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

[StealthP3D]

Someone smarter than me please tell me this is capitulation / the bottom.

Someone smarter than you would probably tell you it's pretty hard to call a bottom in advance of the bottom. But this feels like it could go a bit lower to me.

Remember, the financial powers that exist will push it as low as they can and create a much fear, uncertainty and doubt before they give up, jump in with both feet and let it run. And us peons cannot call that in advance, neither can they as it's a dynamic situation. There is even the possibility that there is no obvious capitulation, this move to the downside could stall out right here and zig and zag a number of times before gradually climbing out of the hole or having one more dramatic fall before a more definite capitulation.

The less individual investors worry about market action and the more they focus on acquiring future value and holding it, the better. I'm heartened by the overall level of economic activity, construction, food production, mining, new energy, etc. that I see happening in the economy which is what provides the capital to bid stocks higher in the future. Of course, one company stands out to those in the know as the obvious outperformer so investors should make their choices using healthy amounts of rationalism and avoid being swayed by unimportant noise.

 

[vikings123]

i don’t see the uptick applied yet by IB TWS

unsure if glitch

i see the little badge there for shopify and some others tho

Probably a glitch, I definitely see it on my TWS.

 

[googlepeakoil]

Think the difference here is the Fed again. Tightening into collapsing markets and on record that their top priority now is crushing inflation via demand destruction and asset devaluation.

I agree that the above could happen very quickly in our new world. But no one knows in the end. If it takes a couple of years to tame inflation the Fed will do it via relentless rate hikes and QT.

A couple of years of this? Ouch.

Still looking for that capitulation day. Getting closer at least…

I'd be more likely to compare the bear market to how long the shares ran up - and they've run up for a good 2-3 years.
I'd be more inclined to look at a few dozen big companies like Apple, Microsoft, Google, with their graph over 10 years, not 2 years, and draw like a moving average 3 year trend line and you'll see the "blow off" "run up" of the last 2 years. Now cut that off and see where the trend line is. Previous collapses will always sink the share a bit below the long term trend before the recovery. Look at ebay amazon and others after the .com crash of 2000-2003. They crashed to fantastic prices.

 

[greenmore]

It's an insanely low PE for a company growing 50% YoY and guiding to maintain that growth for several years.

That's not true for large cap stocks. Take AAPL as an example, it was growing about 50% YoY between 2009 and 2012 and in the same time its P/E was in the teens-20s-30s.

 

[googlepeakoil]

Someone smarter than you would probably tell you it's pretty hard to call a bottom. But this feels like it could go a bit lower to me.

Remember, the financial powers that exist will push it as low as they can and create a much fear, uncertainty and doubt before they give up, jump in with both feet and let it run. And us peons cannot call that in advance, neither can they as it's a dynamic situation. There is even the possibility that there is no obvious capitulation, this move to the downside could stall out right here and zig and zag a number of times before gradually climbing out of the hole or having one more dramatic fall before a more definite capitulation.

The less individual investors worry about market action and the more they focus on acquiring future value and holding it, the better. I'm heartened by the overall level of economic activity, construction, food production, mining, new energy, etc. that I see happening in the economy which is what provides the capital to bid stocks higher in the future. Of course, one company stands out to those in the know as the obvious outperformer so investors should make their choices using healthy amounts of rationalism and avoid being swayed by unimportant noise.

Look at how cheap amazon and ebay got after the .com crash of 2000-2003 ! There will always be an over correction. That's because a lot of things are bought and sold on margins. I said it above, but look at a 10 year graph of a big tech company that's been around 10-15 years. Look at how it hit a "bubble" for the last 3 years - then track how far it has to fall to hit a say 3 year moving average.

 

[wipster]

I must say, so far at least, the Business Inquirer hit piece isn't showing up in too many of the publications to which I subscribe. Hopefully they see through it too (although the weekend is coming)...

 

[Nocturnal]

I must say, so far at least, the Business Inquirer hit piece isn't showing up in too many of the publications to which I subscribe. Hopefully they see through it too (although the weekend is coming)...

