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

[Artful Dodger]

Waymo already has had a proven safe L4 autonomous solution

FTFY.

Waymo suspends robotaxi service except for its truly driverless vehicles – TechCrunch

| March 17, 2020

 

[diplomat33]

FTFY.

Waymo suspends robotaxi service except for its truly driverless vehicles – TechCrunch

| March 17, 2020

Nice try!

Waymo temporarily paused their FSD rides because of covid-19, not because their FSD is not safe. It says so in the article. In fact, the article says that Waymo still continued their driverless FSD rides. So their FSD was obviously still safe enough to drive without a safety driver in the car.

 

[Nocturnal]

July 22nd for earnings. Ok ladies and gentlemen, you have 12 calendar days to start your engines.

Waymo temporarily paused their FSD rides because of covid-19, not because their FSD is not safe. It says so in the article.

It's safe but pointless.

 

[EV forever]

Confession time...

It's either write this post or perch myself on the window ledge. (Ground floor. Not much good there.) This is the only audience to whom I can bare my tortured soul.

Some years ago, I bought a bunch of TSLA at $200. (I'm not savvy enough to trade options. I'm more comfortable buying and holding long-term when I believe in the strength and vision of a company.)

Through it all I held fast and didn't sell. When TSLA went down to $150 and cries of 'bankrupt' were coming from every talking head on Wall Street, I just smiled and sat tight. I watched the reversal and held on, all smiles, until the pandemic hit. Until it was apparent that the pandemic was going to have a significant impact on the world and the Tesla factory closed.

At that point, I made the dumbest financial mistake of my life to date: I sold all my TSLA at around $750. Not because of any reduction in faith. I was trying to be clever. "There's going to be a dip back to $500-ish range due to the results of the plant closing and the general economic impact," my idiotic brain told myself. "I'll buy back in at that point and have even more shares."

And the downturn never happened.

My wife steadfastly shared my long-term faith in Tesla (which is still unwavering) but she, too, believed that the world's most volatile stock would dip and give us a chance to get back in. So we waited for a dip. And opportunity after opportunity passed us by as we waited for a dip that never happened.

So here we sit. Still sitting on cash that while missing every opportunity to reinvest in TSLA.

I'm absolutely tortured at the horrible decision I made by trying to be clever. My wife is far more zen about it. We locked in profit and she does a better job of focusing on that.

And, though it all, I can't stop beating myself up for exiting at $750. I'm so anguished over this that I can't let it go. I told my wife "I want to punch myself in the face until I'm unconscious, wake up, and do it again."

This is the only place who would possibly understand my pain. All of my friends and family would hear this and say "Oh, you didn't make enough on your TSLA stock and you're sad now. Boo hoo. Piss off."

So now we're faced with a decision: I want to just get back in now at market price and forget about the mistakes of the past and she wants to wait for a dip that may never happen before getting back in.

My belief is that long-term we're looking at $2500 - $3500 in the next three to five years and just jumping back in now is the best thing to do. Trying to be clever is what got us into this mess in the first place and I don't want to make that mistake again. My wife still believes that the world's most volatile stock won't disappoint and we'll see a dip again. Certainly not down to where we exited, but possibly nearer to $1000 or a tad lower.

That's my pain and our current struggle.

Thanks for listening.

Take a deep breath and jump back in - that is the only way to get back in the game.

We made the same mistake on Apple. We owned 2 iPods early 2000s and loved them. When iPhone cane out in 2007, we both purchased around thanksgiving. That was such a superior product to anything out there that we purchased 300 shares of AAPL. Well just over an year later the price had doubled and my husband insisted that there was no further growth and we sold. Then every time I wanted to buy again, he felt it was too expensive- so we never got back in. Think of what 300 shares from 2007 would be worth today.

I decided to start managing my own retirement investments myself in 2013 - the very first stock I purchased was AAPL! It has done very well since then too.

Better late than never I say.

 

[diplomat33]

July 22nd for earnings. Ok ladies and gentlemen, you have 12 calendar days to start your engines.

With the way $TSLA is moving, long investors are going to have a good day on July 22nd!

 

[Artful Dodger]

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.

Using the VA on GAAP income is a separate event from reducing the taxes payed in any one jursidiction at any one time. The two are separate events. Thing of GAAP reporting as being a synthetic 'world-view' of the state of the companies books. GAAP requires the VA to be accounted for as soon as it becomes "more likely than not" to be redeemable in the future.

It's like saying I have a future lower cost structure. Accounting practice is to discount its value by a percentage to a present value. So it's kind of like a net present value (NPV) calculation where the analysis assumes that future cash outflows (tax) are reduced.

Cheers!

 

[Mo City]

With the way $TSLA is moving, long investors are going to have a good day on July 22nd!

Question for everyone: Are you certain the market has NOT priced in GAAP profitability for Q2?

I ask because TSLA is up ~$270 since deliveries were announced. What's left to surprise on the 22nd? Is the expectation of a pop purely based on the scarcity expected when TSLA is added to the S&P500? The market is already aware of that.

