Tesla Investor's General Macroeconomic / Market Discussion

[DrMazeppa]

Now this conversation should be in the other thread!

I would bet that TSLA follows all other high beta and growth stocks and goes down. Honestly, if you think macros are going to be negative, it wouldn't be the end of the world to pull out of the market entirely, sit on cash, and then go back in at the first sign of anything going well. And I'm not talking about just TSLA. Pulling that trigger seems hard, though, doesn't it?

The next shoe to drop for TSLA will be that Chinese consumers are not buying cars this quarter. Whether or not this directly impacts Tesla sales is irrelevant, the market perception will be negative. On the other hand, Tesla does sell direct, so maybe they'll benefit. I was surprised that TSLA didn't crash on Friday after this article came out:

Coronavirus nearly halts China car sales, down 92%

Well, I was actually following an extremely aggressive strategy with TSLA from November, and I finally deleveraged a bit last week (on Tuesday). My problem is I am still uber-bullish on TSLA (they will keep producing/selling/expanding) but I was getting more concerned by macros. However, I feel like many investors are now jumping on TSLA before Q1 deliveries (exactly the case you show with the China car sales!). Maybe they are betting on Moody upgrades, or early numbers. I did not expect this, I thought I had more time before end of March and so I am not sure if I should get in now. I feel like there could be another rally and I was wondering if in the past there have been stocks on a run becoming beneficiary of a larger market downturn (not a recession, just a moderate dip as central banks will cut interest rates again, and the party will continue - remember January 2019).

We'll soon see I guess.

 

[Cosmacelf]

@Cosmacelf
A _short_ list of democratic socialist policies already in effect in the US
Libraries, public schools, CDC,
non toll roads, firefighters, social security, etc
https://scontent-mia3-2.xx.fbcdn.ne...1dd237f328a3d56479080851415f&oe=5EBE0DA9&dl=1

As I said, I’m not going to debate economic policies, it’s pointless on discussion forums. Everyone has their own mind made up and just wants to tout what they think and/or provide links without any analysis.

This thread is about macro economy...

 

[Cosmacelf]

Well, I was actually following an extremely aggressive strategy with TSLA from November, and I finally deleveraged a bit last week (on Tuesday). My problem is I am still uber-bullish on TSLA (they will keep producing/selling/expanding) but I was getting more concerned by macros. However, I feel like many investors are now jumping on TSLA before Q1 deliveries (exactly the case you show with the China car sales!). Maybe they are betting on Moody upgrades, or early numbers. I did not expect this, I thought I had more time before end of March and so I am not sure if I should get in now. I feel like there could be another rally and I was wondering if in the past there have been stocks on a run becoming beneficiary of a larger market downturn (not a recession, just a moderate dip as central banks will cut interest rates again, and the party will continue - remember January 2019).

We'll soon see I guess.

Yes indeed. If Tesla goes up while other stocks go down, I would expect it to be because of Tesla specific good news, not as a safe haven. Btw China production, and presumably deliveries, look really good:

Tesla, TSLA & the Investment World: the 2019-2020 Investors' Roundtable

 

[JRP3]

The stock market will freak out if either Bernie or Warren get the nomination, calm down when polls show Trump will win, and have a modest bump when he does win.

I'll just point out that some polls already show Sanders as the only Dem who might beat Trump. If desired further discussion can take place in the appropriate thread:
Market politics

 

[HG Wells]

If nominated I will not run.
If elected I will not serve.

 

[mblakele]

OECD predicts slower growth due to virus outbreak | NHK WORLD-JAPAN News

The Organization for Economic Cooperation and Development says global growth is projected to slow to 2.4 percent in 2020, due to the effects of the coronavirus outbreak.

The OECD said in its latest economic assessment report on Monday that global GDP growth could drop from 2.9 percent in 2019. That figure is 0.5 percentage point lower than the previous forecast made last November.

The outbreak is expected to be a drag on a wide range of economic activities, including manufacturing, tourism and personal consumption.

Japan's economy is now projected to grow by 0.2 percent. That's down 0.4 points from the previous forecast.

The OECD also downgraded its forecast for China by 0.8 points to 4.9 percent.

Growth in the Euro area is forecast at 0.8 percent. That's down 0.3 points. Italy's economy is projected to grow 0 percent. The number of new coronavirus cases has been increasing in that country.

The organization expects growth in the United States to be 1.9 percent. That's down 0.1 points.

The OECD warned that economic prospects could weaken considerably, if the coronavirus outbreak lasts a long time and intensifies.

