TSLA Market Action: 2018 Investor Roundtable

[omarsultan]

That said, I don't think LIDAR is key. I fully agree with Elon - if you're going to have a transmit-and-receive system, why would you double up on the same spectrum as your cameras, and face that spectrum's same limitations? Radar is the way to go. Sure, the radar spectrum has its own weaknesses, but they're different weaknesses from the optical spectrum.

I was at an autonomous vehicles conference over the summer--there was a speaker there from Sony who challenged the conventional wisdom for the need for Lidar. He proposed video, specifically next-gen sensors, being a better long-term sensor strategy. Granted that it was a bit self-serving, but at the time, I thought that he did make some good points and aligned with Elon's prior comments.

One of the interesting points he made was that driving is currently built around visual input (street signs, lane markers, traffic cones, school bus lights, etc) so any sensor strategy should take that into account.

 

[EVNow]

After watching this morning's action, I think the barrier has moved to $310:

• there was fierce volume triggered when TSLA touched $310 around 10:32 am
• double volume+ continued at 10:33 while SP recovered to $310.645
• volume ebbed to 1/3rd peak as SP passed $311 by 10:34
• The $310 line was successfully defended again between 10:36 - 10:40
• By 10:44 the $310 line was holding with low volume
• Since then, SP has risen and not retested the $310 level

I think we have our new floor.

Data source: NASDAQ

Short lived floor ?

I wonder - what is the incentive for any large buyer to hold a particular floor at this point. They'd rather buy at lower price than higher - so it really depends on sellers. If there are sellers are lower levels, the large buyer will buy at lower levels. So, I guess it depends on how much the large buyer wants to buy - and before what date.

 

[shlokavica22]

I wonder - what is the incentive for any large buyer to hold a particular floor at this point.

To kill the IV? To keep the price in range aligning with certain options' OI?

 

[kbM3]

Barring major unforseen events, I'd argue 95% of the time spent in the $300-$350 range until at least Q3 numbers come out, and definitely a spike after the Q3 report, if not before. Q3 production/delivery numbers alone won't answer the big questions like margins and SG&A; those things are highly unlikely to be leaked in advance. So until then, IMHO, anything around or under $300 is a great buy opportunity and anything around or over $350 is a great selling opportunity, with caution taken the closer we get to the Q3 report.



Be serious if you want to be taken seriously.

A profitable company does not need dilution. Tesla is guiding for sustained profitability starting this quarter. Future capital comes from operating profits and borrowing. A profitable company's credit rating rises relative to an unprofitable one, making the latter much easier.

I believe selling when it rises above $350 per-share is a mistake. Yes, it will work as long as we are somewhat range bound. However, I feel it is very likely at some point within the next nine months, the stock will gap up significantly.
You risk holding fewer shares over the long term should that event happen after you sell at $350.

Tesla stock should appreciate roughly 30% per year if it behaves like we all believe it should. I think you’re taking a risk if you think you can jump in and out and improve your return to more than 30%.

Even though I truly think we're at a very different stage now than before, most investors who have been with Tesla for a long while will vividly remember Elon saying they don't need to raise capital in the spring of 2016, then a few days later they went on to raise ~1,5 billion dollars through a follow-on offering. So let's not pretend like they couldn't raise capital again in the future. I chuckled back then, made med think of Bill Cliton itching his nose and saying "I did not have sexual relations with that woman, Ms. Lewinsky"...

Wasn’t that about face a result of the decision to pull forward Model 3 and GF plans because of the unprecedented number of reservations received?

 

[Fact Checking]

I wonder - what is the incentive for any large buyer to hold a particular floor at this point.

AFAIK there's no such incentive normally, in fact the opposite is the case: if they want accumulate quietly they'll just take whatever discount bears/shorts are giving, and might even help along occasionally and break through key price levels.