 

[FrankSG]

David Lee is is talking about the same thing I keep mentioning here when I recommend people change their relationship with money and the way they think and feel about money. I arrived at a similar place to where Dave appears to have arrived at without living through it as he did, I simply thought about it deeply and changed myself to make it happen. But I came from a middle-class family in which money didn't take center-stage in life because there were always regular pay checks. There was no attempt to get ahead beyond saving enough buffer that there were no worries. In those days people would retire on pensions and S.S., we live in a different reality now and investing is something everyone should be doing.

Preferably, investing like dead people so we get better returns.

I was raised in a similar way to be extremely risk averse and conservative. My dad used to work for Capgemini, and had a load of stock options that were worth a lot of money around the year 2000. I was ~11 years old at the time, and I even remember a financial advisor coming over at some point, because my dad had no idea whether he should hold them or sell them. The advisor told him to hold, and then this happened:

The dot com bubble burst, and my parents went from being temporarily very wealthy, back to being (upper) middle class. Probably as a result of this, I ended up growing up with the idea that stocks were inherently very risky and pretty much like a casino, and that I should stay away because I can lose all my money.

In my early twenties I made quite a bit of money, but because of this mentality all I did was put it in savings accounts to collect ~2% interest each year. I even met with a financial advisor from my bank HSBC at the time, who showed me some ways to invest my money. It was all quite diversified, but I wasn't even comfortable putting 10% of my net worth in it, which may not have been that bad of a decision to be honest, because at the time I didn't understand well enough what stocks, bonds, etc. were and how they worked. In the end, all I did was put about 1% of my net worth into a random emerging markets ETF to take advantage of a tax free account in the UK, where I lived at the time.

It'd be easy to look back and say, I wish I put all my money in TSLA in 2011 or 2012, but I'm just glad that I eventually learned about and started following Tesla, that I read Ashley Vance's biography, and that I put a large part of my net worth in TSLA in 2015. It might've been a lot less than I could've invested in 2011/2012 at a better price, because I lost a lot of money in a failed business in the years in between, but I've somewhat made up for that by adding a lot more shares for cheap in 2019, and getting into options at the right time. Even though I was never able to buy a TSLA share for <$185, I think my cost basis is currently at ~$43 and dropping thanks to options.

I've also learned a lot about Tesla following it religiously for the past 5-6 years, which in combination with reading about Elon in Ashley Vance's biography made me comfortable enough to buy TSLA stock. And over the past ~2 years I've learned a ton about how stocks and investing work, partly thanks to some of the smart folks here on TMC. For me, I think all of this has more than undone the mindset @DaveT and @StealthP3D talk about, and I've been able to overcome the incorrect notion that all stocks are extremely risky imprinted on me during childhood.

 

[PeterJA]

Question for everyone: Are you certain the market has NOT priced in GAAP profitability for Q2?

I ask because TSLA is up ~$270 since deliveries were announced. What's left to surprise on the 22nd? Is the expectation of a pop purely based on the scarcity expected when TSLA is added to the S&P500? The market is already aware of that.

I suspect Q2 profitability is partially priced in, by folks who follow Tesla and Elon enough to read the clues. But many folks don't, and some won't believe it until they see it.

Also, judging from this thread, some folks expect Q2 profitability, and want to buy the stock, but are waiting for a dip from the current high because they think TSLA will keep behaving like it has in the past. I wouldn't know if this group includes much of Big Money, but as @StealthP3D has observed, Big Money is not necessarily Smart Money.

 

[RobStark]

Is the underlying cause due to over supply or under supply? I think it is the latter. If we had normal supply and there was a dip I would be worried.

My guess is Norwegians are waiting for Model Y.

Not Tesla choosing not to deliver adequate supply of Model 3s to Norway for 6 months.

 

[EV forever]

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

Okay I will admit it - I took $2000 of my hard earned TSLA profits to buy puts on NKLA. The puts are already down 50% and I know it won’t make any money, but I just had to bet against that snake oil salesman.

 

[Singuy]

Question for everyone: Are you certain the market has NOT priced in GAAP profitability for Q2?

I ask because TSLA is up ~$270 since deliveries were announced. What's left to surprise on the 22nd? Is the expectation of a pop purely based on the scarcity expected when TSLA is added to the S&P500? The market is already aware of that.

Uptick in FSD revenue recognition, Model Y scaling, reduced worker salaries, Shanghai plant ramping, and FSD purchases may surprise on margins and GAAP profits.

What if margins again blow people's mind and Tesla somehow managed to post not just a dollar of profit but one of their most profitable quarters?

Also we probably will get some pictures of Semi in production(even an announcement for first deliveries?), and some kind of guide for Q3/4. Maybe even reiterate 500k for the year.

Those things are most likely not priced in. Currently a small profit is priced in for S&P. But Tesla proving that it can kick more ass and take names in the middle of a pandemic than even a typical quarter? Probably not priced in.

