Tesla, the investment

[Tim]

““revenue is vanity and profit is sanity, but cash flow is reality.”
Depends on how you view fundamentals.
Subscribe to Fastgraphs and the analysis and comparison are easy. The business models are completely different. One sells, another delivers.
One is a cash cow, the other consumes cash.
Both are publicly traded. Take out the hype, look at the cash.

[Lordosis]

If Tesla drops to $5/share I would buy some

[Nysoz]

TSLA has easily been the most successful trade I'll ever make in both dollars and percentage, but it has added stress back into my life. I wasn't worried about risking $10k thatI earned, but now having $50k in the game makes it harder.

My plan is to hold it indefinitely, though the run-up makes me want to sell. The STCG makes that unpalatable. I still think the company is shooting for the moon and so long as they have more hits than misses, will grow into something huge long term, and I'm happy to just watch.

All this day trading I'm reading above makes my chest hurt though.

TSLA is no doubt a high risk investment. If it doesn’t match your risk appetite, sell 15 of your shares to get back your initial investment and pay the stcg tax. Then the rest of the 35 shares is house money that can potentially grow exponentially or crash or that you can sell for ltgc later on.

I have long term belief in the company and the lead they have, but I still only put in an amount I was comfortable in a single stock which has grown a fair amount.

Learning about options has been interesting. What I’m doing limits any large short term gains but also provides additional revenue streams. If TSLA stays flat I essentially get around 17% returns on the capital I have tied up in TSLA stock. If TSLA goes down I still own the shares I want anyways and get that extra money. If TSLA goes up less than 20-30% every 2 weeks, my shares appreciate in value and still get that extra money.

the caveat is If TSLA jumps up 50% in a 2 week period, I’m potentially forced to sell my shares at the 20-30% gain instead of gaining the 50% in value which is the rub. I’m not planning on doing this around earnings or other big news to hopefully avoid this scenario.

Since I have enough shares to do this in my Roth IRA, this also provides another way to get more cash into my Roth past contribution limits to invest in more traditional investments there.

[Molar Mechanic]

TSLA is no doubt a high risk investment. If it doesn’t match your risk appetite, sell 15 of your shares to get back your initial investment and pay the stcg tax. Then the rest of the 35 shares is house money that can potentially grow exponentially or crash or that you can sell for ltgc later on.

I have long term belief in the company and the lead they have, but I still only put in an amount I was comfortable in a single stock which has grown a fair amount.

Learning about options has been interesting. What I’m doing limits any large short term gains but also provides additional revenue streams. If TSLA stays flat I essentially get around 17% returns on the capital I have tied up in TSLA stock. If TSLA goes down I still own the shares I want anyways and get that extra money. If TSLA goes up less than 20-30% every 2 weeks, my shares appreciate in value and still get that extra money.

the caveat is If TSLA jumps up 50% in a 2 week period, I’m potentially forced to sell my shares at the 20-30% gain instead of gaining the 50% in value which is the rub. I’m not planning on doing this around earnings or other big news to hopefully avoid this scenario.

Since I have enough shares to do this in my Roth IRA, this also provides another way to get more cash into my Roth past contribution limits to invest in more traditional investments there.

You took me wrong. I'm more ruminating on an observation about myself than actually stressing about it. It's about a 2 out of 10 stress for the 4 minutes I think about Tesla stock. My portfolio routinely grows and shrinks by six figures on personal capital and I laugh about it. I'll ride out the Tesla roller coaster. If things go the way I think they will, these will end up getting donated to a charity somewhere in the future.

Zaphod says:

No such thing as profitable for half the year. They are still not profitable, and more concerning, revenue is flat. That is trouble for a supposed growth company.

Your first sentence is purely semantics. The profit trend is clearly in the right direction.

2019 Revenue was up 15% from 2018. They have multiple new factories coming online. Do you believe revenue will stay flat?

[Tim]

Has manufacturing startup been one of the stellar achievements of Tesla? There are plans and there are risks. Overly aggressive expansion exponentially increases risk. Just two factors to consider. Bench strength of management and skill sets get stretched.

[Nysoz]

Well see how well gf Shanghai puts out cars and is able to ramp up. Building a factory, creating manufacturing lines, and putting out cars in less than a year has got to be impressive to anyone.

if they can replicate that success or at least get close (highly doubtful anywhere than China) then they can keep replicating and improving on factory build outs.

while they’re doing that, they’re still trying to find ways to optimize the assembly process as well.

with that said, there are still rare reports of bad fit and finish which I agree should be unacceptable when buying any car, let alone a semi/luxury priced car. Tesla does make this right in the end but still an annoying process if you have to go through with it

[Molar Mechanic]

Has manufacturing startup been one of the stellar achievements of Tesla? There are plans and there are risks. Overly aggressive expansion exponentially increases risk. Just two factors to consider. Bench strength of management and skill sets get stretched.

Despite the drama of '17-'18, they've grown production something close toan IRR of 50% since 2013. That's not sustainable into the future, but is a very strong accomplishment.

[Zaphod]

You took me wrong. I'm more ruminating on an observation about myself than actually stressing about it. It's about a 2 out of 10 stress for the 4 minutes I think about Tesla stock. My portfolio routinely grows and shrinks by six figures on personal capital and I laugh about it. I'll ride out the Tesla roller coaster. If things go the way I think they will, these will end up getting donated to a charity somewhere in the future.

Zaphod says:


Your first sentence is purely semantics. The profit trend is clearly in the right direction.

