Articles/megaposts by DaveT

[pz1975]

In a year I'm estimating TSLA to be between $250-380/share.

If I had to pick a number though, I'd say $330/share.

I wonder if we will get a similar short-medium term trend where we spike up past 265 to some number (?300/320) and then eventually dip back down to 265ish, which will act as support the way 180 supported the last dip (close to the previous ATH of 193). Just guessing of course but TSLA is so volatile with its yo-yo action. I don't mind as long as the yo-yo overall swings upwards as it has been.

PS: I like your price projections over the next 5-15 years - seem very reasonable.

 

[DaveT]

sure my wife would like $333 ( or 369 my S racing # :tongue

between now and then do you think we will see a higher ATH?

May through now(end of Jun) seems stronger than the run from January to the ATH (beginning of Mar) where it then trickled back to under $200.
I could see the same thing happening this year. maybe a run of $400+ then back to ~$300.
Second production line will be running pretty soon. + the factory looked like it was filling up pretty quick back in Jan and that wasn't even for the X line (maybe RHD cars -not sure what it all was)...

and I still get the 'what type of car is that?" question almost daily. + the "where is it made?'

There definitely could be run up and pull back, but $400/share will be valuing TSLA at $50 billion and there needs to be something that pushes people's assessment of Tesla to that level. Either Model X sales go bezerk or Gen3 prototype revealed with reservations taken, maybe. At $50 billion valuation, Tesla would be approaching BMW's valuation (BMW sold 1.66m cars last year and is valued at $60 billion).

 

[The Blue Owl]

At $50 billion valuation, Tesla would be approaching BMW's valuation (BMW sold 1.66m cars last year and is valued at $60 billion).

Ok then, let BMW surge to a $150 billion valuation, on the strength of their cooperation with Tesla .

 

[ClownMouth]

...and there needs to be something that pushes people's assessment of Tesla to that level. Either Model X sales go bezerk or Gen3 prototype revealed with reservations taken, maybe. At $50 billion valuation, Tesla would be approaching BMW's valuation (BMW sold 1.66m cars last year and is valued at $60 billion).

Do you think it's possible that within a year we could have the emergence (or the market's recognition of the future emergence of) additional income streams? For example, monetizing the Superchargers, stationary storage, better understanding of what the GF will entail and how Tesla could use the GF to become a supplier to other companies? Like everyone, I look forward to seeing the Model X take off as well as Gen III, but I also keep coming back to JB's presentation on Stationary Storage and how he sees a potentially quicker growth curve in that industry than in EVs even. To me, these "unknowns" and the potential for Tesla to become Tesla Holdings or Tesla Power, etc, make valuation for TSLA very difficult (but also very promising).

 

[justdoit]

Do you think it's possible that within a year we could have the emergence (or the market's recognition of the future emergence of) additional income streams? For example, monetizing the Superchargers, stationary storage, better understanding of what the GF will entail and how Tesla could use the GF to become a supplier to other companies? Like everyone, I look forward to seeing the Model X take off as well as Gen III, but I also keep coming back to JB's presentation on Stationary Storage and how he sees a potentially quicker growth curve in that industry than in EVs even. To me, these "unknowns" and the potential for Tesla to become Tesla Holdings or Tesla Power, etc, make valuation for TSLA very difficult (but also very promising).

What presentation on stationary storage? Can you please share?

We have to remember that current valuation is already taking into account Model X and GenIII. So in order to get significantly above that valuation, I agree with @ClownMouth that it has to be something else. And that something else is most likely stationary storage. The $320 price target by MS (which is what caused the jump to $260's) took into account stationary storage amongst other things. Now if analysts see the potential for stationary storage and batteries to be even greater than they expected and that Tesla is the leader, then the price target of $320 will need to be revised upward.

 

[ClownMouth]

What presentation on stationary storage? Can you please share?

