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

[Krugerrand]

Due for a new factory announcement (or 2) at any time I think.

Yes, but I don't believe that'll move the needle because that just gives the narrative (again) that Tesla doesn't have the cash to do that, or they'll need to go into more debt, or some version. It's a rinse and repeat story.

I'm trying to remember if GigaBerlin moved the needle. I'm pretty sure GigaChina didn't move the needle. Not until the Gigas are up and running and pumping out cars does the needle start to move.

 

[PeterJA]

...by actively deciding not to spend money on something.

Which, again, I have -no issue with them having decided to do for years-

So your issue is with the inaccuracy of their "promises" and you're concerned about the cost of catching up. Fair enough.

But they can't CONTINUE to underfund those things at that rate for ever.

Agreed, and I'm sure Tesla would agree, although we might quibble about the word "underfund" when demand was robust.

It's like people are getting so mad at what they imagined my question to be saying about the past they're ignoring that it's asking a completely reasonable financial question about the future.

I'm not mad. Some folks here are touchy about possible FUDsters because we've seen so many of them.

I agree your question is reasonable, but I'm not worried about it because Tesla's cash flow is about to explode. I vaguely recall reading years ago that a Supercharger station costs around $300k (contrasting with millions for a hydrogen station). You can buy lots of those with billions in cash flow.

 

[Curt Renz]

I realize this article is political, but its focus is on stocks and Tesla is the first one mentioned.

MarketWatch - today: Trump claims only he can keep your portfolio afloat, but JPMorgan says a Biden win could be positive for these stocks

 

[Mo City]

To me it is still a bit unclear if the current run-up will stick or is this a function of the weird setup with high short interest, S&P inclusion, etc that will return back to something in the, say, 800 range when the dust settles. Tempted to sell one or two remaining options so I have a bit more cash to exercise the rest to keep the stock long term.

Q2 deliveries leading to Q2 profits put the stock on a higher pedestal than ever before.

IMO, the only possible way TSLA tumbles back to the 800s again is macros plummet like a millstone or something really negative happens in China. Otherwise, a chance to re-buy in the $800s is pure fantasy.

I'm not saying $2000 is just around the corner (i.e, Q2 good results + scarcity caused by S&P500 inclusion), but it's quite possible TSLA is on a bull run that lasts another 6-12 months. This could be the breakout Cathy Wood talked about last year. Keep in mind Battery Day and blowout Q3, Q4 results are yet to come. There may be other pleasant surprises at the shareholder meeting.

At the same time, I understand the hesitation to buy right now after it closed at $885 just a month ago. Just saying your next chance to "buy the dip" could be much higher than the current $1390. Looked what happened to the people who wanted to see the $500s again while TSLA was in the $700s.

 

[Bet TSLA]

Also not as fast as them themselves keep promising though.

They've missed their target for # of stalls, by many thousands of stalls, every single year since before Model 3 was even being sold (see #s I posted on this earlier)

At current rate (assuming they deployed a similar # in Q2 as they did in Q1) they will have just about FINALLY hit their 2018 goal by midway through 2020.... if they were slowed by the pandemic it'll be at least Q3 2020 before they hit their 2018 goal.


So it's not my expectations they're falling short of. It's their own. By a lot.

There's no excuse at all for that apart from not having been willing to ever spend the $ to meet their own targets.

You keep ranting. So what? Tesla is concentrating on improving quality and efficiency rather than spending on increasing superchargers and service centers more rapidly. You may not agree with this, but there's no doubt that it's the right way to do things if Tesla can make it work. They're aiming high. That's what they do. They always fall short. That's what they do. But in the process what they achieve is way better than the competition.

It is in fact totally wonderful that most of the time if there's something wrong with your car that they can take care of it without you even having to notice beyond setting up a time and place. Not all the time, but every single time they do this it's incomparably better than their competition.

Yeah, they're never as perfect as they can be. And their communication and logistics still suck. Complain about that. Complaining that you don't like their priorities in spending money is just stupid.

EDIT: And any assumption that they need to grow any infrastructure at the same rate as delivered vehicles is also just plain stupid. They know exactly what stresses on the existing infrastructure they are seeing.

 

[Krugerrand]

So you’re saying buy and hold is a good strategy

I'm pretty sure I heard buy and die, or if you just can't manage that, buy and forget.

 

[The Martian]

Be careful. According to Karen, Greenspan is doxxing Omar’s contributors.

What a tool.
https://twitter.com/enn_nafnlaus/status/1280456905907896325?s=21
https://twitter.com/enn_nafnlaus/status/1280456905907896325?s=21

Donated anonymously.

 

[Tim S]

The SP is around $1400, all news is good, and you guys are wasting your evening arguing about service issues? I again strongly recommend the Ignore button.

 

[Krugerrand]

FWIW there's one (Raleigh) that is about a 45 minute drive from home, but only ~10 min from work... which is great (the next nearest is a couple hours away in Charlotte)

But they're offering uber credits to most folks, not loaners (and they don't even offer the credits unless you specifically ask) despite Elon promising years ago loaners for everyone- and having promised repeatedly in the last couple years to "fix" the fact he didn't keep his original promise.

And I did finally get HW3 as well. 4 months after I first asked for it, and 3 cancelled (all at the last minute) appointments later- because every month they'd say "Sorry, we don't have parts- try again next month!"

(Teslas incompetence at parts/logistics for repairs and such is well documented elsewhere so we can leave that at that)

Mine has been in 3 times... Once was to correct a delivery issue (same day as delivery, so at least I didn't have to wait).... second was to replace a windshield since nobody but Tesla around here does Tesla windshield replacement.... third was the HW3 upgrade.

I've also had 2 ranger visits (one to deliver and program a keycard since they forgot to actually include a second one at delivery and had to order one, and this was back when a tesla tech had to program them) and once for the charge pin recall and to address a rattle on the seatbelt attachment.

The second ranger visit took 2 tries BTW- first time they "confirmed" the appointment the night before via text, for 8AM the following morning. Then 30 minutes before 8AM the tech texts me saying he has no idea why this is on his schedule as he's in an entirely different city 100 miles away the entire day doing other work and he'd be in my area the following week instead. (Again- tesla is pretty incompetent at logistics stuff)

As they get more and more of the market- they're going to increasingly be selling not just to fans, but to folks used to excellent scheduling and service from other brands like Lexus... and no loaners, weeks of waiting for an appointment, and multiple last minute cancellations are gonna be serious pain points for these folks.

Given they're planning to have cybertrucks coming out of a year-to-be-designated factory- and likely to be looking at customers in much more remote locations- they probably are gonna need to start spending some significant money to correct this. Plus all those cybertruck-with-trailer friendly superchargers they haven't done anything with yet but promised to.


Which loops back around to there's a bunch of $ they've been neglecting to spend on service center expansion (and loaner fleet expansion) and supercharger expansion

This is going to sound likes it's completely unrelated to the topic. But it's not.

Happy people find less grievances in daily life and they experience less 'bad luck'. Unhappy people find more grievances in daily life and they experience more 'bad luck'.

 

[dakh]

Q2 deliveries leading to Q2 profits put the stock on a higher pedestal than ever before.

IMO, the only possible way TSLA tumbles back to the 800s again is macros plummet like a millstone or something really negative happens in China. Otherwise, a chance to re-buy in the $800s is pure fantasy.

I'm not saying $2000 is just around the corner (i.e, Q2 good results + scarcity caused by S&P500 inclusion), but it's quite possible TSLA is on a bull run that lasts another 6-12 months. This could be the breakout Cathy Wood talked about last year. Keep in mind Battery Day and blowout Q3, Q4 results are yet to come. There may be other pleasant surprises at the shareholder meeting.

At the same time, I understand the hesitation to buy right now after it closed at $885 just a month ago. Just saying your next chance to "buy the dip" could be much higher than the current $1390. Looked what happened to the people who wanted to see the $500s again while TSLA was in the $700s.

It is easy to say that because you're now used to 1300+. Remember just a little while ago, $800 levels even in the middle of the pandemic seemed amazing. There's no narrow band of valuation based on fundamentals, so $800 will stick just as good as $1800, depending on the situation. The stock has a history of not moving much or even falling on various future product announcements, I'd love for this to not be the case for battery day but I think high expectation is already baked in. The actual positive news that the market would have to definitely count in are Gigafactory buildout progress in China, EU and US, and lack of demand concerns with good profit margins. It is still not clear why did they slash prices, and what the current demand situation is looking like. We don't have Q2 profit confirmed either, just a good chance at it.

At 1400 levels any of these things not going quite well would likely be used to amplify the move down. Personally, I think there's money made on both outsized moves up and outsized moves down in TSLA and because of the lack of good valuation basis this stock is perfect for such games.

I'm still in the building of the core position phase in my after-tax account, so I'm not looking to re-buy later. I know I'll de-leverage my remaining LEAPs, the question is what is the right timing. Clearly I rushed it with de-leveraging all the way from ~500 level to about ~1k, but that was a sensible thing to do so no regrets on that, glad I left some leverage on the table to enjoy silly high gains now.

