TSLA - Tesla Motors

[LC]

Looks like there's an Eric junior they talk about on there.

 

"Some dude on WSB bought $100k in $1000 calls by March at the end of January. They've probably just cleared at least $2 million this week and could very well make over $10 million on that insane bet."

 

Granted, I think Eric's bets had the higher probability of success but man, crazy what things can happen.

 

Newbie here... does anyone have a link to this mythical Eric trade?  I spent 15min looking for it and did not find it.

 

You can go thru his post history, it was years ago (2015 or so?) on the BAC-WT thread. There's also a more concise version in the "strategy" forum, but the BAC thread is where it went down "in real time" so to speak. It's a good read for a slow day to see what the thinking was at the time.

[Liberty]

Saw this floating around. Take it for what it is.

 

I have nothing intelligent to say (positive or negative) about Tesla (the company or the car) but the fitted curve intersection end-point corresponds closely to the South Sea historical point when Sir Isaac Newton massively re-entered the trade (after doubling his money before). History says that nobody could ever even whisper the "South Sea" words in Newton's presence when the dust settled and perhaps this explains that.

 

These historical curve fittings (as well as mentions of Enron or whatever) tend to short-circuit real thinking, whether they turn out to be correct or not. You can still get your face ripped off (as lots of Tesla shorts have been finding out recently) even if something eventually turned out to have been a bubble or overvalued...

[Cigarbutt]

Saw this floating around. Take it for what it is.

 

I have nothing intelligent to say (positive or negative) about Tesla (the company or the car) but the fitted curve intersection end-point corresponds closely to the South Sea historical point when Sir Isaac Newton massively re-entered the trade (after doubling his money before). History says that nobody could ever even whisper the "South Sea" words in Newton's presence when the dust settled and perhaps this explains that.

These historical curve fittings (as well as mentions of Enron or whatever) tend to short-circuit real thinking, whether they turn out to be correct or not. You can still get your face ripped off (as lots of Tesla shorts have been finding out recently) even if something eventually turned out to have been a bubble or overvalued...

That's correct as the link between fundamentals and sentiment can diverge to an irrational degree. I've studied the South Sea Bubble but am fairly agnostic and ignorant about Tesla (only relatively comfortable with the Neuralink venture). I guess it's even possible to suggest that today's levels are "justified".

What was interesting with the South Sea Bubble is that the venture was potentially promising and relied on successive rounds of financing but the value of the entity was closer to zero along the entire trajectory and the company survived for some time after the bubble deflated, mostly due to a government bailout.

 

[Spekulatius]

There is no reason, why the stock of the South Sea Company and Tesla should follow a similar trajectory. The correlation we are seeing is a result of cherry-picking one stock out of many stock and timeframes. i  most cases the correlation falls apart once it is posted.

[Castanza]

There is no reason, why the stock of the South Sea Company and Tesla should follow a similar trajectory. The correlation we are seeing is a result of cherry-picking one stock out of many stock and timeframes. i  most cases the correlation falls apart once it is posted.

 

It was merely for entertainment lol by no means was I saying that Tesla is 100% correlated. If the chart has any value at all it would be found in the investor sentiment completely absent of fundamentals. A Tilray chart would probably fit the bill well too.

[Spekulatius]

There is no reason, why the stock of the South Sea Company and Tesla should follow a similar trajectory. The correlation we are seeing is a result of cherry-picking one stock out of many stock and timeframes. i  most cases the correlation falls apart once it is posted.

 

It was merely for entertainment lol by no means was I saying that Tesla is 100% correlated. If the chart has any value at all it would be found in the investor sentiment completely absent of fundamentals. A Tilray chart would probably fit the bill well too.

 

I guess it was for entertainment only, but with everything that pertains to Tesla, one can never tell. ;D

[Liberty]

That's correct as the link between fundamentals and sentiment can diverge to an irrational degree. I've studied the South Sea Bubble but am fairly agnostic and ignorant about Tesla (only relatively comfortable with the Neuralink venture). I guess it's even possible to suggest that today's levels are "justified".

What was interesting with the South Sea Bubble is that the venture was potentially promising and relied on successive rounds of financing but the value of the entity was closer to zero along the entire trajectory and the company survived for some time after the bubble deflated, mostly due to a government bailout.

