TSLA Market Action: 2018 Investor Roundtable

[wipster]

I agree about the email, but not necessarily the car fire - the mainstream news (with the sole exception of the Independent and Daily Mail in the UK) appears to have completely ignored it. There are no other mainstream news hits on Google News for "Tesla fire" within the last day. Perhaps because the fire wasn't very dramatic compared to those from the crashes and seemingly didn't penetrate the cabin.

Bear in mind he's talking about pain to shorts, not to the stock price... I had to read it twice myself.

 

[Zhelko Dimic]

Fallacy: you have to be right to make money in markets. You can be wrong 9 times out of 10 and still end up making tons of money
Experts almost never make big money
Most traders don’t know how to handle leverage and mistake being super leveraged with being brave. Their is nothing brave about being leveraged. They don’t know what they are doing and consequently end up becoming voices of reason for the rest of their nondescript careers as has been traders

The biggest mistake is when you don’t know what you’re doing.

Read Art of War by Sun Tzu

Bolded: were you trying to offend me?
I was never a trader, though my cumulative results are quite ok. Based on recollection of your posts, similar to yours in nature if not quite the same numbers/success... That is, of course, if what I remember you posted is your real story, because I find your statements... slippery? You had millions, and then you didn't, you lost everything on margin call and then you didn't...

But we will agree that biggest mistake is when you don't know what you you're doing. Margin is not for those people. I didn't know, and I still don't quite know. And I believe there are very few on this forum that know enough so that margin is a safe tool for them to use. Every time you encourage people to use margin, I will offer words of caution. And if you didn't feel that your words translate into encouragement, I would ask you to think about it more.

I did read Art of War first time 32 years ago... Not sure what was that point about

(my ego speaking here) My accounts, since I've been called 'has-been' and also to show volatility; for anyone thinking about margin, see that last chart and think how would you behave when you're 75% down...


EDIT: And I should add this one too, my ego missed it first time around

 

[Remus]

Bear in mind he's talking about pain to shorts, not to the stock price... I had to read it twice myself.

No I was talking about 'short term' pain to myself, who never shorted the stock.

 

[Waiting4M3]

Bolded: were you trying to offend me?
I was never a trader, though my cumulative results are quite ok. Based on recollection of your posts, similar to yours in nature if not quite the same numbers/success... That is, of course, if what I remember you posted is your real story, because I find your statements... slippery? You had millions, and then you didn't, you lost everything on margin call and then you didn't...

But we will agree that biggest mistake is when you don't know what you you're doing. Margin is not for those people. I didn't know, and I still don't quite know. And I believe there are very few on this forum that know enough so that margin is a safe tool for them to use. Every time you encourage people to use margin, I will offer words of caution. And if you didn't feel that your words translate into encouragement, I would ask you to think about it more.

I did read Art of War first time 32 years ago... Not sure what was that point about

My accounts, since I've been called 'has-been' and also to show volatility; for anyone thinking about margin, see that last chart and think how would you behave when you're 75% down...
View attachment 310343 View attachment 310344 View attachment 310351 View attachment 310352

Margin and leverage are very dangerous and IMO encouraging other people to use margin is irresponsible. if you only buy shares or calls without margin, at least you have the choice to hold through any dips no matter how big they are. If one uses margin, things could get out of control and he/she could be forced to sell at a loss, which could also trigger additional share price drop, causing an avalanche effect (I suspect the drop to $250 was such a case) which hurts all investors. So I would really like to see people keep margin/leverage to themselves and not endanger the rest of us.

 

[Bet TSLA]

OK so with the celebrity car fire and new leaked email there will be some short term pains starting Monday.

Likely. Instead of TSLA going up $20 it will likely be up only $10. Such is life,

 

[Cobbler]

What does a General Assembly line actually do? I only see a big conveyor, a car on it, surround with boxes and a Model3 parked next to it for GA4. Located in a tent. Hardly finished. Nothing spectacular about it?

Let's not fool ourselves. This must be where all the manual work will be done. No robots Involved.

 

[Remus]

So it is unlikely they can demonstrate sustained rate of 5000 per week by end of June, yet Elon sounded so confident during the share holder conference. I can totally relate to Gali's frustration with him but this is another level.

This is insane, it was only 3 weeks to end of June! He knew they had problems that they don't know how to fix yet.

I have no doubt the target rate can be achieved sometime down the road, but why does he have to give those 'optimistic' estimates and give shorts perfect reasons for attacking him?

Now I have to revisit all his predictions. And I seriously doubt Tesla can achieve sustained profitability by q4.

 

[wipster]

No I was talking about 'short term' pain to myself, who never shorted the stock.

Damn... guess I should have read it three times!

 

[Yuri_G]

So it is unlikely they can demonstrate sustained rate of 5000 per week by end of June, yet Elon sounded so confident during the share holder conference. I can totally relate to Gali's frustration with him but this is another level.

This is insane, it was only 3 weeks to end of June! He knew they had problems that they don't know how to fix yet.

I have no doubt the target rate can be achieved sometime down the road, but why does he have to give those 'optimistic' estimates and give shorts perfect reasons for attacking him?

