2012 Q4 Earnings Report thread

[Citizen-T]

Yea, this line of thinking always just completely goes over my head. Why would I ever root against a company I've invested in? If I want the stock to drop, I should be completely divested and shorting it. If I think the stock is going up, I want to be completely invested. That maximizes expected value. If the goal is risk mitigation, that's different.

Mostly the depressed part is because the stock movement is just completely irrational to me by anything I'd think would make a meaningful measure on a company like Tesla (startup, everything is growth based rather than value based). I don't like it when things make no sense to me

It's not a sports team.

You need to think about the stock market more like a supermarket. I like Coke, I don't want the company to go bankrupt. But when I go to the store today, I'm going to be hoping that it is on sale. Because I want more of it, and I'd rather not pay what I actually think it is worth. I want to pay less than that.

 

[Treker56]

Hoping for a rebound in the next few days. Market is down overall today as well. Btw:

Tesla triggers short-sale circuit breaker - blogs.marketwatch.com/tesla-triggers-short-sale-circuit-breaker

 

[carrerascott]

Well, it was nice to add some under $35 today. Wasn't so nice for the rest of the portfolio to take a hopefully-temporary hit.

 

[ckessel]

It's not a sports team.

You need to think about the stock market more like a supermarket. I like Coke, I don't want the company to go bankrupt. But when I go to the store today, I'm going to be hoping that it is on sale. Because I want more of it, and I'd rather not pay what I actually think it is worth. I want to pay less than that.

I don't get the sports team reference.

I did play a ton of poker at one point amongst other games and concepts of maximizing expected value (EV) are pretty core to most any activity with a "score" (money essentially being your score). The concept of maximizing EV on a given play tends to be pretty black and white. It's not really specific to poker, but lots of people are familiar with poker. You're either pushing in everything on advantage or bailing out of a bad situation. Managing your bankroll is sort of the meta-game around individual plays akin to a portfolio of stock is the meta-game around plays on individual stocks.

With stocks, it can only go up or down so if you trust your vision on where it's going the EV play is to be completely in our out. The idea that you'd have $90 in a stock and $10 in cash and root against that $90 to maximize that $10 on a later stock purchase is hard for me to grasp why that makes any sense. Sell all $100 into cash if the expectation is it's going down to a better buying point later.

That'd be, presumably, one of several plays across lots of stocks so being wrong on one stock doesn't kill your portfolio. In poker, the related concept is bankroll management.

Obviously you're many orders of magnitude better with stocks than I am (which is why I don't buy or sell, I just sit on things for long periods) and I'm not remotely trying to claim you're mistaken. I'm sure you're not. I just don't understand why this half-in/half-out makes any sense to my brain trained in game theory and probabilities.

 

[SteveG3]

Mostly the depressed part is because the stock movement is just completely irrational to me by anything I'd think would make a meaningful measure on a company like Tesla (startup, everything is growth based rather than value based). I don't like it when things make no sense to me

ckessel, I'm not a fan of things not making sense to me either.

these are theories, but you may want to consider...

a. who does the pricing in the first hours after the earnings call? far more traders than investors.
b. what's good news to an investor is often not good to a trader (i.e. Elon saying 2013 target remains 20M, we want to focus on efficiency of production to improve margins, and quality of product. trader would have preferred to hear, "based on demand, our new target for 2013 is 25-30,000)
c. BOA report is part of this. agree with BOA report or not (I don't), it makes sense a downgrade would exacerbate a selloff. I'm optimistic some reports pointing out the positive overall picture from yesterday will be out today, or tomorrow.
d. frankly I see us over $36 later today. $37 within days if not tomorrow. we may have a 36-38 range until next news. (this is all barring a substantial market selloff).
e. I used to get real upset on these with another stock I held 12 years that I saw so much fundamental future promise. after a few of these getting under my skin, I would keep enough cash to do short term trading on what I felt were irrational overnight 5-10% moves. that worked very well for me, and like another poster suggested, I half looked forward to these knocks.