JB Straubel's Keynote at 2014 Energy Storage Symposium. Here is the YouTube link: 2014 Energy Storage Symposium - JB Straubels Keynote - YouTube

 

[DaveT]

Do you think it's possible that within a year we could have the emergence (or the market's recognition of the future emergence of) additional income streams? For example, monetizing the Superchargers, stationary storage, better understanding of what the GF will entail and how Tesla could use the GF to become a supplier to other companies? Like everyone, I look forward to seeing the Model X take off as well as Gen III, but I also keep coming back to JB's presentation on Stationary Storage and how he sees a potentially quicker growth curve in that industry than in EVs even. To me, these "unknowns" and the potential for Tesla to become Tesla Holdings or Tesla Power, etc, make valuation for TSLA very difficult (but also very promising).

I'm a big believer in stationary storage in the long-term, but I'm unclear as to when this will translate into actual revenue numbers. It will be interesting when Tesla starts to report that they're selling stationary storage units and making that another item in their income statement. Then they'll need to give some guidance and it'll start to factor in more. As of now, we don't see really any mention of stationary storage in their income statement or guidance. My hunch is that they're limited with cell supply and are giving preference to autos. Also, they need to probably get the cost of cells lower (as well as ramp up supply with GF) in order to make stationary storage more cost-compelling to customers.

 

[JRP3]

My hunch is that they're limited with cell supply and are giving preference to autos.

I agree, though Tesla has said that the stationary packs use lower energy density cells and thus storage does not impact automotive cell production. My guess is that cell components that don't make the cut for automotive energy density get diverted to lower density stationary storage, so there may be an indirect relationship.

 

[DaveT]

We have to remember that current valuation is already taking into account Model X and GenIII. So in order to get significantly above that valuation, I agree with @ClownMouth that it has to be something else. And that something else is most likely stationary storage. The $320 price target by MS (which is what caused the jump to $260's) took into account stationary storage amongst other things. Now if analysts see the potential for stationary storage and batteries to be even greater than they expected and that Tesla is the leader, then the price target of $320 will need to be revised upward.

It's true that if Tesla surprises us with an unexpected uptake in stationary storage that price targets will be revised, but as of now (and probably over the next year or so) it's unlikely since analysts like Morgan Stanley are already factoring in stationary storage in their price targets.

Regarding current valuation, I think currently it's taking into account Model S/X and about 200-300k units of Gen3 sales. For example, let's say 150k units Model S/X at $90k ASP and 200k units of Gen3 at $50k asp, that's $23.5 billion in revenue. Let's say 15% operating margin, so $3.5 billion. Times that by a 20x multiple (industry standard is 10x but since they're growing let's give them 20x), that would be $70 billion in market cap. That would be the valuation given when Tesla is at that 350k unit level, probably in 2017-2018. However, that's 3-4 years away, so you need to discount the stock price for waiting and also for risk incurred. So, I'd say current valuation would be $25-40 billion (discounted from $70b valuation in 3-4 years).

Next year however, the projections for Gen3 units will likely go up and will be factored into valuation. For example, people might be expecting 400-500k units of Gen3. So, if we project out to 2019 (when we're at next year), then we project 150k Model S/X units at $90k asp ($13.5 billion) and 400k Gen 3 units at $50k asp ($20b), that's $33.5 billion in revenue, with 15% operating margin that would be $5 billion in earnings. And let's say in 2019 we give a 20x multiple since they're still growing fast. That would mean in 2019 (with these assumptions), Tesla would be valued at $100 billion. However, in 2015 you'd have to discount that since it would still be 3-4 years away. So maybe you'd pay $35-50 billion for Tesla in 2015 (275-400 stock price).

Once Gen3 gets released, then more people will begin to realize the full tidal impact of Gen3 and they will increase their projections to 1 million cars/year by 2021. That will push the stock price higher. Let's say in 2017, Gen3 is released and demand is insane. People can start to project 1,000,000 Gen3 units in 2021. Let's say 1000k Gen3 ($45k asp) and 150k Model S/X with ($90k asp), revenue would be roughly $58 billion, operating margin 15%, earnings would be $8.7 billion. Since Tesla is growing rapidly still let's give it a multiple of 15-20 (15 if you're sober, 20 if you're enthusiastic). 15x multiple would be a $130 billion valuation, a 20x multiple would be a $174 billion. But since it would be 2017 still, you'd need to discount that. So maybe you'd give a $70-90 billion valuation (520-667 stock price) in 2017.

