TSLA Market Action: 2018 Investor Roundtable

[Tslynk67]

Indeed 2018 European Union VAT Rates - Avalara VATLive

I find it weird that Belgium isn't happening yet...

 

[KarenRei]

Re. Austrian pricing:

Since this is below the 80.000,- € "luxury" limit you can reclaim 6.667,- € VAT tax if the Model 3 is a company car.
Makes it highly interesting.

The first 1,44M kr of VAT here (€10,3k) is dropped for all buyers, which renders most or all of the price of a Model 3 VAT-free Basically everything over 6M ISK (€43k, $48,9k) is charged the normal base VAT rate (24%), everything else, nothing.

The difference versus gas / diesel cars is amplified because we also have CO2 emissions taxes on cars, which obviously EVs don't have to pay. Polluting cars can end up with huge total taxes (not to the degree of Norway, but similar)

 

[Tslynk67]

I seriously hope that’s not you! But kinda hope it is....

Of course not, I'm a bass player...

 

[printf42]

Oh and here are the german FAQs, if needed:
Bestellung und Fahrzeugübergabe - Model 3

"Alle Reservierungsinhaber in Kontinentaleuropa werden bis 31. Dezember 2018 zur Bestellung ihres Model 3 eingeladen."

Means: Everyone with a reservation will be invited to order by Dec 31.

So, lots of European orders before end of Q4, deposits will show up in balance sheet, numbers/mix might be asked/mentioned in earnings call.
Q4 will blow even my expectations.
She bullish AF!

 

[Beresford]

I think VW is still deluding themselves: by 2026 the only new combustion engines launched will be SpaceX ones ...

By 2026 the EV market will be red-hot like an MVac nozzle extender 2 minutes into the burn.

VW will be scrambling to keep up with the EV market that will be at its max-Q - squandering hundreds of millions on launching a new engine with incomplete combustion that emits carcinogens that will be outlawed within years Just Won't Happen™ - VW will have plenty of excess, idle ICE capacity to worry about.

Come the 2030s I think the only legal combustion allowed in a growing number of civilized countries will be the full-flow type of Raptor engines, that emits water vapor and carbon dioxide:

(With the carbon preferably captured from the atmosphere beforehand.)

What I find extraordinary about such plans as VW's is that they appear to take no account whatever of what is going to happen to the secondhand value of these new models. Who will spend, say, £30k on a car that is going to have zero value - even be unsaleable - within a very short (and clearly forseeable) few years? Of course consumers are not so dumb. A new model produced in 2026 simply won't have time to earn a reasonable return. VW is peeing in the wind.

 

[stef]

Italy
LR 59.600 €
Performance 70.700 €

Switzerland (from reddit)
LR chf 59400
Performance chf 71300
I think here is supercompetitive

 

[cheshire cat]

What I find extraordinary about such plans as VW's is that they appear to take no account whatever of what is going to happen to the secondhand value of these new models. Who will spend, say, £30k on a car that is going to have zero value - even be unsaleable - within a very short (and clearly forseeable) few years? Of course consumers are not so dumb. A new model produced in 2026 simply won't have time to earn a reasonable return. VW is peeing in the wind.

Welcome

 

[Drax7]

It took 24 hours for the market to realize that Mr. Fraud was lying and pretending a victory after the G20 summit.

Mkt was also very much reacting to the inversion of the yield curve in some maturaties.

Though if you like your plan you can keep your plan fraud

 

[ZachF]

FYI, Markets in the US will be closed today for GHW Bush's funeral.

 

[humbaba]

Well, Gilgamesh would say "he had the paws of a lion and a body covered in thorny scales; his feet had the claws of a vulture, and on his head were the horns of a wild bull; his tail and phallus each ended in a snake's head."

Such an accurate description! But while Gilgamesh may be bad news, IMO the one to look out for is Enkidu.

