dreamingof3
Member
Nope- just commenting on the short term price movements of Tesla stock. Which is this forums title.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
- Status
dc_h
Active Member
Thanks. I see Sig 502 is just being delivered. Getting Sig closure and into production would be good news. Hearing they are producing above 238 a week, would be especially good news.
We remain caught in the market-maker tractor beam this morning. Take a look at the graphs for trading of NASDAQ and DOW today and then look at the graph for TSLA. While the DOW and NASDAQ are reasonably in synch, TSLA is doing its own thing today on no news. This looks like manipulation. The trick is to figure out how to use that manipulation to your advantage. The Monday opening is typically up during the first half hour if the broad markets are behaving themselves. There's a temptation to buy a weekly call to try the Friday to Monday play, but in this environment short term calls are typically poor bets. I may buy a June call later today with the plan to sell in Monday morning if we get a nice bump. If that strategy doesn't work, I have nearly half a year for TSLA to rise. I'm keeping a little powder dry these days because of the crazy markets, but I'm willing to invest some of that dry powder in a conservative short-term bet if I think the risk is low enough.
The Blue Owl
Endangerous Herbivore
Warning: this is purely my gut feeling based on everything I'm seeing in the news and various commenting sources. I am not a financial expert nor an economist, so you should take this as simply the best guess of a layman, FWIW.
My bet is that we will continue to see short/medium term volatility, partly due to China, but especially due to the uncertainty injected into the market by the collapse of oil prices. I think this collapse is going to prove more or less permanent, as the Saudis pretty much shouted it to the world. We may never see the higher prices of the recent past ever again, primarily due to the fact that renewables have gotten to the point where it makes more sense to invest in them rather than fossils (some interesting commentary on this subject; also I highly recommend the posts of our own jhm spread over several TMC threads).
I am betting that the China situation is going to be less catastrophic than the loudest voices proclaim, and that most of it has been priced in already. Pretty much everyone assumes 6.5% is not 6.5% (I have seen first-hand how official reporting goes in one-party-rule countries when organic waste hits the fan). There is a risk that all that misguided over-investment, bad loans, plus the general population savings being decimated by the collapse of the stock market will not be contained and everything will collapse, because in principle anything can happen, but I think this risk is low and that China will eventually just chug along at a lower speed than before.
The oil prices are shocking the high-cost producers in the US and elsewhere, but other areas of the economy are benefitting more and on balance this is going to be a net positive. My guess is that the bankruptcies, job losses, and investment losses stemming from the oil price shock will be painful, but not systemically dangerous. I think the US will not grow at more than around 2% this year, if that, but grow it will. I believe all the talk about a US recession is due to the market remembering all-too-well the recent pain from 2008, and will not come to pass.
We went through similar low-sentiment period full of anxiety several times recently. Every time the risks were real, but it's also true that every time it turned out it was a good moment to buy ("Is it the cold weather, or is the US entering recession?" "Is Russia going to stop at Ukraine, or will it challenge NATO in the Baltics?" "Will Grexit happen, and will it drag the whole EU into the toilet, or will they muddle through?").
In short, there are sharks in the water, but the question is whether they will actually jump in the boat. I'm betting they won't, but I have my harpoon ready. When we hit $200, I converted my stock to cash and 2018 LEAPS. Cash to be able to survive a big drop which I don't really think will happen but just might, and LEAPS to capture the massive appreciation of TSLA that I expect will happen this year, but might not. One thing I know for sure: there are really good investors on this board and out there, who can give you a better-informed opinion; this is all I've got, but I thought I'd put it on the record.
PS: The Ashlee Vance book will not disappoint you. Turns out there is more to Musk than even his admirers might think. (Yeah, I am a fanboi. Deal with it.)
Last edited:
The first material good news that I would expect to see would be from the tracking of US vehicle registrations. For it to be extremely good news we would need to see a healthy run of Model S in addition to confirmation of the Model X ramp remembering that Model X sig editions are not excellent from a cash flow perspective because of parts and materials purchasing but more importantly because Sig editions have $40K cash deposits deep in prehistory and not in Q1. If there is a decent chunk of production Model X in the delivery mix in January because the sigs are already delivered then that is very good news for the whole quarter.
The real curve ball (for the shorts) to make a great Q1 will be Model S and Tesla Energy. Tesla energy I think (I don't know but I think) will be almost 100% cash flow positive as a result of drawing on existing cell inventory abandoned by the shift to the silicon carbon anode cell used in the Model X 90s and 90KWh Model S packs.