 

It's like saying that Bitcoin is a bubble in early 2017 after it's up thousands of percents or whatever. Great. But if you could have shorted it at the time, you could then have still lost your shirt... before then being "proven right" when it fell 80% or whatever (and then went back up, and so on). Being "right" is worth very little unless you also time things really well with these types of super volatile and unpredictable situations.

 

As for Tesla, I've mentioned elsewhere in this thread why I didn't think it was a good short. I could see how they could run into problems and implode, but they could just as well pull rabbits out of the hat (as they have in the past) and just power through and do well. There's a bunch of reflexivity on both sides; when things are going badly, they might have trouble raising more capital and the brand might be hurt, which becomes self-fulfilling... But when things are going well, more people are thinking positively about the company and they can raise money at very low cost, which is also self-fulfilling. So it then becomes, do you want to bet against someone who has survived the apocalypse again and again, proven early critics wrong by actually making a space rocket company and an EV company at the same time (while also doing other stuff)? Sounds like a headache to me... Easier ways to make money.

 

Which also brings me to TSLAQ, that quasi-religious clique. These people get together and form this echo chamber mostly because this is an interesting company to talk about, not because it's the best risk-reward. Sears was a good short, as were the negative ROIC energy juniors or whatever, but you don't have a group doing box socials and creating one-issue Twitter accounts to talk about them obsessively. And once you're in an echo chamber and identify your ego with a position, there's very little critical thinking going on (even though they'll all say that they're the only ones thinking critically and everybody else is a brainwashed sheep or whatever -- yeah, that's why they've been wrong for 10+ years on a short that was "obvious" and a company that "can't survive much longer" with "bad products that nobody wants that constantly explode and kill people", with the competition coming out with good EVs "any day now", etc)

 

I still think Tesla can run in trouble and shoot itself in the foot, but I also still think it's low-return-on-brain-damage since it's so unpredictable, and that a much higher stock price (even if it falls 50% from here) reduces their forward risk a lot.

[Junto]

First investment in months and it's a short on this stock. Way out of reality... Bigger than all other car companies combined?!? Short at $894. Only second short in my investing career and looks like easy money.

 

Long term a fan of what they are doing but don't see this valuation as reasonable.

 

Locked in profit. Great quick trade...

[awindenberger]

Tesla very well could have gone bankrupt over the last couple years, but at this point I don't see that potential anymore, as the business looks to have tailwinds across the board:

 

1. Cars: Their rolling out the Model Y sooner than expected. I agree with Elon that it will likely outsell all the other models combined.

2. Cybertruck: I hated the look, but the more I think about it, the more I agree that it will be an amazing work truck for all types of construction jobs

3. Battery storage: They continue to increase sales in this area and margins have improved. I develop solar+ battery projects and so far I haven't found better pricing than Tesla's batteries.

4. Solar Glass (roof) is finally turning into more than vaporware this year. Elon's 1000 roofs per week goal is high as usual, but the roofs are being installed, and they are actually quite price competitive with traditional solar + a regular roof.

 

Does all this make it worth $900/share today? I'd say hell no, but I wouldn't try to short either given all the tailwinds.

[A Dhandho Investor]

That's correct as the link between fundamentals and sentiment can diverge to an irrational degree. I've studied the South Sea Bubble but am fairly agnostic and ignorant about Tesla (only relatively comfortable with the Neuralink venture). I guess it's even possible to suggest that today's levels are "justified".

What was interesting with the South Sea Bubble is that the venture was potentially promising and relied on successive rounds of financing but the value of the entity was closer to zero along the entire trajectory and the company survived for some time after the bubble deflated, mostly due to a government bailout.

 

It's like saying that Bitcoin is a bubble in early 2017 after it's up thousands of percents or whatever. Great. But if you could have shorted it at the time, you could then have still lost your shirt... before then being "proven right" when it fell 80% or whatever (and then went back up, and so on). Being "right" is worth very little unless you also time things really well with these types of super volatile and unpredictable situations.

 

As for Tesla, I've mentioned elsewhere in this thread why I didn't think it was a good short. I could see how they could run into problems and implode, but they could just as well pull rabbits out of the hat (as they have in the past) and just power through and do well. There's a bunch of reflexivity on both sides; when things are going badly, they might have trouble raising more capital and the brand might be hurt, which becomes self-fulfilling... But when things are going well, more people are thinking positively about the company and they can raise money at very low cost, which is also self-fulfilling. So it then becomes, do you want to bet against someone who has survived the apocalypse again and again, proven early critics wrong by actually making a space rocket company and an EV company at the same time (while also doing other stuff)? Sounds like a headache to me... Easier ways to make money.

