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

[Right_Said_Fred]

I think this is incredibly risky strategy. A big drop -- and there could easily be a big drop for lots of reasons beyond "Musk rushed to hospital w covid19 symptoms" -- could wipe out 30 x the money you make from the sale.

It isn’t any riskier than selling and hodling common shares. In fact, you receive the put premium as a bonus. So if you don’t mind getting extra shares and then keeping them (or selling covered calls against them) there’s no extra risk involved.

 

[Right_Said_Fred]

I sell weekly puts against $145k of cash capital I have in my trading account and am currently adding $5-10k a week extra from premiums. When the puts occasionally get exercised, I either sell a covered call for more premiums or, as was the case with "the Tweet" a couple of weeks back, just sell the shares the following week for more profit and then sell another put against the cash. Rinse-repeat.

This makes money while the SP is wandering about in a bounded range. It also keeps me in cash most of the time in case of a big drop (lesson learned from C19).

I have my core shares that I sell covered calls against - I don't want them called away, so I tend to target above strikes that are protected with existing call volumes. This is less profitable and I started using the premiums to buy extra core shares - bought extra $TSLA in the last couple of weeks.

So yeah, HODLing is great, but you can make money with your capital as well, seems crazy not to, actually.

Not an advice, but my trading account was $3k in September, hit $180k just before C19 and now is around $220k.

Plus it's entertaining to have some skin in the game every Friday - adds a bit of spice to proceedings or was it stress...?

This is exactly what I’ve been doing with 135k from the proceeds of selling my 1000 core shares during the corona drop and buying them back at a lower price. I used the money to set up a ‘play’ account and have been selling puts (700 and 750). I’ve been able to add 12k in a month. I don’t understand how you’ve been able to add 5-10k per week. The premiums for the weeklies are too low for that. What’s your secret?

 

[ZachF]

This is kinda fascinating -- FOX News switching sides to cheerlead for the quarterback of sustainable energy. Well, they've switched sides before on other issues (e.g. Trump several times). Their audience of critical thinkers doesn't seem to notice.

More fascinating is a Cleantechnica story today claiming the Trump administration has dropped the coal and natgas industries like a hot coal, and somehow now supports Obama-style clean energy.
Mammoth Solar Power Plant Drives Another Nail Into US Coal Coffin

A stopped clock can be right twice a day... maybe more if you drop it on its head a few times.

It's becoming painfully obvious where the energy industry is moving. nobody wants to be the guy defending the horse drawn carriage. The 2012 Mitt Romney talking points might as well be from another era.

The late 2010s was the switch to gas.

The early 2020s will be the switch to gas/RE/storage hybrid.

The late 2020s renewables and storage eat everything.

 

[Fishy Fish]

The Intercept's latest Deconstructed podcast covers Elon and this week's Fremont drama in an interview with California Assemblywoman Lorena Gonzalez.

Haven't listened to it yet myself.

Deconstructed Podcast With Mehdi Hasan

Edit: Not much more than 3 people talking negatively about him and the situation who all more or less start by saying they disapprove of him. No context on the unique local county lock down situation relative to surrounding areas, or the impact on the company or employees by keeping plant closed, or the greater headwinds faced by starting a car company in a market with entrenched oil and gas subsidized competition

 

[Christine69420]

Premarket going down to -13 to 776. And Opricot says Max Pain is 765.

I think I have heard this weekend tune before.

 

[Rammstein]

I sell weekly puts against $145k of cash capital I have in my trading account and am currently adding $5-10k a week extra from premiums. When the puts occasionally get exercised, I either sell a covered call for more premiums or, as was the case with "the Tweet" a couple of weeks back, just sell the shares the following week for more profit and then sell another put against the cash. Rinse-repeat.

This makes money while the SP is wandering about in a bounded range. It also keeps me in cash most of the time in case of a big drop (lesson learned from C19).

I have my core shares that I sell covered calls against - I don't want them called away, so I tend to target above strikes that are protected with existing call volumes. This is less profitable and I started using the premiums to buy extra core shares - bought extra $TSLA in the last couple of weeks.

So yeah, HODLing is great, but you can make money with your capital as well, seems crazy not to, actually.

Not an advice, but my trading account was $3k in September, hit $180k just before C19 and now is around $220k.

Plus it's entertaining to have some skin in the game every Friday - adds a bit of spice to proceedings or was it stress...?

Are you selling these Puts at the money?