 

[kenliles]

I'm a big believer in stationary storage in the long-term, but I'm unclear as to when this will translate into actual revenue numbers. It will be interesting when Tesla starts to report that they're selling stationary storage units and making that another item in their income statement. Then they'll need to give some guidance and it'll start to factor in more. As of now, we don't see really any mention of stationary storage in their income statement or guidance. My hunch is that they're limited with cell supply and are giving preference to autos. Also, they need to probably get the cost of cells lower (as well as ramp up supply with GF) in order to make stationary storage more cost-compelling to customers.

generally agree on the pricing, but not the cell supply (ditto JRP3 comments on that one)- stationary storage will need to be close to current grid parity to see it's revenue. Going to be interesting to see how close the GF-stationary pricing gets to that

 

[TSLAopt]

It's true that if Tesla surprises us with an unexpected uptake in stationary storage that price targets will be revised, but as of now (and probably over the next year or so) it's unlikely since analysts like Morgan Stanley are already factoring in stationary storage in their price targets.

Regarding current valuation, I think currently it's taking into account Model S/X and about 200-300k units of Gen3 sales. For example, let's say 150k units Model S/X at $90k ASP and 200k units of Gen3 at $50k asp, that's $23.5 billion in revenue. Let's say 15% operating margin, so $3.5 billion. Times that by a 20x multiple (industry standard is 10x but since they're growing let's give them 20x), that would be $70 billion in market cap. That would be the valuation given when Tesla is at that 350k unit level, probably in 2017-2018. However, that's 3-4 years away, so you need to discount the stock price for waiting and also for risk incurred. So, I'd say current valuation would be $25-40 billion (discounted from $70b valuation in 3-4 years).

Next year however, the projections for Gen3 units will likely go up and will be factored into valuation. For example, people might be expecting 400-500k units of Gen3. So, if we project out to 2019 (when we're at next year), then we project 150k Model S/X units at $90k asp ($13.5 billion) and 400k Gen 3 units at $50k asp ($20b), that's $33.5 billion in revenue, with 15% operating margin that would be $5 billion in earnings. And let's say in 2019 we give a 20x multiple since they're still growing fast. That would mean in 2019 (with these assumptions), Tesla would be valued at $100 billion. However, in 2015 you'd have to discount that since it would still be 3-4 years away. So maybe you'd pay $35-50 billion for Tesla in 2015 (275-400 stock price).

Once Gen3 gets released, then more people will begin to realize the full tidal impact of Gen3 and they will increase their projections to 1 million cars/year by 2021. That will push the stock price higher. Let's say in 2017, Gen3 is released and demand is insane. People can start to project 1,000,000 Gen3 units in 2021. Let's say 1000k Gen3 ($45k asp) and 150k Model S/X with ($90k asp), revenue would be roughly $58 billion, operating margin 15%, earnings would be $8.7 billion. Since Tesla is growing rapidly still let's give it a multiple of 15-20 (15 if you're sober, 20 if you're enthusiastic). 15x multiple would be a $130 billion valuation, a 20x multiple would be a $174 billion. But since it would be 2017 still, you'd need to discount that. So maybe you'd give a $70-90 billion valuation (520-667 stock price) in 2017.

Great projections DaveT. You have a great record from last years post you pulled up as I remember that screen shot you photo-shopped and I thought you were an overzealous fanboy investor like me getting carried away but you were right. I've gotten to know your work a bit more over the year and find it actually the opposite of overzealous...your projections and analysis is very stoic and level headed and the most insightful and valued of anyone.

keep up the great work as I probably wouldn't be as well off as I am now if I didn't have analysis like yours to help reaffirm my own projections as not being too overzealous as the shorts want us all to think.

