Tesla Motors

Off Topic
161

[quote]on edge wrote:
It looks like today may be the day we close over 200 dollars!

Has anyone bought TSLA besides DB?

I just went back and read my opening post and was reminded my initial investment was 8,700. I think my conviction must have grown quite a bit since then because I’ve now got 47,000 in Tesla. I’m not sure how much of that 47K is out of my pocket. My initial 8,700 is now worth 20,000 though.[/quote]

My family and I, by which I mean my parents, brother, sister, and wife have at several points over the last few years have put a fair amount of money into Tesla stock, and I personally own a Tesla (well, it is my wife’s). Right now it is a fairly high risk stock, and it is overvalued so I do not keep any of my shares permanently. If they can fix a few problems they have with the company, which I believe they will, I will move it into my list of companies that are “safe” to hold permanently.

For now, though, there are many factors that are and will continue to contribute to the price of tesla changing by wide margins, in both directions. That makes it a prefect candidate for a simple but extremely risky “buy low/sell high” strategy. I will stake my reputation that within the next year or two will see another couple of major drops in the price of the stock followed by a rapid recovery (or complete collapse of the company). This is a very risky strategy, and there is a very high probability that most if not all the money you put into moves like this, and companies like Tesla as it is now, will be lost though, which is why I never put more then 10% of my portfolio into stocks like this (netflix was another stock that I followed this strategy with to great benefit, but right now I consider netflix too risky to bother with at all).

The trick here is to not wait too long for the price to go up a little bit more or drop a little more and once you have made a decent profit, move those profits into something more safe and stable, and definitely something where you can cash in on compounding interest. I like index funds, CDs, and stocks that are relatively stable in price and consistently pay high dividends, and such for this.

162

[quote]Dr.Matt581 wrote:
I personally own a Tesla
[/quote]

Doc Matt, someone recently said you’re the coolest. I agree, you are the coolest.

I also agree that the stock is a great trading vehicle due to the wild swings that it will continue to endure. I disagree about the risk though. The company and the plan are so good, the product is so good and I believe the world is at a tipping point where it is ready for a revolution in transportation. Owning the stock may be a wild ride for the next ten years, maybe even twenty, but it’s not going away.

Btw, now that I think about it, Tesla happens to be about ten percent of my investible capital. I didn’t plan it that way but that about what it’s at.

163

PS What are the few problems you see that need fixing?

164

Fuck the stock, I want to hear about that car. Is it as bad-ass as they say it is? What model?

165

[quote]on edge wrote:
I also agree that the stock is a great trading vehicle due to the wild swings that it will continue to endure. I disagree about the risk though. The company and the plan are so good, the product is so good and I believe the world is at a tipping point where it is ready for a revolution in transportation. Owning the stock may be a wild ride for the next ten years, maybe even twenty, but it’s not going away.

Btw, now that I think about it, Tesla happens to be about ten percent of my investible capital. I didn’t plan it that way but that about what it’s at.[/quote]

So, you’re never going to get out…?

My point being, even if Tesla is the greatest thing since sliced bread, you should always have an exit. The stock may very well go to $1,000 but it may also dip below $100 first.

Do you have a margin account; are you able to trade options? Are you familiar with covered call strategies?

The March 225 calls expiring on the 7th are trading for $5.45, the 225 calls expiring on the 22nd are trading for over $7.00. I understand you think the stock is going higher, but do you think it can gain over %10 in 17 (or so) trading days? If you don’t have an opinion, then you’re not investing, you’re just gambling with the houses money.

Lastly, if it’s a great trading vehicle, then it’s precisely because of the risk. The two are nearly mutually exclusive.

166

Dr. Matt,

I would love to hear your personal experience with the Tesla vehicle, if you please, can you share ?

Elon Musk also plans to create something called the Hyperloop, some kind of transport system using pods and tubes that would get people from Los Angeles to San Francisco in 30 minutes using solar power, costing only $6 Billion (as of Aug 2013).