In my 401K account it's a different story, I got enough TSLA there and actually now need to re-balance some out since I'm now way too heavy on TSLA for a more conservative retirement stuff.

 

[The Accountant]

@The Accountant - any updated thoughts on this?

The Deferred Tax Asset Valuation Allowance at Dec 31, 2019 was $1.95B.
I think we will see some of this benefit come into the P&L in Q3 or Q4 after Tesla shows it can deliver strong profitable quarters.
With deliveries of 150k+, pretax profit in Q3 and Q4 would be about $500m. This should be enough to convince PwC that Tesla is "more likely than not" to be profitable going forward (allowing them to use these tax benefits).

James Stephenson, an analyst who does a very thorough job estimating Telsa's earnings, has $1.4B in benefit arriving in Q3, 2020.
You can see it here:
https://twitter.com/ICannot_Enough/status/1278813740796870656
(see his schedule on the bottom left).
He may be right.

 

[Nurkbonis]

Would love some opinions from anyone willing on what I should do.

I have two 6/17/22 leaps. One is $1,015 and one is $1,100. I'm up $61k on one and $57k on the other.

My option goal was to acquire more shares, but I don't have $100k+ I can blow by exercising them, so I am thinking of selling one and taking half the money and buying shares, then buying another another leap with the other half.

I'm looking at a 9/17/21 $2,000 call, which looks like it'd cost me about $28k. If I sold the $1,100 call for about $62k, that'd leave me with about $34,000 to buy shares.

I'd then have:

- 9/17/21 $2,000 call
- 6/17/22 $1,015
- 24ish new shares purchased
- My existing shares

I know it's my decision, but I'd like to bounce this idea off some other people with option experience.

It seems like a good time to sell, buy shares and another call.

Just curious if anyone has any thoughts.

 

[dakh]

Would love some opinions from anyone willing on what I should do.

I have two 6/17/22 leaps. One is $1,015 and one is $1,100. I'm up $61k on one and $57k on the other.

My option goal was to acquire more shares, but I don't have $100k+ I can blow by exercising them, so I am thinking of selling one and taking half the money and buying shares, then buying another another leap with the other half.

What's the tax situation in the account you got all these goodies?

 

[adiggs]

Q2 deliveries leading to Q2 profits put the stock on a higher pedestal than ever before.

IMO, the only possible way TSLA tumbles back to the 800s again is macros plummet like a millstone or something really negative happens in China. Otherwise, a chance to re-buy in the $800s is pure fantasy.

I'm not saying $2000 is just around the corner (i.e, Q2 good results + scarcity caused by S&P500 inclusion), but it's quite possible TSLA is on a bull run that lasts another 6-12 months. This could be the breakout Cathy Wood talked about last year. Keep in mind Battery Day and blowout Q3, Q4 results are yet to come. There may be other pleasant surprises at the shareholder meeting.

At the same time, I understand the hesitation to buy right now after it closed at $885 just a month ago. Just saying your next chance to "buy the dip" could be much higher than the current $1390. Looked what happened to the people who wanted to see the $500s again while TSLA was in the $700s.

Or the people that wanted to buy in the 40's after the sharp spike to 60. Or ...

This is my greatest fear as a Tesla investor - I try to swing trade my shares and find myself outside of the glass bubble when the shares strap on a rocket booster and leave. Far bigger losses available by missing the big moves when they come.

 

[Unpilot]

I'm not sure how that addresses the fact they they miss their goals every year, by large percentages, on supercharge buildouts.

What new information would cause them to decide to NOT build thousands of stalls they said they would for that year- and then state an even HIGHER target they end up ALSO missing by a mile the year after? Then doing it yet again the year after that?




No- it's setting a goal and then failing to spend the money to achieve it. Year after year.

But if there IS another explanation for it- what is it?






Or they just didn't spend it at all to reduce costs.

Which appears to be the actual case.

I don't even blame them for doing it- it was touch and go for a while, and they needed to show financial progress and eventual profits.

So deciding to under-invest in things like service and charging is something I'm totally on board with being a rational decision by Tesla during the 3 and eventual Y ramps.


But that service and charging gap, which gets larger and larger each year, is not sustainable to keep increasing every year into the future.

So eventually Tesla will need to spend significantly more $ than they have been to close that gap.

THAT is the thing I'm asking about.




Right.

And I'm asking what that looks like- financially.

How much is that bridge likely to cost- because I don't THINK that's a genuinely insiginficant number- but I haven't seen anyone discussing future growth and cashflow address it.