Finally some media started to spin the drunk driver incident as negative:
A SLEEPING TESLA DRIVER HIGHLIGHTS AUTOPILOT'S BIGGEST FLAW
Calif. police use Tesla system to halt sleeping man’s car

But the arguments are pretty weak though.
The reality is:

1. the drunk driver committed suicide by hopping in the car.
2. the car saved his life
3. police officers saved him an embarrassing trip back from LA, where the car would run out of juice.

Kidding aside: kudos to police officers for knowing what they are dealing with.

What gets me about this is they criticize Tesla because the driver nag can be defeated. This is moronic: any driver nag system can be defeated. The only point for a manufacturer is to make their system reliable against failure, not reliable against tampering. The person who is operating the vehicle inherently has physical access which will always trump secure design*. Anyone with a security background should know this. Anyone with DRM experience should know this.

I argue that this is not off topic -- driver nag systems are the way of the future and the more intrusive the design the more likely it is to be bypassed. Which will have a negative effect on the company as its system will be seen to be lacking and adversely affect their image and quite probably stock price. A proper design will be robust against failure and have non-nag safety controls that require deep access to circumvent.

By that I mean a driver nag system that keeps the honest drivers honest. It reminds them that they need to pay attention, but doesn't try to be their mom or -- even worse -- bitching betty. Because those will be bypassed by those who otherwise find the car to be an irresistible purchase. Tesla seems to be doing fine here, and the best of the offerings when using this metric.

And non-nag safety controls are a requirement because human safety comes first. You can't nag a driver into being good. It just doesn't work, so what you need is to enforce safety whether or not an autonomous or semi-autonomous system is engaged. Maybe I don't have AP engaged, but I'm distracted for <insert reason here> and so I don't see the [deer | pedestrian | dog | child | bicycle | motorcycle] that is now unexpectedly in front of me. A good car will detect such imminent danger and proactively take action.

There is a fine line to be drawn here: the system should be as unobtrusive as possible. It cannot know if the driver is aware or not, and interrupting an aware driver's plan could be disastrous. But there does need to be a "crash prevention sytem". While this was not an evident requirement in the past, with even semi-autonomous vehicles the need is becoming clear and I think this will become a differentiator in the future, proven more after the fact by lives saved and thus it will take time to snowball, but I think it is inevitable.

* The best counterexample I can come up with Apple's secure enclave, but even then the security of the design is just kicking the can down the road to stay ahead of those who would defeat it. And if you slip at all then the "secure design" might as well be open to the world. Whether that is "did they even try" Samsung, "we believe all user input" VNC, "multiple flaws" OpenSSH, "we thought boundary checking was optional" OpenSSL, or someone that takes security seriously "customer convenience gives yet another access bypass" Apple.

 

[neroden]

And you keep announcing this. And I have to keep explaining that TSLA remains the #1 holding in three of ARK's ETFs. They rebalance their funds virtually every day, while trying to keep any individual holding at not much more than 10%. Today many of their holdings moved down in price, thus making price-gaining TSLA a relatively higher percentage of their holdings. Do you understand?

This is why percentage-based diversification sucks, as my mom taught me.

 

[neroden]

Rebalancing needs to occur not just when a position becomes outsized wrt a fund's holding restrictions (such as ARK's "no more than 10%"), but also and ===>particularly around month-breaks AND year-ends<=== when the fundholders move in or out of the fund. You can't redeem the South Zzzygistan Acrobats' Retirement Fund pullout of $130mm by sending them the portfolio's shares - you have to sell the positions and give 'em a check.

Actually, most mutual funds do allow very large redemptions from a single investor to be settled in shares at the fund operator's discretion. I learned this from reading prospectuses... they don't usually do it, but they can.

 

[neroden]

Curt: are ARK-type ETFs, then, bog-standard good* old-fashioned closed-end funds?

*for a given definition of "good". I don't like 'em and never did, though I had to run one for a long time.

ETFs are closed-end funds where the operator says they'll try to dilute the stock when the market price gets too far ahead of the NAV, and redeem it when it gets too far behind the NAV. But they have months to do the redeeming or issuing, unlike mutual funds. They do it through block trades with big banks or brokerages.