 

[Todd Burch]

Just bought some @ 35.12 today.

 

[dave]

Just bought more at 34.75. Hopefully it stops bleeding soon.

Tough to INCREASE my position in the stock after it's gone down so much, but that's how you play the game!

 

[ckessel]

So, out of curiosity looking into the eventual Q1 report. If the Q1 report says Tesla is profitable, but the profitability is short of "The Street", would the stock nose dive again on that?

 

[mitch672]

Just bought some @ 35.12 today.

I'm not sure thats a good move or not,the drop caused the circuit breaker to trip, tommorow it could go down another %10 (down $3.50 more), I wouldn't put beyond the realm of possibility. debating selling my entire position and waiting it out now.

 

[SteveG3]

So, out of curiosity looking into the eventual Q1 report. If the Q1 report says Tesla is profitable, but the profitability is short of "The Street", would the stock nose dive again on that?

Warren Buffett once said in the short term the stock market is a voting machine, in the long term a weighing machine.

so, couldn't tell you what would be day of Q1 earnings report. but if Tesla more or less delivers for 2013 what Elon layed out yesterday I'd be surprised if Tesla isn't 40+ a year from now.

 

[gregincal]

I'm not sure thats a good move or not,the drop caused the circuit breaker to trip, tommorow it could go down another %10 (down $3.50 more), I wouldn't put beyond the realm of possibility. debating selling my entire position and waiting it out now.

In my opinion that's the sort of move that just loses you money. Sure it could go down more, but my mantra is still "if you're long, be long." Eventually it will go back up, and it can do it in a hurry. Sell now, and you lock in the lower price, and almost certainly miss the upward movement. If you believe in the stock, now is a time to buy, not sell.

 

[mitch672]

In my opinion that's the sort of move that just loses you money. Sure it could go down more, but my mantra is still "if you're long, be long." Eventually it will go back up, and it can do it in a hurry. Sell now, and you lock in the lower price, and almost certainly miss the upward movement. If you believe in the stock, now is a time to buy, not sell.

wrong. my average price is $28.50, there is such a thing as "protecting profits" you already have. Would have been better to sell pre-earnings, or buy a put, but I still have SOME profits left. There is no telling how low this is going to go, we could be looking at $26-$29 range again. There are no fundamentals to even support TSLA at $10/share, in reality.

 

[jkirkebo]

Sorry, I don't "buy" this. Momentum maybe, but, for every sale, surely prospects are going to insist on a test drive? And a test drive is handled at a "store". Who, in their right mind, aside from a serious early adopter would spend $80k+ without sampling the product?

I usually don't bother to sample, I'm quite content doing my research on-line. Like when I bough my $6000 Sony TV 1,5 years ago. Of course I could have driven quite a few miles to the store who had one on display, but I instead trusted the glowing reviews on-line. Good call, the 65HX920 is excellent. A keeper for 10+ years.

The Tesla store 60 miles from here has a Model S for test drives. I haven't been there to see it, nor test it. Probably won't set my foot there until my car is ready for delivery.

 

[Norbert]

I guess it's this

Stocks Hit by Lackluster Economic Data - TheStreet

plus this

UPDATE: Bank of America Downgrades Tesla Motors to Underperform on Valuation | Benzinga

which is mostly looking at the quarterly EPS and paper value.

This suggests

Tesla triggers short-sale circuit breaker - The Tell - MarketWatch

that the shorts might have increased again, after going down from 29 million to 26 million. Shorts eventually have to buy back.

I would't have sold even if I knew this happened, given that I would need to wait until it settles before I can buy back, and that I'd lose the 12 month status. I'd be too afraid it will soon go up again.

 

[Todd Burch]

I'm not sure thats a good move or not,the drop caused the circuit breaker to trip, tommorow it could go down another %10 (down $3.50 more), I wouldn't put beyond the realm of possibility. debating selling my entire position and waiting it out now.