167

[quote]on edge wrote:

[quote]Dr.Matt581 wrote:
I personally own a Tesla
[/quote]

Doc Matt, someone recently said you’re the coolest. I agree, you are the coolest.

I also agree that the stock is a great trading vehicle due to the wild swings that it will continue to endure. I disagree about the risk though. The company and the plan are so good, the product is so good and I believe the world is at a tipping point where it is ready for a revolution in transportation. Owning the stock may be a wild ride for the next ten years, maybe even twenty, but it’s not going away.

Btw, now that I think about it, Tesla happens to be about ten percent of my investible capital. I didn’t plan it that way but that about what it’s at.[/quote]

Thank you. And don’t get me wrong, I think Tesla is a great company and the cars are amazing and I was by no means predicting its collapse. I consider that unlikely for a number of reasons. But right now, the stock is very volatile and thus high risk and will continue to be so for a while until the company and the market itself settle themselves out. I fully expect Tesla to become a stock that I keep permanently instead of my current strategy of selling when the price rises sharply and then buying back in when it drops. It has made me much more money than if I had just bought and held the stocks, although that would have been very profitable as well.

I actually just unloaded all of my shares of Tesla today for quite a profit (I bought these shares back when the stories about the car fires helped cause the drop in share prices). I do not think that the price is done rising for this cycle yet. I would not be surprised if the share price got up to around 210-220 before the next dip, but I do not want to risk it. I made a nice profit and I will be ready to buy more shares during the next major dip in price or to buy shares to hold permanently.

168

I don’t know anything about the stock, but I first spotted a Tesla car in the parking lot where I work about a year ago. My first reaction was “Wow, what kind of car is that?” So I circled back through the lot and was like “Holy shit it’s a Tesla!”

Definately turned my head, and cars never turn my head.

169

[quote]on edge wrote:
PS What are the few problems you see that need fixing?[/quote]

To start with, the production capacity for Teslas is well below demand, which is a problem and is hurting their profits and growth. My wife and I had to wait over 7 months for her car (but it was well worth it). A lot of people who may otherwise be interested in purchasing one will go with another car just because of this. Tesla needs to expand production capacity, but without sacrificing quality. They need to either find new suppliers of batteries as well.

Another problem is the market is naturally limited by the very nature of the product. They are very expensive, but they are working on cheaper models which are less expensive which will open up lower income markets which is good. But that is not what I am talking about. What I am talking about is the fact that you have to plug in the car. That may not seem like such a big deal, but it really does severely limit the market. Think about a person who has to drive long distances quite often. They may not be able to plug in their car to charge when they need to, so they will not be buying this car. Also, people that live in say apartment buildings and do not have access to a garage with a plug are out, among others.

Right now, all of their models are expensive and marketed towards higher income people who usually live in suburbs and thus this is not much of an issue right now since these products are obviously not for those people but once they roll out their lower priced models these will become larger issues, but they have a plan for developing a charging station network so I don’t see this as a long term issue.

There are a few more, but they are slipping my mind right now. I will add them as I think of them.

170

Just an observation:
At the current book value of the company, each vehicle sold last year would be worth $1.1 million.
So investors are speculating, on the stock value, and on the bet that sales will sky rocket.
But a good technology is not contained, and alternatives come onto the market. (See, for example, Ford Fusion Energi, a cheaper and more versatile and practical car for those who intend to travel more than 200 miles.)

It is good to have an exit strategy. It may not be wise to buy on the big dips.

171

[quote]MaximusB wrote:
Dr. Matt,

I would love to hear your personal experience with the Tesla vehicle, if you please, can you share ?

Elon Musk also plans to create something called the Hyperloop, some kind of transport system using pods and tubes that would get people from Los Angeles to San Francisco in 30 minutes using solar power, costing only $6 Billion (as of Aug 2013).[/quote]

I would be more than happy to oblige. Overall it is a great car, but right now the market for it is fairly limited which I outlined above. It is not a practical vehicle who regularly travel long distances, or who do not have access to a plug to charge it overnight and they are quite expensive, but the company is working on those issues and have a pretty good plan of action if they can get production up to match the demand.

