TSLA Market Action: 2018 Investor Roundtable

[KarenRei]

That is not guaranteed as well. As I said above, a black swan event could cause the whole market to tank. SPY drop in the 2008 crisis over an 18 month period was 56%. Extreme measures could need to be taken to preserve even profitable companies in the face of financial gridlock.

Sounds like you're not as bullish on the Tesla thesis as I am. Tesla has tons of demand levers on top of huge amounts of demand just waiting for a chance to buy their products. Demand reduction due to a crisis is not a problem. On the other hand, a crisis reduces their costs, aka boosts their margins.

 

[EVMeister]

AWDtsla, few things in life are certain. Investing in anything has potential risks as well as potential rewards. I knew this when I was about 15 years old, maybe younger. If you're completely risk averse and fill your mind with negative thoughts then frankly investing isn't for you. I'm quite confident the probability of Tesla suceeding and there being great rewards in the future far outweigh the risks. Although still, I am a long-hold stock only type of guy. I don't dabble in options.

 

[KarenRei]

AWDTsla: Since you're clearly nervous about price falls, perhaps you should think about selling calls or buying puts as insurance.

 

[AWDtsla]

Sounds like you're not as bullish on the Tesla thesis as I am. Tesla has tons of demand levers on top of huge amounts of demand just waiting for a chance to buy their products. Demand reduction due to a crisis is not a problem. On the other hand, a crisis reduces their costs, aka boosts their margins.

Anyway, since you're clearly nervous about price falls, perhaps you should think about selling calls as insurance. You cap your potential profit, but lock in some degree of returns

What I am saying it's not about the thesis. It is only about markets. Force majeure events do happen.

 

[JRP3]

What I am saying it's not about the thesis. It is only about markets. Force majeure events do happen.

Sure but they are temporary events. Also there are usually warning signs, 2008 came as no surprise to me and before it happened I positioned myself accordingly.

 

[AWDtsla]

AWDTsla: Since you're clearly nervous about price falls, perhaps you should think about selling calls as insurance. You cap your potential profit, but lock in some degree of returns. E.g. if the stock is $350 and you sell $250 calls for $100, your per-share profit is:

• If TSLA falls to $250, you've lost $100 in value on the stock but gained $100 on the calls
• If TSLA falls to $300, you've lost $50 in value on the stock but gained $100 on the calls, for a net profit of $50.
• If TSLA remains at $350, you've simply profited $100 on the calls.
• If TSLA rises to $400, you've lost a potential $50 profit on the stock but gained $100 on the calls. You profit $100 instead of just $50.
• If TSLA rises to $450, you've profited $100, the same as you would have gotten from just the stock
• No matter how high TSLA goes, you only profit $100 (29%).

Does that sound like a better fit for you?

I'm considering an options strategy heading into 2019. However if the SP goes above 600, I think I will likely start taking profits. Saying things like #NotSellingAShareBefore2500 hashtag on Twitter sound great, but are pretty foolish unless you had a tiny position to start with.

 

[KarenRei]

However if the SP goes above 600, I think I will likely start taking profits.

Yeah, good luck with hitting 600 any time soon

Note that the math in the above that you quoted is wrong, which is why I deleted it. But the main point still stands.

 

[AWDtsla]

Sure but they are temporary events. Also there are usually warning signs, 2008 came as no surprise to me and before it happened I positioned myself accordingly.

Looking for the same heading into the next 2 years.

 

[Cherry Wine]

I really do enjoy reading the comments and thoughts of much more experienced investors here -- this forum is a true fount of knowledge.

With regard to swing trading, my current philosophy is: I have a core holding (my whopping 100 shares), and then I have a much smaller side stake that I am willing to play with. That side stake is not shares, but options. This approach both satisfies my itch to (let's call it what is is) gamble, and keeps my exposure low in the event of a large upswing or downswing.

Caveat: I've only been investing for just over two months, so my approach is hardly some tried-and-true method.

 

[JRP3]

Looking for the same heading into the next 2 years.

I don't see similar catalysts this time.

 

[Cherry Wine]

Sure but they are temporary events. Also there are usually warning signs, 2008 came as no surprise to me and before it happened I positioned myself accordingly.

Do us all a favor and wave the caution flag on here if you're getting similar vibes within the next year or two.

 

[JRP3]

I really do enjoy reading the comments and thoughts of much more experienced investors here -- this forum is a true fount of knowledge.