 

[DaveT]

#1 The Three Stages - intro to First Stage (The Case for TSLA at $2000-3000 by 2030)

I’m starting a series of posts that will share my overall investment thesis on Tesla Motors and why I think TSLA is headed to $2000-3000/share by 2030. Each post will highlight a specific investment angle or thought and each post will build upon each other. This is the post #1 in the series. I’m expecting the series to be about 20-30 posts. It will be flexible as I will adapt the following posts based on people’s replies, questions, and comments.

For post #1, I will introduce the first stage of the three stages of Tesla that the investor needs to go through successfully in order to keep their long-term position in TSLA from the beginning. The "first stage" for investors was roughly from Tesla's IPO in mid-2010 to mid-2013.

The first stage many investors, including myself, found ourselves in when we first began our TSLA investment was believing in Elon’s “secret master plan” (The Secret Tesla Motors Master Plan (just between you and me) | Blog | Tesla Motors). The vision/goal of Tesla was to eventually produce a Gen3 mass market affordable electric car.

Also, many “first stage” investors also latched on to the Elon Musk CEO incentive plan (as found in the company’s filings) and described here,A $43 Billion Tesla: Musk's Incentives Of Interest - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha. The goal was to sell 300,000 Gen3 vehicles and reach a market cap of $43 billion within 10 years.

In 2012, when I bought the vast majority of my shares, Tesla’s market cap was at roughly $3.5 billion. So, if TSLA could reach a $43 billion market cap within 10 years, that would be more than a 10x gain in 10 years. Not bad (to say the least). This was the thinking of many early investors, including myself.

However, the biggest risk for this “first stage” was Tesla going bankrupt. The media was filled in Tesla’s early days with pundits casting doubt on Tesla’s viability and future. And there was a general doubt that Tesla could find enough lasting demand for their expensive and electric cars. The general argument was when early adopter demand ended then there would be no more people to buy the Model S and Tesla would go bankrupt.

So the question in 2012 was whether the Model S would have lasting demand, at least enough demand for 20,000 cars yearly (which was Tesla’s public projections at that time). Early in 2012, it was difficult to tell since the factory was slated to start production in the summer 2012. However, by fall 2012 the initial cars were on the road, people were talking and raving about the car, and if you tried hard enough you could get a test drive.

Then, in November 2012, MotorTrend gave the Model S their Car of the Year award. I had finished my stock purchases by then (I spread out my purchases over several months), and I was fully expecting the stock price to skyrocket. However, it didn’t. It just lingered in the low 30s.

In my mind, Tesla had produced a stellar product that was being awarded rave reviews and the threat of bankruptcy was pretty much off the table in my opinion. Yet, the stock price was still being traded with the threat of bankruptcy in full force. For me personally, it helped test-driving the car and comparing it to the many other performance vehicles I had test-driven before. The Tesla Model S was better than I had expected and I knew I was driving the future. I thought, "Holy Moly! I just drove the iPhone of cars."

With bankruptcy off the table (at least in my opinion at that time in late 2012), I felt that Tesla was worth at least $10-15 billion. Even if they went bankrupt, they could sell their factory and patents probably for $2+ billion. However, by producing a stellar car Tesla ensured that there would be enough demand (at least 20k units a year) for them to survive and have a chance at fulfilling the “master plan” of producing an eventually mass market electric car. Even if they only produced the Model S (and X) and gave up on Gen3, Tesla would still be able to achieve a valuation of $10+ billion. (Think 50,000 Model S/X sold annually long-term at 90k asp, that’s $4.5 billion revenue, 15% operating margin is $675m, give them a 15x multiple and that’s roughly $10b). But with such a stellar product in the Model S, it gave credence to the vision/goal of a Gen3 mass market vehicle. That’s why at the end of 2012, I felt Tesla was worth $10-15 billion. But that market thought otherwise.

Tesla’s high short interest was one of the main reasons why TSLA stock remained ridiculously depressed at the end of 2012 and all the way into March/April 2013. Another reason was that Tesla had to lower their initial estimates of 5,000 cars delivered in 2012, and as a result all their revenue/earnings numbers were much lower than analysts had forecasted.