It might not be the best move to make the most money. I'm a busy father and don't have time to watch the markets closely all the time. Having said that though, I play the markets *long enough* to sell above where I buy.

In 15 years of investing, I've never lost a dime in the markets. Not a penny, and it's all from waiting to sell until prices are up. My rate of return is usually around 5-10%. I don't set out to make the largest profit--that tends to increase risk, in my opinion--and I'm too busy to do full-on research and all that jazz. I don't claim to be the most savvy of investors. But by being patient and avoiding crazy moves, I've been pretty successful at coming out ahead.

 

[mitch672]

It might not be the best move to make the most money. I'm a busy father and don't have time to watch the markets closely all the time. Having said that though, I play the markets *long enough* to sell above where I buy.

In 15 years of investing, I've never lost a dime in the markets. Not a penny, and it's all from waiting to sell until prices are up. My rate of return is usually around 5-10%. I don't set out to make the largest profit--that tends to increase risk, in my opinion--and I'm too busy to do full-on research and all that jazz. I don't claim to be the most savvy of investors. But by being patient and avoiding crazy moves, I've been pretty successful at coming out ahead.

That's fine Todd, but I am single, and a lot closer to retirement than you probably are (I am 53), so each person has to do what's best for them.
I have tried buying on downdrafts before, and "averaging down", usually doesn't work well for me. If TSLA makes another move to the downside, I am out.
P.S. Good choice of color (I also have 85KW, Dolphin Gray, 19" wheels, grey leather, pano, tech, sound studio, air, and dual chargers)

 

[Todd Burch]

That's fine Todd, but I am single, and a lot closer to retirement than you probably are (I am 53), so each person has to do what's best for them.
I have tried buying on downdrafts before, and "averaging down", usually doesn't work well for me. If TSLA makes another move to the downside, I am out.
P.S. Good choice of color (I also have 85KW, Dolphin Gray, 19" wheels, grey leather, pano, tech, sound studio, air, and dual chargers)

We'll see how it goes. At the very minimum I'll hold until after the Q1 earnings report. My tendency is to be long...so as long as the stock builds healthily after that I'll probably stay in.

 

[Norbert]

We'll see how it goes. At the very minimum I'll hold until after the Q1 earnings report. My tendency is to be long...so as long as the stock builds healthily after that I'll probably stay in.

If you are already thinking "long", I'd say that I'd expect the real increase in value of the company (not talking about the stock value for a moment) to come with Gen III, and afterwards, in a few years. And that the stock price might (not an expert) make that move as a more continuous movement between now and then (with ups and downs, of course).

 

[Beckler]

Can Regular Investors Beat The Market?


Maybe we should all just get out, permanently...

 

[drinkerofkoolaid]

I could be mistaken, but if I read the analysis from the Bank of America downgrade issued today correctly, the only reason they seem to give is they don't believe Elon about 25% margins, and think the Model S is too expensive. Their estimate of 10 cents per share (11million in profit) is a bit confusing.

if they were counting the EV credits as part of the 25% margins the estimates would make sense, but Elon explicitly said this was not the case, numerous times during the conference call. I see it as possible that they will earn $1-3 per share if EV credits are worth what I think they are. 20,000 Model S with an Average Price of 85,000 and 25% gross margins = about 400million profit. The EV credits alone could be 400million in profit. If operating expenses are 400 million for the year, and the 300million in debt is paid off, that gives them earnings of 100million, or over $1.

Am I missing something? My only guess is that they don't believe Elon can produce on his claims.

Jeffries seems to agree to some extent, and affirmed their target of $45. Does anyone have the detailed analysis?

Doesn't a miss by 10 cents only mean they spent 11million more than expected on something? They also seem to have explained the problem some buyers had mentioned about receiving the wrong tires, I think?