With regard to swing trading, my current philosophy is: I have a core holding (my whopping 100 shares), and then I have a much smaller side stake that I am willing to play with. That side stake is not shares, but options. This approach both satisfies my itch to (let's call it what is is) gamble, and keeps my exposure low in the event of a large upswing or downswing.

Caveat: I've only been investing for just over two months, so my approach is hardly some tried-and-true method.

I do the same at times, my core position is untouched and I may play with small amounts if I think I can play the swings. Lately I've been selling some over $350 and buying back below $341. Waiting to buy back again but am OK if that never happens again.

 

[printf42]

Tesla Energy steps forward with Solar Roof production ramp at Gigafactory 2
Wait...Solar Roof is a fake product and doesn’t exist....right?
Wondering how shorts are going to respond to this the coming week.

 

[AWDtsla]

Sure but they are temporary events. Also there are usually warning signs, 2008 came as no surprise to me and before it happened I positioned myself accordingly.

I have to add that - most people, including myself, were aware the housing may be in a bubble for several years. There were of course people denying that, but the word was out on the street. What almost everyone didn't know was how highly levered the industry was, having hidden the risk of the underlying mortgage backed assets. That was the black swan event. There were only a handful of people that predicted that, and probably all of them got rich.

Off the top of my head there's at least 2 things today that people know that are out of control, but no one can say exactly how they will fail, and a lot of people say no everything will be fine, i.e. the market will function. Student loans and national debts. There's a soft landing and there's a hard landing, which will it be?

 

[SW2Fiddler]

Instead of buying low and selling high. I usually sell low and never was able to get back in, or selling too early and have to chase high.

Until one day I chatted with one of my friend and he said, the investment is really simple, you just buy a good stock and hold it. The boring stuff, almost.

Sincerely:
Thank you for not buying high and coming here to blame others for your actions. (Geez, I love pushing that Ig Button on finger-pointers after a trend starts of “look what they made me do!” posts Real Oliver Hardy stuff.)

I understand this is the short term market movement thread.

Is it? Does it say that, anywhere? I acknowledge that its ancestors were named such... I mean, slow action is still Action...

/META

 

[Causalien]

Sure but they are temporary events. Also there are usually warning signs, 2008 came as no surprise to me and before it happened I positioned myself accordingly.

Did you sell your house and rent? It's what I am doing now, but it's pretty unbearable. The wait is taking several years to play out.

 

[Joe F]

Why do people do this? If you believe in the company's fundamental thesis, you should be buying whenever people are freaking out about bad news. That's certainly my instinct - I hear bad news, look at the red ink, and immediately think, "Score - BUY!". Why isn't that others' instinct? Selling is only for either when you over-expose yourself, you need the cash, or you need to free up some liquidity to be able to buy when one of those "dumb things" happens.

How can a "dumb thing" change your perception on the company's fundamental thesis? Either its business model and strategy is sound, or it isn't. Only if its fundamental thesis is rendered unsound by changing events should you be bailing.

Where were you 10 years ago when the bottom fell out? When there were 500 point swings in the DOW?

And as has been said, black swan events happen. There is no such thing as a sure bet. Fundamentals are not a guarantee against losses.

Not everyone owns a crystal ball.

 

[tivoboy]

Do us all a favor and wave the caution flag on here if you're getting similar vibes within the next year or two.

Can I do it for him, for you? Caution flag raised. Chances of significant market pull back in the next 1-2 years (probably 9-18 months), approaching 50%.

5/1/2008-3/9/2009, I lost 5%

 

[Off Shore]

The null hypothesis?

Edit: Sorry, wolfman, didn't see you were Not Talking to ghosts

 

[EVNow]

There might be some faster transients (I'm curious about the first spike beyond $400), but it's pretty clear that a VW type technical short squeeze requires artificial restriction on available shares to sell, which won't happen without a buyout or going private.

A 2013-style short squeeze looks more likely, during 2019.

But that doesn't help the shorts much: ~30 million shares of shorts don't want to cover at $350 - they won't like higher price levels either, and 30 million shares is a lot of buying power.

Another useful comparison in BABA. 104 Million shorts out of 800 Million - some 11%. For a 400 B market cap company, that is unique.

According to some articles I saw, bears have lost more money shorting BABA than any other stock - including the infamous VW case.

In Both BABA & TSLA - it is more likely that bears will suffer huge but slow losses.

But some significant runups (say $50) are still possible - say some big short like Einhorn announcing he is "now long on TSLA and fears rest of the shorts will get caught in a short squeeze". This would be completely legal and would let Einhorn make a ton of money as well, unfortunately.