From November 2012 (after MotorTrend’s Car of the Year award) until March 1, 2013, investors could have picked up all the TSLA stock they wanted in the low 30s. It was an amazing opportunity to say the least. I had spent all the money I had. Literally. During those months, I would ask my wife how we could secure more money. I would tell her, "if I had x millions of dollars, I would stick it all in TSLA. I also daydreamed countless times if I had a $1 billion I would use it all to buy an almost 30% stake in TSLA. I knew the days of opportunity wouldn’t last.

I remember telling my wife several times in early 2013 that TSLA would be over $100/share by the end of the year, and that people were getting a deal of a lifetime with the stock in the low 30s (market cap under $4 billion!?!?!). When TSLA eventually did surge after their Q1 2013 earnings, I wasn’t surprised. By then, I thought TSLA was worth $15-25 billion (Short-Term TSLA Price Movements - 2013 - Page 366) and was looking it to keep going higher.

However, an interesting occurrence happened as TSLA’s stock price surged. Long-term investors who had planned on holding until Gen3 started to feel the stock price was too frothy - some kept holding, but many sold some or most of their holdings. I’ve been thinking about this more of late, and I have an explanation that makes sense to me.

I’ll share that explanation in post #2 and introduce the concept of a "second stage" to TSLA investing.

 

[AlMc]

Very nice Dave. Thanks....Looking forward to your other chapters.

 

[macman]

Great post. Please keep going. So we can go back to these posts when TSLA is depressed and we start having doubt.

 

[TSLAopt]

Very nice Dave. Thanks....Looking forward to your other chapters.

Yes, a, great post...I felt like a lot of what you said and timeline you gave resembles much of my story as well...even to telling the wife several times and getting permission to put a chunk of our savings in TSLA options at that time (we also bought more Bitcoin at that same time, but lost half of that when Mt Gox went bankrupt...bummer).
Looking forward to read your next series as I almost fell into that trap multiple times bc of the emotional hangovers from such sharp price movements, luckily I didn't bc 1)reading analysis from people like you helped reassure me to stay the course 2)my day job doesn't let me place orders during the day when the emotional swings are strongest from the sharp price movements and 3)had a hard time accepting short term taxes on the massive gains which essentially would have meant forfeiting an extra unnecessary 20% of my equity to taxes vs? holding out for long term gains

 

[AlMc]

Yes, a, great post...I felt like a lot of what you said and timeline you gave resembles much of my story as well...even to telling the wife several times and getting permission to put a chunk of our savings in TSLA options at that time (we also bought more Bitcoin at that same time, but lost half of that when Mt Gox went bankrupt...bummer).
Looking forward to read your next series as I almost fell into that trap multiple times bc of the emotional hangovers from such sharp price movements, luckily I didn't bc 1)reading analysis from people like you helped reassure me to stay the course 2)my day job doesn't let me place orders during the day when the emotional swings are strongest from the sharp price movements and 3)had a hard time accepting short term taxes on the massive gains which essentially would have meant forfeiting an extra unnecessary 20% of my equity to taxes vs? holding out for long term gains

You and Dave, and many others who were confident enough to be 'all in' early have my respect. I 'could of/should of' put a lot more capital into TM when I first invested in March 2013.....But I did not have the 'kahunas' to do so. Like many, I have done well with TM but I tip my hat to all of you who were 'all in' when TSLA was still at a point where it could fail. Nicely done! :wink:

 

[sundaymorning]

I’m starting a series of posts that will share my overall investment thesis on Tesla Motors and why I think TSLA is headed to $2000-3000/share by 2030. Each post will highlight a specific investment angle or thought and each post will build upon each other. This is the post #1 in the series. I’m expecting the series to be about 20-30 posts. It will be flexible as I will adapt the following posts based on people’s replies, questions, and comments.

For post #1, I will introduce the first stage of the three stages of Tesla that the investor needs to go through successfully in order to keep their long-term position in TSLA from the beginning. The "first stage" for investors was roughly from Tesla's IPO in mid-2010 to mid-2013.

The first stage many investors, including myself, found ourselves in when we first began our TSLA investment was believing in Elon’s “secret master plan” (The Secret Tesla Motors Master Plan (just between you and me) | Blog | Tesla Motors). The vision/goal of Tesla was to eventually produce a Gen3 mass market affordable electric car.