A bit... well... let's just say they have the same tail risks as money market funds. Money market funds can break the buck, ETFs can diverge from NAV.

 

[NicoV]

I find it weird that Belgium isn't happening yet...

It is happening: Tesla Model 3 in februari naar België - AutoGids

 

[NicoV]

What I find extraordinary about such plans as VW's is that they appear to take no account whatever of what is going to happen to the secondhand value of these new models. Who will spend, say, £30k on a car that is going to have zero value - even be unsaleable - within a very short (and clearly forseeable) few years? Of course consumers are not so dumb. A new model produced in 2026 simply won't have time to earn a reasonable return. VW is peeing in the wind.

At least they see the end. The other car manufacturers not yet.

 

[neroden]

nursebee: Fair 'nuff. Most people who claim to be trading on instinct are fools. But I have used my trading instincts on rare (rare!) occasions, when I couldn't pin down exactly why I believed what I believed; I was right each time. When something is warning my subconscious that there's a serious risk to a company I've been intently studying for years... it's right, even if I only figure out what was bothering me after the fact. I couldn't have told you exactly what what wrong with GE when I got out of it at the peak (I figured it out a few months later).

 

[neroden]

I've gotten about 500 margin calls and been sold out repeatedly. In general they give you 5 business days. In severe cases when your margin call exceeds $20-50,000 they ask you to settle by 3:00. I've had margin calls up and over $100,000 and they generally sell your stocks first and not your options. They also charge a huge commission ($32.75). Most of the time you can bargain with them in some form or another, and telling them that you are aware makes a difference to them as they are concerned people don't know they have a margin call. They usually sell you out first thing in the morning if you fail to meet it at night, at least for me.

Very informative. I'm set up so that margin calls would be a "black swan" tail risk for me, but it could happen, and if I had a margin call due to a black-swan event it would definitely be in the hundreds of thousands. Do you know whether their trigger for "severe" margin calls is typically dollar-value or percent-of-account?

I can hand over securities in stock certificate form to add collateral, so it's good to know that talking to the broker can get you extra time.

Also the rules differ for house calls vs fed calls. I am legit scared of fed calls as you have to be very careful of what you sell (you create violations if you do the wrong thing). I guess I also am now scared of house calls because more often in the past 2 years they change the house requirements as the stock market becomes more volatile, which makes it harder for me to make predictions.

 

[Buckminster]

This is why percentage-based diversification sucks, as my mom taught me.

It's simple really, ARK just need to find 10 more stocks that will go up 20X in the next 10 years and then they won't need to sell anymore.

Oh..Oh - I'm with you now...

 

[JBRR]

nursebee: Fair 'nuff. Most people who claim to be trading on instinct are fools. But I have used my trading instincts on rare (rare!) occasions, when I couldn't pin down exactly why I believed what I believed; I was right each time. When something is warning my subconscious that there's a serious risk to a company I've been intently studying for years... it's right, even if I only figure out what was bothering me after the fact. I couldn't have told you exactly what what wrong with GE when I got out of it at the peak (I figured it out a few months later).

Recommend this read on the topic of using gut feels in decision making.
Qualifier: my background is high stakes poker professional for over a decade.

The Hour Between Dog and Wolf: Risk Taking, Gut Feelings and the Biology of Boom and Bust by John Coates

 

[neroden]

At least whoever Tesla bought the hedge for the March convertibles from has a pretty strong financial incentive to keep the stock below $365 - I think they lose about $2.5 million for each dollar above that level (until the limit).

Right, of course they do. :slaps forehead: Thank you. They mainly need to control the price during *Feburary*, though.

I don't know who that is (GS?) but it is likely they are a market maker and therefore authorized to do naked short selling. They could of course just buy the shares to hedge their position but since it's probably an East coast Wall Street firm, they're bound to not believe TSLA can hold this level.

At this point they could just buy February calls to hedge their position. The "hedges" are basically naked short calls with a cap, so buying calls cancels them out perfectly. Not sure why they wouldn't... unless, as you say, they don't believe TSLA can hold this level and are speculating on it.