Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Mokuzai]

Don't think we want Tesla selling rabbits, had enough of PETA with steering-wheel-gate...

Don't forget the shift knobs!

 

[elasalle]

Explain this please. I only see IV @76% on ameritrade.

Implied Volatility for Trading Options
Implied volatility (commonly referred to as volatility or IV) is one of the most important metrics to understand and be aware of when trading options. In simple terms, IV is determined by the current price of option contracts on a particular stock or future. It is represented as a percentage that indicates the annualized expected one standard deviation range for the stock based on the option prices. For example, an IV of 25% on a $200 stock would represent a one standard deviation range of $50 over the next year.


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Learn About Implied Volatility

 

[tslagreen]

I get the feeling that people like this believe we have put the same amount of thought into our Tesla investment as they have (an hour, tops?)

They have no idea how deep we’ve gone

Like many others, I have had my share of "advice" from friends and family. 3 of my friends, in particular, all of whom are in the finance industry have taken jabs at TSLA. The first, probably about 3-5 years ago when it was trading around $250 said it was only worth about $75 and of course compared it to ICE auto manufacturers. The second friend recommended I sell most of my TSLA holdings as it had a "ton of debt." The third friend has been making the same arguments to me for 5+ years - his latest hit is that competition is coming. Same, sad excuses over the years despite the current SP, continued growth and growing disparity between Tesla and the "competition."

 

[Cosmacelf]

Thanks for pro-tip, Phil. I didn’t know you had a lot of journalism experience. Also, Isaacson is a lightweight historian who tends to overlook important facts, misleads readers with historical inaccuracies you could sail a Glovis ro-ro ship through, and doesn’t do the deep homework, but whatever. And the taken out of context argument seems reasonable on the surface but is not at all the issue here.

Everybody is shooting from the hip here. This is not adding value, just spreading ignorance. I recommend returning to learned speculation on stock price.

I thought the *previous* post was going to be your last on this subject after you had already said an earlier post was going to be your last. I'm so confused.

What's your author page at Amazon again?

 

[Unpilot]

I get the feeling that people like this believe we have put the same amount of thought into our Tesla investment as they have (an hour, tops?)

They have no idea how deep we’ve gone

Deep

Like many others, I have had my share of "advice" from friends and family. 3 of my friends, in particular, all of whom are in the finance industry have taken jabs at TSLA. The first, probably about 3-5 years ago when it was trading around $250 said it was only worth about $75 and of course compared it to ICE auto manufacturers. The second friend recommended I sell most of my TSLA holdings as it had a "ton of debt." The third friend has been making the same arguments to me for 5+ years - his latest hit is that competition is coming. Same, sad excuses over the years despite the current SP, continued growth and growing disparity between Tesla and the "competition."

Some people have friends...outside of TMC?

Strange.

 

[ReddyLeaf]

I just, by accident, looked at the price of a 610 put for Jan 2022. Over a hundred dollars!

I mean... uh... I'm, I'm not using that margin right now anyway... it's just sitting there...

edit: I am weak.

Pretty crazy for such a sure bet, but you don’t need to go out so far. I sold a Jun 800p for $131 last Thursday. It’s down to $118 now and I’ll probably hold it until some big news pops the SP. Since it’s fully cash-secured, it works out to near 35% annual interest. Worst case, I end up buying at $669 effectively.

 

[LN1_Casey]

Pretty crazy for such a sure bet, but you don’t need to go out so far. I sold a Jun 800p for $131 last Thursday. It’s down to $118 now and I’ll probably hold it until some big news pops the SP. Since it’s fully cash-secured, it works out to near 35% annual interest. Worst case, I end up buying at $669 effectively.

Well, I only had enough margin leftover from my current put-purchased Wheel shares to cover a put SP of 610, which was why I was looking at that price in the first place. The closer dates didn't really make it worth the inflexibility of losing that margin leverage.

But I will certainly keep that in mind for when my Wheel shares are called away and my margin goes back to normal. Weeklies are fun, but maybe I'll start doing Monthlies for puts instead.

 

[Artful Dodger]

I've got to be honest, I don't know much about margin trading or options... My plan for next year was to "retire" and then just sell a few shares of TSLA from time to time to pay the bills

This topic comes up here in Main from time to time, for instance:

Schwab calls it a Pledged Asset Line (PAL) h/t @sroh​

There's a few experts here that may be able to provide more color.

When the time comes that I need some larger chunks of money (oh, say a new house or maybe something in plaid), I will pursue such a personal line of credit.

The interest on this loan will grow far more slowly than the value of my pledged assets (TSLA shares), which I get to retain. But frankly my retirement income will already be over 2x my expenses, so I have the luxury of choosing my time.

I'll choose a line of credit product that doesn't require monthly payments. Eventually, a lump sum from my estate will pay off the loan. Meanwhile, the value of my retained shares will grow far faster than the interest on the line of credit.

Cheers!

 

[j6Lpi429@3j]

Tesla just started their move into israel:
Tesla Moves Into Israel With Fairly Low Prices

Tesla also plans to install Superchargers in Tel Aviv, Haifa, Eilat, and Be’er Sheva with its V3 Superchargers in Tel Aviv and Haifa.