Now I have to revisit all his predictions. And I seriously doubt Tesla can achieve sustained profitability by q4.

He's overly optimistic because he knows that is a major motivator to his employees. If he said I don't think we'll hit 5k per week at the end of the quarter, they definitely won't hit that run rate. If he says we will do it, they may fail but the chance of succeeding is far greater than if he said it isn't going to happen. It's a way to ensure they ramp as quickly as possible, whether or not it's beneficial to any of us.

 

[Bet TSLA]

think how would you behave when you're 75% down...

Well, my portfolio low this year was about 65% down from my high. The way I behaved was... remaining all in and buying more on the way back up. Now I'm only 24% off my high and actually up 5% on the year. It's been an exciting ride.

Being heavily leveraged accentuates everything.

 

[AZRI11]

So it is unlikely they can demonstrate sustained rate of 5000 per week by end of June, yet Elon sounded so confident during the share holder conference. I can totally relate to Gali's frustration with him but this is another level.

This is insane, it was only 3 weeks to end of June! He knew they had problems that they don't know how to fix yet.

I have no doubt the target rate can be achieved sometime down the road, but why does he have to give those 'optimistic' estimates and give shorts perfect reasons for attacking him?

Now I have to revisit all his predictions. And I seriously doubt Tesla can achieve sustained profitability by q4.

Elon is writing a story, his narrative has tesla in the brink of discovery. Everything he does has drama, it's just how he likes it.

 

[Zhelko Dimic]

Well, my portfolio low this year was about 65% down from my high. The way I behaved was... remaining all in and buying more on the way back up. Now I'm only 24% off my high and actually up 5% on the year. It's been an exciting ride.

Being heavily leveraged accentuates everything.

65% almost isn't even scary It could get worse if you're confident things will get better, and you keep getting curve balls.
Peak to through I was (I just checked) 92-93% down overall. I saved it, recovered, and I'm now well above that first peak. And part of the save was injecting some fresh, borrowed money right at the bottom ($150) and then paying it off.
But that was harrowing ride than I don't wish on anyone.
So I'll continue arguing against leveraging, until one really knows what one is doing.

My charts don't accurately capture depth of the bottoms, because of the sparse sampling points, it was worse than it looks. And as you can see on the last chart, I was 99% down peak to through at some point.

I know couple of guys that suffered similar loses, liquidated accounts and left these forums to never be seen again.

 

[Zhelko Dimic]

Margin and leverage are very dangerous and IMO encouraging other people to use margin is irresponsible. if you only buy shares or calls without margin, at least you have the choice to hold through any dips no matter how big they are. If one uses margin, things could get out of control and he/she could be forced to sell at a loss, which could also trigger additional share price drop, causing an avalanche effect (I suspect the drop to $250 was such a case) which hurts all investors. So I would really like to see people keep margin/leverage to themselves and not endanger the rest of us.

Both margin and options/calls are leverage, and they are similarly, but not quite the same, dangerous. I now use deep in the money leaps with almost no time value (using strikes btw $100-$180), they are probably least dangerous, yet dangerous they are...

 

[wipster]

So it is unlikely they can demonstrate sustained rate of 5000 per week by end of June, yet Elon sounded so confident during the share holder conference. I can totally relate to Gali's frustration with him but this is another level.

This is insane, it was only 3 weeks to end of June! He knew they had problems that they don't know how to fix yet.

I have no doubt the target rate can be achieved sometime down the road, but why does he have to give those 'optimistic' estimates and give shorts perfect reasons for attacking him?

Now I have to revisit all his predictions. And I seriously doubt Tesla can achieve sustained profitability by q4.

I now think that Tesla will go all out to demonstrate they can hit a rate of 5K a week or better by the end of June, then throttle back to complete whatever they discovered needs to be fixed shortly afterwards to not only hit the 5K rate, but to throttle back up on all three lines in order to reach a sustained pace of 10K a week in December. In reading his latest internal memo, I'm feeling pretty confident they will reach that pace.

And in reaching that pace and restructuring, which includes the current RIF, they will cut back on all not immediately needed capital expenditures for the remainder of the fiscal year to demonstrate Tesla can be GAAP profitable, if they were to continue status quo.

But, beginning in the 1st quarter 2019, capital expenditures will increase dramatically to bring both the Semi and the Y to market. They may lose their profitability for the next year, but when the Semi and the Y hit the market, profitability will soar... and that's not to mention the pickup!

I think there is a good chance that is their strategy, but we shall see. In any case, the expanded manufacturing of the 3 and profitability in the 3rd and 4th quarter should grow the stock price substantially by year end.

BTW, since Ford's no longer making sedans as of 2019, how come we can't use E? (Nevermind, it was because of their E series vans, not their sedans).

 

[Chocochip]

This makes me think it might be the GA4 line mentioned in the note. It mentions GA3 needing to be improved and GA4 completed, and in the shareholder meeting Elon said that the 3rd line was added to get to 5k/week. GA1, GA2 and the recently built GA3 are building LR versions while GA4 is dedicated to the P. That would make sense as I would not expect the P to be more than 1/4 of all produced Model 3.

