TSLA Market Action: 2018 Investor Roundtable

[Mike Smith]

Nasdaq futures up 20, Bloomberg Model 3 tracker up to 2,394, and Elon reaffirming 5k/wk model 3 target. Looks good for Monday morning.

 

[Waiting4M3]

Given that PUTS are expensive, and one shouldn't be selling Covered Calls at the bottom or just before a strong breakout, only other option might be to sit on some cash. ~ cheers!!

If PUTS are expensive, and you suspect we're at the bottom or just before a brake out, one could sell PUTS. It is very risky IMO since you could get margin call if the price drops, but if one really wants to gamble big...

 

[elasalle]

If PUTS are expensive, and you suspect we're at the bottom or just before a brake out, one could sell PUTS. It is very risky IMO since you could get margin call if the price drops, but if one really wants to gamble big...

Right, selling PUTS at bottom, is good and another LONG strategy.
When SP was in 250s, could have bought shares, or sold PUTS for high IV and if exercised, basically bought it for even low prices.

Unfortunately my monies tied to selling PUTS in 300-360 range for June18-Jan19. If this goes up, I am hoping to be able to take 85% profits, and resell the same or slightly higher PUTS for the same monies ... a strong ramp at it might be better to buy Calls, rather than Sell PUTS though ...

 

[bdy0627]

If PUTS are expensive, and you suspect we're at the bottom or just before a brake out, one could sell PUTS. It is very risky IMO since you could get margin call if the price drops, but if one really wants to gamble big...

I think TSLA will continue on this climb for a bit. I'm not ready to sell my calls and shift to shares just yet. The S&P trend has me worried enough to want to hedge short-term though.

 

[defc0n]

The S&P trend has me worried enough to want to hedge short-term though.

If S&P falls below 2580, then it might be time to be nervous. Otherwise, now still feels like a buying opportunity to me. If we appear to have decisively fallen below 2580, then a 16-20% correction from here would not surprise me.

The S&P 500 has already shed ~10% from its late January high, so we've arguably already had a correction. With a strong economy and what should be good upcoming reported earnings, no reason for me to believe this bull period is over.

Still assuming we will see S&P break 3000 by year end.

 

[Tslynk67]

I think a massive reforestation project worldwide is needed as well as a change in mindset. Governments are too slow.

Converting desertified land to grazing pasture could sequester huge amounts of carbon as well as provide grass-fed livestock to feed us all. Don't need trees (although I'm very fond of them)

Grass Based Health: Cattle "Emissions"

 

[Waiting4M3]

Converting desertified land to grazing pasture could sequester huge amounts of carbon as well as provide grass-fed livestock to feed us all. Don't need trees (although I'm very fond of them)

Grass Based Health: Cattle "Emissions"

Are there any cattle growers that would put in the effort/cost to grow grass in a desert? From what I see around my neck of the woods, cattle growers graze on existing grass land and reduce the amount of grass available to sequester carbon. Grass that are grazed frequently tend to have shorter root system and don't survive dry summer well. Having grass and cow could be good for the environment. Having grass without cows would be better.

 

[Esme Es Mejor]

Are there any cattle growers that would put in the effort/cost to grow grass in a desert? From what I see around my neck of the woods, cattle growers graze on existing grass land and reduce the amount of grass available to sequester carbon. Grass that are grazed frequently tend to have shorter root system and don't survive dry summer well. Having grass and cow could be good for the environment. Having grass without cows would be better.

Luckily, there are people working to accelerate the world’s transition to sustainable agriculture, working from first principles. Here’s one:

 

[CuriousSunbird]

This is what shorts don't get. There is an army of supporters that are willing to look past some of the blemishes to see the bigger picture. There seems to be a fairly large contingent that will add shares as money becomes available from now until the mission is complete. This could take decades so getting shares at $1000 is going to seem cheap at some point.

Because of the small float and because die hard supporters keep buying the stock, it helps keep institutional investors in the game. It's important to note that this support could fade if Tesla misses to many deadlines. To me Tesla's bigger issue is not missing deadlines, its in the messaging. Tesla originally targeted 2020 for 500,000 model 3s per year before pulling forward GF1 and model 3 by 18 months and they should exceed that goal by -3 months maybe 6- and exit 2019 at the 500,000 pace to hit that goal. You cannot grow a multi billion dollar company 50% every year for decade without doing something right and meeting realistic deadlines and I think this growth rate is only going to accelerate over the next couple of years at a minimum and if the economy doesn't collapse, it could continue for a decade or more. Even if competition is able to metastasis in any meaningful way, that is not a death knell for Tesla, it actually supports everything Tesla is trying to accomplish and at the same time will expand the addressable market for Tesla.

The fact is that it was impossible for any company to pull forward this kind of product ramp by 18 mo. But you wont hear anyone say that today. Not FUDsters, not legitimate press. Not anyone associated with Tesla. But the fact remains that Tesla is ahead of that original schedule, but you would think they were about to go bankwupt if you read mainstream media sources and believed everything.

