TSLA Market Action: 2018 Investor Roundtable

[mershaw2001]

He is 15% short shares, 12% short in 210 jan 2020 puts, and 0.3% in short term puts that will "pay off massively" if the whole thing falls apart.
He also said he added to his short position each time news came out that was negative but the stock went up- so maybe he was at ~30%-40% before having to change strategies.

The only question I have is why is his position so small if he's so convinced.

The ramblings of a lunatic. I couldn’t make it through the whole thing.

 

[RABaby]

Couldn't happen to a nicer guy.

Stanphyl Capital: Tesla's Stock Kept Levitating

"The fund was absolutely massacred this month, and it was primarily due to our large short position in Tesla."

The link presents most of the material but doesn't include all that is on the actual pdf.
I think TSLA longs would find it amusing. At the bottom of the report is the actual pdf and it includes this text:

For June 2018 the fund was down approximately 13.8% (no that is not a misprint- please see the paragraph below) net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 0.6% while the Russell 2000 was up approximately 0.7%. Year-to-date the fund is down approximately 16.2% while the S&P 500 is up approximately 2.6% and the Russell 2000 is up approximately 7.7%. Since inception on June 1, 2011 the fund is up approximately 67.4% net while the S&P 500 is up approximately 134.7% and the Russell 2000 is up approximately 113.7%. Since inception the fund has compounded at approximately 7.6% net annually vs 12.8% for the S&P 500 and 11.3% for the Russell 2000. (The S&P and Russell performances are based on their “Total Returns” indices which include reinvested dividends.) As always, investors will receive the fund’s exact performance figures from its outside administrator within a week or two; meanwhile I continue to waive the annual management fee until the entire fund regains its highwater mark.

The fund was absolutely massacred this month, and it was primarily due to our large short position in Tesla, to which I added on each new piece of negative news, much of which was indicative of the kind of outright fraud (see below) that would immediately send a “normal stock” into a death spiral, and yet for most of the month Tesla’s stock kept levitating. So here’s what I’ve done about it: I slashed our common stock short position to approximately 15% of the fund from a much larger size and then put approximately 12% of the fund into far less volatile January 2020 put options (as nearly all the luxury EV competitors will be in showrooms by 2019) with a strike price of $210. Then in light of recent whistleblower stories (see below for more detail) and the potential for a fast Tesla death spiral as it may be under a Wells Notice (also see below), I put another 0.30% (30 basis points) of the fund into an array of near-term (out one to three months) put options that will pay off hugely if a TSLA stock crash is imminent.

Those of you in the fund have been extremely patient with what has been absolutely abysmal performance over the past 18 months, and I completely understand if any of you want out. “Thanks” to the current valuation bubble the fund has great liquidity independent of our awful performance, as only one of our positions is an illiquid microcap. On the other hand, although the fund is now down nearly 27% from the high-water mark set at the end of 2016 (FWIW, Buffet’s Berkshire has had two 50% drawdowns— the only way in which I don’t seek to emulate him!), if I didn’t strongly believe we will once again significantly exceed that high-water mark I wouldn’t just offer a “no hard feelings” redemption—I’d mandate it and go find another line of work. But I’m not going anywhere-- I think the ideas expressed through the positions in the fund are good ones and that eventually we’ll make a lot of money on them. And with that, I now return you to our regularly scheduled monthly letter…

 

[defc0n]

The only question I have is why is his position so small if he's so convinced.

I guess I’ll go ahead and try to defend him on that. In his mind, he is 100% sure. But he does understand how difficult the correct timing and volatility can be until he’s proven right, and he doesn’t want to go bankwupt before he is eventually proven right, so the position has to be smaller than what he would ideally want.

I read the whole thing. I think he is losing it and his mental health may be teetering on the brink now.

 

[UnknownSoldier]

I don't think Mark BS is really that worried, he's backstopped by the Kochs or somebody anyways. There's no other explanation for how he manages to run a tiny $8.5 million (before recent losses) hedge fund into the ground like this and everyone covers him like he's relevant. There's big money behind him, he's a full-time employee of somebody being paid to bash Tesla 24/7.

 

[ggr]

Actually 2 for 2 is you just consider stock price surge. (2017 he also tweeted when the SP was around 290).

