Tesla, the investment

[CordMcNally]

I was in high school and not aware. I get the sentiment. I fully anticipate a pullback on TSLA and market in general but there are key differences. This stock run is driven buy cheap, cheap money and no returns on cash/ cash equivalents.

Tesla will take some time to grow into valuation and the price now is really based on 2025 expectations. That is fine with me since I own so much now and so may h Ashe opportunity to get more if there is any market concerns related to execution.

I agree that all traditional metrics mean it is overvalued but no company has had such a huge runway on such a large/challenging addressable market and they are so far ahead that it is possible no one will catch them.

They also have built everything in house which means no one can get their tech from suppliers. And they own their distribution, service, and fueling network. People comparing them to car manufacturers are so clueless it hilarious. I didn’t get to more speculation on self driving and grid solutions but those are cherries on top.

I don't think you do. I know I don't. You can't if you haven't lived through it. "But this time is different"...

[BCBiker]

I don't think you do. I know I don't. You can't if you haven't lived through it. "But this time is different"...

Well the comparison is inevitable. Tesla is a real company with a much larger addressable market and a track record. I’m not sure which company you want to compare them to from dot com crash. Microsoft? Maybe. Pets.com? No. Amazon? Sort of. I’m positioned such that most possibilities will be quite good for me even with a decade stagnation or a boom and bust and boom again. The thing that is most like dot com is that trash ev makers are getting high values with low prospects and no consideration that Tesla went through ************************ to be successful while every other startup with a rendering is getting funded to be like Tesla and all/most are not going to be be around in 5 years.

[fatlittlepig]

What’s your take on NIO.

[CordMcNally]

Well the comparison is inevitable. Tesla is a real company with a much larger addressable market and a track record. I’m not sure which company you want to compare them to from dot com crash. Microsoft? Maybe. Pets.com? No. Amazon? Sort of. I’m positioned such that most possibilities will be quite good for me even with a decade stagnation or a boom and bust and boom again. The thing that is most like dot com is that trash ev makers are getting high values with low prospects and no consideration that Tesla went through ************************ to be successful while every other startup with a rendering is getting funded to be like Tesla and all/most are not going to be be around in 5 years.

The DotCom crash just didn't take down the trash companies, it brought all of them down. The strong ones eventually recovered and the trash ones didn't. It will be similar in the EV space.

[BCBiker]

The DotCom crash just didn't take down the trash companies, it brought all of them down. The strong ones eventually recovered and the trash ones didn't. It will be similar in the EV space.

I would like nothing better than for the world to think it was the apocalypse. March 2020 took me from previous peak of $1.2M to $300K. And I bought assets then now worth over $6M. Volatility is my friend.

[BCBiker]

this is great. Kind of like watching a slow motion train wreck or you will be an incredibly rich baron. Keep posting.

I think last time you told me that I was not as far of a pig as you. Now I presume I have caught up.

[CordMcNally]

I would like nothing better than for the world to think it was the apocalypse. March 2020 took me from previous peak of $1.2M to $300K. And I bought assets then now worth over $6M. Volatility is my friend.

I really hope it continues well for you.

[fatlittlepig]

I think last time you told me that I was not as far of a pig as you. Now I presume I have caught up.

I don’t believe I’ve said that

[Otolith]

BCBIKER
Out of curiosity how did you get started in options and margins. Did you play around with other small options first?

[Zaphod]

From a value investing stand point it has a PE ratio greater than 1400. It can keep going up, but the justification just isn’t there. Maybe this is reminiscent of the dot com boom?

There was never and wont likely ever be (until after implosion if happens), justification by PE. Anyone still using a basic first level value framework will continue to get rekt. This time is indeed different since the facts on the ground have changed. Doesnt mean richly valued companies cant hurt you, it may just mean no such thing as actual value, lower returns, etc....most value is value because the businesses are terrible.

[Nysoz]

It's probably been beaten to death but P/E isn't good for growth companies or companies just starting to turn a profit. Amazon's P/E ratio hit 3633 in 2012. 2013 was 1078.

https://www.macrotrends.net/stocks/c...mazon/pe-ratio

TSLA's P/E ratio will make more sense in 10 years if they stop trying to exponentially grow and as their margins improve. Unless of course the stock price continues to mars/Valhalla. Some people/uber bulls out there are wildly guessing TSLA will have a $40T market cap in 2030 . They're trying to model that TSLA takes over the world's transport with autonomous driving at that point.

[BCBiker]

What’s your take on NIO.

Not going to buy it. They are valued as if they are Tesla which is bad if you are not Tesla. I’m a one trick pony do don’t go chasing waterfalls.

[BCBiker]

BCBIKER
Out of curiosity how did you get started in options and margins. Did you play around with other small options first?

Yes. I just bumped around with biotech stocks I knew well. I then made $20-30K on Amd running from $14 to $40. When I started Tesla was too expensive on options but they were left for dead. I bought $3000 worth of deep otm options in summer 2019 for $0.20 to $1.23 per share presplit. I made 200,000% profits on those and got lucky on volatility when I sold near expirations. There is not a great way to learn without holding positions. I am rather sophisticated now by making minor mistakes along the way. I was very close to quitting when I had only made $5000-10,000 and was thinking not worth effort compared to consulting or other gigs. I’m going to spend much less time now once I’ve locked in my 2021 position. It worked out for me but I don’t think everyone should make it a big thing.

[PhotonsRGR8]

I read somewhere that TSLA shorts lost 34 billion in 2020 same as the entire airline industries losses. I know that David Einhorn lost $$$ for his investors in 2019 trying to short it. More recently Dr. Michael Burry announced that he's short in December. How big and with what leverage I don't know but a lot of investors have exsanguinated on that bet.

[Otolith]

How would one do a put option on tesla? A put option with distant timeframe may be less risky than a true short?