TSLA Market Action: 2018 Investor Roundtable

[EVNow]

There's a state income tax in my state.

You're in Washington state, so I can see why you didn't think of this

Oh yes, forgot about that. So, no income tax on long term cap gains in NY ?

 

[Nocturnal]

My understanding is that is ø1 of the phenomenon; after that occurs then new sales will diminish. But as I wrote, I've not been following closely either the theory or the phenomenon...except that, even in Alaska!!!!!...I'm seeing far larger than should be expected of teenagers not getting their drivers' licenses (or driving, for that matter).

Car ownership is definitely on a downward path for several reasons. IMO it won't be anything drastic. Another point to consider is that as we move towards self driving that may have a positive pressure on car ownership as people who can't/won't drive on their own are able to. (old people, drunks, etc)

 

[neroden]

A question for experienced investors. What do you do with the tax money you have to pay when you sell ? For eg., now that I sold my calls and I've to pay a substantial amount of taxes - how do I invest that money till Jan end when I'll pay it as part of my Q4 tax pre-payment ? I could buy CDs or write puts (not sure whether the broker will allow me to do both).

T-bills, personally. I can get them expiring any Thursday, sometimes other days of the week, so I can line them up very closely with the tax payments due.

I can sell puts against the T-bills (and sometimes have done), but it's a bit risky -- if the puts execute, where's my money to pay taxes? (T-bills at Schwab appear to require only 1% equity! -- so they're practically as good as cash for collateralizing put sales.)

I'm in a state with an income tax; T-bills have the added advantage of being exempt from state income tax if you hold them to maturity, so at the moment they're giving a better return for me than CDs. This wouldn't be relevant to you in Washington state.

 

[neroden]

Oh yes, forgot about that. So, no income tax on long term cap gains in NY ?

Oh, we have full income tax on long-term capital gains. The thing is, if I can defer taxation *indefinitely*, I never end up paying it. It disappears when I die during the basis reset which happens during inheritance. If I give the appreciated stock to charity, again the tax on the gain disappears.

Even if I eventually sell and use the money for personal purposes or reinvest it, many years of tax deferral is worth a lot -- it's like "float" in the insurance business. My unrealized gains on my 2013-2014 purchases of TSLA have been tax-deferred for five years already -- think about the losses in float if I'd repeatedly had the stock called away and rebought it, paying taxes each time. Essentially the benefit from deferring taxation of unrealized capital gains is the same benefit as deferring taxation in a traditional IRA; as long as the stock is going up, it's a meaningful and substantial benefit.

One of the reasons selling my Exxon stock in 2008 was a big decision is that it was carrying deferred gains from the 1970s. The amount I ended up with to reinvest was substantially lower than the amount I had invested in Exxon at the time, because the taxes had to be paid when I sold.

 

[EVNow]

T-bills, personally. I can get them expiring any Thursday, sometimes other days of the week, so I can line them up very closely with the tax payments due.

I can sell puts against the T-bills (and sometimes have done), but it's a bit risky -- if the puts execute, where's my money to pay taxes? (T-bills at Schwab appear to require only 1% equity! -- so they're practically as good as cash for collateralizing put sales.)

I'm in a state with an income tax; T-bills have the added advantage of being exempt from state income tax if you hold them to maturity, so at the moment they're giving a better return for me than CDs. This wouldn't be relevant to you in Washington state.

Thanks - I'll look into T-bills.

The way I'm thinking about it - while writing puts is somewhat risky - I can choose as low a strike rate as I'm comfortable with. Say $320, if I'm feeling brave or lower If I'm feeling nervous (about the macros).

 

[Tslynk67]

Always instructive esp for those of us isolated from Europe. BUT: I'll claim you're being merely mischievously rhetorical with that "mystery". It's no mystery: the almost halcyonic aftermath of The Peace bringing to an end the searing many decades (and, in effect, several centuries) of the tragedy that was Divided Ireland. Many residents on both sides of the Irish Sea that I have spoken to about this suggest - in effect - they sooner would give up their right arms...their mothers...their grandchildren...UK's place in the EU...before they allow anything to imperil that peace - and a hard border would, in their minds, so imperil it.