Backing up a bit. There was a recent article about Tesla suing a supplier over an actuator for the falcon wing doors. The article misrepresented the supplier as an out-sourced designer of the actual doors which doubly misses the significance here.
It is easy to imagine Tesla specifying a design for these doors based on hydraulics. This is a simple design concept that allows a hydrostatic gear pump to be positioned just about anywhere convenient and taking flexible hydraulic lines to little hydraulic rams to exert immense torque in small spaces. The suppler apparently agreed that they could deliver the actuator system to required quality and specifications and Tesla apparently went ahead and designed the car and its production tooling based on that commitment. Then the hydraulic system proved inadequate precipitating a redesign and re-tooling of the entire door architecture and the adjoining bodywork and hence the tooling for the 'entire car' according to Tesla. Having got that to work with the electric actuator Elon no doubt insisted that they apply the electric actuator to the front doors too. Hence a considerable source of Model X delay - but one that brought the Model X program in range of production readiness for the silicon carbon anode cell for the 90KWh packs and resulting 250/257 mi range instead of the circa 235/240 mile range that would have resulted from going with the standard 85KWh packs. Hence the final Model X gating delay could well in fact be argued as waiting for the cell to be validated and go into production (even more so than the seat supplier debacle or the door actuator supplier debacle).
Regards the law suit, Tesla is suing for a declaratory judgement that it does not have to pay more than it did but more importantly Tesla is suing for damages that incorporate the entire Model X re-tooling and re-testing and in theory that would incorporate losses as a result of program delay. The suppler has been around since 1985 and turns over a $billion or so annually and can probably pay if Tesla wins. Whether Tesla will win damages or not I don't know, a judge may simply grant them the declaratory and dismiss the damages claim as retaliatory and vexatious, but this is a significant windfall in prospect if it does win.
Last edited:
Completely understand your frustrations, many have stopped posting trades & sharing opinions in this thread for the exact same reasons. Weighing risks while considering all aspects not just hope & hype have served me well, so I wish you profitable trading in TSLA in the future.
Panic selling at the bottom is the main risk to wealth at present. Panic buying is not good either. Trading discipline is good.
Despite some personal comments on this thread, and even trivia posted by myself, the discussions above referenced include some extraordinarily sophisticated conversations about battery technology and oil's effect on markets. This site remains the absolutely most important source of information about the economy and TSLA in particular. Despite the aforementioned faults, this site has some of the best thinkers this investor has encountered.
Be justly proud.
I think you could see more contraction than that if TSLA doesn't show close to cash flow break even in Q1. The risk would shift to financing while maintaining a high burn in a down market environment. Not a good place to be.
On other hand if cash flow looks good in Q1, along with strong S pipeline and significant ramp in X production then I think we have a lot of room to the upside in a flat to up market environment. I really don't see the scenario in which TSLA hits $285 in a full bear market even if execution is perfect.
I completely dispute the post where they claim they saw 3 non-Sig X's ready for delivery in Syosset, NY. We're Sig X VIN 897 and as of two days ago, our DS claimed that the car hadn't even finished general assembly and that we have, at a minimum, 18-25 days after production completes before we get our vehicle. Plus, does Tesla really want the ire again from the Model S days of production cars being delivered before all Sigs? Unlikely.
It also brings up an unfriendly statistic. If Tesla hasn't gotten around to building 897 yet, then there has likely been little ramp of the X over these past three weeks.
Thanks Rhino, I appreciate taking the time to respond.
I'm also comparing the current situation with the other recent anxiety-induced downturns... But the problem is I was fairly confident those were unsubstantiated and that's exactly why I'm out of ammunition now and my biggest regret is not saving some for after Jan '18s became available. Converting stock to cash and leaps sounds like a very good strategy.
But I think this time is different (not meant to sound gloomy). It's different in that it is a real sustained fundamental shift. It was ridiculous to think that Russia would go to war with NATO, or that, Grexit or not, the Euro would disintegrate. But it's not ridiculous to think that renewables are replacing oil for good (they are), and China is transitioning to a moderate growth service economy from a hyper growth manufacturing one (it is).
While both of these fundamental shifts are good in the long run, it is apparently causing irrational market fear, and I'm trying to figure out how long that could last. And also, if it would be a fundamental market reset, as in, pricing in lower global growth as the new normal for a long time to come.
Anyway, that's turning into a topic for the long-term thread. Short term I think we should see some relief in TSLA on any confirmation (Elon tweet or Q4 CC) that the Model X ramp is going fine, which seems to be the case. I think they will be conservative with delivery guidance for 2016 at 75k, and that is probably priced in, but if we see 80k+, I hope the market will react.