It noted that such a scenario could result in global growth dropping to 1.5 percent in 2020. The organization added that several economies could enter into recession. Japan and the Euro zone are among them.​

 

[mblakele]

Here's an article from 2018 that seems increasingly relevant. Normally central banks try to manage the economy using interest rates — but those are already very low in developed countries. Since 2008 central banks have turned to quantitative easing (QE), creating new money and handing it directly to banks, bondholders, and in some cases equity markets.

Why not send the money directly to consumers? This wouldn't be a one-time check, nor would it be a UBI. Rather it would be a policy tool for central banks.

Central banks should consider offering accounts to everyone

[...]extend the privilege enjoyed by banks, to hold digital money at the central bank, to everyone.

Why, though, would central banks want to do so? One answer is that individual accounts could help them with their monetary-policy mission. At present, they manage interest rates across the economy indirectly, by adjusting the rates banks earn on their reserves. But these are passed on only imperfectly to consumers. At the moment, banks in America can earn a short-run, risk-free interest rate of about 1.75% (those in Europe and Japan earn less). Current accounts at private banks, meanwhile, pay approximately nothing. In a world of individual central-bank accounts, in contrast, the rate paid on individual deposits would become a potent policy tool. Rate changes would have a direct, transparent effect on depositors. And were central-bank digital money to account for a big share of transactions, swings in such spending could become a useful real-time source of data for policymakers.

The accounts would come in especially handy when near-zero interest rates leave central banks with few good options in a crunch. The effects of QE diminish over time, particularly when crisis-induced breakdowns in credit markets begin to heal. Central bankers could be more confident in the stimulative effect of what Milton Friedman termed “helicopter money”: distributions to the public of newly minted dosh.

[...]​

 

[steve3]

Chamath Palihapitiya on How To Invest in This Crisis, interviewed on April 1, fairly recent. Lengthy at 1 hr 22 minutes, very informative. Among many topics, he shares personal development aspirations, let’s us see a bit under the hood; how he’s assessing current business climate & what it means for asset allocation looking forward. At some point, maybe go public...next Berkshire??

 

[mblakele]

It's worth reading this whole blog post, but I thought this chart was especially relevant.

An Early View of the Economic Impact of the Pandemic in 5 Charts

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[defc0n]

What happens next in these next months?

 

[mblakele]

Expensive stocks do not necessarily mean a crash is close

[...]

The chart shows the long-term average for the CAPE ratio going all the way back to 1881 (market data from before 1957, when the S&P 500 was founded, are estimated). But the ratio has only briefly dipped below that average in the past 30 years, in the aftermath of the Great Recession that followed the financial crisis of 2007-09. Avoiding equities on the grounds that they looked expensive, in historical terms, would not have been a successful strategy. It may take some extremely bad news—the return of high inflation or a government attack on the corporate sector—to drive the ratio back down to the level seen for much of the 20th century.​

 

[Skryll]

And here we are December 15th, 2021 and the new macro is as scary as the old one, but no crash yet...

 

[DarkandStormy]

Expensive stocks do not necessarily mean a crash is close

​

​

[...]​

​

The chart shows the long-term average for the CAPE ratio going all the way back to 1881 (market data from before 1957, when the S&P 500 was founded, are estimated). But the ratio has only briefly dipped below that average in the past 30 years, in the aftermath of the Great Recession that followed the financial crisis of 2007-09. Avoiding equities on the grounds that they looked expensive, in historical terms, would not have been a successful strategy. It may take some extremely bad news—the return of high inflation or a government attack on the corporate sector—to drive the ratio back down to the level seen for much of the 20th century.​

The market has only been more expensive (relative to earnings) during the dot com bubble.

 

[voyager]

I'd like to see Tesla sort of 'outgrow' its rather limited scope of developing and selling electric cars.
There is a huge void between micro-mobility (two-wheelers) and cars which have grown steadily more obese.
And I don't mean bring a Tesla hatchback. Other car companies are better at that (I guess).

 

[petit_bateau]

A couple of papers just resurfaced and which may interest folk here. Not new papers, but nonetheless relevant in the context of the perennial tensions with both Russia and China that are once again on the boil.

https://www.brookings.edu/wp-content/uploads/2016/06/lukin20030328.pdf

https://www.degruyter.com/document/doi/10.1515/9783110420722-013/pdf

 

[JRP3]

I'd like to see Tesla sort of 'outgrow' its rather limited scope of developing and selling electric cars.
There is a huge void between micro-mobility (two-wheelers) and cars which have grown steadily more obese.
And I don't mean bring a Tesla hatchback. Other car companies are better at that (I guess).

We've seen no evidence that other companies are better at any type of EV automobile. However there are plenty of companies making good E-bikes and scooters, plus Elon has flat out said he doesn't want to do motorcycles.