2019 Revenue was up 15% from 2018. They have multiple new factories coming online. Do you believe revenue will stay flat?

Well, then your framing is also semantics. 2019 revenue was up yoy from 2018 2% (this is from Tesla IR presentation). They have never turned an annual profit, any other way of stating it without also saying that can give the wrong impression. You can get this right off their own website.

I would not expect revenues to stay flat, though it appears things have trended that way, though some countries still have some subsidies that will make it appealing. If they can release the Y or something this year with full production behind it, revenues can increase, but will depend on ASP ofc.

They are valued as a growth company, hyper growth in fact, yet they in reality are definitely not. Now, as mentioned it clearly doesnt seem to matter to the stock price, so can be ignored until it does.

I am a little concerned about the shanghai plant and china production, who knows where that ends up in reality.

[Tim]

Well see how well gf Shanghai puts out cars and is able to ramp up. Building a factory, creating manufacturing lines, and putting out cars in less than a year has got to be impressive to anyone.

if they can replicate that success or at least get close (highly doubtful anywhere than China) then they can keep replicating and improving on factory build outs.

China is probably the hardest place in the world to accomplish this. Why? Ex-pat talent restrictions and the difficulty dealing with the local environment. You can’t take a seasoned Manufacturing manager, production engineering, logistics etc. and build a truly international global staff for navigating an international business. You have to do your startup with local Chinese. Local is always better, but you are starting with a “rookie team” with extreme communications barriers. Japan and Korea are tough. Singapore and EU are a piece of cake. The language of business is English with sensitivity to local customs.
China is all Chinese with zero confidentiality, every thing goes to the government and you might not even be getting the judgement of the employee. The restrictions are huge. That is why Manufacturing is sub-contracted. Production for $$$. It’s business. And they will put you out of business once they don’t need you. Don’t be surprised if Tesla China has “miraculously encountered “ sophisticated Chinese competition that looks and runs like a better “Chesla”. China is big on vehicles. Train the staff and they have new jobs.

[White.Beard.Doc]

I got interested in Tesla back in 2011. I feel like they may actually succeed in becoming a leading worldwide auto and battery manufacturer, but it also feels like there is a ton of risk. The German green movement just got their German G4 factory project put on hold by court order for cutting down trees. Plus the Shanghai factory is facing COVID-19 purgatory. And then there is the whole self driving thing, which also seems full of incredible potential as well as massive risk. In any case, it has been quite a ride over almost a decade watching them achieve this level of success despite all the naysayers.

I have been considering selling TSLA and converting to index funds. However, I would have to pay tons of taxes to sell what is now approaching a cost basis that rounds to zero (~2.5% of current market). My combined capital gains rate sucks at 33%. I may be stuck with riding this Tesla stock rollercoaster for the duration.

[Nysoz]

I got interested in Tesla back in 2011. I feel like they may actually succeed in becoming a leading worldwide auto and battery manufacturer, but it also feels like there is a ton of risk. The German green movement just got their German G4 factory project put on hold by court order for cutting down trees. Plus the Shanghai factory is facing COVID-19 purgatory. And then there is the whole self driving thing, which also seems full of incredible potential as well as massive risk. In any case, it has been quite a ride over almost a decade watching them achieve this level of success despite all the naysayers.

I have been considering selling TSLA and converting to index funds. However, I would have to pay tons of taxes to sell what is now approaching a cost basis that rounds to zero (~2.5% of current market). My combined capital gains rate sucks at 33%. I may be stuck with riding this Tesla stock rollercoaster for the duration.

The halt at gf Berlin should be super temporary as it makes no sense and the local government is supposedly behind Tesla and expediting court dates and such. They’ll probably restart by the end of the week.

if you’re considering selling your TSLA stock consider selling covered calls. You get to dictate what price you want to sell at and if it doesn’t hit that price you get the premium associated with selling the option. The downside is that it would be in 100 share increments.

edit looking at the options chain now, say you sell a covered call 2/28 with a strike price of 900, you would get around $1100 for selling that option

[Dont_know_mind]

In my opinion, Amazon, in 1999 was uninvestable.
It had a market cap that was not supported by any logic.
It did not have AWS until 2002 and AWS did not become large until 2007.
So there was no logical reason to hold AMZN through the 94% drop from 1999 to 2001 except blind hope.

Tesla, now has the second largest market cap of all automakers. Even if it succeeds in being dominant in automobile manufacturing, this appears to already be significantly priced in.

The assumption appears to be that the autonomous driving technology is worth something. I think it is like Amazon in 1999. Yes, it could keep going up, but it is not supported by any fundamentals and it has not found its AWS. Maybe it will. Maybe not.

The autonomous driving problem is an interesting one. The assumption seems to be that the Tesla cumulative data is worth something. It might not be worth that much.

I was looking at Arlo last year and came across an interesting presentation on deep data, AI and computer vision.

https://youtu.be/HKnY05QoSi0

(NB, I can’t believe this presentation has only been viewed 28 times, it is really good !)

[xraygoggles]

So... anyone buying TSLA at $560?

Edit: $528 after hours....

[StarTrekDoc]

ironically; they require less workforce and parts than other legacy -- but still need them and people to finish a car.

[Zaphod]

ironically; they require less workforce and parts than other legacy -- but still need them and people to finish a car.

More ironically, the years I say things are in their favor and theyve made some smart moves...turns out to be exogenously horrific, for everyone.