There's some exceptions:

• Big player wants to protect options and "telegraphs" strong resistance but actually allows others to do most of the buying.
• Big player accumulating under time constraints and wants to bait shorts but not allow price too low which might trigger more accumulation and a rally.
• Multiple big players accumulating.
• Big short keeping the price high in a visible fashion and fading the small rallies covertly.

But I'm not sure which of these cases we are seeing, or whether there's some other cause.

Price action is still weird overall.

So I'd be super careful with leveraged positions, it's unclear (to me) whether this week's price action was short or long dominated. If it was mostly shorting we might still see a break of $300.

 

[Fact Checking]

Price action is still weird overall.

One key weirdness from today: NASDAQ performed a powerful +0.5% breakout today in the first 2 hours of trading, which correlation $TSLA ignored almost completely. So there's quite a bit of pressure built up in the current TSLA range, and there could be a breakout in any of the directions.

Edit: it's a 1% breakout on new all-time-highs meanwhile, also on the Dow.

TSLA would normally follow this with a volatility multiplier of 4x-5x, i.e. we should be seeing a $10+ rise normally. Instead it's trading in a narrow range of only $3.

 

[defc0n]

308 triple bottom today? I’d be okay with that.

 

[TradingInvest]

Short lived floor ?

I wonder - what is the incentive for any large buyer to hold a particular floor at this point. They'd rather buy at lower price than higher - so it really depends on sellers. If there are sellers are lower levels, the large buyer will buy at lower levels. So, I guess it depends on how much the large buyer wants to buy - and before what date.

If there are more than one buyers...

 

[KarenRei]

I believe selling when it rises above $350 per-share is a mistake. Yes, it will work as long as we are somewhat range bound. However, I feel it is very likely at some point within the next nine months, the stock will gap up significantly.
You risk holding fewer shares over the long term should that event happen after you sell at $350.

This is TSLA we're talking about. Volatility is guaranteed.

 

[gtrplyr1]

I was at Whole Foods yesterday and parked my Chevy Volt in the EV charging station, parked next to me was a beautiful white Model 3 so as I got out I walked over to admire it. Just as I was in front of it the owners, a nice mid 30ish couple, walked up and we struck up a conversation. I asked how they liked it and of course they had only great things to say ... not good ... great.

I put this in this section because of how it relates to my investing strategy .... having a product that everyone wants and loves is the hardest thing for a company to do .... the rest will work itself out. Yes, Tesla has it's share of problems trying to go from a little niche company to a major player ... why would you expect them not to? But ultimately it's this love of their product and the loyalty they generate with their customers that will help them get through the trying times. Some people who invest just look at numbers and forget about this very important metric .... those are usually the ones who simply cannot see what is happening. I'm not one of those people.

Cheers to the longs.

 

[EVNow]

308 triple bottom today? I’d be okay with that.

Just as I was about to say yes, it started trading below 308.

 

[tivoboy]

.... having a product that everyone wants and loves is the hardest thing for a company to do .... the rest will work itself out.

history is literally riddled with companies that made great products that consumers/customers loved and yet the companies failed by execution, business model, rapid rise of competition for various reasons, etc. So, just because one or many love a product is not a totally solid way of evaluating a stock investment. IMHO.

posted as we're triggering LOD

 

[ezevphl]

I was at Whole Foods yesterday and parked my Chevy Volt in the EV charging station, parked next to me was a beautiful white Model 3 so as I got out I walked over to admire it. Just as I was in front of it the owners, a nice mid 30ish couple, walked up and we struck up a conversation. I asked how they liked it and of course they had only great things to say ... not good ... great.

I put this in this section because of how it relates to my investing strategy .... having a product that everyone wants and loves is the hardest thing for a company to do .... the rest will work itself out. Yes, Tesla has it's share of problems trying to go from a little niche company to a major player ... why would you expect them not to? But ultimately it's this love of their product and the loyalty they generate with their customers that will help them get through the trying times. Some people who invest just look at numbers and forget about this very important metric .... those are usually the ones who simply cannot see what is happening. I'm not one of those people.

Cheers to the longs.