...by actively deciding not to spend money on something.

Which, again, I have -no issue with them having decided to do for years-

But they can't CONTINUE to underfund those things at that rate for ever.


It's like people are getting so mad at what they imagined my question to be saying about the past they're ignoring that it's asking a completely reasonable financial question about the future.

Maybe give it a rest...you made your point.
Starting and running a new car business is hard...mistakes are made.

More importantly they are eventually fixed.

 

[Causalien]

This is going to sound likes it's completely unrelated to the topic. But it's not.

Happy people find less grievances in daily life and they experience less 'bad luck'. Unhappy people find more grievances in daily life and they experience more 'bad luck'.

Prepared people are happier in life. Unprepared are not.
I don't know if others are experiencing the same thing, but among my friend group, things are getting very real this month. It was very happy during June when people were released from the lock down, but just a month later. Breakups and lay-offs are hitting one after another. It is hard to get in the right mood to console them when you are giddy all the time from winning. I decided to just stay away and let the others do the consoling.

 

[Nurkbonis]

Roth IRA

What's the tax situation in the account you got all these goodies?

 

[Mo City]

It is easy to say that because you're now used to 1300+. Remember just a little while ago, $800 levels even in the middle of the pandemic seemed amazing. There's no narrow band of valuation based on fundamentals, so $800 will stick just as good as $1800, depending on the situation. The stock has a history of not moving much or even falling on various future product announcements, I'd love for this to not be the case for battery day but I think high expectation is already baked in. The actual positive news that the market would have to definitely count in are Gigafactory buildout progress in China, EU and US, and lack of demand concerns with good profit margins. It is still not clear why did they slash prices, and what the current demand situation is looking like. We don't have Q2 profit confirmed either, just a good chance at it.

At 1400 levels any of these things not going quite well would likely be used to amplify the move down. Personally, I think there's money made on both outsized moves up and outsized moves down in TSLA and because of the lack of good valuation basis this stock is perfect for such games.

I'm still in the building of the core position phase in my after-tax account, so I'm not looking to re-buy later. I know I'll de-leverage my remaining LEAPs, the question is what is the right timing. Clearly I rushed it with de-leveraging all the way from ~500 level to about ~1k, but that was a sensible thing to do so no regrets on that.

In my 401K account it's a different story, I got enough TSLA there and actually now need to re-balance some out since I'm now way too heavy on TSLA for a more conservative retirement stuff.

What I meant was the regular large dips we all know and love (nothing personal ) may or may not be available for a while because things have materially changed.

3/S/X prices in the USA were dropped to max out Q2 deliveries. Notice there was no reduction for Model Y which is the horse that will pull the wagon from now on. I don't think there is any mystery Model 3 demand will slack without further price cuts but with costs continuing to decrease (just wait on Battery Day), margin shouldn't decline much if at all.

IMO: Q2 profit is a lock, demand is a non-issue for the next couple of years, production continues to grow and competition remains pathetic. Only macros stand in the way. Also consider storage growth and a possible autonomy breakthrough.

 

[MC3OZ]

This tweet from Elon is what has me most bullish about Q2 particularly the word "trust".

https://twitter.com/elonmusk/status/1278782112074735617

Thanks Tesla owners & investors! Love you!! We will work super hard to earn your trust & support.

IMO "trust" means unexpected negative surprises are unlikely...

 

[Bet TSLA]

Would love some opinions from anyone willing on what I should do.

I have two 6/17/22 leaps. One is $1,015 and one is $1,100. I'm up $61k on one and $57k on the other.

My option goal was to acquire more shares, but I don't have $100k+ I can blow by exercising them, so I am thinking of selling one and taking half the money and buying shares, then buying another another leap with the other half.

I'm looking at a 9/17/21 $2,000 call, which looks like it'd cost me about $28k. If I sold the $1,100 call for about $62k, that'd leave me with about $34,000 to buy shares.

I'd then have:

- 9/17/21 $2,000 call
- 6/17/22 $1,015
- 24ish new shares purchased
- My existing shares

I know it's my decision, but I'd like to bounce this idea off some other people with option experience.

It seems like a good time to sell, buy shares and another call.

Just curious if anyone has any thoughts.

I know that anybody who mentions even the faint possibility of "exercising them" is so clueless about call options as to be a danger to himself. You shouldn't be in options if you know so little. Get out of them right now by selling (not exercising) them. Seriously. First thing in the morning. Then be grateful you didn't lose all your money. And don't touch options again until you have some idea what you're doing.

And please don't discuss this here. Go to an options beginners board and talk about it there.