Ending Q4 investing

Discussion in 'Tesla' started by bwilson4web, Dec 22, 2018.

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  1. bwilson4web

    bwilson4web Well-Known Member Subscriber

    This is how I see TSLA:
    • TSLA -> Nothin' in week 12-09 signaled prices were about to decease. Buyers were missing while sellers were active. The usual executive turnover still happening. When I left a company, I always sold my stock because they were not bright enough to keep me (and always made a nice profit.) NOTE: need to check executive stock holdings to see if their sales orders might initiate TSLA price decline. Then check if these former executives might be investing in their new employer.
    • TSLA + KL -> Week 12-16 shows the value to diversity, both TSLA and KL (gold).
    • TSLA -> Week 12-23 will have a short Monday and then three full days. This is an excellent time for shorts to cover their margins to avoid or reduce potential losses. I still expect to see a short-squeeze bring the price up starting in the next two weeks.
    • KL -> Week 12-16 flat gold stock suggests a general panic has not started but leveling of 'concern' from week 12-09. The wise are waiting to see how the bigger picture turns out.
    For week 12-23, I can see a TSLA 10% price increase because of new investors seeking 'safe harbor' and 'short squeeze.' A lot of general market investors have seen a recent loss of equity with general economy bad news. Regardless, I am not a 'day trader' as I really look forward to the Q4 sales and production numbers.

    Tesla has had a relatively quiet quarter with USA capital expenses. The China effort is reported to be supported by Chinese capital, not a solo Tesla investment. Tesla had time to tune their manufacturing and suppliers leading to greater margins and supporting lower retail prices. Tesla has also started shipping Model 3s to expanding markets.

    CAUTION: I own TSLA stock, ~2/3ds of my holdings, So I am NOT an objective observer.

    Bob Wilson
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  3. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Bob, you might want to change the thread title to something more generic (such as "Tesla Investing -- Week by Week") if you want to continue to post to the thread.

    I certainly understand why you wouldn't want to continue to use a thread created for the purpose of posting anti-Tesla "pravduh" by a serial Tesla shorter, but a more descriptive title might attract more readers and encourage more participation.

    CAUTION: Altho I own no TSLA stock (and never have), I have been a hardcore Tesla fan since even before they started selling the old Roadster in 2008, so altho I may try to be an objective observer, I'm really NOT one. Go Tesla!
    Last edited: Dec 24, 2018
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  4. bwilson4web

    bwilson4web Well-Known Member Subscriber

    Well I got this wrong for Monday:
    • Diversity works
    • Interesting sell-off the end of the trading day (will it be panic Wednesday?)
      • 800,000 may be looking to fill-in for missing pay
    Bob Wilson

    ps. Too late to change title.
  5. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Hmmm, I guess the ability to edit the title went away at the same time as the cutoff for normal editing. :(

    Well, if you want to, you can send a private message to Domenick asking him to change it. Up to you, of course.

  6. bwilson4web

    bwilson4web Well-Known Member Subscriber

    Let's wait til after Christmas. And a Merry Christmas to you and your kin.

    Bob Wilson
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  8. bwilson4web

    bwilson4web Well-Known Member Subscriber

    Back to the Monday, December 23, TSLA performance. I too follow the news to see if I missed something: https://techcrunch.com/2018/12/24/tesla-shares-fall-7-6-following-price-cuts-in-china-and-elon-musks-promise-to-reimburse-missed-tax-credits/

    . . . The stock fell by 7.6 percent after Tesla cut the Model 3’s price in China and CEO Elon Musk promised to reimburse U.S. customers if they miss a tax credit deadline due to Model 3 shipment delays.

    Reuters reported this weekend that the Model 3’s prices on Tesla’s China website had been reduced by up to 7.6 percent, with the starting price now at 499,000 RMB (about $72,000). This is the third time since November that Tesla has lowered the price of its vehicles in China.

    The first was in November, when it slashed the price of Model X and Model S vehicles by 12 to 26 percent, stating that it was “absorbing a significant part of the tariff to help make cars more affordable for customers in China.” Then this month, Tesla cut Model X and Model S prices again, citing China’s decision to temporarily suspend a new 25 percent tariff on American-produced vehicles and auto parts as the two countries reached a ceasefire in the trade war.

    Seeing only a percentage without quantities always tickles my 'spider sense.' How many cars are sold in China? How many Q4 Tesla owners will miss getting the $7,500 Federal tax credit but only a $3,250 credit? At most, Tesla would be on the hook for $3,250 per car.

    In Q3, Tesla reported an operating margin: "We also delivered on our internal cost efficiency targets, leading to GAAP Model 3 gross margin of more than 20%, which exceeded our guidance." Also, "Due to the ingenuity and incredible hard work of our team combined with an innovative vehicle design and manufacturing strategy, we have achieved total auto gross margin of ~25%." This means Tesla has a lot of pad to pay for good customer relations which is especially important in China.

    China has a growing, domestic EV industry but they are still 2-3 generations behind Tesla. Buying market share, the prestige, buys market share in the future. Pay a little today with small sales leads to sustained market share in future years.

    Remember I'm a calm investor and the Q4 production numbers should come out within 7-10 days. Then the Q4 report in about 45 days. If others want to 'run around and set their hair on fire', my only regret is not having ready cash to buy more stock.

    Bob Wilson
    Last edited: Dec 25, 2018
  9. bwilson4web

    bwilson4web Well-Known Member Subscriber

    Abridged version of last posting:
    • Correlation is not necessarily causation.
    Bob Wilson
  10. bwilson4web

    bwilson4web Well-Known Member Subscriber

    My best guess is Q4, Model 3 production will be ~61,670.

    I used a straight-line approximation of the first two months of Q3 and Q4 to estimate the production improvement. Then I applied production improvement to the third month of Q3 to get 25,270 for December Q4. Add that to 17,750 September and 18650 October, the grand total becomes 61,670.

    Bob Wilson
  11. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Yeah, I too found that news rather strange. The claim here is that stock investors are unsettled by the news that Tesla is offering to make up for any missed tax credit for any customers who missed their promised delivery date?

    Well if so, it seems to me those investors are not thinking things through. There will probably be only a very small number of cases that Tesla will have to settle because of that situation, and Tesla losing a few thousand dollars on what will almost certainly be only a very small percentage of its monthly deliveries will surely be more than made up for by the positive effect this will have on Tesla's reputation for superior customer care.

    Seems to me the overall turn to a "bear market" should have much, much greater effect on investors, and thus on Tesla's stock price.

    All just my opinion, of course.

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