 

[Sudre]

Two missing ingredients are reduced costs and the production ramp. These are what the market wants to hear and Tesla must address on Battery Day.

This Twitter account has confirmed cred?

My fear is all those tweets setup a sell the news moment since it will be considered nothing new. If Tesla announces anything less than what was tweeted they totally failed. One has to consider how the news hours and bears like to twist information.

 

[Reductionist]

This could be massive if true, highly recommend reading the entire article:
Exclusive: Tesla's secret batteries aim to rework the math for electric cars and the grid - Reuters

Key sections:

• "Tesla Inc plans to introduce a new low-cost, long-life battery in its Model 3 sedan in China later this year or early next that it expects will bring the cost of electric vehicles in line with gasoline models, and allow EV batteries to have second and third lives in the electric power grid."
• "Tesla’s goal is to achieve the status of a power company, competing with such traditional energy providers, sources said."
• New "million mile" Battery to be a joint development between Tesla and CATL, significant technology contributions from Tesla
• Improved versions of this battery (better density, lower cost) will eventually be rolled out internationally
• "Tesla’s plan to launch the new battery first in China and its broader strategy to reposition the company have not previously been reported. Tesla declined to comment."
• "Tesla also plans to implement new high-speed, heavily automated battery manufacturing processes designed to reduce labor costs and increase production in massive “terafactories” about 30 times the size of the company’s sprawling Nevada “gigafactory”"
• Tesla to be working on battery recycling and second life applications, plans to become electric utility
• "CATL also has developed a simpler and less expensive way of packaging battery cells, called cell-to-pack, that eliminates the middle step of bundling cells. Tesla is expected to use the technology to help reduce battery weight and cost."
• "The cost of CATL’s cobalt-free lithium iron phosphate battery packs has fallen below $80 per kilowatt-hour, with the cost of the battery cells dropping below $60/kWh, the sources said. " (keep in mind that LFP chemistrys only work for lower range EVs, ie the SR+ M3, due to their low energy density of ~160 Wh/kg. The LFP discussion is pretty much independent of the new cell tech, and mainly a way on increasing margins on the chines SR+ as far as I can tell)

 

[Sudre]

Premarket going down to -13 to 776. And Opricot says Max Pain is 765.

I think I have heard this weekend tune before.

Yup... they have been raising max pain all week. I think they are shooting for something similar to last week. I was hoping we could beat them at their game but they had the pre-arranged entire market drop no matter what was said about the stimulus package. It was clear as day Tuesday that the market was supposed to drop Wednesday. Now they just have to hold it here.

Next week tho max pain is somewhere around 785 already.

 

[Tslynk67]

This is exactly what I’ve been doing with 135k from the proceeds of selling my 1000 core shares during the corona drop and buying them back at a lower price. I used the money to set up a ‘play’ account and have been selling puts (700 and 750). I’ve been able to add 12k in a month. I don’t understand how you’ve been able to add 5-10k per week. The premiums for the weeklies are too low for that. What’s your secret?

The €10k week was "the Tweet" week when I sold $745 put on Monday the previous week $2100, then another for the next week $4000, same strike. Closed the put on the morning of the Tweet for $500, resold the same put on the drop fr $1500, let it exercise, received 100 shares for $745, which I sold the following week at $785. At the same tile sold 5 covered calls for $2200 and bought 3 core shares at $700-ish, did the same this week, 5 calls for next Friday, 4 core shares added.

I'm fishing for premiums between $2000 and $4000, these tend to be borderline for getting exercised. This week and next I have $795's in play, hopefully will get assigned some shares and can play next week

 

[FreshPrince]

This could be massive if true:
Exclusive: Tesla's secret batteries aim to rework the math for electric cars and the grid - Reuters

Key sections:

• "Tesla Inc plans to introduce a new low-cost, long-life battery in its Model 3 sedan in China later this year or early next that it expects will bring the cost of electric vehicles in line with gasoline models, and allow EV batteries to have second and third lives in the electric power grid."
• "Tesla’s goal is to achieve the status of a power company, competing with such traditional energy providers, sources said."
• New "million mile" Battery to be a joint development between Tesla and CATL, significant technology contributions from Tesla
• Improved versions of this battery (better density, lower cost) will eventually be rolled out internationally
• "Tesla’s plan to launch the new battery first in China and its broader strategy to reposition the company have not previously been reported. Tesla declined to comment."
• "Tesla also plans to implement new high-speed, heavily automated battery manufacturing processes designed to reduce labor costs and increase production in massive “terafactories” about 30 times the size of the company’s sprawling Nevada “gigafactory”"
• Tesla to be working on battery recycling and second life applications, plans to become electric utility
• "CATL also has developed a simpler and less expensive way of packaging battery cells, called cell-to-pack, that eliminates the middle step of bundling cells. Tesla is expected to use the technology to help reduce battery weight and cost."
• "The cost of CATL’s cobalt-free lithium iron phosphate battery packs has fallen below $80 per kilowatt-hour, with the cost of the battery cells dropping below $60/kWh, the sources said. " (keep in mind that LFP chemistrys only work for lower range EVs, ie SR+)

I doubt this is true. It looks like amalgam of speculations probably to either boost CATL or Osbourne Tesla China. It is expected that CATL will provide new battery and that is likely have new tech and chemistry from CATL, but it's unlikely that it will contain secret sauce Tesla had been working on. Tesla battery/pack is will come out in US first .

 

[Prunesquallor]

• "Tesla also plans to implement new high-speed, heavily automated battery manufacturing processes designed to reduce labor costs and increase production in massive “terafactories” about 30 times the size of the company’s sprawling Nevada “gigafactory”.

Jeezuz. No wonder he wants to build this sucker in Texas.

 

[jeewee3000]

I doubt this is true. It looks like amalgam of speculations probably to either boost CATL or Osbourne Tesla China. It is expected that CATL will provide new battery and that is likely have new tech and chemistry from CATL, but it's unlikely that it will contain secret sauce Tesla had been working on. Tesla battery/pack is will come out in US first .

I can't straight up disagree with your post, but I'll just say you cannot know.

Your assumptions are based on less than the Reuters reporters have to go on.

Battery day news will be pretty astounding, given this Musk quote from Q1 2019 ER:

Martin Viecha

The next question is from institutional investor is, can you give us a brief preview of the Battery Day by generally highlighting steps Tesla is taking to improve cell energy density and time line for introduction?

Elon Musk

Yes. Actually, we were just -- we don't want to preempt Battery Day. We want to leave the exciting news for that day, but there will be a lot of exciting news to tell. And I think it would be one of the most exciting days in Tesla's history and we're just trying to figure out the right timing for that. We think probably the right timing will be the -- probably the third week of May. Not giving a firm date, but we think that probably that's the right timing. And depending upon what we're allowed to do, it will either be in California or Texas.

And further on Zachary says:


Pierre Ferragu

Thanks. And I had a quick follow-up on energy storage, if you can hear me well. I think like – I can't remember – I think from the very first days I heard you on the call, you've always mentioned that demand for energy storage is always outstripping supply, and you have more orders than you can make. And so I'm kind of thinking there will be – there should be an inflection point in that business at some point, and it's going to be driven by your ability to add much more manufacturing capacity like battery manufacturing capacity. And at a high level, how are you thinking about that inflection point in terms of time line?

Zachary Kirkhorn

In terms of time line, I think what we've been doing with both our partners and internally is looking at how to reduce the – fundamentally the cost of investments in new sales capacity because when you look at a car – a vehicle product, there's a lot of things in the vehicle besides the cells. When you look at an energy storage product, it's really just the cells. And so to really grow the energy storage business, it's all about cell investments.

And so that's what we've been focused on. And I think not to give too much away, but that will be one of the things we address in Battery Investor Day is how we're focused on that. And when we have that in the place we want, it will be a lot easier to scale that business.

So Battery day will talk about:
- lower cost;
- higher energy density;
- cheaper/faster/more manufacturing capabilities (scalable)

It will be far more than you assume. There will be Tesla secret sauce included, even though that secret sauce might just be building insanely large production facilities as the Reuters article suggests.

 

[j6Lpi429@3j]

• "Tesla also plans to implement new high-speed, heavily automated battery manufacturing processes designed to reduce labor costs and increase production in massive “terafactories” about 30 times the size of the company’s sprawling Nevada “gigafactory”"

Thats nuts, and almost certainly bullshit. Especially given all this fancy dry electrode stuff is supposed to hugely REDUCE the factory floor size required to make cells.

Plus super-centralisation of battery production at that scale makes no sense. Surely its way more sensible to have several large factories on each continent to avoid shipping?

 

[avoigt]

This could be massive if true, highly recommend reading the entire article:
Exclusive: Tesla's secret batteries aim to rework the math for electric cars and the grid - Reuters

Key sections:

• "Tesla Inc plans to introduce a new low-cost, long-life battery in its Model 3 sedan in China later this year or early next that it expects will bring the cost of electric vehicles in line with gasoline models, and allow EV batteries to have second and third lives in the electric power grid."
• "Tesla’s goal is to achieve the status of a power company, competing with such traditional energy providers, sources said."
• New "million mile" Battery to be a joint development between Tesla and CATL, significant technology contributions from Tesla
• Improved versions of this battery (better density, lower cost) will eventually be rolled out internationally
• "Tesla’s plan to launch the new battery first in China and its broader strategy to reposition the company have not previously been reported. Tesla declined to comment."
• "Tesla also plans to implement new high-speed, heavily automated battery manufacturing processes designed to reduce labor costs and increase production in massive “terafactories” about 30 times the size of the company’s sprawling Nevada “gigafactory”"
• Tesla to be working on battery recycling and second life applications, plans to become electric utility
• "CATL also has developed a simpler and less expensive way of packaging battery cells, called cell-to-pack, that eliminates the middle step of bundling cells. Tesla is expected to use the technology to help reduce battery weight and cost."
• "The cost of CATL’s cobalt-free lithium iron phosphate battery packs has fallen below $80 per kilowatt-hour, with the cost of the battery cells dropping below $60/kWh, the sources said. " (keep in mind that LFP chemistrys only work for lower range EVs, ie the SR+ M3, due to their low energy density of ~160 Wh/kg. The LFP discussion is pretty much independent of the new cell tech, and mainly a way on increasing margins on the chines SR+ as far as I can tell)

If true that is a game changer.

Given other sources we have e.g. Jeff Dahn but also the UK Energy application it sounds likely and makes sense in the overall context.

A year ago or so, I called Tesla an Energy Generation, Transformation and Distribution company and it sounds like this is happening.

 

[FreshPrince]

Jeezuz. No wonder he wants to build this sucker in Texas.

I think reporter misunderstood it's source - it's likely that new battery production facilities and technology will have 30x output of Nevada Gigafactory rather than 30x footprint.

 

[mongo]

Thats nuts, and almost certainly bullshit. Especially given all this fancy dry electrode stuff is supposed to hugely REDUCE the factory floor size required to make cells.

Plus super-centralisation of battery production at that scale makes no sense. Surely its way more sensible to have several large factories on each continent to avoid shipping?

I took that as 30x the capacity i.e. a teraWatt Hour per year production.
Energy (and to a lesser degree Semi) will need that kind of scale.

 

[JusRelax]

"Tesla also plans to implement new high-speed, heavily automated battery manufacturing processes designed to reduce labor costs and increase production in massive “terafactories” about 30 times the size of the company’s sprawling Nevada “gigafactory”"

Thats nuts, and almost certainly bullshit. Especially given all this fancy dry electrode stuff is supposed to hugely REDUCE the factory floor size required to make cells.

Plus super-centralisation of battery production at that scale makes no sense. Surely its way more sensible to have several large factories on each continent to avoid shipping?

You're right -- it most likely is BS, but it may not be complete BS. It may be a translation error... maybe it's more akin to 30x the production of the company's sprawling Nevada "gigafactory".

EDIT: @FreshPrince and @mongo beat me to it.

 

[Sudre]

Jeezuz. No wonder he wants to build this sucker in Texas.

Also remember for this Tesla will need a work force this time instead of hoping for the "if you build it they will come.". Automated still needs service technicians. Texas probably suits a lot of needs.

Also there are a lot of line workers and technicians in Missouri that would love a job even in middle of no where country-ville BUT our state refuses to offer incentives. One time China wanted to put an air shipping hub here at the St. Louis airport and the state refused to offer any incentives. We have had a lot of car plants move out. Hard for someplace like Joplin, MO to offer up a package against Texas + Texas locals. I wonder how many states act this way...... nose removal... unhappy face...

More of my 2 cents.

 

[ZeApelido]

Thats nuts, and almost certainly bullshit. Especially given all this fancy dry electrode stuff is supposed to hugely REDUCE the factory floor size required to make cells.

Plus super-centralisation of battery production at that scale makes no sense. Surely its way more sensible to have several large factories on each continent to avoid shipping?

Limiting Factor guy estimated it would reduce footprint by 10% I believe.