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

[jerry33]

It is difficult to hold a stock long-term through ups and downs. I have only sold a few shares of TSLA once. I thought I could get back in a little lower and it made some tax sense. Taxes helped but I lost money just the same. Not sold any TSLA since and my thinking of stock trading vs careful choice of a deserving long-term hold has changed. When the deserving long-term hold comes along, it is the way to go above all others. Trading looks increasingly foolish to me.

I bought a basket of EV related stocks initially but over time I moved it all to TSLA (now about 30% of holdings).

TSLA has to be the near perfect long term hold. It is exciting to watch on a grand scale. It is secretive and at the same time transparent. There is always news to consider and new horizons. TSLA has a deserving villain (fossil fuels) as a counterpoint that threatens, blusters and motivates.

TSLA can't help but be engaging, enlightening and exciting. Today I would have a very hard time selling partially because I still see so much up side.

When I started Tesla was 33% of my investments. Now it's 75% (by dollar value). I only sold a few from my "cash" account to get some eat'n money (unfortunately last year when the SP was low, but still not too much lower than what I paid). Needs to go up some more before I become a TSLA millionaire. However, I'm pretty happy, and if it goes down after the quarterly report, I know that it will later reach new ATHs.

 

[lascavarian]

S&P question. Is the portion of a given included stock subject to rebalancing? How are the numbers (by # shares or $s) determined? Is it possible that a soaring price for TSLA results in selling TSLA? How would a multi-trillion dollar valuation be handled by funds?

I tend to think that TSLA will be moved into the S&P in later Summer. I also think that a lot of the trillions of dollars of recent Gov't largess will land in the markets in the Fall and thus buoy up general prices. I am wondering if this might be a double bump for TSLA by the end of the year? Or might it be a counter bump?

 

[StealthP3D]

When and how will S&P500 inclusion happen? S&P500 is both rule based and by Committee (the wild card here IMO). The Committee meets monthly to evaluate S&P candidates/participants and assesses each Company using the following criteria:

While I agree the committee is the wild card, people should be aware that they also meet on an "as needed" basis. I mention this because it's my opinion that getting TSLA into the index sooner, rather than later, would be most advantageous to the goals of the Committee. I think the most likely scenario is an announcement within a week or two of Tesla announcing a quarterly profit.

I read that after meeting, the S&P Committee provides a 7 day notice of S&P inclusion of a new candidate to index funds so as to provide opportunity to accumulate prior to public knowledge. (not a verified source)

I believe the 7-day notice is a public notice so as to not disadvantage any market participants. It would be good to get confirmation on this.

Q: Other than the above criteria, is there any subjectivity the Committee can introduce to foil S&P inclusion?

Yes, the committee can do whatever they want. It's "their" index. That said, it's in their best interest to behave in a predictable manner that is true to their established guidelines. They didn't achieve their current standing and high level of credibility by playing favorites and acting contrary to their established guidelines without good and sensible reason.

Q: What are the dates the S&P committee meets? (We know its once a month but when?)

Whenever they call a meeting. I wonder if the meeting minutes are made public? I doubt it.

 

[Mo City]

If GAAP positive Q2 results are announced late this month,

When would TSLA inclusion to the S&P500 index be announced and when would it be added?

 

[PaulRocket]

Just visited Giga Berlin, not much going on. Huge construction site which really seems to be located at a nice spot strategically. Highway right next to it and access to the railway.
Also nice to see that they use pre-fabricated steel pillars.

edit: forgot to add the pictures

 

[davecolene0606]

Ford doesn't owe taxpayers.

They owe the banks.

Taxpayers only incur liability if Ford goes bankrupt.

Per original agreement.

It was a government backed loan not a loan from the government.

I recalled it as a loan from DOE...
"
Tesla Motors announced that it has paid off the entire loan awarded to the company by the Department of Energy in 2010. In addition to payments made in 2012 and Q1 2013, today’s wire of almost half a billion dollars ($451.8M) repays the full loan facility with interest. Following this payment, Tesla will be the only American car company to have fully repaid the government."

Ford has a loan under identical terms and is paying it back according to the terms.

Fire Away!
It's STILL the batteries, Stupid!)

 

[mongo]

If GAAP positive Q2 results are announced late this month,

When would TSLA inclusion to the S&P500 index be announced and when would it be added?

Whenever the S&P committee wants. No fixed timing exists. Even the delay between announcement and inclusion can be less than three days, if they want.
Rules: https://www.spglobal.com/spdji/en/d...odology-sp-us-indices.pdf?force_download=true

 

[MP3Mike]

Furthermore, Tesla Truth / Factchecking has said more this morning:

https://twitter.com/truth_tesla/status/1278890526671081473

This is the key bit:
Potentially 76m+20-25m+10-15m = 106m-116m shares out of circulation once this process concludes, 72%-79% of the float.

But how many of those S&P500 index funds lend their shares to get extra returns? So all of the shares won't necessarily be out of circulation.

 

[Tim S]

A lot of chat about when to sell. As dollar cost averaging works well when purchasing shares, it should also work well when selling. Upon retirement from one to three years from now, my plan is to sell 1/40th of my shares every year on January 1st. Dollar cost averaging is my long term exit plan. I'm posting this on my fridge. I'd be an absolute fool not to stick with this plan, and @StealthP3D, no need to remind me what blunder I did last May!

