TSLA Market Action: 2018 Investor Roundtable

[lklundin]

And that's why a home isn't a "good" investment. People sell their home for 200k more than they paid and think "wow, 200k profit" forgetting the opportunity cost of their money and the thousands of dollars of repairs and updates they did over the years.

Well, in most jurisdictions the gains are tax free, the interest on the mortgage is relatively low and tax deductible - and one doesn't need to pay rent. Let's assume that maintenance and other ownership costs equals the cost to rent.

In twelve years the value of my house has doubled - I don't see how I could have made an annual after tax gains of 9% - twelve years in a row - and that across a major recession - and without spending a lot of time in playing against the house as a retail investor. (Naturally, I did not know ahead of time exactly how the real estate prices would go up, but the uncertainty there is limited).

For people who have an actual talent for investing, another strategy is to buy a home, but instead of paying off the mortgage, they invest that money - which will work as long as the gains exceed the interest on the mortgage. That allows for the real estate gain - and for some (reduced) investment gains.

 

[sub]

Are you implying that these guys don't know what they're doing??
The GALL of some people...

They could have a moronic understanding of Tesla and still have a better grasp of trading. Not likely though, stupid is stupid.

 

[sunhelm]

People constantly selling at 348 for easy money

Lots of traders have pegged this price point as key level to watch for possible breakout to $352. Looks like it's being countered to prevent that in a whack-a-mole type manipulation. Look forward to Papafox's analysis in his daily thread.

 

[humbaba]

Flip side is you have to live somewhere and renting is in effect not earning you a dime.

While it isn't earning, as already noted, buying a home isn't really earning either. And renting can save money so that you come out ahead financially.

While homes (that you live in) are not a (good) investment, renting has its perks as well. For example, a renter:

- has better geographic mobility. This is less of an issue the wealthier you are, but for someone with a mortgage and lacking the financial resources to purchase a second property, owning a house complicates any relocations

- avoids ownership costs. Everything from property tax to property maintenance

- minimal upfront cost. No down payment and money not tied up in a mortgage is money that can be spent/invested elsewhere

- flexible payments. While landlords dislike non-payment, and evictions can eventually result, you fundamentally have less at stake than when missing mortgage payments.

In general, the longer one plans to live in a domicile the more sense it makes to own; conversely the shorter ones horizon the more sense it can make to rent.

Note: I am a home owner and can't stand renting. But it is a valuable proposition for many people, not always just tolerated out of necessity.

 

[defc0n]

I have observed that nobody turns up to my home each day on a mission to add value to it. Whereas more than 30000 people turn up to Tesla workplaces each day on a mission to grow the company.

But I do need to pay for a place to live anyway and the bank was willing to give me 3.625% on a 30 year loan, so it’s not a terrible deal if it holds value relative to inflation.

 

[UnknownSoldier]

And that's why a home isn't a "good" investment. People sell their home for 200k more than they paid and think "wow, 200k profit" forgetting the opportunity cost of their money and the thousands of dollars of repairs and updates they did over the years.

You have to live somewhere.

 

[UnknownSoldier]

While it isn't earning, as already noted, buying a home isn't really earning either. And renting can save money so that you come out ahead financially.

While homes (that you live in) are not a (good) investment, renting has its perks as well. For example, a renter:

- has better geographic mobility. This is less of an issue the wealthier you are, but for someone with a mortgage and lacking the financial resources to purchase a second property, owning a house complicates any relocations

- avoids ownership costs. Everything from property tax to property maintenance

- minimal upfront cost. No down payment and money not tied up in a mortgage is money that can be spent/invested elsewhere

- flexible payments. While landlords dislike non-payment, and evictions can eventually result, you fundamentally have less at stake than when missing mortgage payments.

In general, the longer one plans to live in a domicile the more sense it makes to own; conversely the shorter ones horizon the more sense it can make to rent.

Note: I am a home owner and can't stand renting. But it is a valuable proposition for many people, not always just tolerated out of necessity.

The argument against this is the same as it ever was.

No rich person ever rents their residence. They own it. So unless you think all rich people are wrong about this, there is no argument to be made here about owning versus renting your residence.

 

[EVMeister]

Nice on-topic Tesla Market Action discussions going on here.

 

[Lessmog]

Because Oumuamua.

Because ...

(Ringo-roll)

 

[Johan]

- flexible payments. While landlords dislike non-payment, and evictions can eventually result,

LOL. That's one way of putting it I guess... Are you in marketing or advertising? If not you should apply for the position of spin doctor.

WRT to today's weak close; I'd assume that because TSLA didn't manage to break out above trefiddy in the middle of the day short-sighted traders exited toward the end of the day to lock in small gains and in preparation of election results.