 

[Fred42]

As an early reservation holder of the Rivian R1S, I’m more than a bit annoyed that Amazon was able to jump the line and get their vans first. Rivian even used the excuse of the coronavirus as the reason their consumer vehicles weren’t delivered last year, which I guess was total bollocks given the appearance of the Amazon van.

Fleet sales to Amazon and others might be where the revenue and profit will be for Rivian. Retail vehicle manufacture is a very tough business. I'd say you're lucky they haven't put the R1S on a shelf at least for a while as they grow the fleet van business.

 

[WattsHappening]

This topic comes up here in Main from time to time, for instance:

Schwab calls it a Pledged Asset Line (PAL) h/t @sroh​

There's a few experts here that may be able to provide more color.

When the time comes that I need some larger chunks of money (oh, say a new house or maybe something in plaid), I will pursue such a personal line of credit.

The interest on this loan will grow far more slowly than the value of my pledged assets (TSLA shares), which I get to retain. But frankly my retirement income will already be over 2x my expenses, so I have the luxury of choosing my time.

I'll choose a line of credit product that doesn't require monthly payments. Eventually, a lump sum from my estate will pay off the loan. Meanwhile, the value of my retained shares will grow far faster than the interest on the line of credit.

Cheers!

I haven't done anything on this yet. As far as I'm concerned, it's yet another tool in the investor's tool box. It will work for some, not for others, depending on the situation.

I used to be all about minimizing debt. I paid off my credit card purchases every month, paid cash for cars, etc. Every once in a while, I would pay additional to lower our mortgage principal. When you have a diversified portfolio earning market returns (say 7-10%), the idea of using cash to pay down debt or pay for large purchases makes sense, even if the cost of capital is lower than your returns. The idea of borrowing against my stock would not have even crossed my mind.

BUT, as @Artful Dodger and others have pointed out, if you expect (as I think most of us here do) TSLA to have much greater returns, using cheap debt to finance purchases/expenses may be the right call.

 

[Artful Dodger]

After-action Report: Thu, Feb 04, 2021: (Pre+Main Session Trading)

Headline: "TSLA takes Early Dip then Treads Water"

Pre-Market:

Volume: 279,550
SP High $860.23
SP Low $854.40​

Main Session:

Traded: $13,117,173,086.64 ($13.12B)
Volume: 15,534,902
VWAP: $844.37

Close: $849.99 / VWAP: 100.67%
TSLA closed ABOVE today's Avg SP
TSLA MaxPain (7:00 A.M.): $840 (+$2.50 from Wed)​

TSLA S&P 500 Weight: 2.004892% (Feb 03)
Mkt Cap: TSLA / FB $805.706B / $758.876B = 106.17%
NB: Yahoo hasn't updated Mkt Cap re 7.91M shares issued Dec 11th

CEO Comp. Status: (est'd Mkt Cap including Dec 11th shares ~$6.72B)

TSLA 30-day Closing Avg Market Cap: $800.90B
TSLA 6-mth Closing Avg Market Cap: $505.06B

Mkt Cap req'd for 8th tranche ($450B) likely achieved Tue, Jan 19, 2021
Mkt Cap req'd for 9th tranche ($500B) likely achieved Wed, Feb 03, 2021
Nota Bene: Operational milestones req'd (chart at link).
​

'Short' Report:

FINRA Volume / Total NASDAQ Vol = 45.1% (44th Percentile rank FINRA Reporting)
FINRA Short / Total Volume = 36.0% (43rd Percentile rank Shorting)
FINRA Short Exempt ratio was 0.85% of Short Volume (49th Percentile Rank Exempt)​

QOTD: "I ask you to judge me by the enemies I have made." -- FDR

Comment: "We need a Hiro"

View all Lodger's After-Action Reports

Cheers!

 

[MC3OZ]

This sums up the real problem we have in trying to save the world from catastrophic climate change, half the world is currently run by crazies or\and dictators who care for nothing beyond their own power and wealth during their expected lifespan.

On the other hand, the imminent decline of the Fossil Fuels industry means a lot of those crazies will no longer have the money or incentive to sow discord.

A lack of people trying to deliberately sow social division will seem like increase social harmony.
All the technological innovations for clean energy and transport and other new technologies, should make day-to-day life more pleasant and rewarding for the bulk of the human population.

Peace always happens after one side in the war is defeated, the Fossil Fuel industry are heading for a crushing and total defeat, and most of them more than deserve it.

 

[AZRI11]

Is it written by Russ?

 

[Prunesquallor]

I've got to be honest, I don't know much about margin trading or options. For my entire life I've just bought shares in companies I was confident in (or VOO) and held long term. Now and then I'd sell some long term shares to move the money into other long term stocks.

My plan for next year was to "retire" and then just sell a few shares of TSLA from time to time to pay the bills and buy myself stuff. Maybe I need to learn about margins now that I have bucket loads of money in my accounts....

No, no, no margin. Most collateral accounts do not allow margin or options. Just check with your broker and see if they offer line-of-credit loans with your shares as collateral. The loan is treated sort of like margin (loan amount available based on your portfolio value, if portfolio value falls, you may be required to pay off part of loan). But as mentioned above, *usually* the interest rates appear quite low and no minimum payments are required.