I'm also comparing the current situation with the other recent anxiety-induced downturns... But the problem is I was fairly confident those were unsubstantiated and that's exactly why I'm out of ammunition now and my biggest regret is not saving some for after Jan '18s became available. Converting stock to cash and leaps sounds like a very good strategy.
But I think this time is different (not meant to sound gloomy). It's different in that it is a real sustained fundamental shift. It was ridiculous to think that Russia would go to war with NATO, or that, Grexit or not, the Euro would disintegrate. But it's not ridiculous to think that renewables are replacing oil for good (they are), and China is transitioning to a moderate growth service economy from a hyper growth manufacturing one (it is).
While both of these fundamental shifts are good in the long run, it is apparently causing irrational market fear, and I'm trying to figure out how long that could last. And also, if it would be a fundamental market reset, as in, pricing in lower global growth as the new normal for a long time to come.
Anyway, that's turning into a topic for the long-term thread. Short term I think we should see some relief in TSLA on any confirmation (Elon tweet or Q4 CC) that the Model X ramp is going fine, which seems to be the case. I think they will be conservative with delivery guidance for 2016 at 75k, and that is probably priced in, but if we see 80k+, I hope the market will react.
If macro turns bad and we enter recession then I definitely think Tesla will be closer to 2 P/S than 5 P/S. So end 2016 long options position is as much betting on macro not getting bad as Tesla's execution.
I personally think macro conditions will hold up because of Europe getting better and I would also think that China's growth is maybe in the 1%-3% range even now. Entering recession with central bank rates this low would also be unexpected...
Last edited:
DJ Frustration, Thanks much for this data point. It's helpful. We know that Tesla batches cars depending upon options, and what we don't know is whether you're near the end of the line, even though your VIN number is below 900. We have heard that some non-signature P90Ds have entered production, and perhaps we're seeing some batching with both signatures and production models. Nonetheless, I agree that with your signature X not yet finished, having 3 non-sign Xs ready for delivery in New York sounds rather far-fetched.
I was hoping that the Model X reservation holders that were around for the s launch would realize that production x, s will certainly be delivered before all sigs are done.
Due to the way they batch orders and how the scaling approaches an exponential curve this would be impossible to avoid without holding back orders while waiting on sigs to be delivered. I've never seen them promise that all signatures will be delivered before any productions.
This occured to me too, in addition to logistic practicalities there is an incentive to mix in production deliveries asap as a result of better cash flows from calling down the balance of sale after a $5K deposit as opposed to the balance after a $40K deposit. No matter what, production X deliveries is good.
Last edited:
Causalien
Prime 8 ball Oracle
Orders for automakers are generally up. Chinese automaker orders went up significantly. TSLA orders unknown (i.e. not possible to parse data, so that it is not ambigous.)
The Blue Owl
Endangerous Herbivore
With apologies to everyone for posting off-topic. I promise it's the last post on this topic from me, but I have to respond to this since it's being repeated.
Austin, you may have directed this at someone else, but in case you were referring to my posts: I resent and reject this characterization.
I admit that in the past I have overestimated tftf's ability to provide much insight. I got less and less interested in his posts over time, on account of his being completely impermeable and incessantly repetitive. But I have no interest in, or record of, defending and feeding the obvious trolls. Today I meta-posted because a valuable contributor (in my opinion) left after a heated argument had spiralled out of control. It could have been seen as a two-person conflict of no real consequence, but I beg to differ. The quality of the board is in everyone's hands. Bulls don't need defending over here. Worse, jesselivenomore wasn't even being a bear. He was disagreeing with another poster, while stating his own view with plenty of qualification. He did get carried away unfortunately, as he admitted, but him leaving in a huff is a loss.
It's easy for the cool kids in the hallway to say "we could do with less drama" and walk away, but I want to make money and I have a direct interest in the quality of information. So please keep this type of attribution to yourself.
CyberDutchie
Active Member
Meet Model X event reached capacity within the hour! Good news: lots of interest in Model X. Bad news: I was too late 
Zhelko Dimic
Careful bull
I was so thrilled to see you join to have another actual finance professional here, and am thus significantly sad to see you go. I do hope you keep in touch but I share your frustrations about the deteriorating quality of contributions and analysis in this thread/forum, and fear this board could go the way of Yahoo if we lose every professional investor and analyst to a sea of cheerleaders. So I do hope you will drop in from time to time.
Thanks again.
- Status
Similar threads
- Locked