 

[AudubonB]

For something that's a bit more On Topic than each of you giving real estate primers to each other.....to the extent you have an interest in exploring the concept of Tesla becoming an efficient homebuilder so as to create a newfangled Company Town, you may find it luminating to learn there is a company called Blu Homes that for over a decade had been factory-building higher-end houses out of a massive building in the old Mare Island Naval Shipyard in Vallejo, CA, about 50 miles north of Tesla's Fremont factory. Although I believe they now are using other locations for their construction, they remain one of the pioneers of pre-fabricating some really, really appealing homes. It boggles the mind that Tesla has not long been aware of their activities - and their modus operandi is right up Mr Musk's alley.

They've a pretty cool website, by the way: www.bluhomes.com. We visited one of their open houses a number of years back and were impressed by their offerings....in our case we determined that for our own needs we could equal their product at a lower cost but I think they have a very viable business.

 

[MP3Mike]

- avoids ownership costs. Everything from property tax to property maintenance

Anybody that thinks that renting allows them to avoid paying property taxes is fooling themselves. Hint: landlords include those costs in the rent.

funny story: Many years ago my parents had a rental house and they raised the rent after a property tax increase was voted into effect. The renters complained, and after my parents told them why, and that they were only raising the rent by the amount the property taxes went up they replied "we thought that would only impact homeowners, we would have never voted for it if we knew it would impact us."

 

[avoigt]

Ihor Dusaniwsky‏ @ihors3
Ihor Dusaniwsky Retweeted jon

$TSLA short situation is such a unicorn, I couldn't hazard a guess at what price would start a short squeeze ... but I do know that when and if it happens you'll see millions of share exiting in a stampede and $TSLA's stock price will resemble a SpaceX rocket launch



MacGyver‏ @MacGyver_BE
Replying to @ihors3
Would you mind elaborating on why it's such a unicorn?



Ihor Dusaniwsky‏ @ihors3
Ihor Dusaniwsky Retweeted MacGyver

I've never seen such a long term short (over 3 years) of this size (average $8.6 bn since 2016) that is pretty much immune to price moves and mark-to-market losses (over -$6.3 bn since 2016). Short sellers have continuously & tenaciously followed their thesis regardless of price.

 

[wipster]

Those a-%^&#$

It looks like the MMD has been replaced by the end of session bomb.

ESB eh?
I nominate CBB... Closing Bell Blues. Seems we've seen that a bunch lately, don't know if it's computer driven or not. Regardless, it sucks.

 

[Artful Dodger]

In twelve years the value of my house has doubled - I don't see how I could have made an annual after tax gains of 9% - twelve years in a row

Yeah, it's about 6% annual compounded return over 12 yrs to double your principle. Still it's an excellent investment, athough the S&P 500 is up 120% over the same time period, so 1.2x more. But that's just your money, not your home.

BTW, my house has averaged 5.25% annual compounded return over the last 30 years. That's almost exactly what I paid in taxes, insurance, utilites and maintenance over that time. It's like a piggy bank you can live in.

Cheers!

 

[Jayjs20]

Or play options, all day err day like me. I'm currently up x3, been investing in only TSLA since the M3 announcement in 2016.

 

[wipster]

Well, in most jurisdictions the gains are tax free, the interest on the mortgage is relatively low and tax deductible - and one doesn't need to pay rent. Let's assume that maintenance and other ownership costs equals the cost to rent.

In twelve years the value of my house has doubled - I don't see how I could have made an annual after tax gains of 9% - twelve years in a row - and that across a major recession - and without spending a lot of time in playing against the house as a retail investor. (Naturally, I did not know ahead of time exactly how the real estate prices would go up, but the uncertainty there is limited).

For people who have an actual talent for investing, another strategy is to buy a home, but instead of paying off the mortgage, they invest that money - which will work as long as the gains exceed the interest on the mortgage. That allows for the real estate gain - and for some (reduced) investment gains.

Agree with your logic, but the only problem about the value of your house doubling is that the value of potential replacement domiciles has doubled as well! The housing prices in my area have also doubled in the last five years... subscribed to Zillow just to see what they're going for and it's nuts! Maybe not for the Seattle or SF areas but crazy for Eastern Washington.

Wish I would have invested in some rentals when my neighbor did a few years ago, but I was too lazy, plus there was this company called Tesla that was going to be worth a grand per share by now, so I put my money there. Didn't take Elon time into consideration.

 

[wipster]

Now this is a great tweet!
@elonmusk: Elon Musk on Twitter

 

[SpaceCash]

Now this is a great tweet!
@elonmusk: Elon Musk on Twitter

It won't load for me whatsitsaywhatsitsay

 

[wipster]

It won't load for me whatsitsaywhatsitsay