggested was the alternative of selling covered calls with the intention to let them execute rather than just straight up selling. Kind of hard to see the risk in that since it's literally zero.

If someone is sitting on a pile of shares and needs to periodically sell for living expenses, this is a perfectly rational thing to do. And IMO fits beautifully in a HODLing strategy.

OBVIOUSLY there are variables that could impact total return, but the scenarios are quite easy for even a novice to plot and make educated decisions.

People get in trouble with options. Doesn't mean you need to pummel any conversation suggesting the use of the very simplest use of what can be a complex and dangerous financial tool.

 

[Max Plaid]

For those who are thinking about selling Tesla shares, absolutely sell them by selling covered calls. It's free money..like literally I can't think of any downside if you sell in the money covered calls. You get your share sold at the price you want plus a premium. Why would you not want to take the free premium?

There is one downside, sort of...

Imagine you need to sell out of $TSLA now, but with the split coming you want to leave it to the last moment too see what you can get... instead you hit on the side to sell -c1000's for this Friday, thus netting (looks at options-chain...) $6.30 (=$630) cash for every call you sell, nice! And you guarantee a sell price of $1000 of the SP rises... come Friday, the SP is $1200 and your shares are sold for net $1006.30 -> ergo you've missed-out on $173.70 profit per share

Of course this beings in another issue, that of timing the market, which we all know it not at all easy, and a pretty foolish game most of the time. But that's the point with selling options, it's not about timing the market, it's about getting paid for specific outcomes by a certain date

 

[Billionaire]

For those of you peons that want dabble in the breadcrumbs from selling a few covered call contracts, there was this great analysis by the esteemed poster @ZeApelido in the "other" thread a year ago.

Wiki - Selling TSLA Options - Be the House

Textbook MaxPain says Friday close $650-660. If I had money or margin, selling p650 & c660 sure looks like a pretty sure bet. Unfortunately, I’m pretty much tapped out. I could sell a couple more CCs. Hmmmm. Too late today, maybe tomorrow.

teslamotorsclub.com

My servant read it to me while I was eating brunch in bed. TLDR selling covered calls is usually more profitable than just holding when the stock price appreciates moderately, but if the stock 3x's or more in say a year, you will still profit, but you will profit less than if you just held the stock.

So there is a lot of variance, but big picture is feel comfortable selling covered calls when you don't think the stock is going to double or more in less than a year.

 

[Krugerrand]

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.

Did having Ford, GM, Chrysler pave the way for others to be successful? IE Delorean?

 

[henchman24]

I haven't seen anyone say every trade except for buy/hold is a sin!

But I have seen people promoting options trading here. Not that there's anything wrong with that (other than it belongs in a different thread) but I'll tend to speak up if I think it's presented in a misleading manner to those with less options knowledge. It's hard for me to overlook the fact that some people promoting options trading have only been doing it themselves for 3 or 5 years (or even less)!

I think you can make an argument that selling options (calls and puts) over the last 3 years has given more experience of how to handle market volatility than the previous 10 years. We've had some pretty extreme events happen and learning how to trade through those is likely a much better education than trading them 2010-2018. You don't have the 08 event to go back much further as an educational experience, but 2 bear markets in ~2+ years along with one of the strongest bull market recoveries we've ever seen (and at minimum in the midst of a bear market rally that could be the start of a new bull market).

 

[Krugerrand]

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.

And I contend it doesn’t matter what the market thinks. Of course the market is wrong because they are LYING to protect whatever is making them money in the present. You repeating their lies helps them, not us. That’s the whole point. Stop embracing their narratives and talking like it’s the truth.

The reason why a bunch of us here are stupid rich is because we didn’t fall for the lies and we didn’t repeat them. Instead, we fought against them.

Excuse me for not putting in AMERICAN. You knew what I meant.

 

[Krugerrand]

That's not bankruptcy though... all automakers have been willing to take gov't money, including Tesla.

Context much?

 

[henchman24]

Did having Ford, GM, Chrysler pave the way for others to be successful? IE Delorean?

Ford actually did pave the way for the host of successful automakers in the teens and 20s. There was consolidation in the 30s through post war era where a market had matured and then was dominated by a few larger companies. Without Ford succeeding and showing the way for others, we don't have GM or Chrysler.

 

[SOULPEDL]

OT Robot & Tesla Solar roof leak fixed

A-hum. retirement planners. No doubt, I guessed 10-15 yrs, maybe sooner for the easier stuff.

Elon Master Plan: In the future, a home robot may be cheaper than a car. Perhaps in less than a decade, people will be able to buy a robot for their parents as a birthday gift. (Maye Musk looking forward to this now.)

I do worry about the pool and Robot. Good waterproof bubble suit maybe, it doesn't have to breath so sealing is easier, and it could dive eventually too. OK, that's way OT, just wanted to point out that most of my friends think I'm crazy for planning for a robot. I'm so ready for living in the Sci-Fi age. Imagine it could pull a skier and spot at the same time (used to do tournaments). Common, they gotta put a camera in back of the head right? It's a safety thing!

Speaking of water, Tesla just came out and fixed a solar roof leak for free today, within about 2 working days response time. They re-installed 4 panels even though I've had 2 appraisals for leak repair and nobody could (or wanted to) do it. "It needs a new re-roof" was my only option provided by 3rd party. Meanwhile, Tesla patched up several puddle spots that I'm sure were not their fault, some maybe related hard to tell. But THIS is what customer service looks like. In fact, Tesla recommended I use them when I was scheduling the re-roof. Seriously happy for a Monday!

 

[henchman24]

Context much?

Tesla took similar (although much lower amounts) of loans. Tesla also has benefitted from credits. There isn't a company out there that doesn't take the gov't money when offered.

 

[Krugerrand]

I thought Tesla would have more "goofballs" with the release to 100K users to be honest. I think they are taking a very measured approach to how many people will be exposed to FSD relative to the improvements they are making. I'm not sure they are gaming the progress like you suggest, but the effect is there: FSD has been very successful with no serious screwups so far. The FSD progress has stayed ahead of the idiocy that can be caused by an ever larger population of users.

Well, honestly FSD needs/needed to be idiot proof. We need only remember the orange in the steering wheel, the watermelon in the driver’s seat etc… to know if the system isn’t idiot proof somebody will dress up a mannequin like a toddler wearing a construction cone, run it over and claim ‘AHA! FSD kills children!’

 

[NicoV]

Just saw a Tesla EU customer reporting on FB to have been assigned a VIN for a Model Y (non-performance) made in Berlin.

 

[Krugerrand]

I just gave an obscene nest egg to each of my seven closest relatives. All were offered the option of cash vs Tesla shares. Only two chose shares. OTOH, at my age I need to be disposing of weath when it can be structured to avoid taxes almost completely. Corollary: You've probably never seen regressive taxation until you come to Brazil!..or can use 'carried interest' if in the US. In neither place can they really find a way to tax unearned income. TSLA puts many of us in such a boat, as have more than a few others for non-BEV fanatics.

Umm - didn’t get mine. Pretty sure we’re related.

 

[MountainRatMat]

...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.

You say miracle, I say hard work, dedication, and a leader that isn't afraid to take a risk while keeping the business sense in mind. If Elon didn't make enemies he wouldn't be where he is today. Tons of credit to him and his entire team for all they have risked and worked for.