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

[jhm]

My buddy and I trade stock tips and stories all the time. I convinced him to buy into tesla when it was in the 300s this past fall. He did, and sold in the 600s for a nice profit. He often talks about how dumb selling was. I'm not interesting in piling on so I try to be constructive (it was dumb lol). Yes, it would have been better for any of us to buy far more TSLA at $180, $300, or even earlier at lower prices. That's due to hindsight though. Buying at $200 was cheap, but it also came with way more risk than buying at $1300. Back then Tesla could have gone to zero, now that's extremely unlikely and the huge upside estimates are objectively more likely. Heck, you could probably make a good argument that the risk/reward for buying now vs then is better.

Tesla's balance sheet is much more robust now.

 

[Artful Dodger]

08:00 a.m. Whistle: Thu, 09 Jul 2020

Comment: "Pre-Market High $1,394.20 @ 08:41 ET"

16:00 hrs Closing SP: $1,394.28

jus' sayin'... HODL if ya got'em.

Word.

 

[MC3OZ]

Just to expand on this idea a little more: money has always been a proxy for resources under one’s control, which itself is a proxy for energy (classical definition: the ability to do work). Electron flow is currently (heh) humanity's best means of harnessing energy. Once we have the technology to track electrical energy generated, stored, and consumed, we can effectively bypass the middleman of money. First principles.

I like the concept in the 3rd Industrial Revolution video, all products contained embedded energy, energy is also used temporarily to reverse entropy, turning a lower valued product into a higher value product.

Productivity in a Fossil Fuel economy topped out in Japan in the 1980s, the embedded energy is one part of the productivity equation.

What Renewable Energy and Storage does is, allow lower priced, more naturally abundant energy that is not owned by virtual monopolies or supply constrained, economies no longer need to follow boom and bust cycles determined partially be the oil price and oil supply.

Lowering the cost of embedded energy in products is a productivity gain, which lowers prices or increases margins.
Higher margins can allow lower prices and more market share.

It isn't readily apparent now, but clean energy and transport will lower costs and deliver competitive advantage.

Whether we are talking about the Tesla, Semi, Battery Storage, Solar, or Autobidder, it is a self-reinforcing ecosystem and Tesla is right at the heart of all areas... Currency itself doesn't really matter, what matters is products and services, energy is needed to make most products and services.... lower cost more abundant energy is an advantage, domestic sources of energy are preferable to imported oil.

 

[wipster]

This may have already been referenced, if so my bad:

Tesla poised to electrify S&P 500 - Reuters

• Tesla (NASDAQ:TSLA) appears on the verge of joining the S&P 500, Reuters reports, a move that would unleash a flood of new demand for the company's shares which already have surged 500% over the past year.
• Stronger than expected Q2 vehicle deliveries, announced last week, have sparked confidence that Tesla will record its first cumulative four-quarter profit, a key hurdle for inclusion to S&P 500; its quarterly report is set for July 22.
• Analysts predict massive demand for Tesla shares if the company is added to the benchmark index, and some point to Yahoo as a model for a potential debut; in 1999, Yahoo soared 64% in five trading days between the announcement that it would be added to the index and its actual inclusion.
• "The lesson learned from Yahoo was that when you have an up and coming issue that may possibly go into the index, you should already own a little of it," says S&P Dow Jones analyst Howard Silverblatt. "If you had to get into that stock, you were paying a heck of a premium compared to owning it a week earlier."
• Tesla printed a new high of $1,429.50 during Tuesday's session, as even the bear camp begins to crack under the stock's huge rally.

 

[Artful Dodger]

I am at the point where I could sell 2/3 of my shares and retire comfortably. However, I believe that if I hold out until S&P500 inclusion I will have 25-50% more money, and could then buy my dream Newell Motorcoach...

Lol, how about a dream that burns fewer dead dinosours? Like a Tesla Semi Trailer RV?

#NOMOREFOSSILFOOLS

Cheers!

 

[Rockster]

As you've observed, waiting hasn't helped. Just grit your teeth and buy back in. Remember that you have to pay tax on that sale. Sorry if I made it worse.

Actually, no taxes due yet. It's all in been done inside retirement accounts.

 

[Mo City]

With all the recent talk in the media about Tesla's eligibility of joining the S&P500 based on Q2 results, is there is a lot of pressure on the S&P index committee to add TSLA is Q2 if GAAP profitable?

Has it now become a foregone conclusion?

 

[StealthP3D]

It takes a very strong conviction to sit still during those drops. My brother, who owns 420 shares (not kidding), solves this problem by never looking at the share price (although he found out what the stock price was last week as it was all over the news; he wasn’t unhappy).

Hey, you never told us that you had a brother who was even smarter than you!

 

[The Accountant]

Thanks. So my question is would it make sense for Tesla to save this valuation allowance until the tax rate has been hiked as opposed to right away? Some of us are expecting a huge profit at some point this year.

This requires a complicated answer but I will try to keep it non-technical for the non-accountants here. (The Deferred Tax topic is complicated to explain)
Tesla could take $1.9B now as a benefit and then another $0.5B later if the tax rate increases.
However, it would likely go as follows:
If Biden wins the election and gets a new tax policy through Congress, it would likely not be effective until Jan 2022.
Telsa will likely use up a portion of this tax asset in 2021 reducing the $1.9B down to about $1.3B.
So by the time the asset gets revalued from a 21% to 28% tax rate, it is no longer at $1.9B but around $1.3B.