You might want to wait until after the Q4 P&D report, rather than Jan 1

 

[wipster]

I think I'd rather have managers that are committed to the mission rather than managers poached from competitors.

I'd rather have a bottle in front of me than a frontal lobotomy...

 

[jerry33]

I'd rather have a bottle in front of me than a frontal lobotomy...

Assuming that the bottle in front of you is some kind of alcoholic beverage, and alcohol kills brain cells, is there a difference?

 

[wipster]

Assuming that the bottle in front of you is some kind of alcoholic beverage, and alcohol kills brain cells, is there a difference?

One is a lot more fun (at least in the short term) than the other.

 

[Mich]

But how many of those S&P500 index funds lend their shares to get extra returns? So all of the shares won't necessarily be out of circulation.

to lend a shares means someone else opens a short position. In this scenario this will not matter

 

[Curt Renz]

...Q: If there really is a 7 day prior notice to institutional index funds, is there any ability to be privy to this?...

...I believe @CurtRenz 's source the other day said the 7-day notice is public knowledge, not just to the index funds, e.g. a press release...

Indeed, on Tuesday, Todd Rosenbluth (CFRA head of ETF and mutual fund research) responded to my queries about announcements of S&P 500 additions. Todd held the identical position at S&P Global Market Intelligence before it was bought by CFRA. Below are his responses. The second one was after I asked for clarification that the announcement is published for everyone and not initially for only fund managers.

Happy to help. ETFs learn typically a week before a stock enters the index and will build a position in advance of it being added formally to cushion the impact.

Everyone at same time. Usually with 7 days notice.

 

[Prunesquallor]

?..
I think Tesla should look into paying good money to poach some top-tier managers from Uber,Lyft etc to come set up a Tesla network. ...

I doubt they would fit in with Tesla’s ethics policy, i.e, you must have some.

 

[The Accountant]

I believe the 7-day notice is a public notice so as to not disadvantage any market participants. It would be good to get confirmation on this.

Here is an article written by the Chairman of the Index Committee (he wrote this in 2015).
In the article he states, "These changes are usually announced five trading days before the index change"

btw - in the article he makes the case for no permanent bump in in SP "Moreover, any bump up is temporary. A few weeks after a stock joins the S&P 500 there is no lasting effect and its price, adjusted for overall market movements, is back to normal"
I believe his argument that the bump is temporary does not take into consideration the points @truth_tesla (Fact Checking) has made on Twitter (Tesla's market cap size, Tesla not currently included in S&P400, etc). My opinion is that we will see a lasting bump.

He makes this comment as well:
"A portfolio manager running an S&P 500 fund is not constrained to buy only at the close on the day the stock is added to the index. He or she can buy at any time; can spread their purchases over a few days or weeks if they believe they will get a better price. The flexibility gives the portfolio manager an opportunity to time the buying to his advantage and use his understanding of the index. Some hedge fund managers and speculators do buy when an index add is announced and expect to sell to an index fund a few days later. Some may also forecast (guess) what stock will be added next and buy in advance"

Inside the S&P 500: Adds, Drops and Tall Tales | S&P Dow Jones Indices

 

[wipster]

By July 2024, TSLA will dethrone MSFT as the No. 1 component of the S&P500 list.

Ie: TSLA > $8k / chair in today's furiture prices...

Cheers!

You're assuming Lodger that MSFT does not grow in the next 4 years... possible, but not probable. Could was though!

 

[wipster]

Imagine, getting deliveries from Tesla Eats. And if was all somehow handled with a full self driving car, you wouldn't have to pay a tip!

(Don't rightly know how that could be done, but wonders never cease in the new world)

 

[oldTAVguy]

5 Boat coming to SF as of today:

Tesla Carriers

 

[Singuy]

Nice summary. But I think we need to consider the possibility that the committee will simply decide to take some alternate action, possibly based on TSLA inclusion being too disruptive at this time. An abrupt rise followed by a similar crash isn't really a good thing for anybody, except a few day traders who get lucky.

Another possibility that doesn't contract the float is if current institutional investors have already accumulated shares and agreed on private sales to S&P tracking funds. After all, S&P 500 inclusion has been an obvious eventuality for a long time, so it's reasonable to guess that plans have been put in place to avoid chaos. These people aren't stupid, and it sure ain't their first rodeo. This is pretty much what I expect is the case.

So what happens if the powers that be don't play along with the "IT'S GOING PARABOLIC!!!!" crowd? What's the reasonable level for TSLA? Does it hang around 1200 into earnings, or continue up to something much higher (my Jan '21 1800 calls would like that!)? Does it fall back after earnings, or sit around waiting for battery day? Or continue up? All a mystery. But all things considered, I wouldn't count on the S&P 500 event to do anything much for the stock price beyond what's already happened.

Be careful out there.

My guess is that S&P contacted Elon or they have talking about inclusion right now(or already done). So they will slowly have those who tracks the S&P to start buying in at a set rate to not disrupt the market like you said up to earnings. When the official announcement comes, we might see a 2% gain and that's about it, but about maybe 10-15% rise from now till earnings(remember there will be plenty of profit takers to ease the sp upwards, not having it go parabolic. So essentially this doesn't cause a squeeze and crash but price it in the next 45 days.