At the end of the day, the stock will go up and it will go down, but the long term trend is for massive upside. Only some kind of black swan even could stop Tesla at this point. Tesla has proven over a decade that it can over deliver at the end of the day, even if they miss some ridiculous timelines that Tesla and only Tesla believe are possible. They laughed at Elon when he said 20,000 model Ss and Bob Lutz said the Model X was not manufacturable. The same Bob Lutz who is not a exactly a hater of batteries in cars mind you. Granted he is an old, arrogant windbag, but the Volt is pretty amazing vehicle in its own right though I believe all Hybrids at this point are just half measures that are crappy at two things instead of being very good at one, but I digress.

This stock is not going to make your rich over night and it might make you lose your lunch a few times in the process, but its one of the best long term investments. The idea that Competitors had the ability to make better vehicles and just sat on it for the last decade while Tesla stole their lunch in the large luxury sedan market is beyond ridiculous. Sure competitors have tons of resources, but they are not growing at 50% a year and their stock holders are not so willing to watch them lose money while they grope around the dark to find a clue. That growth rate that Tesla has hides a lot of warts that can occur with a company growing that fast. Investors are willing to pay for growth and will put up with a lot as long as that growth persists. You dont have to be a big time financial analyst to see the path of growth potential. With Model 3 at 2000/w Tesla has already increased production by 100% in terms of units and 50% in terms of revenues, in just the first quarter alone, 25% improvement in revenue and 50% improvement in unites over last quarter. Its April.. You think Tesla can get to 4000/w by the end of the year? I would bet my house, but im not going to do that and that is not an advice. But FUDsters would have you believe that was utter failure, though it would continue the decade long 50+% CAGR. Going from 4k/w to 8k/w next year would also be considered a failure, but it would still be 50% growth. I expect Tesla to exceed these targets and I expect them to start delivering the Model Y and Semi very late next year with a tiny bit smoother ramp then the Model 3 and Model X before it.

At some point, TE is going to start contributing to that growth in a way that will be measurable. If you can sell 1000 roofs a week like the ones they recently showed on Eletrek, that would be equivalent to the revenues from model S. I know 1000/w seems like a lot, but there are 5 million new roofs per year in the US alone. Traditional solar can go on top of a lot of those roofs and the glass roof is not really viable for the $200,000 average home price. But with 5M to cherry pick 1000/w or just 1% per year, you will find homes where it makes sense and the solar files are the ONLY option. If you have Spanish tile and an association that requires Spanish tile and your house faces south and you own 2 electric cars for example... Your going to get Tesla roof tiles, or your going to be over paying for electricity at a rate that would have paid for the roof. These homes are all over the place in SoCal and the average home price for these types of homes is more then $500,000, which would justify a 30 year solar roof at $100,000. I was border line and if the Solar roof was available, last year and a big hailstorm would have come through, I would have definitely put on a solar roof. In a past life, I was a roofer and I always wanted a slate roof that matches those slate tiles Elon showed. Slate with some copper accents. Its so awesome when it tarnishes and turns a million shades of green. Dont sleep on the solar roof, its a juggernaut and I believe it could be easier to manufacture then traditional panels with the help of Grohmann. Laminating a glass sandwich with a solar cell in the middle is not rocket surgery. Making glass tiles is not complicated either, its a very easy material to work with and the raw materials are abundant and cheap as well. Not that it will all be sunshine and daisies, because Tesla needs to automate the manufacture of a billion tiles at a very high rate and quality. I also want to be clear here, that the Solar roof is going to be a higher margin product then traditional panels. They are an upscale, premium product. This is not asphalt shingles where a dozen companies make them in high volumes and they are commodities.

In terms of traditional panels, I think Tesla's biggest customer will be Tesla. They need several Gigawatts a year for super and mega chargers. Certainly, you will be able to get an all Tesla setup for home with traditional panels and they will be great panels (I just bought 29 of those Panasonic HIT 330W panels which should be pretty close to what you will get from Tesla and Panasonic from GF2.) But I could see Tesla consuming half of what they make in GF2 and at least a GWh/Y of batteries to go with it.

Just one small query. What happens if the company keeps making the same losses for 18 months, but the faithful keep the faith and keep buying shares. Then liabilities exceed assets and...what happens next?

 

[WarpedOne]

Shares are not a liability, shares are free money in exchange of some control.

 

[Runarbt]

If PUTS are expensive, and you suspect we're at the bottom or just before a brake out, one could sell PUTS. It is very risky IMO since you could get margin call if the price drops, but if one really wants to gamble big...

I sold some puts through schwab, but have cash in the account to cover the "risk". This is money I dont plan to spend anyhow.. and selling 2020 $50 puts feel like a no risk game imho. :-D Got $450 a put, but this equals 5% interest a year, which is pretty good.

