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

[WADan]

Yea this. My E-trade also has the correct shares but my cost basis is out of whack. Wait and see...

TD and Schwab haven't updated shares yet...

Schwab has (share count and cost basis), but Vanguard has not!

 

[Ogre]

In my mind there's a difference between premium and luxury which has nothing to do with exterior build quality.

Premium to me first starts off with the price, with the base vehicle having to be at least 38k or higher with hp at least over 200. Interior is slightly better than a fully loaded standard car with usually fake leather as base, some wood/aluminum trim and soft plastics. Standard cars usually have wood veneers and plastics that look like aluminum.

Luxury steps it up in the interior with high quality stitched leather, many leather surfaces you usually touch, at least 300 bhp, usually v6 superchargers or higher to really tune in that smoothness, cool ambient lights, bigger screens, load of sound proofing, car feels like a boat, doors feel heavy, lots of aluminum/wood surfaces and high quality metal push buttons.

So if he is talking about luxury, then we are talking about a step up in interior and not just good fit and finish.

We’ve seen improvements to Teslas interior over the past few months (wood trim, felt on the doors), and I think Teslas seats are very comfortable. But to me “Luxury“ would imply an even quieter ride and a smoother suspension. Probably the noise levels and suspension would be the big improvements I’d need to call the Model Y “Luxury”.

 

[jamaatta]

Dang!

 

[Thekiwi]

Just a reminder that Jackson Hole is now in progress - so the comments from Powell on fed policy will be what the markets will be focusing on over the next couple of days.

 

[SmokyPeat]

Futures looking very strong. I guess the split rally starts today!

 

[jkirkwood001]

Pre-market trading over $300

 

[Englishman]

TSLAQ WERE RIGHT ALL ALONG! THEIR DAY HAS COME!

 

[EnergyMax]

Vanguard cut my share price to one third, but my share count is unchanged instead of tripling. One would think this would be a single operation, not two separate changes.

 

[JusRelax]

Futures looking very strong. I guess the split rally starts today!

Doing my best @StarFoxisDown! impression, TSLA isn't even performing at it's beta. It's obvious even a stock split can't bring it out of it's doldrums until Q3/Q4 earnings overwhelm it's underperforming PE ratio. Bah humbug.

Edit: well, it was just barely below it's beta earlier... no longer the case now. Maybe this whole complaining thing really does work. =X

 

[Christine69420]

However, Wall Street can't fleece HODLers.

Oh but sure they can. By pushing the valuation down. Which means you can borrow less with your investments as collateral. And you get less when you eventually sell some.

 

[hobbes]

I don't think all of us know that Elon's behavior is the reason for Q2's QoQ drop from Q1. It may have been a factor, but it is by my math at least 6x less influential than the collapse of the overall stock market which seems to have been triggered primarily by the ramifications of the war in Ukraine, by interest rate increases, and by the terrible natural disasters we've had this year. All the following numbers use pre-split TSLA prices.

First of all, if we do the measurement from Apr 1st to Jun 1st, TSLA fell 32% and the NASDAQ Composite fell 16%.

TSLA's beta is about 2.​

2 * 16% = 32%​

Performance on par with beta.​

Here's a scatter plot showing daily pairs of TSLA price and NASDAQ price at market open, from the beginning of 2020 until today. Even in this naive comparison, TSLA and NASDAQ have a surprisingly linear relationship with R^2 of 0.773 which indicates a strong correlation. Amazingly, this correlation has appeared strong across TSLA prices ranging from less than $100 to more than $1200.

View attachment 844682

Taking the same chart but zooming in on March 15th through Jun 15th to include Q2 and a couple weeks before and after Q2, the correlation is stronger with R^2 of 0.862, as we would expect. On a shorter time horizon, less information specific to Tesla's performance and prospects will come out than over a multiyear time period, and so TSLA would be more likely to be influenced by other factors not relating directly to Tesla matters. In this case, TSLA explosively outperformed the NASDAQ in 2020 as the company hit a series of major milestones, including finally achieving sustainable positive cashflow, demonstrating mass production of good cars in Shanghai, finally getting added to the S&P 500, holding Battery Day, and showing impressive earnings growth, all of which generated alpha and drove the stock price higher. TSLA's long-term growth profile makes its macro correlation weaker over longer time periods.

View attachment 844686

Overall, the data says that around 80% of the variation in the TSLA price can be predicted simply by knowing the NASDAQ Index for the day in question.

For example, today the NASDAQ is at 12432. Using the linear regression shown in the chart below to model the relationship between TSLA and NASDAQ based on the data from Mar 15th to Jun 15th, the model predicts a current TSLA price of $829. The actual current TSLA price is $891. That's only a 7% prediction error even with zero other information included in the model!

Imagine I traveled back in time to Jun 15th and posted here with a poll asking for TSLA price predictions for Aug 24th, and imagine the only hint I provided was that the NASDAQ would be sitting at 12432. How many people would guess within 7% accuracy ($829-$953)? How much work would most guessers put into estimation while neglecting or downplaying the overwhelming importance of the NASDAQ data point?