Also, many “first stage” investors also latched on to the Elon Musk CEO incentive plan (as found in the company’s filings) and described here,A $43 Billion Tesla: Musk's Incentives Of Interest - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha. The goal was to sell 300,000 Gen3 vehicles and reach a market cap of $43 billion within 10 years.

In 2012, when I bought the vast majority of my shares, Tesla’s market cap was at roughly $3.5 billion. So, if TSLA could reach a $43 billion market cap within 10 years, that would be more than a 10x gain in 10 years. Not bad (to say the least). This was the thinking of many early investors, including myself.

However, the biggest risk for this “first stage” was Tesla going bankrupt. The media was filled in Tesla’s early days with pundits casting doubt on Tesla’s viability and future. And there was a general doubt that Tesla could find enough lasting demand for their expensive and electric cars. The general argument was when early adopter demand ended then there would be no more people to buy the Model S and Tesla would go bankrupt.

So the question in 2012 was whether the Model S would have lasting demand, at least enough demand for 20,000 cars yearly (which was Tesla’s public projections at that time). Early in 2012, it was difficult to tell since the factory was slated to start production in the summer 2012. However, by fall 2012 the initial cars were on the road, people were talking and raving about the car, and if you tried hard enough you could get a test drive.

Then, in November 2012, MotorTrend gave the Model S their Car of the Year award. I had finished my stock purchases by then (I spread out my purchases over several months), and I was fully expecting the stock price to skyrocket. However, it didn’t. It just lingered in the low 30s.

In my mind, Tesla had produced a stellar product that was being awarded rave reviews and the threat of bankruptcy was pretty much off the table in my opinion. Yet, the stock price was still being traded with the threat of bankruptcy in full force. For me personally, it helped test-driving the car and comparing it to the many other performance vehicles I had test-driven before. The Tesla Model S was better than I had expected and I knew I was driving the future. I thought, "Holy Moly! I just drove the iPhone of cars."

With bankruptcy off the table (at least in my opinion at that time in late 2012), I felt that Tesla was worth at least $10-15 billion. Even if they went bankrupt, they could sell their factory and patents probably for $2+ billion. However, by producing a stellar car Tesla ensured that there would be enough demand (at least 20k units a year) for them to survive and have a chance at fulfilling the “master plan” of producing an eventually mass market electric car. Even if they only produced the Model S (and X) and gave up on Gen3, Tesla would still be able to achieve a valuation of $10+ billion. (Think 50,000 Model S/X sold annually long-term at 90k asp, that’s $4.5 billion revenue, 15% operating margin is $675m, give them a 15x multiple and that’s roughly $10b). But with such a stellar product in the Model S, it gave credence to the vision/goal of a Gen3 mass market vehicle. That’s why at the end of 2012, I felt Tesla was worth $10-15 billion. But that market thought otherwise.

Tesla’s high short interest was one of the main reasons why TSLA stock remained ridiculously depressed at the end of 2012 and all the way into March/April 2013. Another reason was that Tesla had to lower their initial estimates of 5,000 cars delivered in 2012, and as a result all their revenue/earnings numbers were much lower than analysts had forecasted.

From November 2012 (after MotorTrend’s Car of the Year award) until March 1, 2013, investors could have picked up all the TSLA stock they wanted in the low 30s. It was an amazing opportunity to say the least. I had spent all the money I had. Literally. During those months, I would ask my wife how we could secure more money. I would tell her, "if I had x millions of dollars, I would stick it all in TSLA. I also daydreamed countless times if I had a $1 billion I would use it all to buy an almost 30% stake in TSLA. I knew the days of opportunity wouldn’t last.

I remember telling my wife several times in early 2013 that TSLA would be over $100/share by the end of the year, and that people were getting a deal of a lifetime with the stock in the low 30s (market cap under $4 billion!?!?!). When TSLA eventually did surge after their Q1 2013 earnings, I wasn’t surprised. By then, I thought TSLA was worth $15-25 billion (Short-Term TSLA Price Movements - 2013 - Page 366) and was looking it to keep going higher.