Indeed I was being rhetorical. I'm old enough to have lived with evening news reports of atrocities and worked for many years in Birmingham, and have friends who were directly affected by the Troubles. Say what you like about Tony Blair, but the Good Friday Peace Accord was a huge achievement.

Jin SEO on Twitter

Another short has covered.

Fascintating comments on the embedded tweet - they're a weird bunch... Jin SEO on Twitter

 

[neroden]

Thanks - I'll look into T-bills.

The way I'm thinking about it - while writing puts is somewhat risky - I can choose as low a strike rate as I'm comfortable with. Say $320, if I'm feeling brave or lower If I'm feeling nervous (about the macros).

I have sold puts with strikes as low as $50 (that was probably a mistake; they don't really move until very close to expiration), and a bunch in the $200-$300 range.

 

[neroden]

Anyway, MARKET ACTION...

Tesla is trading in Frankfurt aroudnd 318.54, which is $361.07 US. I think it's going to be very hard to keep Tesla below $360; it keeps swinging back up.

 

[Curt Renz]

Zacks - today: Is Tesla (TSLA) Outperforming Other Auto-Tires-Trucks Stocks This Year?

 

[dondy]

How is returning to steel a problem. Here’s one way it’s not a problem; it’s way easier to make body panels from steel than aluminum.

And hasn’t Tesla already put steel in the 3? Why yes they have.

they have put high grade steel in quarter panels, pillars and battery bed.
I suspect if they would do more (bumper, back side, front doors) the car would become significantly more expensive and the weight is just part of the issues.
It is not easier to stamp good steel than aluminum. It is different, you need different form of stamp "lips", lubrication and of course different way of applying pressure (the main problem with using standard press to stamp Al plates).
There is problem with aluminum oxide, but it is easily solved with surface treatment before stamping.
People who learn to stamp Al don't return to steel and actually have difficulties with stamping steel when needed. You need to look for different things. In terms of equipment and the energy you use AL is cheaper. If to use properly the stamp forms last also much longer.
To make precise stamps you need to anticipate very well material flexibility (formability they name it). AL (and copper --another interesting material) are fundamentally different from steel. Hence different expertise=>"return to steel" argument.
I wouldn't be surprised if it would be also one of the reasons for Model 3 delays.
Material guys in Tesla are from airspace industry. I believe this is the reason why AL mostly (and composite and titan as possibilities).

AL parts are better against very small accidents (it just doesn't get damaged), but damaged parts are significantly more difficult to repair, and all loaded parts have to be reinforced with extra material after reforming or often have to be changed. It is the main reason for "easy" totaling of an aluminum car.
If to optimize car body vs. repairability (see insurance rates) you need a steel body. Tesla haven't done that exactly and easily damaged hood, doors etc. are still AL. Steel body is an essential part of a cheap affordable auto.

As well steel body is an essential part of a "repairable/serviceable" truck. Electrical part of Teslas post 2016 is fantastic, both design and execution. The only parts which would require real attention are body and suspension. AL trucks will be sold but the main clients will be big companies and special equipment providers mostly, i.e. customers who can afford in-house professional servicing or the customers with special needs.

 

[EVNow]

My understanding is that is ø1 of the phenomenon; after that occurs then new sales will diminish. But as I wrote, I've not been following closely either the theory or the phenomenon...except that, even in Alaska!!!!!...I'm seeing far larger than should be expected of teenagers not getting their drivers' licenses (or driving, for that matter).

My take is that the car volume will reduce dramatically in the west - with individuals owning cars almost as exotic as people listening to music on Vinyl with SET amps & horn speakers. All cars will be bought by ride sharing companies.

This is not just me saying it - all legacy manufacturers believe in this - from what my consultant friends who talk to c-suite tell me.

 

[Unpilot]

Indeed I was being rhetorical. I'm old enough to have lived with evening news reports of atrocities and worked for many years in Birmingham, and have friends who were directly affected by the Troubles. Say what you like about Tony Blair, but the Good Friday Peace Accord was a huge achievement.