3 for 3 if you count the anti-squeeze when he said the price was hard to justify. I didn't believe him and that hurt a lot.

 

[Bullish_Bear]

I don't think Mark BS is really that worried, he's backstopped by the Kochs anyways or somebody. There's no other explanation for how he manages to run a tiny $8.5 million (before recent losses) hedge fund into the ground like this and everyone covers him like he's relevant. There's big money behind him, he's a full-time employee of somebody being paid to bash Tesla 24/7.

I don't think so... He is now almost the very definition of pathetic himself... His lunatic remarks won't really hurt TSLA since he sounds really obsessed and untrustworthy... If he has an employer or sth, he shouldn't behave like this.

There are 30% shorted shares, and there are for sure some ppl got burned badly.

 

[ggr]

I've never studied / read about queuing theory, but I've heard of Markov chains before in relation to email spam.

Mark V. Shaney is a good friend of mine.

 

[pz1975]

The ramblings of a lunatic. I couldn’t make it through the whole thing.

Agree - I couldnt finish it either. It felt like reading the ramblings in the comments section of an article on some random website. How ANYONE could trust their money to this person is beyond me. Just absolute insanity.

 

[wipster]

Bloomberg's 4,500/wk is just too low... , my estimation is over 5,000/wk for the delivery report on 4-July.

Really don't know how they do that... it's not even 11 PM PDT yet...

 

[Boomer19]

If this is correct (and I have no reason to believe it isn't), there are two possibilities:

1 Production is much better than expected; or
2 Production is the same or worse than expected, and the conversion/take rate is much worse than expected.

We will know which in a couple of days.

they’ve been making as many LR rear drive with premium package in the various colors as they can. when they opened resv for ordering, those requesting cars that match the particular configuration of what’s already being produced (possibly were able to produce some overflow of that configuration) will get them soon. now that prod is focused on AWDP, those will next in queue (as they exhaust the LR RD, then AWD, then back to LR RD again, then SR RD (base)
my interpretation may be incorrect.

basically i’m saying its neither of your 2 points.
doesn’t mean it’s better or worse than either of your points, either.

 

[AudubonB]

... For anyone below 100% TSLA, who is long-term investor and not trader, there is no point being in this forum... Except to occasionally check if there are fundamentally new developments.

Rebuttal #99:

Cuz someone’s gotta moderate all you knuckleheads!

 

[Tslynk67]

Can you be more specific? I need to know the peak ahead of time

My logic is to follow Elon's compensation package as a rough guide, so to add $50billion to Tesla's capital value annually. Ergo this time next year the SP should be around in the 600-700 range. So even if we get an sudden spike in the SP, it will com back down somewhere between current value and this, I suspect 450-500 would be likely before assuming normal growth and with some of the new stuff baked-in.

The trick isn't to time the peak, but to set a series of GTC orders on the way up, the lowest one being above where you judge the valuation of Tesla to be post-squeeze.

Of course if a load of longs sell on the squeeze, then re-buy, that's going to propel it back up again too.

Damn, this is complicated, can we just set the SP at 6000 now and be done with it?

BTW, that's the end of Q2 now, right?

 

[Lhan]

If true, that's huge. It was sounding like the paint shop might be a serious impediment to 5,000+, though that line of thinking did not seem in sync with Elon's tweets. This does.

Seems like the "bottleneck" was the paint line exit sensor not being able to handle the speed of the line, so now someone just push's a button , until the sensor can be reprogrammed.

 

[Tslynk67]

Couldn't happen to a nicer guy.

Stanphyl Capital: Tesla's Stock Kept Levitating

"The fund was absolutely massacred this month, and it was primarily due to our large short position in Tesla."

This gave me a giggle: "...as nearly all the luxury EV competitors will be in showrooms by 2019"

Right!