A similar story even holds for daily price fluctuations, which have a lot more randomness involved. Here we can see TSLA's beta of 2 (the slope of the line) and a correlation coefficient of 0.435. That is, 43.5% of TSLA's daily variation since 2020 began was explainable by daily variation in the NASDAQ Composite. I would bet that random chaotic motion causes a great deal of the remaining 56.5% of the variation, but that I don't have data for testing that.

On 479 out of 658 trading days, which is 73%, TSLA and the NASDAQ moved in the same direction. On days of significant action during which the NASDAQ rose or fell by an absolute value of at least 1%, TSLA moved the same direction 86% of the time!

View attachment 844688

The correlation is significantly stronger if we exclude days where the NASDAQ moved less than 1.5% up or down, leaving behind only days where most likely some kind of big news came out that moved the overall markets. Now R-squared is 0.591!

View attachment 844744

On the other hand, for the less-than-1.5% days for the NASDAQ, it seems TSLA just tended to do whatever it wanted without regard for what the NASDAQ was doing. This could be due to many factors, including alleged manipulation by options market makers seeking Max Pain, or random chaotic variation, or TSLA having some consistent tendency to jump twice as high as the market on days with big moves, or something else I'm not thinking of.

View attachment 844746


Here's another way to look at it. The table below shows, for each $100 price range for TSLA, the minimum and average NASDAQ open in the last 365 days.

View attachment 844727

This table clearly shows how, if we want TSLA to get back to $1000 and beyond, we either need to wait for the NASDAQ to reach like 14000+ or wait for good Tesla news, understood well enough by the market to cause a reaction, for TSLA to start substantially outperforming its beta. Tesla has never opened above $1000 with the NASDAQ less than 13000, and these days the NASDAQ is less than 13000. I expect, if all else fails, the market will manage to somewhat comprehend the numbers for Q3 deliveries and financials and TSLA will go up, and then Q4 deliveries and financials will knock their socks off in January.

Conclusion
Elon Musk is single-handedly crushing TSLA and the entire stock market with his stock selling, antics and controversial Twitter acquisition bid. More complaining about this is definitely warranted, and the author recommends further research and posting about it outside of the designated threads.

This is not investment or financial advice.

Interesting. What´s the source, sounds like you did the research yourself?

 

[Atomsla]

I logged into my broker today and saw no change. While reading a notification about Tesla's stock split, I saw some orders being carried out that I hadn't placed. All tesla shares sold, then triple the amount purchased. It was kinda funny to see it happening while logged in, wasn't expecting it to play out 'live' like that. Cost basis is not adjusted yet, so my account's vallue went up by about 190%. If I sell quick for yesterdays price, I can buy nearly triple the amount of shares back right after! Right?!?!

 

[Discoducky]

I logged into my broker today and saw no change. While reading a notification about Tesla's stock split, I saw some orders being carried out that I hadn't placed. All tesla shares sold, then triple the amount purchased. It was kinda funny to see it happening while logged in, wasn't expecting it to play out 'live' like that. Cost basis is not adjusted yet, so my account's vallue went up by about 190%. If I sell quick for yesterdays price, I can buy nearly triple the amount of shares back right after! Right?!?!

Fidelity and E-Trade have tripled my shares and have correct balances, FYI

 

[2daMoon]

Who called this meeting of insomniacs?

I'm happy waiting for however long it takes the brokers to update after having updated my spreadsheet after close yesterday.

Why did I wake so early?

 

[Mike Smith]

Many more TSLA call options will be affordable to retail investors now, which will help TSLA. For instance a single Jan 24 $1200 contract was over $16,000.

 

[WADan]

Vanguard cut my share price to one third, but my share count is unchanged instead of tripling. One would think this would be a single operation, not two separate changes.

You will be amazed to find how “competent“ the IT group of some of these companies are.
My Pledge Asset Account at Schwab fails to properly debit the interest from my checking when the payment date happens on the weekend.
They still could not fix it for over a year now!

 

[jerry33]

I’m not quite sure what to think about this comment. I still see people getting Teslas delivered with major flaws. Is Fremont just cranking out junk while Berlin and Shanghai have much better quality?

Are the Model Ys coming out of Austin going to be “Luxury” vehicles? I love my Model Y, but they would need a pretty significant update to their suspension to justify that claim.

https://twitter.com/x/status/1562632060442800133

EDIT: I don't think Fremont production is "Junk" so much as a bit inconsistent. Also... not super picky about paint, but paint quality on mine is pretty meh with small but obvious chips after just a year.

All the aerodynamic cars I've had over the past fifty years have had more paint chips than square style cars. There's something about the aerodynamics that invite chips. This isn't a "Tesla only" thing.

 

[DFibRL8R]

TD Ameritrade has post-split price but still
showing pre-split share balance. Portfolio value is down 77% this morning

 

[generalenthu]

TD Ameritrade has post-split price but still
showing pre-split share balance. Portfolio value is down 77% this morning

Pfft. My TD account is down 102%. Not kidding. Had to take a screen shot. And this one is an IRA.

 

[uselesslogin]

So I’ve said this twice before and been wrong. I’m really hoping it sticks this time. I think my chances are a little better now. I don’t think the stock is going below $300 ever again.

Oh man, I never qualified this for post stock splits. I hope this still stays true though.