CNBC picked it up.

 

[StealthP3D]

As a trend, bear markets have been much quicker over the last 40 years. Bear markets prior to 1982 were long. Is that a change in how markets work, or are we due for a long bear? That's probably a scholarly argument that we won't know for a long time.

The trend is your friend, and the trend is for market downturns to work out of the system much more rapidly than in pre-computer times. I believe this is due to the much higher velocity of both information and money. In any case, I will not be sitting on the edge of my seat waiting for a scholarly article to tell me how markets work. I will just continue to buy future value, those companies bringing a better future at lower costs than anyone else.

 

[StarFoxisDown!]

Apparently mr. market doesn’t believe 50-100% growth in recession.

Oh you mean the same Mr Market that missed Tesla's growth, especially earnings growth, every year since existence?

Can't roll my eyes enough at this comment

 

[wipster]

CNBC picked it up.

One of the reasons I don't subscribe to it. The NY Post also ran with it... I definitely don't subscribe to it either, albeit for completely different reasons.

 

[henchman24]

Think the difference here is the Fed again. Tightening into collapsing markets and on record that their top priority now is crushing inflation via demand destruction and asset devaluation.

I agree that the above could happen very quickly in our new world. But no one knows in the end. If it takes a couple of years to tame inflation the Fed will do it via relentless rate hikes and QT.

A couple of years of this? Ouch.

Still looking for that capitulation day. Getting closer at least…

I highly doubt we will see years of this (anything is always possible). If we did, inflation will solve itself in a hurry (we'd move from the early 08 inflation to 09 deflation) and the Fed will loosen a ton.

 

[M|S|M MYP]

CNBC picked it up.

CNBS does not count!

 

[googlepeakoil]

When prices return

Look at how cheap amazon and ebay got after the .com crash of 2000-2003 ! There will always be an over correction. That's because a lot of things are bought and sold on margins. I said it above, but look at a 10 year graph of a big tech company that's been around 10-15 years. Look at how it hit a "bubble" for the last 3 years - then track how far it has to fall to hit a say 3 year moving average.

Out of curiosity I did the trend line for Apple like I suggested above. This is how much it's got to fall to return to a trend line. Obviously many of the companies tracked by ARKK and such have had much shorter histories. But I've got friends who never bought shares before, or any "coins" - got caught up in the bubble and hype (ala the .com crisis), are down 40% and deeply regretting it! They bought some stallwarts like Amazon and can't believe they've lost 40% even in those. Lost so much "cash in the bank" that they can't sell to buy the house move they planned. Reminded me of my losses from 20 years ago! Even having faith in Tesla growing 50% can't undermine the fact the market is crashing because everyone and their neighbour bought a bit of a share in ARKK stocks! So yeah, I believe that "6 months of pain bear market" article.

 

[henchman24]

The trend is your friend and the trend is for market downturns to work out of the system much more rapidly than in pre-computer times. I believe this is due to the much higher velocity of both information and money. In any case, I will not be sitting on the edge of my seat waiting for a scholarly article to tell me how markets work. I will just continue to buy future value, those companies bringing a better future at lower costs than anyone else.

Yup... look at history and try to find your best chances.

 

[Drax7]

Apparently mr. market doesn’t believe 50-100% growth in recession.

Given the price of gasoline, the shift to electric cars has just shifted
higher world wide. That’s growth during a recession.

something good always happens.

 

[TheTalkingMule]

Someone smarter than you would probably tell you it's pretty hard to call a bottom. But this feels like it could go a bit lower to me.

Remember, the financial powers that exist will push it as low as they can and create a much fear, uncertainty and doubt before they give up, jump in with both feet and let it run. And us peons cannot call that in advance, neither can they as it's a dynamic situation. There is even the possibility that there is no obvious capitulation, this move to the downside could stall out right here and zig and zag a number of times before gradually climbing out of the hole or having one more dramatic fall before a more definite capitulation.