As for the car itself, it is an amazing machine both mechanically and visually. As the poster above stated they are very beautiful cars and do indeed turn heads. I have had several neighbors and other people have asked me about the car just after looking at it.

Mechanically, they are actually very simple machines, with surprisingly few moving parts which makes them very durable and long lasting. This is the same reason why older model traditional automobiles tend to be very reliable. The fewer moving parts, the fewer chances for things to go wrong and break. I really like this back to basics automobile design. Usually car manufacturers pile as many moving parts and crap into the car as they can, and then people get surprised when things start breaking.

As for handling, I can honestly say that you will not find a nicer handling vehicle. The flat torque profile is amazing and traditional cars just cannot compare. I can barely feel turns even going well above the speed limit.

172

[quote]DrSkeptix wrote:
Just an observation:
At the current book value of the company, each vehicle sold last year would be worth $1.1 million.
So investors are speculating, on the stock value, and on the bet that sales will sky rocket.
But a good technology is not contained, and alternatives come onto the market. (See, for example, Ford Fusion Energi, a cheaper and more versatile and practical car for those who intend to travel more than 200 miles.)

It is good to have an exit strategy. It may not be wise to buy on the big dips.
[/quote]

I wholeheartedly agree, which is why I qualified my strategy as extremely risky. The market, especially the automobile market is very volatile and it is not out of the question of other companies outperforming Tesla in this market to the point of making them irrelevant, which is why I like the fact that they are also working on building charging stations and also supplying parts to other manufacturers as well. This will help to ensure Tesla’s survival even if they are run out of the automobile manufacturing end of the market.

173

[quote]on edge wrote:
LOL I just looked at my account and noticed the Schwab Equity Rating for TSLA is a big fat F. Haha They better be wrong because I’m 46 grand into Tessy.

[/quote]

There’s nothing wrong with that rating from an analyst POV. Tesla is a classic growth stock. It has a market cap. of $24B but has negative earnings. Its adjusted P/E is 125x and still has a PE of 13x even when you factor in its estimated 5-year growth rate forecast (PEG). Obvious a fair chunk of Tesla’s value is purely speculative. Price/Sales is 14x and Price/Book is 43x. It’s highly levered. I don’t know how sane it would be to permanently “hold” Tesla.

As far as trading, it has largely been moving with the market (historical beta of 1.05).

174

[quote]Gettnitdone wrote:

As far as trading, it has largely been moving with the market (historical beta of 1.05).[/quote]

It’s recent beta is much higher, it’s been hovering around 1.8.

175

[quote]Dr. Pangloss wrote:

[quote]on edge wrote:
I also agree that the stock is a great trading vehicle due to the wild swings that it will continue to endure. I disagree about the risk though. The company and the plan are so good, the product is so good and I believe the world is at a tipping point where it is ready for a revolution in transportation. Owning the stock may be a wild ride for the next ten years, maybe even twenty, but it’s not going away.

Btw, now that I think about it, Tesla happens to be about ten percent of my investible capital. I didn’t plan it that way but that about what it’s at.[/quote]

So, you’re never going to get out…?

My point being, even if Tesla is the greatest thing since sliced bread, you should always have an exit. The stock may very well go to $1,000 but it may also dip below $100 first.

Do you have a margin account; are you able to trade options? Are you familiar with covered call strategies?

The March 225 calls expiring on the 7th are trading for $5.45, the 225 calls expiring on the 22nd are trading for over $7.00. I understand you think the stock is going higher, but do you think it can gain over %10 in 17 (or so) trading days? If you don’t have an opinion, then you’re not investing, you’re just gambling with the houses money.

Lastly, if it’s a great trading vehicle, then it’s precisely because of the risk. The two are nearly mutually exclusive.