The spent the "free" money on september 400 calls, which also should be profitable. Just my "on the side" fun.

 

[Tslynk67]

Are there any cattle growers that would put in the effort/cost to grow grass in a desert? From what I see around my neck of the woods, cattle growers graze on existing grass land and reduce the amount of grass available to sequester carbon. Grass that are grazed frequently tend to have shorter root system and don't survive dry summer well. Having grass and cow could be good for the environment. Having grass without cows would be better.

No, the ruminant animals are part of the cycle, they help restore the pasture. indeed it mustn't be over-grazed, which is why herds move from place to place seeking fresh grass. In any case, farlers should be subsidised for this as it could potentially reverse global warmign very, very quickly.

Reversing Desertification with Livestock - Our World

 

[Tslynk67]

Shares are not a liability, shares are free money in exchange of some control.

In my case, shares are a savings/pension-plan. I'm hopeless with money and would spend it otherwise, tying it up in $TSLA with a LONG strategy is the first time in my life I've really saved anything.

 

[bambam4171]

There is one thing that occurred to me: The quarterly results will look worse than before because Tesla has much higher stock now. What makes me say this? Well Tesla seems to produce much bigger batches of cars now and then fulfill orders from already produced cars. They have few configs so they can do that versus before were they mostly had cars built to order.

I'm sure Shorts will spin that into "Look no one wants to buy Tesla cars anymore, the're doomed. Bankwupt any day now!

 

[neroden]

The prospectus for those issues said the principal would be re-paid in cash.

Ach, let me recheck. Each series of convertibles had different specs, which is honestly very confusing.

...OK, done checking. If converted, the 2019s can be paid entirely in stock or in cash at Tesla's option, or the principal can be paid in cash and the rest in stock. (Whew.) The 2021s do require payment of the principal in cash.

Obviously if the stock price is below the conversion level, Tesla will have to pay the principal in cash.

 

[neroden]

170M shares outstanding:

+25% held by insiders = 42m

+61% held by institutions = 103m

+10% hard core believers? =17M

That’s 162 million shares tied up.

Leaves 8M shares outstanding. Not much. Which is why think the stock can go up very quickly.

The analysis is wrong. Several of the institutions are very weak holders. I ran through them one at a time once; haven't redone it lately, but at the time I estimated about half the institutional shares were held by long-term holders and the other half by short-term traders.

Then you have to add in the short-sellers, who have created an extra 28.3 million shares, which are also held by someone,

So this is my analysis:
-- 170 million shares outstanding + 28 million shares created by short-sellers
-- 42 million shares insiders
-- 51 million shares "strong" institutional holders (Bailie Gifford and the like)
-- 52 million "weak" institutional holders
-- leaves 53 million shares in individual hands -- higher than you might expect. I will guess these are actually mostly pretty hard-core believers, much less likely to sell out than the institutions.

I think the short sellers are going to have to rely on the "weak" institutional holders to cover their positions.

 

[neroden]

The Beneficiary IRA is an odd animal. USAA requires an annual letter/form stating clearly what my plan is for the RMD ~ every year. All the money must be withdrawn by my eighty-forth birth. As I am sure you already know, I had several option like taking it in a lump sum, or over three years (I think) or withdraw entirely by the 84th birthday. In 2013 when my father passed, I swapped the shell oil for Tesla and the rest is history. I will try to remember and check to see if that is a USAA issue about not transferring stock to a tax bearing account from a Beneficiary IRA account.

Betcha it's a USAA issue. If the IRA account was at Schwab I'm pretty sure you could move stock from the Beneficiary IRA account to a taxable Schwab account. I'm not 100% sure that you can transfer the Beneficiary IRA to a different custodian, though; you're supposed to be able to but sometimes there can be gotchas which prevent you.

 

[neroden]

Yes, you are absolutely correct. Bottom line is the word Beneficiary:-( I keep asking the same question year after year, hoping for a new deal

Yes, you can't convert an inherited traditional IRA to a Roth.
You also can't roll over any money from it to another IRA. (By demanding a check and then deposting it.)

But it looks like you can do a custodian-to-custodian transfer to an identically titled "beneficiary IRA"/"inherited IRA" at another firm, and then start taking withdrawals in kind rather than in cash at *that* firm. The destination firm would be highly likely to help you out with the transfer, for obvious reasons (more money under custody). Check your USAA custodian agreement to see if they prohibit this...

 

[neroden]

For some reason Schwab isn't lending my shares out. I'm going to have to do something about that...

...and now they are. But not all of the shares, so I'll call later today...

 

[MacRocket]

OK, it’s now over 3 days since Tesla’s good news production numbers release.
The FUD is about to start in earnest. Brace yourself, the better the Tesla news the more viscous the attacks.
GET READY to DEFEND OUR COMPANY!!