Fascintating comments on the embedded tweet - they're a weird bunch... Jin SEO on Twitter

Yeah when you go down the twitter rabbit hole it gets weird fast.

 

[KarenRei]

Well, actually there is no confirmation of a US CCS adapter, and so far they have only said that the Superchargers in Europe will have CCS plugs added. (not that they will be changed over to CCS.)

I was only referring to EU superchargers re: switching over to CCS. But yes, they didn't specify that a US CCS adapter would be available, only just an "adapter" in general - which may pertain just to Europe:

"...a CCS Combo 2 adapter will soon be available to purchase, if desired."

 

[scaesare]

This is what I have thought all along, $38k is NOT their cost. Everyone else was wrangling about how the $35k version is never going to happen, when the real truth in what Elon was stating is that they are only $3k away, after adding whatever they consider the minimum margin they can deal with. Today, they would have to sell it for $38k. Actually, when I thought about it, they don't need to trim $3k from their costs. Assuming their minimum margin is for example 15%, they would need to trim $3000/1.15= $2609. Tesla is NEVER going to sell a car at cost, that would be crazy.

Right. Not when the LR cost ~$18K in parts and ~$10K in labor to manufacture.

 

[EVNow]

One of the reasons selling my Exxon stock in 2008 was a big decision is that it was carrying deferred gains from the 1970s. The amount I ended up with to reinvest was substantially lower than the amount I had invested in Exxon at the time, because the taxes had to be paid when I sold.

Yes, I'm intimately familiar with this. I've large unrealized gains from Microsoft I used to work for. Infact I got into TSLA trading 3 months back because I was trying to figure out how to diversify without triggering a sale - after looking into things like exchange funds. Its a long story with lots of twist and turns, starting with "going private" tweet. Funny enough I ended up not selling most of MSFT as the tech stocks tanked.

 

[cheshire cat]

From the Tesla Model 3 page (from German via Google Translate):


I see this as confirmation that the Model 3 will come with a CCS plug

From the horses mouth this morning-- that's a yes

 

[AlexS]

BTW selfdriving delivery robots causing traffic troubles in Estonia.
Pakirobot tekitab segaduse

Problem is, drivers don't know the rules that they have priority over robot, but drivers think that robot has pedestrian privileges.

Probably this post should be moved to another topic, but I don't know which.

 

[JoaoD]

Configuration emails have already started to be sent for European reservations

 

[Beresford]

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

What they see as 'the end' is when they will be ready with some reasonable EVs and they have got their money back from their last ICE products. The real end (for them) is coming somewhat sooner - See Zac and Jesse's coverage of Ross Tessian's article in SA:

 

[Fact Checking]

Jin SEO on Twitter

Another short has covered:

"If you are short TSLA, you need to take a hard look at today's price action. My guess is that someone is, and has been, accumulating for some reason. This appears to be beyond the normal drooler demand."

"I closed out my short today if that motivates you to make a decision."

BTW., in case people are wondering what 'price action' he is referring to, I think it's the price action at around 12:30 (NASDAQ market time), the very sharp 10 dollar drop of $TSLA from $361 to $351 in lock-step with the NASDAQ - followed by a very sharp recovery which NASDAQ didn't do on that scale: NASDAQ continued falling while $TSLA showed remarkable resilience all day long.

This kind of 'spike' and macro-resilience in relatively illiquid holiday trading might be a sign of one (or several) big buyers being present who are accumulating $TSLA regardless of the macro environment. It could be $TSLA S&P 500 addition accumulation arbitrageurs (they'll need up to 5-10 million $TSLA shares by next May/June, depending on the weight Tesla gets when it gets added to the S&P 500), large funds buying, really big shorts covering - or the combination of all of them.

The short above who covered correctly identified this dangerous price action pattern. I'm curious how $TSLA is going to react to the BRExit panic sell-off next week, when May's EU BRExit deal bill in the parliament will probably fail and spook markets globally. (Not a prediction and not advice, as usual.)