However, an interesting occurrence happened as TSLA’s stock price surged. Long-term investors who had planned on holding until Gen3 started to feel the stock price was too frothy - some kept holding, but many sold some or most of their holdings. I’ve been thinking about this more of late, and I have an explanation that makes sense to me.

I’ll share that explanation in post #2 and introduce the concept of a "second stage" to TSLA investing.

Dave, great post. I've been with tesla since 2012 as well, I plan on holding for another 8-10 years as I believe TSLA will be supply constraint for a very long time. Additionally, like TSLAopt, I don't like losing the extra15-20% on taxes on shirt term trades, so holding long term is much better for my taste. Although watching the day to day movement is fun, being a veteran tsla investor has given me very large "kahunas" to withstand the fluctuations and short attacks that occur weekly. Taking advise from Kurt, was one of the best strategies I've learned, and that is holding long term will beat day trading on fast growing companies like TSLA in the long term. Good luck to you and keep up the good work, I look forward to being all in again on 2nd Q earnings very much with everyone, cheers.

 

[Jack6591]

I worked as a solar power inspector from 2009 through 2012. Assigned to Beverly Hills, Bel Air, and the Pacific Palisades many of my customers drove Tesla Roadsters. This experience and exposure led me to invest when TSLA was at $36 a share.

It's funny, many of friends, family and co-workers see me as a visionary. Truth is, I was at the right place at the right time. And I'm staying.

 

[DaveT]

Yes, a, great post...I felt like a lot of what you said and timeline you gave resembles much of my story as well...even to telling the wife several times and getting permission to put a chunk of our savings in TSLA options at that time (we also bought more Bitcoin at that same time, but lost half of that when Mt Gox went bankrupt...bummer).
Looking forward to read your next series as I almost fell into that trap multiple times bc of the emotional hangovers from such sharp price movements, luckily I didn't bc 1)reading analysis from people like you helped reassure me to stay the course 2)my day job doesn't let me place orders during the day when the emotional swings are strongest from the sharp price movements and 3)had a hard time accepting short term taxes on the massive gains which essentially would have meant forfeiting an extra unnecessary 20% of my equity to taxes vs? holding out for long term gains

Yeah taxes significantly altered my plans. I was hoping that I could accumulate more shares by switching my shares over to Jan16 LEAPs during a chart-breaking drop in TSLA late last year (ie., $194 to $120s) but when I calculated long-term capital gains it became prohibitive (20% long-term capital gains at certain income level, 3.8% medicare surtax, up to 13.3% california state tax). So instead, I went on margin to exercise all the Dec13/Jan14 options (80/85 strike) I had purchased in May13. I'm also planning to exercise as many of my Jan15 options (mostly 85/90 strike bought in May13) on margin as well but will have to sell some since I don't want to risk a margin call due to TSLA volatility. But I'm currently planning to slowly pay off my margin over the next 10 years or so. My wife is still warming up to this plan. It's kind of an unconventional plan, but I couldn't think of anything else that was compelling.

 

[Johan]

Yeah taxes significantly altered my plans. I was hoping that I could accumulate more shares by switching my shares over to Jan16 LEAPs during a chart-breaking drop in TSLA late last year (ie., $194 to $120s) but when I calculated long-term capital gains it became prohibitive (20% long-term capital gains at certain income level, 3.8% medicare surtax, up to 13.3% california state tax). So instead, I went on margin to exercise all the Dec13/Jan14 options (80/85 strike) I had purchased in May13. I'm also planning to exercise as many of my Jan15 options (mostly 85/90 strike bought in May13) on margin as well but will have to sell some since I don't want to risk a margin call due to TSLA volatility. But I'm currently planning to slowly pay off my margin over the next 10 years or so. My wife is still warming up to this plan. It's kind of an unconventional plan, but I couldn't think of anything else that was compelling.

But if you are really that confident in your price projections for TSLA would it not be better to buy Jan 16 calls on margin, even including taxes? Or are you afraid of wild swings on the way?