 

[printf42]

Bloomberg - Are you a robot?
Tesla Shorts to Amass First-Ever $20 Billion Bet Against a Stock'

Ihor's info was posted earlier but this is getting attention. 20 billion in short interest would definitely add some fuel.


SQ is my #2 holding right now. (not that this says much)

This makes it sounds like shorts has 20billion in hand and going to mobilize it against TSLA.

But in reality, they own someone else 20billion and will be struggling to repay them. The debts started at a much smaller amount though, and they have already paid much more than what they loaned.

Talking about poor life choices.

 

[vikings123]

Question for everyone: Are you certain the market has NOT priced in GAAP profitability for Q2?

I ask because TSLA is up ~$270 since deliveries were announced. What's left to surprise on the 22nd? Is the expectation of a pop purely based on the scarcity expected when TSLA is added to the S&P500? The market is already aware of that.

In addition to margins and FSD I’m looking forward to the GAAP number minus any credits. Imagine the narrative if Tesla were to post a 50 million USD GAAP income without the credits. Given all the salary cuts, higher FSD intake + higher number of LR deliveries for China it is definitely possible.

If there was ever a doubt the last minute shopping frenzy from the generous folks on here likely sealed the victory and again victory is GAAP income without the credits.

 

[StealthP3D]

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?

I believe it wouldn't make a lot of sense for S&P to do anything but add TSLA as expected if and when they report profit that makes them eligible. Having said that, as an investor, I think I have to consider that ~5% chance that they deny or delay the addition. I pulled the ~5% out of my butt but it is based upon the following:

1) Tesla, due to it's market valuation and other factors, would not be a typical addition to the index - it might be more than a little disruptive.
2) a lot of powerful interests probably prefer it NOT be added at this point (or at all)
3) the fact that institutions in general appear less beholden to traditions.

Please note, I think it's basically a done deal, I'm just saying an investor might consider the slim chance that it doesn't happen (for whatever reason). This wouldn't be a factor for most buy/hold investors but those buying options expiring this year should probably factor in a small discount for a possible delay or rule change.

 

[RobStark]

Question - so I was looking to see which energy companies are larger than Tesla by market cap. It would appear that there aren't any (in the USA). Is this table correct? Is Tesla really the USA's 17th-largest company?
Largest Companies by Market Cap Today (TOP 50 LIST) • Dogs of the Dow

Toyota and Taiwan Semiconductor are not American companies.

That is a list of the 50 largest public corporations in the world.

 

[kengchang]

Toyota and Taiwan Semiconductor are not American companies.

That is a list of the 50 largest public corporations in the world.

Neither is Alibaba, SAP SE, ASML just to name a few

 

[RobStark]

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

I think it is rather simple to verify if Mexican factories making engines/engine parts are allowed to operate in Mexico.

Since they shut down Automotive News Mexico I don't have an easy reference to what is going on down there automotive wise.

 

[StealthP3D]

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

A 1.29 million share "true short interest" would imply all convertible bond holders are delta hedged 100%. While I don't have good visibility into the nature of the entities that hold the convertibles, I would assume many of them are TSLA supporters and/or bulls who bought the convertibles because they believed it was the best way to profit while supporting the company. As long as the investment was made with funds earmarked for capital appreciation, it would be pretty foolish to delta hedge 100% (or at all depending upon the investment goals). Delta hedging 100% would cause their gains to be limited to whatever the coupon rate was (around 5-8%?) while still risking their capital somewhat in the event of bankruptcy. So I would assume the convertibles are delta hedged less than 50%. And the options market with associated delta hedging complicates things.

The fact is, there is simply not enough data available (even to industry people like Ihor) to know how large the "true short interest" is. Ihor was forced to admit he didn't have good visibility into that (even though he's predicting a short-squeeze). Personally, I would be more hopeful of a short-squeeze if the possibility of a short squeeze was discounted by Ihor!

 

[FrankSG]

A 1.29 million share "true short interest" would imply all convertible bond holders are delta hedged 100%. While I don't have good visibility into the nature of the entities that hold the convertibles, I would assume many of them are TSLA supporters and/or bulls who bought the convertibles because they believed it was the best way to profit while supporting the company. As long as the investment was made with funds earmarked for capital appreciation, it would be pretty foolish to delta hedge 100% (or at all depending upon the investment goals). Delta hedging 100% would cause their gains to be limited to whatever the coupon rate was (around 5-8%?) while still risking their capital somewhat in the event of bankruptcy. So I would assume the convertibles are delta hedged less than 50%. And the options market with associated delta hedging complicates things.

The fact is, there is simply not enough data available (even to industry people like Ihor) to know how large the "true short interest" is. Ihor was forced to admit he didn't have good visibility into that (even though he's predicting a short-squeeze). Personally, I would be more hopeful of a short-squeeze if the possibility of a short squeeze was discounted by Ihor!

Chamath definitely isn't short TSLA to hedge his convertible bonds: