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

[Nrkl]

Not sure if it has been posted, but here is the panel discussion of Axel Springer Award:

Both this and the main event were a pleasure to watch. Elon seems happy, confident, yet quirky in a very relatable way. He truly is such an inspiring leader compared to the average CEO's that took part in the discussion.

I can only imagine the efficiency that decisions can be made in a company with such a strong leader and such a clear mission. You can distribute a lot of decision-making to the people who are working on any given problem day-to-day, and they can easily test whether a given decision is aligned with "accelerating the advent of sustainable energy".

I've never been lucky enough to be part of a company that genuinely works towards a selfless and lofty vision, but it must be amazing.

 

[Johan]

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Thanks for the reply. What we share in common is a belief that no common methods of guessing short term movements of stock prices are terrific for predicting short term price movements. News or macros can cause price movements that are totally unexpected and overrule the expected movements. Even fundamentals can be of dubious help in short term predictions, as we've seen with truly unexpected price movements after an earnings report.

That said, tools such as technical analysis and spotting repeating patterns of apparent manipulation can aid an investor's profitability. What really caught my attention about technical analysis was how @Curt Renz would talk about a Fibonacci retracement level when we were experiencing one of those hellacious mega-dips in previous years, and lo and behold the bottom of the dip turned out to be precisely the number Curt put forward. He did this multiple times. The ability of the stock to bounce off upper and lower bollinger bands is so common that attributing such behavior to chance is ludicrous. I really don't know if technical analysis is such a precise distillation of human psychology or if it works simply because there are people controlling large amounts of money who THINK it works (and it therefore affects their buying and selling behavior) but the result is that technical analysis sometimes does have predictive powers.

As for manipulations, we very often see the stock price take a big dip in the second half of the week and close very near the price where call options dominate going up and put options dominate going down. I've listened to explanations why this might be a natural phenomenon rather than a manipulation, but whatever the cause the result is the same: a sale price for Tesla shares and options at the end of the week and a good chance you will see a higher price come Monday.

You see, here's the thing. You haven't personally benefitted from TA or placed bets on perceived manipulation patterns, but that doesn't mean that other people aren't benefitting from these tools. Over the past 18 months I'm up over 20X with my TSLA investments and I couldn't have done that with pure HODL investing in stock. You suggest I should test my beliefs, but that is exactly what I do with my investment decisions on a regular basis. Live and let live, my friend, we'll both do well with TSLA.

I've enjoyed the back-and-forth between you and @Bet TSLA. I think you're both right in the following sense: He's right to say that short term price movements are truly inexplicable and that technical analysis really is akin to for example religion in that it's just us humans wanting to see and recognize patterns, and find some kind of design og deeper mening, in things that are truly inexplicable. On the other hand, as you say, because so many market participants "believe" in different aspects of TA in one way or the other, and act upon these beliefs, you get a lot of self-fulfilling prophecies thus "confirming" the validity of TA as a tool for predicting the market and thereby creating a sort of positive feed-back loop. But then real events (i.e. fundamentals) come in and affect the stock price, and of course it's these fundamentals that are driving the long term price of a equity. And really, the dichotomy between "short term" and "long term" price changes is a false one, because the long term price movements of a stock is really just the sum of the short-term price change, so if TA was "real" it would also - of course - be able to predict the long term future. But as you say, understanding the psychology of TA can be traded upon, especially if you at the same time have a really good understanding of the fundamentals.

With regard to manipulation I believe that you are definitely on to a real phenomemon with regard specifically to TSLA. With the amount of shorting historically and the unusally high degree of options trading in this stock there are some unusual dynamics that come in to play. Your detailed analysis of this has been mostly spot-on and I'm glad to hear that you have out-traded the market in a big way this year. The proof is in the pudding!

 

[Tslynk67]

572$...

Lots of click-bait mis-representing the "leaked" email yesterday. Hedgies, shorty and other manips will capitalise on this today, starting with a push-down in Germany to try and set a negative sentiment...

They want your shares, they want them now. Stay strong!

Example form MarketWatch - classic FUD, it's almost, but not quite what was written by Elon, subtly twisted make it look likely:

 

[dw4ngg]

TA is a self fulfilling prophecy at times w the stock price often-times front running the fundamentals.

So while it can seem like voodoo at times, it should not be ignored.

 

[WarpedOne]

So while it can seem like voodoo at times, it should not be ignored.

No, it should be ignored. Time is much better spent studying the company.

TA is yet another tool that perfectly explains what just happened but has zero predictive power.
it doesn't matter if it's predictions were 99% or just 50,000000000000001% correct or wrong.
As long as it's predictive correctness was distinct from 50%, we all would be infinitely reach already.

And yet we are not. How come?
We just don't master TA well enough?
It may be so, but are there any souls that got infinitely reach by using TA?
No? So nobody masters TA well enough?

TA thus enters Fermi paradox territory... the absence of evidence is evidence of absence.

 

[Causalien]

I've enjoyed the back-and-forth between you and @Bet TSLA. I think you're both right in the following sense: He's right to say that short term price movements are truly inexplicable and that technical analysis really is akin to for example religion in that it's just us humans wanting to see and recognize patterns, and find some kind of design og deeper mening, in things that are truly inexplicable. On the other hand, as you say, because so many market participants "believe" in different aspects of TA in one way or the other, and act upon these beliefs, you get a lot of self-fulfilling prophecies thus "confirming" the validity of TA as a tool for predicting the market and thereby creating a sort of positive feed-back loop. But then real events (i.e. fundamentals) come in and affect the stock price, and of course it's these fundamentals that are driving the long term price of a equity. And really, the dichotomy between "short term" and "long term" price changes is a false one, because the long term price movements of a stock is really just the sum of the short-term price change, so if TA was "real" it would also - of course - be able to predict the long term future. But as you say, understanding the psychology of TA can be traded upon, especially if you at the same time have a really good understanding of the fundamentals.

With regard to manipulation I believe that you are definitely on to a real phenomemon with regard specifically to TSLA. With the amount of shorting historically and the unusally high degree of options trading in this stock there are some unusual dynamics that come in to play. Your detailed analysis of this has been mostly spot-on and I'm glad to hear that you have out-traded the market in a big way this year. The proof is in the pudding!

I arrived at the same dilemmna 10 years ago. Then one of my close friend told me " If anyone can reconcile the difference between the two methods, it's you." I think I've solved the issue, but for normal investors it's best to stick with one or the other.

And option strategies is what allowed the two to have synergies with each other.

One lesson from my early "real" teachers in TA. Back then when the space wasn't filled with scam artists with no track record. He said that the news will come out to fulfill what the TA predicts. The theory behind that is because there is so much money bet behind the option fulfillment. The big players will often cause the news. Lo and behold, I've observed so many of this happen over the years that I've started taking it as a fact.

 

[kanweg]

I've enjoyed the back-and-forth between you and @Bet TSLA. I think you're both right in the following sense: He's right to say that short term price movements are truly inexplicable and that technical analysis really is akin to for example religion in that it's just us humans wanting to see and recognize patterns, and find some kind of design og deeper mening, in things that are truly inexplicable. On the other hand, as you say, because so many market participants "believe" in different aspects of TA in one way or the other, and act upon these beliefs, you get a lot of self-fulfilling prophecies thus "confirming" the validity of TA as a tool for predicting the market and thereby creating a sort of positive feed-back loop. But then real events (i.e. fundamentals) come in and affect the stock price, and of course it's these fundamentals that are driving the long term price of a equity. And really, the dichotomy between "short term" and "long term" price changes is a false one, because the long term price movements of a stock is really just the sum of the short-term price change, so if TA was "real" it would also - of course - be able to predict the long term future. But as you say, understanding the psychology of TA can be traded upon, especially if you at the same time have a really good understanding of the fundamentals.

With regard to manipulation I believe that you are definitely on to a real phenomemon with regard specifically to TSLA. With the amount of shorting historically and the unusally high degree of options trading in this stock there are some unusual dynamics that come in to play. Your detailed analysis of this has been mostly spot-on and I'm glad to hear that you have out-traded the market in a big way this year. The proof is in the pudding!

It is a bit like the weather I think (albeit much less accurate). We can make short time predictions (weather; technical analysis) and long term predictions (climate; fundamentals).

 

[Artful Dodger]

TA is yet another tool that perfectly explains what just happened but has zero predictive power.

I guess all the predictions I published here in advance using TA don't count when you need to make a point? It's not TA that's broken, it's your 'search' (and your memory).

That's not rich.

 

[Johan]

I guess all the predictions I published here in advance using TA don't count when you need to make a point? It's not TA that's broken, it's your 'search' (and your memory).

That's not rich.

I think a lof of confusion comes from arguing about whether TA has predictive power as opposed to why it has/could have predictive power. A lot of people who totally dismiss TA and equate it to reading tea leafs do so because they find no rational for why it would tell us anything "true". On the other hand, people who put more or less weight on TA do so from a pragmatic stand point: to a certain degree it does work - there is predictive power - and we can be agnostic as to why it works (all though I suspect it's all herd psychology, self fullfilling prophecies and positive feed back loops that are in play).