My strategy will be:
1) at the beginning of the year, borrow amount needed for that year’s income supplement
2) pay off (at least) loan interest amount every month to avoid interest-on-interest
3) when loan amount get uncomfortably high (whatever that means), look for opportune time to sell some shares and pay it down

The point being that TSLA SP is compounding at some ridiculous annual rate while your loan amount is compounding at 2-3%. The longer you feel you can delay selling shares to pay down the loan, the richer you stay.

Not without risks - black swans, etc. Hence the “uncomfortably high” comment above.

@Lycanthrope will tell you do options. He may very well be right. I honestly don’t understand them well, so won’t bet my retirement on them.

As others have pointed out, there is a thread dedicated to these discussions.

edit: what @Artful Dodger said

 

[MC3OZ]

Spoofing the car shouldn't be required. It doesn't seem like a challenge for Tesla to have all the fast DC charging stations mapped so they can treat third party chargers in the same manner as a Supercharger (for purposes of battery conditioning).

It does seem a lot of the problem can be fixed by software updates and some of it has.

A LFP Model 3 is an ideal city (Robo-)taxi or rideshare charging to 100% overnight each night.

For long road trips in cold climates, some planning/compromise is currently needed, software upgrades can overcome the part of the problem,

 

[Prunesquallor]

My original plan was to sell on Oct 27, 2027.

However, based on what we now know about Tesla's product roadmap, I'll revise that:

NEVER.​

Lol, c.f. discussion above about borrowing against the value of your shares. When TSLA growth drops below 2.75% per year, then it's time to sell to pay off the loan (and NOT before!).

I reckon Tesla growth will still be above 25% through 2040, long into my retirement. By then it'll be SpaceX and asteroid mining (not just Starlink).

I'm riding this Elon train to the last stop (even if AI eats the visible Universe).

Cheers!

Unfortunately, for the next few years, Tesla is still vulnerable to Black Swans - either at Fremont or Shanghai which could set us back many years.

When Shanghai, Berlin, Austin and a thitd US Giga are at full capacity, I will sleep well.

edit: I’ve lost track of “Giga” nominclature. Loss of either Nevada or Buffalo would be severe. We’ve got a ways to go before we can lean back in the leather chair with our brandy snifter and declare success.

 

[marvinat0rz]

Not a fan of the idea of borrowing against shares IMHO, especially in a crazy-volatile stock such as Tesla. You're taking on enough risk just by owning it.

Amazon, for instance, fell more than 90% from its top in late 1999, before growing to the unstoppable behemoth it is today, 20 years later. Tesla's growth curve (in terms of revenue) will likely be much steeper than that, but it's a stark reminder that surprises can happen. In a 90% drawdown, you'd have to be unreasonably conservative in your spending not to get margin called and lose your entire position at the worst possible time. Someone who is that conservative probably wouldn't decide to get such a loan in the first place.

If it's for a tiny portion of your position that you could easily cover with other means, and it's for tax reasons or something like that, sure. But I don't get the impression that's what we're discussing. Exposing yourself to a risk of ruin isn't something to be taken lightly.

 

[JustSaying]

I might just do that later on. Right now I'm minimizing my debt while negotiating a mortgage.



I know. But not an option (sic) on the type of investment account I use. And it sounds too much like work.

These are a couple of good threads on the retirement issues:

How to best sell down when retired - and options are not possible

How much $ to retire and how to fund your lifestyle in retirement

Early retirement strategies

OT (maybe)
I am 70 and retired, I sold enough Tesla stock a few months ago that we now have enough cash so that I don't have to worry about the day to day Tesla share fluctuations
( I hope those shares were bought by someone that "bought on the dip" and will hold them to enrich their life).
The remaining shares are for our kids .
Lived thru the dotcom bust, but had the time to gain it back.
Sold our SOCAL home in April 2007, rented for a while and later bought a nicer place a block from the beach and pocketed the change.
The point is I could afford to wait out market swings when I was younger and still sleep easy.
Now we are on to experiences that cash can buy and not stuff of which my wife an I agree we have enough.
(One exception, I can't wait until we get a delivery date for our new refreshed Model S)

 

[goinfraftw]

Not a fan of the idea of borrowing against shares IMHO, especially in a crazy-volatile stock such as Tesla. You're taking on enough risk just by owning it.

Amazon, for instance, fell more than 90% from its top in late 1999, before growing to the unstoppable behemoth it is today, 20 years later. Tesla's growth curve (in terms of revenue) will likely be much steeper than that, but it's a stark reminder that surprises can happen. In a 90% drawdown, you'd have to be unreasonably conservative in your spending not to get margin called and lose your entire position at the worst possible time. Someone who is that conservative probably wouldn't decide to get such a loan in the first place.

If it's for a tiny portion of your position that you could easily cover with other means, and it's for tax reasons or something like that, sure. But I don't get the impression that's what we're discussing. Exposing yourself to a risk of ruin isn't something to be taken lightly.

...did you get the principles and examples in that post from this podcast?