 

[dc_h]

The link presents most of the material but doesn't include all that is on the actual pdf.
I think TSLA longs would find it amusing. At the bottom of the report is the actual pdf and it includes this text:

For June 2018 the fund was down approximately 13.8% (no that is not a misprint- please see the paragraph below) net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 0.6% while the Russell 2000 was up approximately 0.7%. Year-to-date the fund is down approximately 16.2% while the S&P 500 is up approximately 2.6% and the Russell 2000 is up approximately 7.7%. Since inception on June 1, 2011 the fund is up approximately 67.4% net while the S&P 500 is up approximately 134.7% and the Russell 2000 is up approximately 113.7%. Since inception the fund has compounded at approximately 7.6% net annually vs 12.8% for the S&P 500 and 11.3% for the Russell 2000. (The S&P and Russell performances are based on their “Total Returns” indices which include reinvested dividends.) As always, investors will receive the fund’s exact performance figures from its outside administrator within a week or two; meanwhile I continue to waive the annual management fee until the entire fund regains its highwater mark.

The fund was absolutely massacred this month, and it was primarily due to our large short position in Tesla, to which I added on each new piece of negative news, much of which was indicative of the kind of outright fraud (see below) that would immediately send a “normal stock” into a death spiral, and yet for most of the month Tesla’s stock kept levitating. So here’s what I’ve done about it: I slashed our common stock short position to approximately 15% of the fund from a much larger size and then put approximately 12% of the fund into far less volatile January 2020 put options (as nearly all the luxury EV competitors will be in showrooms by 2019) with a strike price of $210. Then in light of recent whistleblower stories (see below for more detail) and the potential for a fast Tesla death spiral as it may be under a Wells Notice (also see below), I put another 0.30% (30 basis points) of the fund into an array of near-term (out one to three months) put options that will pay off hugely if a TSLA stock crash is imminent.

Those of you in the fund have been extremely patient with what has been absolutely abysmal performance over the past 18 months, and I completely understand if any of you want out. “Thanks” to the current valuation bubble the fund has great liquidity independent of our awful performance, as only one of our positions is an illiquid microcap. On the other hand, although the fund is now down nearly 27% from the high-water mark set at the end of 2016 (FWIW, Buffet’s Berkshire has had two 50% drawdowns— the only way in which I don’t seek to emulate him!), if I didn’t strongly believe we will once again significantly exceed that high-water mark I wouldn’t just offer a “no hard feelings” redemption—I’d mandate it and go find another line of work. But I’m not going anywhere-- I think the ideas expressed through the positions in the fund are good ones and that eventually we’ll make a lot of money on them. And with that, I now return you to our regularly scheduled monthly letter…

How sad. What a path of ruin he has set out on.

 

[Tslynk67]

How sad. What a path of ruin he has set out on.

It would be sad, except for the endless tirade of abuse he slings at Elon. I'm pretty sure he could be successfully sued if Elon had the inclination.

 

[Tslynk67]

Worth a read: Can Elon Musk and Tesla Reinvent the Way Cars Are Made?

 

[The Blue Owl]

Couldn't happen to a nicer guy.

Stanphyl Capital: Tesla's Stock Kept Levitating

"The fund was absolutely massacred this month, and it was primarily due to our large short position in Tesla."

Stanphylococcus Capitalus has acquired resistance to all evidence.

 

[NicoV]

My logic is to follow Elon's compensation package as a rough guide, so to add $50billion to Tesla's capital value annually. Ergo this time next year the SP should be around in the 600-700 range. So even if we get an sudden spike in the SP, it will com back down somewhere between current value and this, I suspect 450-500 would be likely before assuming normal growth and with some of the new stuff baked-in.

The trick isn't to time the peak, but to set a series of GTC orders on the way up, the lowest one being above where you judge the valuation of Tesla to be post-squeeze.

Of course if a load of longs sell on the squeeze, then re-buy, that's going to propel it back up again too.

Damn, this is complicated, can we just set the SP at 6000 now and be done with it?

BTW, that's the end of Q2 now, right?

Anything Tesla does will be relative to it’s size (if only because the ability to attract capital will be relative to its size), which means that growth will be exponential, not linear. You’re estimating a size at a certain point in time, and are then linearly mapping a curve, but you should map an exponential curve.

 

[Tslynk67]

Anything Tesla does will be relative to it’s size (if only because the ability to attract capital will be relative to its size), which means that growth will be exponential, not linear. You’re estimating a size at a certain point in time, and are then linearly mapping a curve, but you should map an exponential curve.

Who knows, but for sure if the SP spikes to $3000 on a squeeze, it's not going to stay at that point, it will drop back down. The question is to where?