 

[dl003]

One lesson from my early "real" teachers in TA. Back then when the space wasn't filled with scam artists with no track record. He said that the news will come out to fulfill what the TA predicts. The theory behind that is because there is so much money bet behind the option fulfillment. The big players will often cause the news. Lo and behold, I've observed so many of this happen over the years that I've started taking it as a fact.

Its precisely this. Everyday, there are countless developments, things said, laws passed, numbers reported, etc... that the power that be can choose to ignore or wield as a tool to control the stock price. "Fundamentals" are not that real either. What is real is the market's perception of fundamentals being fed to them via the media. Sometimes when it has nothing negative to say, it would recycle old news. Market sentiment also plays a big part. When we are at ATH, everybody is on edge and looking for a reason to sell. The same piece of news will have a much bigger effect on them, if twisted the right way. The market is rigged, which is one of the reasons why TA works. Of course its not 100% right, but thats only because there might be more powerful forces at work, at times. Its effect can still be felt, though.

 

[Tslynk67]

Manips trying to spook retail with a push-down before pre-market...

 

[WarpedOne]

So... why not infinitely rich yet?

 

[vikings123]

Manips trying to spook retail with a push-down before pre-market...

Yep it looks like it’s going to be a fun ride today.

Talking about TA What are some key support levels? I guess Monday’s low of 555 and then maybe 520 for the gap fill. I highly doubt 520 is in play but greed has no limits.

Regardless I definitely think they try to go for the 550 stop loss orders and then reassess. Bring it on lol.

 

[Featsbeyond50]

No, it should be ignored. Time is much better spent studying the company.

TA is yet another tool that perfectly explains what just happened but has zero predictive power.
it doesn't matter if it's predictions were 99% or just 50,000000000000001% correct or wrong.
As long as it's predictive correctness was distinct from 50%, we all would be infinitely reach already.

And yet we are not. How come?
We just don't master TA well enough?
It may be so, but are there any souls that got infinitely reach by using TA?
No? So nobody masters TA well enough?

TA thus enters Fermi paradox territory... the absence of evidence is evidence of absence.

Well then we're screwed because you just invalidated fundamental analysis also.

 

[WarpedOne]

That fundamental analisys that is used by gordon johnson?

Whatever tool one uses, its quality is measured by its success. If it does not bring you consistent profits, it is useless.

 

[Pezpunk]

I guess all the predictions I published here in advance using TA don't count when you need to make a point? It's not TA that's broken, it's your 'search' (and your memory).

That's not rich.

the TA predictions posted here are vague and come true about half the time. whoopty doo.

 

[Artful Dodger]

What are some key support levels?

This morning's maximun-pain.com calculation is $560 which MMs have now put within easy reach by swamping the Orderbook with a steady stream of 4-8K/min orders during the After-hrs session, during the period after many classes of investors with less-priviledged access to the Market can not Trade. It's a cheat, but one used frequently by MMs when they need to move the SP against the tide of the Market.

Manipulation CONTINUED immediately upon the open of the Pre-market session today, at which time most interested parties also can not trade yet. Result? Now, TSLA is down 2.66% while Tech macros are down only 0.27% (10x multipler). Yet the blind/deaf/dumb continue to wail 'there is no manipulation'. Makes you wonder who pays for those voices, or how they benefi from the situation they deny?

Further SP moves today depend upon options trading, but we get no real-time info on options. MMs keep that info to themselves while only stale data is ever released publicly. That's another way the game is rigged.

TL;dr HODL.

 

[Singuy]

This morning's maximun-pain.com figure is $560 which they've now put within easy reach. Movement will depend (in part) upon further options transactions, but we never get real-time info to act upon. MMs keep that to themselves, or only release stale data. That's how they rig the game.

Can you explain what happened last Friday? We closed no where near max pain and volume was not even all that great due to a short trading day. People begining of the week were dead set that Friday will be manipulated down below 550 but that didn't happen at all. In fact not one post about manipulation last Friday about manipulation... because I guess stock was up...

 

[joh01652]

The #1 trending article on CNBS right now is this:Musk to Tesla employees: 'Our stock will immediately get crushed like a souffle under a sledgehammer!' if we don't control costs

 

[Unpilot]

When Tesla is a 10 trillion dollar company...and Musk is tweeting from Mars....there will still be "articles" written about the demise of the company....and how crazy Musk is.

Some stand at the back and yell how the ones forging ahead are doing it wrong.
While other's get dirty and sweaty working their arses off making the future.