Short-Term TSLA Price Movements - 2016

[anticitizen13.7]

Why all the drama today TSLA went from close to 290 down to 185 around this time last year.

I've said this for years and I'll say it again: if your holdings in TSLA are causing you to lose sleep, your portfolio % allocation in TSLA is too high. Any company, no matter how promising, can go to 0. I keep all my retirement investments in a variety of simple Vanguard index funds.

 

[joefee]

Why all the drama today TSLA went from close to 290 down to 185 around this time last year.

I've said this for years and I'll say it again: if your holdings in TSLA are causing you to lose sleep, your portfolio % allocation in TSLA is too high. Any company, no matter how promising, can go to 0. I keep all my retirement investments in a variety of simple Vanguard index funds.

Great point...me too!

 

[tftf]

I believe Toyota will be back, whether or not it will be too late for them is the question that is up in the air.

Toyota doesn't need to come back to Tesla. They have billions in cash and can directly order from / form a JV with LG/Samsung/Panasonic (or insert any future competitive battery supplier here) and get as many EV/PHEV batteries as they want.

They also have huge in-house R&D efforts in solid-state batteries for the next decade (beyond Li-Ion).

To claim Toyota, Daimler or any large car maker will inevitably fail on a path to EVs is delusional imho. See the chart I provided, the move to EVs will take decades. Using tech analogies is mistaken in the car sector, completely different time horizons - even if we use unrealistic assumptions such as immediate ICE bans:

FleetCarma: If Law Requiring All New Cars Be Electric Were Enacted Today, It Would Take 18 Years For 50% Penetration

Let the chart in the link sink in for a minute.

I don't want to hijack the short-term thread or this forum further and will leave it at that.

 

[BornToFly]

Why all the drama today TSLA went from close to 290 down to 185 around this time last year.

I've said this for years and I'll say it again: if your holdings in TSLA are causing you to lose sleep, your portfolio % allocation in TSLA is too high. Any company, no matter how promising, can go to 0. I keep all my retirement investments in a variety of simple Vanguard index funds.

That is great if you are hoping to double your money ever 7-10 years and retire when you are too old to have fun. I believe I can blow that kind of return out of the water with TSLA, and retire early.

- - - Updated - - -

Looking at the 2 yr charts for the NASDAQ and TSLA was really helpful. We are within about 10% of the lowest values in 2 years. Each time over the last two years when TSLA got down around 180-190 there was strong growth. Last year it grew about 50% in 3 months April-end of June. The fundamentals are much stronger today than they were 2 years ago, which means that it should be an even safer buy now than it was then.

 

[Julian Cox]

Toyota doesn't need to come back to Tesla. They have billions in cash and can directly order from / form a JV with LG/Samsung/Panasonic (or insert any future competitive battery supplier here) and get as many EV/PHEV batteries as they want.

They also have huge in-house R&D efforts in solid-state batteries for the next decade (beyond Li-Ion).

To claim Toyota, Daimler or any large car maker will inevitably fail on a path to EVs is delusional imho. See the chart I provided, the move to EVs will take decades. Using tech analogies is mistaken in the car sector, completely different time horizons - even if we use unrealistic assumptions such as immediate ICE bans:

FleetCarma: If Law Requiring All New Cars Be Electric Were Enacted Today, It Would Take 18 Years For 50% Penetration

Let the chart in the link sink in for a minute.

I don't want to hijack the short-term thread or this forum further and will leave it at that.

Obviously tftf is as usual insulting our collective intelligence by ignoring the fact that everything he writes here has been debunked in advance - except the nonsense about solid state batteries. Which is also bunk.

I won't repeat all the rational work-ups why he's wrong about all the rest, they are contained in my previous comments as well as those from jhm and others, this is how trolls like this operate. There are places for this kind of behavior and I would suggest that it is not here.

Bosch solid state batteries for example do have at least marketing 'specs' published, and these fail to mention energy density except to say twice that of some undefined standard for lithium ion which is almost certainly twice 130KWh /Kg (a standard automotive grade LiFe cell). In which case when it finally reaches production it will be on a par with Tesla's 2014 NCA, pre silicone-carbon anode cell and nowhere close to Tesla's Gigafactory cells at any time.

I would suggest that the forum hold this character to his word regards his oft-repeated promise to hijack this forum no further.

 

[mmd]

Below is my attempt to model Model X ramp-up/production for Q1. I'm thinking out loud here; your feedback is appreciated. I'm probably pretty off base here, and there's probably a better way to do this, but I wanted to write up my thoughts.

I think the ramp up in Q1 is one of the largest, if not the largest upcoming catalyst. I wonder if The Street will get a little impatient with Tesla if they have to wait until Q2 to see steady state X production (800+/week).

Model X Ramp-up

Assumptions:

• 24,000 US X reservations
• 60% conversion rate (14,400)
• 40% of these X orders will be P90D (5,760)
• As of Jan 12th, it appears ALL US reservation holders have been invited to configure
• Tesla HQ telling PeterK on 1/11 it'll take 3-4 months to get a P90D; this agrees with the configurator saying 90D deliveries begin mid 2016
• 500 X's were produced in 2015, ended Dec. @ 238 X's/week

Since 500 cars were produced last year, (5760 - 500) = 5,260 P90D's to produce in this initial run before switching production to 90D. TeslaHQ said a couple days ago that you'd likely get your P90D in 3-4 months if you configure it now, and since all US reservation holders have been invited to configure, we can probably stick to that. Lets give Tesla 4 months, first week of Jan. - last week of April to finish producing the 5,260 P90D's (16 weeks). 5,260/16 = 329/X's per week, on average. So the first few weeks of production could be more like 2-300/week, and I guess there's potential the last week could be something crazy like 800+. Changing up the numbers a little can really impact the weekly rate.

I'm also monitoring the Model X forum here and the Model X Facebook page, it looks like early/mid-February is when we can expect the first non-Sig X's to be delivered. If there's about 1,700 Sigs/Founders/FBR's total, and 500 X's were produced last year, that's about 1,200 Sigs/Founders left to produce in January. I guess it's possible they could also produce some inventory/service center test drive cars.

Thanks for some good analysis, lost in a sea of speculative posts! I see a few things here:
1) You are not buying the "exponential X ramp" announced by Tesla in the Q4 delivery PR.
2) You are assuming that even the most recent P90D orders will be produced first before the regular X orders that were placed long while ago. Is this correct understanding? Is this how Tesla will produce the Xs?
3) Your average seems reasonable. But I'm afraid, at that rate, Tesla won't be cash flow positive in either Q1 or Q2. Let's say the ASP is $130K for P90D. At 30% gross margin, it will only offset 0.3 * 329 * 12 (number of weeks in a quarter) * $130,000 = $154M. But Tesla's cash burn was much higher than that in the last few quarters. Unless this is combined with huge Model S deliveries in Q1 & Q2, I think being cash flow positive is going to be very hard.

 

[aznt1217]

Toyota doesn't need to come back to Tesla. They have billions in cash and can directly order from / form a JV with LG/Samsung/Panasonic (or insert any future competitive battery supplier here) and get as many EV/PHEV batteries as they want.

They also have huge in-house R&D efforts in solid-state batteries for the next decade (beyond Li-Ion).

To claim Toyota, Daimler or any large car maker will inevitably fail on a path to EVs is delusional imho. See the chart I provided, the move to EVs will take decades. Using tech analogies is mistaken in the car sector, completely different time horizons - even if we use unrealistic assumptions such as immediate ICE bans:

FleetCarma: If Law Requiring All New Cars Be Electric Were Enacted Today, It Would Take 18 Years For 50% Penetration

Let the chart in the link sink in for a minute.

I don't want to hijack the short-term thread or this forum further and will leave it at that.

But saying it's impossible for them to fail doesn't make any sense either. I didn't even say it was inevitable, I'm not a Sith Lord. Let' this thought sink in... If what you state was the case, then why did they have Tesla build the power trains for them? Model S has been around since 2012, where are the comparable direct competitors?

I didn't claim anything and I was responding to Julian's post based on evidence that exists now. It's not a question of capability it's a question of will. We haven't seen anything serious until this year. My argument is always that it's not a winner take all scenario. You grow the EV pie to compete with ICE's and there isn't any problem.

To bring it back OT. We tracked NASDAQ and many investors are waiting for earnings season + guidance to do assessments. If you can't stomach the paper losses, you need to reasses your positions and align it to your risk appetite. When I say you I mean the individual investor not specifically tftf

 

[anticitizen13.7]

That is great if you are hoping to double your money ever 7-10 years and retire when you are too old to have fun. I believe I can blow that kind of return out of the water with TSLA, and retire early.

Almost 20 years ago I had a pretty winning portfolio of stalwart tech stocks. That portfolio crashed and what I hadn't cashed out by late 2000 I lost about 60+%. Those stocks never recovered. At least I didn't go for the speculative dotComs, because I had several friends who were completely wiped out.

This is why I have 2 different silos for investments.

The first silo is un-glamorous index funds that grow slowly with the pace of the economy. It's only purpose is to ensure that I have a basic standard of living in future decades if I am unable to work for whatever reason.

The second silo is money I can afford to lose, which I use to place bets on companies that I think are poised to take advantage of inflection points in the way societies operate. If it wins big then I enjoy some riches and my family can have some nice things.

If silo 2 falls apart like my investments did in 2000, I'm not left with nothing. Silo 1 is a backstop against insolvency. If Silo 1 falls apart, that means the economy has fallen apart too, and I have much bigger things to worry about. In that scenario, hand tools, seeds, and hunting rifle become my best portfolio assets

 

[BornToFly]

Great explanation. +1 anticitizen!

 

[sub]

Toyota doesn't need to come back to Tesla. They have billions in cash and can directly order from / form a JV with LG/Samsung/Panasonic (or insert any future competitive battery supplier here) and get as many EV/PHEV batteries as they want.

They also have huge in-house R&D efforts in solid-state batteries for the next decade (beyond Li-Ion).

To claim Toyota, Daimler or any large car maker will inevitably fail on a path to EVs is delusional imho. See the chart I provided, the move to EVs will take decades. Using tech analogies is mistaken in the car sector, completely different time horizons - even if we use unrealistic assumptions such as immediate ICE bans:

FleetCarma: If Law Requiring All New Cars Be Electric Were Enacted Today, It Would Take 18 Years For 50% Penetration

Let the chart in the link sink in for a minute.

I don't want to hijack the short-term thread or this forum further and will leave it at that.

Are you not one of the typical bears that thinks that other companies like GM, Audi, BMW, VW etc can come out with EV's and destroy Tesla? Doesn't this chart say the exact opposite? There goes the "Tesla Killer" theory I guess. :wink:

 

[Spidy]

BTW if you had not quoted me out of context you would have seen that I made the case (in 2013) the Daimler relationship with Tesla was Daimler's opportunity of solving the Innovator's Dilemma (for Daimler).

Daimler (and Toyota) blew it. That was Daimler's shot. There is no longer any realistic chance of either of them participating in significantly, nor surviving the transition to EVs.

They, like Nissan are road kill. Note, Nissan is planning on trying to do something to compete with the GM Bolt by the end of the year. They are up against a lower-cost higher volume competitor ten weeks away from taking down C-Class vehicles (3-Series, C-Class, A-4, Lexus 3xx).

Living in Germany I just chocked reading that. Honestly it's that comical.

I can tell you that people buying those German cars don't really consider a Nissan. At best maybe a VW.

People who buy a Nissan are people who consider cars like hyundai, mazda, kia, or toyota.

Oh and Lexus doesn't even sell 2000 cars here. In a YEAR!

There is more to a car than the engine. Unless you just want a HOV lane sticker...

 

[Yuri_G]

Oh, believe me. I could have picked plenty of other quotes but I don't have the time to dig in old stuff. I just picked a strategically important point (Tesla burning bridges with both Toyota and Daimler).

Daimler and Toyota both bailed from their partnership with Tesla. Not the other way around. Keep attempting to rewrite history, since you can't predict much of anything.

 

[dmckinstry]

If you really want tftf to go away, just quit responding to him.

 

[roblab]

Living in Germany I just chocked reading that. Honestly it's that comical.

I can tell you that people buying those German cars don't really consider a Nissan. At best maybe a VW.

People who buy a Nissan are people who consider cars like hyundai, mazda, kia, or toyota.

Oh and Lexus doesn't even sell 2000 cars here. In a YEAR!

There is more to a car than the engine. Unless you just want a HOV lane sticker...

"Living in Germany" you have this national notion that German cars are superior to everything else. I would really like to understand how a BMW is different from a KIA. When you answer "German Engineering", which means little, I ask to understand how BMW is different than VW. Bigger engine? More pollution? More fires? More advertising? More expensive to repair? Maybe it's that VW cheats more.

Some people in Detroit think GM is better. So?

The only car that is truly different, is different in the radically new drive train. Yes, it's more than the engine. Anyone can put in more cupholders. Maybe you mean leather seats. How about reliability or safety? Only recently have BMW and Porsche become really good driving cars, but a lot of that, too, is advertising, and my Model S beats them in driving, unless you mean going 155 mph on the Autobahn, which seems to be going out of style with most of the German population.

Since a large part of Germany's economy is German cars, it behooves you to believe that those cars are better. That's your opinion, and I don't agree.

And I live in California, and I don't have an HOV sticker.

 

[pGo]

First up, January registrations possibly accompanied by some background of comment from Tesla on the Model X ramp and the commencement of Model X reviews, possibly awards.

Then earnings and Q1 guidance.

Then the onset of the Model 3 anticipation.