Ok - maybe I will make it a bit more complicated.
- Since 2004, Tesla has lost $6.9B.
- That means Tesla does not need to pay taxes on future profit of $6.9B
- At a tax rate of 28% (21% federal and 7% state), this is a $1.9B Tax Benefit/Asset ($6.9B x 28% = $1.9B)
- Let's assume they have $2B in pre-tax profit in 2021. Tesla will use a portion of the $6.9m prior losses to pay no tax.
- In 2022, the losses to offset future income is now only $4.9B ($6.9B loss less 2021 income of $2.0B)
- If Federal Taxes change to 28% then total tax rate is 35% (with 7% state).
- Tax asset will now be $1.7B ($4.9B x 35%)

 

[wipster]

With all the recent talk in the media about Tesla's eligibility of joining the S&P500 based on Q2 results, is there is a lot of pressure on the S&P index committee to add TSLA is Q2 if GAAP profitable?

Has it now become a foregone conclusion?

Read the article from Reuters above. Get in now.

Not an advice, but damn...

 

[Artful Dodger]

Confession time... I sold all my TSLA at around $750.

"There's going to be a dip back to $500-ish range And the downturn never happened.

So we waited for a dip. And opportunity after opportunity passed us by as we waited for a dip that never happened.

Uh, what do you mean the "dip never came"? TSLA bottomed out at $350 intraday on March 18. That was a dip of > 50% BELOW the SP just 2 wks previously on March 4th.

What was your target SP for buying back in? 10 bucks? But seriously, how much CNBC do you watch? They are PAID LIARS, and they are LYING to you.

I know it hurts man, but Rule #10 is "Be Honest with Yourself".

Hope you can shake this off and move forward.

Good luck!

 

[Mo City]

Read the article from Reuters above. Get in now.

Not an advice, but damn...

97% of my net worth is TSLA. See sig below.

EDIT: Just saw Artful Dodger's post above. I missed it by one day.

 

[wipster]

97% of my net worth is TSLA. See sig below.

Cool, mine isn't quite as much but close!

 

[vikings123]

Interesting thread on short interest. If the majority is a delta hedge the implication seems to be that the true short interest is only 1.29 million shares. I don’t exactly know how these convertible bonds work but the numbers make sense.

https://twitter.com/ihors3/status/1281350494552821760?s=21

 

[mblakele]

Just to expand on this idea a little more: money has always been a proxy for resources under one’s control, which itself is a proxy for energy (classical definition: the ability to do work). Electron flow is currently (heh) humanity's best means of harnessing energy. Once we have the technology to track electrical energy generated, stored, and consumed, we can effectively bypass the middleman of money. First principles.

I like that vision, but I think the focus on energy alone is a little too narrow. As I see it, wealth is a function of resources multiplied by technology.

W = RT​

I think I got this idea from R. Buckminster Fuller, but I don't have a reference handy. Anyway, energy is one type resource — but it isn't the only type. Consider natural resources such as land, minerals, fresh water, etc. You're right that you need to do work (use energy) to do much of anything with most of natural resources. But energy doesn't get you much of anywhere without other resources. You also need a certain amount of technology to do much of anything. I'm using technology in a very broad way here, to cover everything from software and rockets back to farming and stone tools. A BEV illustrates the idea: you need a lot of tech, energy, and material resources to build one. Once you have it, though, almost all you need to operate it is more energy.

Money is useful because it allows you to exchange one type of resource for another, or resources for technology, and it's more efficient than barter. But energy alone isn't sufficient, and it doesn't account for the multiplicative effect of technology. So I don't believe money can be displaced by energy alone.

 

[FrankSG]

As much as I believe NKLA is not worth 10% of their share price, I would never short it.

Woow, 10%? You're quite a NKLA fanboy, eh?

 

[FrankSG]

Ford may shut U.S. plants due to lack of engines from Mexico: U.S. ambassador

That sounds like terrible news for Ford. I sure hope Tesla's engine supply is secure..

I feel like this could easily be an excuse used to be able to shutdown the plant because of a lack of demand.

 

[FrankSG]

The Netherlands are currently not very interesting, as the benefit in kind was reduced by half as of 1 January although we may see a slight surge at the end of the year when the arrangements get even worse.

I thought it was reduced from 20% to 16%? Or it's normally 20%, was 0% for EVs, and is now 4% for EVs? Something like that? Iirc it was only marginally reduced at the start of 2020.

 

[FrankSG]

Are there really people paying $50 for Jan2022 puts with a strike of $450? These options prices are absurd. Obviously they're for hedging, but TSLA running down to $390 or lower seems.......a longshot.

The good old Mark B. Spiegel patented bankruptcy PUT

 

[ZeApelido]

I am at the point where I could sell 2/3 of my shares and retire comfortably. However, I believe that if I hold out until S&P500 inclusion I will have 25-50% more money, and could then buy my dream Newell Motorcoach and a vacation home. So as hard as it is to not lock in my gains right now, I am waiting. I have a friend that is kicking himself for selling TSLA in the 300s after a solid gain. Another friend sold in the 300s and went all in again in the 700s. I believe that selling now would be a big mistake. In fact, I just lost some money buying back 1500SP covered calls for next Friday that I had sold a few months ago. I would not be surprised to see TSLA at 2,000 two weeks from now, and 2,500-3000 after S&P500 announcement.

Hi Dad