 

Which also brings me to TSLAQ, that quasi-religious clique. These people get together and form this echo chamber mostly because this is an interesting company to talk about, not because it's the best risk-reward. Sears was a good short, as were the negative ROIC energy juniors or whatever, but you don't have a group doing box socials and creating one-issue Twitter accounts to talk about them obsessively. And once you're in an echo chamber and identify your ego with a position, there's very little critical thinking going on (even though they'll all say that they're the only ones thinking critically and everybody else is a brainwashed sheep or whatever -- yeah, that's why they've been wrong for 10+ years on a short that was "obvious" and a company that "can't survive much longer" with "bad products that nobody wants that constantly explode and kill people", with the competition coming out with good EVs "any day now", etc)

 

I still think Tesla can run in trouble and shoot itself in the foot, but I also still think it's low-return-on-brain-damage since it's so unpredictable, and that a much higher stock price (even if it falls 50% from here) reduces their forward risk a lot.

 

I agree with some of your points, but saying that TSLAQ is together because it is "an interesting company to talk about" is far from reality. I really invite you to listen to Teslacharts his podcast https://www.listennotes.com/podcasts/tcs-chartcast-teslacharts-georgia-orwell-uYqMyJTiQKN/

 

It's a fun listen because they don't only talk about Tesla, but also about the personal life of the different guests.

 

Episodes:

1. Montana Skeptic (Lawrence Fossi): lawyer that got doxxed by Elon for writing negative stories on SeekingAlpha

2. Luis Carruthers (least interesting episode imo)

3 & 4. Aaron Greenspan: founder of plainsite

5. Ed Niedermeyer: journalist and auto industry analyst -  author of the book "Ludicrous" on Tesla

6. Grant Williams: co-founder of Realvision

7. Peter Dicaprio: runs a specialty asset management firm (CrowPointPartners)

8. Tiffany: a "victim" of Tesla's solar panel business

9. Demetri Kofinas: host of the podcast "hidden forces"

[Kaegi2011]

 

It's like saying that Bitcoin is a bubble in early 2017 after it's up thousands of percents or whatever. Great. But if you could have shorted it at the time, you could then have still lost your shirt... before then being "proven right" when it fell 80% or whatever (and then went back up, and so on). Being "right" is worth very little unless you also time things really well with these types of super volatile and unpredictable situations.

 

 

There are other options (no pun intended) to play the situation that may better allow one to tweak the way they think the various scenarios might unfold, and limit risk.  Shorting is of course one path, but there are numerous options strategies to express a more nuanced view. 

[Liberty]

I agree with some of your points, but saying that TSLAQ is together because it is "an interesting company to talk about" is far from reality. I really invite you to listen to Teslacharts his podcast https://www.listennotes.com/podcasts/tcs-chartcast-teslacharts-georgia-orwell-uYqMyJTiQKN/

 

It's a fun listen because they don't only talk about Tesla, but also about the personal life of the different guests.

 

Episodes:

1. Montana Skeptic (Lawrence Fossi): lawyer that got doxxed by Elon for writing negative stories on SeekingAlpha

2. Luis Carruthers (least interesting episode imo)

3 & 4. Aaron Greenspan: founder of plainsite

5. Ed Niedermeyer: journalist and auto industry analyst -  author of the book "Ludicrous" on Tesla

6. Grant Williams: co-founder of Realvision

7. Peter Dicaprio: runs a specialty asset management firm (CrowPointPartners)

8. Tiffany: a "victim" of Tesla's solar panel business

9. Demetri Kofinas: host of the podcast "hidden forces"

 

I didn't mean that there's nothing to talk about. I mean it's "interesting" in that there's constantly newsflow and controversy and stuff to find and new products and updates coming out and it's all very emotional. Kind of like how on this board some threads have hundreds of pages and others barely have any replies. Teslaq community is like one of those hundred page threads, which isn't always a sign of good risk-reward.