The few times that we parked at Whole Foods, I feel like I could have sold a dozen Teslas.
Honestly my wife never expected to feel like such a celebrity in our Model 3.

 

[gtrplyr1]

history is literally riddled with companies that made great products that consumers/customers loved and yet the companies failed by execution, business model, rapid rise of competition for various reasons, etc. So, just because one or many love a product is not a totally solid way of evaluating a stock investment. IMHO.

posted as we're triggering LOD

Yes there are no guarantees ... but having a product everyone wants is definitely the hardest part of the equation ..... without that execution, management, marketing are all irrelevant.

 

[defc0n]

Just as I was about to say yes, it started trading below 308.

Yep thought I had found the bottom.

 

[MarcusMaximus]

history is literally riddled with companies that made great products that consumers/customers loved and yet the companies failed by execution, business model, rapid rise of competition for various reasons, etc. So, just because one or many love a product is not a totally solid way of evaluating a stock investment. IMHO.

posted as we're triggering LOD

True, but it’s also riddled with companies people said exactly this about that have, essentially, taken over the world, without significantly changing that execution/business model.

 

[wipster]

I was at Whole Foods yesterday and parked my Chevy Volt in the EV charging station, parked next to me was a beautiful white Model 3 so as I got out I walked over to admire it. Just as I was in front of it the owners, a nice mid 30ish couple, walked up and we struck up a conversation. I asked how they liked it and of course they had only great things to say ... not good ... great.

I put this in this section because of how it relates to my investing strategy .... having a product that everyone wants and loves is the hardest thing for a company to do .... the rest will work itself out. Yes, Tesla has it's share of problems trying to go from a little niche company to a major player ... why would you expect them not to? But ultimately it's this love of their product and the loyalty they generate with their customers that will help them get through the trying times. Some people who invest just look at numbers and forget about this very important metric .... those are usually the ones who simply cannot see what is happening. I'm not one of those people.

Cheers to the longs.

Thanks for the post! While I haven't spoken directly with any model 3 owners, all of the reactions I've read from new owners has been the same, not just good but great, if not fantastic (I think that's better than great)! You are correct, word of mouth from new owners is the best advertising you can't buy.

So my question is, when are you going to trade in your Volt for an m3?

Cheers!

 

[Dan Detweiler]

More Elon tweets...more FUD ammo. Price drops. Here we go again.

Dan

 

[Joe F]

Dip perhaps related to hit piece on CNBC stating Unsworth is preparing a lawsuit. It also omitted the "shove it where it hurts" comment yet fully quoted Elon's comment.

I thought the interesting thing was it was published by their "Digital Reported" who's focus is on "advertising and media."

Perhaps Tesla need to spend a few ad dollars too...

That was followed by increased put open interest in the Aug 31 300 strike.

 

[dgodfrey]

I was at Whole Foods yesterday and parked my Chevy Volt in the EV charging station, parked next to me was a beautiful white Model 3 so as I got out I walked over to admire it. Just as I was in front of it the owners, a nice mid 30ish couple, walked up and we struck up a conversation. I asked how they liked it and of course they had only great things to say ... not good ... great.

I put this in this section because of how it relates to my investing strategy .... having a product that everyone wants and loves is the hardest thing for a company to do .... the rest will work itself out. Yes, Tesla has it's share of problems trying to go from a little niche company to a major player ... why would you expect them not to? But ultimately it's this love of their product and the loyalty they generate with their customers that will help them get through the trying times. Some people who invest just look at numbers and forget about this very important metric .... those are usually the ones who simply cannot see what is happening. I'm not one of those people.

Cheers to the longs.

When I first saw this video,

it really resonated with me for business reasons but even more so when considering investment opportunities. It could just as easily been focusing on Tesla as an example rather than Apple. Had he made this talk today, it most likely would be Tesla as the shining example of product loyalty you mentioned. It helps explain why we Musketeers are so fervently supportive of the company.
The gist of the "golden circle" talk by Simon Sinek in 2010 is, "it's not what you do, it's why you do it".