The less individual investors worry about market action and the more they focus on acquiring future value and holding it, the better. I'm heartened by the overall level of economic activity, construction, food production, mining, new energy, etc. that I see happening in the economy which is what provides the capital to bid stocks higher in the future. Of course, one company stands out to those in the know as the obvious outperformer so investors should make their choices using healthy amounts of rationalism and avoid being swayed by unimportant noise.

I think volatility, as a Wall Street goal within itself, is underappreciated. It's in a LOT of people's interest to see these big 5-12% daily swings, especially TSLA with it's massive options market. Now that we all know Wall Street cannot pick winners any better than a chimp throwing darts, they need to take our money in other ways. I bet we're in for a couple weeks of wildness in both directions.

All we can do is guess this is "near the bottom". Maybe Putin dies tomorrow and this is the bottom. We'll see.

Another big factor is the dwindling workforce in the US. It's decidedly NOT people taking covid-related unemployment, since we know continuing claims are at their lowest since 1969. But it could be people assuming they can live off their newfound stock market "wealth". That right there is some good fuel for panic selling.

And we all know the ultimate goal is taking cheap shares from retail....

 

[Gigapress]

You make it sound as if 90 is cheap?! The average for the S&P used to be 18. In Europe most stocks trade on PE's of 10-15. There's energy companies, house-builders on PE's of 5 or 6 in the UK. I know Tesla is a growth stock but that's not a low PE. When there's uncertainty in the market, recession fears, a escalating war, political problems, distracted CEO, a CEO making increasingly bizzare posts... well the heady PE's in the 100s can't last forever. What we're seeing is the downside of a bubble. Like 2001 all over again. Tesla got pushed ridiculously high like a lot of stocks by fractional share investing on platforms like Robinhood. But that party is unwinding and some people are making margin calls and selling down. Personally I love my model 3 - just have never bought shares. And no, I don't even have the knowledge to sell short.

Bruh…

90 is ludicrously cheap.

First of all, that’s for trailing twelve month earnings. GAAP earnings per share for the last 5 quarters:

• $0.39
• $1.02
• $1.44
• $2.05
• $2.86

Q1 TTM EPS: $7.37
Q1 EPS annualized: $12.88

(55% higher than TTM for 50 GAAP P/E)​

OpEx ate up almost 40% of our profit last quarter and it’s growing much slower than gross profit. Simply getting bigger will continue to drive that down and consequently drive EPS growth to greatly outpace delivery growth and gross profit growth, even if we assume deliveries and gross margin slow down from their current rates of improvement. The idea of mass production and economies of scale is basic economics that I remember learning in 4th grade Social Studies class.

Watch how that operating leverage phenomenon affects upcoming earnings.

If you apply crazy bearish assumptions that 2023 will have:

• Only 2.5 million deliveries
• Only $16k gross profit per car (steady from Q1)
• OpEx grows over 10% to $8B
• Energy still makes no money even with Lathrop coming into the fray
• 1.2B outstanding shares
• 10% tax

Then that model gives total ‘23 EPS of $24, 3.2x more than the current $7.37 TTM EPS upon which the 90 P/E ratio is based, so the new P/E if current TSLA price holds would be 27. And they’d still be growing earnings rapidly, so 27 would go to 15 and then 10 and then 5 as the years roll by.
This current price makes absolutely no sense in my opinion and I just sold 20% of my remains shares to cover my daily margin call and buy yet more LEAPS. Make your own decisions of course, the first of which might be to reconsider why you’re cluttering an investment forum with your opinions about a stock you don’t even invest in on the long or short side.

 

[Matias]

Oh you mean the same Mr Market that missed Tesla's growth, especially earnings growth, every year since existence?

Can't roll my eyes enough at this comment

What? Many years Tesla’s P/E was infinite.

 

[Discoducky]

I wish James was on this forum; he has great insights and data visualizations.

https://twitter.com/x/status/1527699584172138506

 

[StarFoxisDown!]

What? Many years Tesla’s P/E was infinite.

This comment really shows ignorance