Inside of this period I expect to become apparent that the short thesis is fundamentally broken. It is fundamentally broken and that has been apparent at least to me since Nov 13th. 2015 @ $207. The data to prove it I expect to be generally obvious within this window.

There are no official January numbers coming from Tesla. I noticed that you've written this a few times now. Why do you think Tesla will release numbers in January? At best, they will talk about Model X ramp in earnings.

 

[CALGARYARSENAL]

There is one thing that could end the relentless selling and turn this bear into a bull ; a Donald Trump victory in November.

 

[Julian Cox]

There are no official January numbers coming from Tesla. I noticed that you've written this a few times now. Why do you think Tesla will release numbers in January? At best, they will talk about Model X ramp in earnings.

Just referring to credible indications with possible PR confirmation from Tesla regards X ramp rate. First registrations of X are exclusively US so there is reasonably comprehensive and unambiguous all of Jan registration data visibility for X expected early Feb.

 

[eloder]

Love the product and the company but really what is the short term reason to buy?

Because the market in general is correcting right now, and stocks in TSLA are almost assuredly, at some point, going to do extremely well. As long as I'm cost averaging stocks and not playing with options, paying attention to companies that mesh well with longer-term cultural and technological trends, it's hard to lose. Invest responsibly and this is a fantastic market for buyers.

My medium term (~6 months holding) shares made quite a handsome profit in 2015, after buying chunks of stock all the way down its fall. I expect the same situation here, and if not it's not money that'll cause financial stress for me.

Honestly even if the US goes a full recession (which it's extremely unlikely to, for anyone paying attention to how well the US is doing compared to every other country right now), the only stock I could maybe see as better than TSLA would be Netflix. And that's only assuming that Netflix does as well in a recession environment as it did last time.

 

[anticitizen13.7]

There is one thing that could end the relentless selling and turn this bear into a bull ; a Donald Trump victory in November.

I general I don't like Donald Trump and I don't agree with him on much of anything, but there is one valuable takeaway from Trump's bluster, and that is:


Be a tough investor! Be tough!

I think I am qualified to say this as someone who bought piles of equities all the way to the rock bottom of 2009. Co-workers said I was crazy. People were showing me their trashed 401(k) statements and declaring that they were jumping ship. They sold and locked in horrific losses. I bought when the markets had lost half or more of their value and took full advantage of the years long upswing that followed.

Obviously, don't buy in with money that you have in reserve for emergencies. But people who have a bit extra each month that they can afford to risk, can get great returns by buying in on a big downturn. You have to be willing to take the pain on the way down. In 2008 through the beginning of 2009, my portfolio basically tread water: I'd add new money and buy new shares, and the shares I already had were simultaneously losing value. I won't lie -- it is not "fun" to watch added money result in no net gain in portfolio value, although it was "fun" to see $XYZ buy 2x as many shares as it did only a few months before.

If you want to be a winner like Trump, you must be able to withstand the torrent of negative feeling that market loss can generate in people.

 

[jhm]

I think you are going to be vastly surprised when you finally realize that Tesla (and EVs in general) will succeed regardless of the price of gas. A superior product will always win out. Tesla has one of the most sought after cars in the world, and this will carry them even if gas hits $1 a gallon.

Gas will not hit $1/gal. In the US, the cost to refine, distribute and market gasoline is about $1.25/gallon. Even at $21/b, the cost of oil contributes $0.50 to this $1.25. So at $21/b, gas is still $1.75/gal. At $10.5/b, gas is $1.50/gal.

I would also point out that the investment cost for adding to oil reserves is about $10/b, and this does not include many other operating costs for actually getting the oil out of the ground. So with the price of oil below $20/b, there is practically no motive for expanding reserves. Moreover to maintain production levels reserves must be expanded by about the same volume that is consumed each year, about 34.5 billion barrel. So at least $350B must be invested just to maintain the oil supply. With oil at $30/b, we are looking at total revenue for oil at about $1050B. At that level it makes little sense to plow 1/3 of revenue back into investments. Simply put, the oil supply and reserve levels will decline at current price levels. There is nothing sustainable for the oil industry at these prices. It is a monumental irony that peak conventional oil coincides with a massive fossil fuel glut. But oil cannot push the peak out a few more years without a higher price for oil, but apparently the global economy is finding better alternatives to fossil fuel such that the may never command high prices again, at least not sustainably so.

So I'm not too worried about the price of oil staying low. This is what is necessary to scale back the industry. It's a necessary part of the transition to sustainable transport and clean energy. The longer oil prices remain low, the faster oil declines. If oil got tight again, the price would rise and so would investment levels. But fortunately EVs and renewable energy could also accelerate. But I think the transition actually happens faster when low fossil fuel prices deprive the industries capital to maintain supply.