[Liberty]

 

It's like saying that Bitcoin is a bubble in early 2017 after it's up thousands of percents or whatever. Great. But if you could have shorted it at the time, you could then have still lost your shirt... before then being "proven right" when it fell 80% or whatever (and then went back up, and so on). Being "right" is worth very little unless you also time things really well with these types of super volatile and unpredictable situations.

 

 

There are other options (no pun intended) to play the situation that may better allow one to tweak the way they think the various scenarios might unfold, and limit risk.  Shorting is of course one path, but there are numerous options strategies to express a more nuanced view.

 

Sure, my point wasn't about tactics, but about the larger reality that "being right" at some point isn't enough to make money.

 

There's usually no such thing as a free lunch, other strategies have their downsides and upsides too.

[Kaegi2011]

 

Sure, my point wasn't about tactics, but about the larger reality that "being right" at some point isn't enough to make money.

 

 

Of course.  I don't think anyone will disagree with the point that timing is an important component to making money (you can be wrong and make money too!!).  I'm just saying that in these really volatile situations, one can mentally think about outcomes that aren't binary, and using other means to express that view.  Perhaps that's not worth the energy expenditure for you - totally get it.  I happen to think the opposite, but that's not relevant to my point. 

 

[Kaegi2011]

 

You can go thru his post history, it was years ago (2015 or so?) on the BAC-WT thread. There's also a more concise version in the "strategy" forum, but the BAC thread is where it went down "in real time" so to speak. It's a good read for a slow day to see what the thinking was at the time.

 

Thank you LC!  I was looking only in this thread.  Started reading the BAC one - interesting one for sure, especially to a non FIG guy!

[Liberty]

 

Sure, my point wasn't about tactics, but about the larger reality that "being right" at some point isn't enough to make money.

 

 

Of course.  I don't think anyone will disagree with the point that timing is an important component to making money (you can be wrong and make money too!!).  I'm just saying that in these really volatile situations, one can mentally think about outcomes that aren't binary, and using other means to express that view.  Perhaps that's not worth the energy expenditure for you - totally get it.  I happen to think the opposite, but that's not relevant to my point.

 

Sure, that's true (though not in the specific case of Bitcoin in 2017, as options weren't available at the time, IIRC). But in other situations, you can usually decide to cap your downside and upside via options and limit risk.. But if you do that and things go massively in your direction, you might feel the pain of the missed gain too, which can be just as real as a loss to many.

[StevieV]

2. Cybertruck: I hated the look, but the more I think about it, the more I agree that it will be an amazing work truck for all types of construction jobs

 

The Cybertruck changed my thinking on the company at least somewhat.  I thought the design was laughably bad and it was coupled by that botched presentation.  Any other car company would have been laughed off the stage.  Perhaps a backtrack of the product.

 

Tesla took some initial jokes, but it didn't take long for people to get on board with the "quirky" design.  Speaks to the tremendous brand power and customer loyalty.  Doesn't matter what I think.  Whether I would like the service.  Whether I would like the Cybertruck design.  Whether I feel the range and refueling limitations of the cars is too much of an obstacle at this time.  Real people with real money are buying the vehicles and doing so with enthusiasm and under terms (e.g. deposits) that no other major car company can match.

 

As others have mentioned, with the current stock price rise, funding should be simple if necessary.

 

I'll continue to stay away from the stock on either side.

 

 

[John Hjorth]

First investment in months and it's a short on this stock. Way out of reality... Bigger than all other car companies combined?!? Short at $894. Only second short in my investing career and looks like easy money.

 

Long term a fan of what they are doing but don't see this valuation as reasonable.

 

Locked in profit. Great quick trade...

 

Congrats on the trade, Andy.

[Aberhound]

I shorted it at $935 today.  It is a tiny position.

No surprise you timed it so well. I think fondly of your kind and hyper-rationale comments back in May 2006 that gave many of us including me the confidence to buy FFH options and make incredible gains. Thank you again.

 

What a contrast to the quality of this board today when I post at the end of October my conviction that the shorts were failing to consider the disruption entailed in the recent series of positive developments and Tesla was likely entering into an exponential phase. Instead of support and discussion what I got in response was "ok Boomer". Perhaps in the future we all can realize that if we support and aid each other we will all be rewarded.

 

[LC]

Instead of support and discussion what I got in response was "ok Boomer". Perhaps in the future we all can realize that if we support and aid each other we will all be rewarded.