[/quote]

I agreed that the stock is a great trading vehicle I didn’t say I was trading it. I’m a buy and hold investor for this stock. I know I know, right now you’re screaming YOU’VE GOT TO HAVE AN EXIT STRATEGY! With the high valuation and the volatility I’m perfectly fine with enduring crazy swings in stock price (I wasn’t breaking a sweat in the 120s). Earlier in this thread or maybe it was in the PWI Tesla thread I said I wouldn’t be worried unless it broke under a hundred bucks. Now, and especially since a bottom has been put in place at 120, I’m not worried unless it breaks under 120.

You are right I think Tesla is the greatest thing since sliced bread and that is precisely why I decided not to trade the stock. I’ve had plenty of trading stocks in the past, even stocks I couldn’t see a clear vision for, get away from me when I was trying to trade them. I want to make sure Tesla doesn’t get away from me. If the share price continues to move up into the 220 range I will now consider trading a few of my shares but that’s only because I’ve got a lot more shares now.

Btw, those of you who have trading on your mind, I had an idea occur to me today that is probably a long shot but might have something to it.

Two of the Tesla fires last fall were due to debris puncturing the under carriage of the cars and both incidents occurred pretty close together in time and hasn’t happened again since. Why is that? My hunch is it’s because it was at the end of the summer driving season when there is the maximum amount of debris on the road. I think if you are a trader and the price continues to climb going into summer when speeds start to climb as well as the amount of junk on the road, that might be a good time to make an exit.

176

[quote]Dr.Matt581 wrote:
it is not out of the question of other companies outperforming Tesla in this market to the point of making them irrelevant [/quote]

This is actually not possible. Tesla is 5 years ahead of everybody and most of the established car makers have already thrown in the towel. They’ve given the market to Tesla and are praying they fail at changing the world.

The only major automaker that is even trying is Nissan. The Leaf is a nice product but it’s way behind the Tesla and they’ve committed to using their existing infrastructure which assures that they will never catch up to Tesla.

177

[quote]on edge wrote:

[quote]Dr.Matt581 wrote:
it is not out of the question of other companies outperforming Tesla in this market to the point of making them irrelevant [/quote]

This is actually not possible. Tesla is 5 years ahead of everybody and most of the established car makers have already thrown in the towel. They’ve given the market to Tesla and are praying they fail at changing the world.

The only major automaker that is even trying is Nissan. The Leaf is a nice product but it’s way behind the Tesla and they’ve committed to using their existing infrastructure which assures that they will never catch up to Tesla.[/quote]

Don’t just count out the Germans.

178

[quote]on edge wrote:

[quote]Dr.Matt581 wrote:
it is not out of the question of other companies outperforming Tesla in this market to the point of making them irrelevant [/quote]

This is actually not possible. Tesla is 5 years ahead of everybody and most of the established car makers have already thrown in the towel. They’ve given the market to Tesla and are praying they fail at changing the world.

The only major automaker that is even trying is Nissan. The Leaf is a nice product but it’s way behind the Tesla and they’ve committed to using their existing infrastructure which assures that they will never catch up to Tesla.[/quote]

Goodness, you’re emotionally attached to both the stock and the story. Which is lots of fun when you’re making money, but I would push you to grow as an investor. There are strategies (like selling covered calls) that will allow you to keep a core position in the stock but take profit if the stock should rise, or collect an income stream if the stock should fall.

I’d love to see you make a ton of money on this, but if you can also learn better decision making, it will serve you well in the future.

Edit: are you familiar with options at all?

179

Something about the Tesla that didn’t make much sense to me…why there is a front AND rear trunk ?

I have never heard many complaints about wanting another trunk, if you need storage you might as well buy a vehicle designed for that.

In the front trunk area, they could have put more batteries to help with extending the range, and since most people are used to not using the area under the hood for storage, there is nothing lost and plenty gained.

There are definitely more Teslas on the roads here, without question it is gaining momentum.

180

[quote]MaximusB wrote:
In the front trunk area, they could have put more batteries to help with extending the range, and since most people are used to not using the area under the hood for storage, there is nothing lost and plenty gained.
[/quote]

Batteries are heavy. The last thing you want is an unbalanced performance/luxury car–you want the weight low and in the middle if possible.