I think this is where some people get it wrong. The way I understand this, GA4 is actually the third Model 3 general assembly line, with GA1 being reserved for the Models S and X combined, and GA2 and GA3 being the original two lines for the 3. I may have this wrong.

Also, I am not familiar with what End of Line means, but I'm guessing it's some sort of final inspection area. If that's the case, the "tent" structure (metal frame with stretched polymer skin) seen in the posted image is this inspection area. As pointed out by several people, it doesn't seem to have the necessary equipment for a GA area. Note that Elon says the performance M3 is "coming off the line". It's a bit like reading tea leaves, but I doubt they would build a permanent GA line in that structure. I may be wrong about this as well.

Anyone with more knowledge can add to what an End of Line section is, and whether that "tent" area can accommodate a proper GA line?

 

[TrendTrader007]

Bolded: were you trying to offend me?
I was never a trader, though my cumulative results are quite ok. Based on recollection of your posts, similar to yours in nature if not quite the same numbers/success... That is, of course, if what I remember you posted is your real story, because I find your statements... slippery? You had millions, and then you didn't, you lost everything on margin call and then you didn't...

But we will agree that biggest mistake is when you don't know what you you're doing. Margin is not for those people. I didn't know, and I still don't quite know. And I believe there are very few on this forum that know enough so that margin is a safe tool for them to use. Every time you encourage people to use margin, I will offer words of caution. And if you didn't feel that your words translate into encouragement, I would ask you to think about it more.

I did read Art of War first time 32 years ago... Not sure what was that point about

(my ego speaking here) My accounts, since I've been called 'has-been' and also to show volatility; for anyone thinking about margin, see that last chart and think how would you behave when you're 75% down...
View attachment 310343 View attachment 310344 View attachment 310351 View attachment 310352

EDIT: And I should add this one too, my ego missed it first time around
View attachment 310367

Not attempting to offend anyone
Margin is certainly not for most investors and I would never encourage anybody to go on margin or to trade options. My comments are specifically for sophisticated investors who are familiar with and already using margin and call options and comfortable with the associated risks.
Art of war basically talks about strategy and using leverage simply is a form of strategy. Nothing more nothing less.
Current time in the stock market is simply an extremely optimal time to be using leverage for those who are comfortable with It Since the probability of Tesla doubling from here within the next seven months is pretty high. Again it is just my opinion and I could easily be wrong

 

[Zhelko Dimic]

Not attempting to offend anyone
Margin is certainly not for most investors and I would never encourage anybody to go on margin or to trade options. My comments are specifically for sophisticated investors who are familiar with and already using margin and call options and comfortable with the associated risks.
Art of war basically talks about strategy and using leverage simply is a form of strategy. Nothing more nothing less.
Current time in the stock market is simply an extremely optimal time to be using leverage for those who are comfortable with It Since the probability of Tesla doubling from here within the next seven months is pretty high. Again it is just my opinion and I could easily be wrong

I will actually agree with this completely.
EDIT: Well, maybe not double, but I do agree there is likely good times coming...

 

[wipster]

Anyone with more knowledge can add to what an End of Line section is, and whether that "tent" area can accommodate a proper GA line?

I don't know about the tent, but "End of the Line" was a great song on the first Traveling Wilburys album.

 

[AlMc]

Margin is not for everyone. Calls for 'backing up the truck' and 'mortgaging the house' should only be viewed as positive sentiments that the SP will rise......not real advice. If you have any doubt you should read about GTAT. It was 'exciting' and many people here followed some seasoned investors into it from TMC.....Got totally wiped out.

I believe most people understand the nuances of extreme positive sentiments here but to those that don't...........BE CAREFUL.

 

[mongo]

I think this is where some people get it wrong. The way I understand this, GA4 is actually the third Model 3 general assembly line, with GA1 being reserved for the Models S and X combined, and GA2 and GA3 being the original two lines for the 3. I may have this wrong.

Also, I am not familiar with what End of Line means, but I'm guessing it's some sort of final inspection area. If that's the case, the "tent" structure (metal frame with stretched polymer skin) seen in the posted image is this inspection area. As pointed out by several people, it doesn't seem to have the necessary equipment for a GA area. Note that Elon says the performance M3 is "coming off the line". It's a bit like reading tea leaves, but I doubt they would build a permanent GA line in that structure. I may be wrong about this as well.

Anyone with more knowledge can add to what an End of Line section is, and whether that "tent" area can accommodate a proper GA line?

On shareholder call, (June 5th) they had 2 GA lines going for 3 plus GA3 which started getting built about two weeks before (May23rd ish) had already had vehicles through it, and was faster.
Tent was still being constructed May31.Market Action: 2018 Investor Roundtable
No reason to mention S/X lines in call or recent e-mail which referenced GA1-4.
17 More Tesla Shareholder Meeting Highlights | CleanTechnica

It may be they recieved two sets of parts for GA3 and GA4 at the same time, 3 went inside and 4 was partly assembled inside and then bolted down/ together in the tent. Thus the similar timelines.

SpaceX is using same type of structure at the Port of LA to house the BFS mandrel.

Edit: why am I taking about this in market action? Oh right it's the weekend...