 

This is a shame but instead of dwelling on that let's revisit your post because as usual it was a good one:

https://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/tsla-tesla-motors/msg387586/#msg387586

 

Part of my thinking is that demographically we are close to the Millennial's big spending years and I suspect millions will end up with the Tesla roofs and vehicles which vehicles are mostly shared out.

 

Tesla soon will be offering to millennials hope by changing these two major assets into an asset that save money (the roof) or becomes an income earning appreciating assets (the million mile vehicle). Just wait until Telsa's design genius gets their hands on quantum dot glass and v4 of their roof doubles in efficiency and then v5 transform skyscrapers into energy generating towers

 

We think of Tesla as a car company but isn't it more accurately described as a company that is going to take the biggest sectors ie energy and vehicles and re-imagine how they will be used in society? Technology is changing and improving at incredible rate and my thesis is that this Tesla approach will create a company with moat like we rarely see. Legacy companies almost never can make the transition. The future competitor is likely to be a new entrant and that is incredibly difficult in the car business in particular. The question is are they or will they be in a position that Amazon found themselves in that Amazon was so far ahead no one will ever be able to compete with them effectively.

 

These 3 paragraphs I think lay the foundation of the bull case. Here are some counterpoints:

 

-Electric pickup: Pickups as you mention are working cars. Batteries I think still need to improve before it is feasible (although given that we have the ecascade I am wondering what is the delay here).

-Roofs: The trend with millenials is not to own large expanses of house. They are going smaller, closer together, in other words with less roof space.

 

But I do agree with you on the main point: it will not be an OldCo which is going to transform cars or housing. IF it happens, it will be Tesla. But I think that's still a big IF.

 

Personally I think Tesla is still unproven but the price assumes the opposite.

[ERICOPOLY]

I shorted it at $935 today.  It is a tiny position.

No surprise you timed it so well. I think fondly of your kind and hyper-rationale comments back in May 2006 that gave many of us including me the confidence to buy FFH options and make incredible gains. Thank you again.

 

What a contrast to the quality of this board today when I post at the end of October my conviction that the shorts were failing to consider the disruption entailed in the recent series of positive developments and Tesla was likely entering into an exponential phase. Instead of support and discussion what I got in response was "ok Boomer". Perhaps in the future we all can realize that if we support and aid each other we will all be rewarded.

 

I've got $600 in unrealized gains at the close today. Woohoo!  More gains tomorrow?  Losses tomorrow?  This is fun stuff. 

[stahleyp]

I shorted it at $935 today.  It is a tiny position.

No surprise you timed it so well. I think fondly of your kind and hyper-rationale comments back in May 2006 that gave many of us including me the confidence to buy FFH options and make incredible gains. Thank you again.

 

What a contrast to the quality of this board today when I post at the end of October my conviction that the shorts were failing to consider the disruption entailed in the recent series of positive developments and Tesla was likely entering into an exponential phase. Instead of support and discussion what I got in response was "ok Boomer". Perhaps in the future we all can realize that if we support and aid each other we will all be rewarded.

 

I've got $600 in unrealized gains at the close today. Woohoo!  More gains tomorrow?  Losses tomorrow?  This is fun stuff.

 

Good to see that you can stay retired indefinitely now after this trade, eric.

 

I do find it kinda funny you go from betting it all on stock options to shorting 4 shares of tesla stock.  ;D

[Cardboard]

Wife took most away...

[ERICOPOLY]

I took 70% and she took 30%.  Payback is a bitch!

[Liberty]

I shorted it at $935 today.  It is a tiny position.

No surprise you timed it so well. I think fondly of your kind and hyper-rationale comments back in May 2006 that gave many of us including me the confidence to buy FFH options and make incredible gains. Thank you again.

 

What a contrast to the quality of this board today when I post at the end of October my conviction that the shorts were failing to consider the disruption entailed in the recent series of positive developments and Tesla was likely entering into an exponential phase. Instead of support and discussion what I got in response was "ok Boomer". Perhaps in the future we all can realize that if we support and aid each other we will all be rewarded.

 

I've got $600 in unrealized gains at the close today. Woohoo!  More gains tomorrow?  Losses tomorrow?  This is fun stuff.

 

So are you out of the trade, or do you think you can grow that $600 bucks into the one comma club?