$Tesla (TSLA.US)$ OK, I’ll try to explain it to those who do...
$Tesla (TSLA.US)$ OK, I’ll try to explain it to those who do not know enough about building factories (That’s what I did, among the rest, for two decades).
You build a new factory (the most efficient though less expensive in the whole car industry, to be clear), then you have costs at 100 but production has yet to go from 0 to 100, and more than 100 to get profits.
Austin and Berlin just opened, so it is IMPOSSIBLE to get to the break even (cost parity) in two months. It took about one year and a half to Shanghai (which is an industrial RECORD break in history), it will take the same or something more (due to the massive dimensions of the factories) to Austin and Berlin. The relative cost is not discounted “at once” , but in several years as progressive “amortizing” of the building and machinery costs. SO, the problem is not the factory itself, but the salaries of the employees you have to hire to get those plants operating and, if there is some supply shortage, as there is, you pay the employees for building much less cars than you could.
That’s the real reason why they announced a 3,5 % reduction on the total workforce (10% of white collars). It is because they hired to be able to produce 2 million cars, but they may produce only 1,5/1,7 million… (MORE than the 1,4 million estimated by Wall Street analysts). Anyway Tesla has almost 20Billion cash in the bank and has no problem at all.
ALL the others are much more affected, as Tesla will grow more than 50% (in overall profits too) while the others are losing between 15 and 20% (big trouble for Gm).
It is a non-news that may increase the fear of uninformed day traders (those who usually sell at loss).
If the price should go down for such an inconsistent factor (relatively to Tesla’s general fundamentals) not only I wouldn’t sell, but I would buy the dip (AGAIN). In any case there will be two or three more dips to buy before the split.
From whom am I going to buy TSLA stocks at a RIDICOLOUS PRICE ?
From all the inconsistent retail traders PANIKING for 50 or 100 dollars (small thing, compared to the increase TSLA will have in the next 6-12 months).
There are many other ways to compensate a momentarily loss of value on a stock like TSLA without having to sell the long term portfolio. Personally, as I don’t do options (because when you get fucked with an option you get really fucked, while a good stock like TSLA will always go back to its value in the end), I compensate day trading (or just shorting) the VIXY which generally moves in an opposite direction.
So, keep calm..
You build a new factory (the most efficient though less expensive in the whole car industry, to be clear), then you have costs at 100 but production has yet to go from 0 to 100, and more than 100 to get profits.
Austin and Berlin just opened, so it is IMPOSSIBLE to get to the break even (cost parity) in two months. It took about one year and a half to Shanghai (which is an industrial RECORD break in history), it will take the same or something more (due to the massive dimensions of the factories) to Austin and Berlin. The relative cost is not discounted “at once” , but in several years as progressive “amortizing” of the building and machinery costs. SO, the problem is not the factory itself, but the salaries of the employees you have to hire to get those plants operating and, if there is some supply shortage, as there is, you pay the employees for building much less cars than you could.
That’s the real reason why they announced a 3,5 % reduction on the total workforce (10% of white collars). It is because they hired to be able to produce 2 million cars, but they may produce only 1,5/1,7 million… (MORE than the 1,4 million estimated by Wall Street analysts). Anyway Tesla has almost 20Billion cash in the bank and has no problem at all.
ALL the others are much more affected, as Tesla will grow more than 50% (in overall profits too) while the others are losing between 15 and 20% (big trouble for Gm).
It is a non-news that may increase the fear of uninformed day traders (those who usually sell at loss).
If the price should go down for such an inconsistent factor (relatively to Tesla’s general fundamentals) not only I wouldn’t sell, but I would buy the dip (AGAIN). In any case there will be two or three more dips to buy before the split.
From whom am I going to buy TSLA stocks at a RIDICOLOUS PRICE ?
From all the inconsistent retail traders PANIKING for 50 or 100 dollars (small thing, compared to the increase TSLA will have in the next 6-12 months).
There are many other ways to compensate a momentarily loss of value on a stock like TSLA without having to sell the long term portfolio. Personally, as I don’t do options (because when you get fucked with an option you get really fucked, while a good stock like TSLA will always go back to its value in the end), I compensate day trading (or just shorting) the VIXY which generally moves in an opposite direction.
So, keep calm..
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TESLA holder and trader. Economics and tech studies, writer, traveller and chef for passion. FREE in SouthAmerica 😎
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dwarrior : General people wants to sell high buy Low unless you have unlimited resource to keep buying the dip. Most of them are paper hand
Masakaki_C : nice write-up.... I think you are right but on another perspective, if I have these info and giv me the edge other investors aka alpha, why would I share it so openly?? my apologies but have no ill intention.... my instinct tell me that this post seem like a post that trying to support the stock price from diving because if I have such a edge I won't even say it... just my 2 cents
TeslaSmurf OP dwarrior : That’s why you choose ONE (or a few) companies that you should study in deep (fundamentals, production, plans for the future, management, etc) and concentrate there your resources. Then you may use the margin just to day trade (not to buy long, not to buy options !) prudently: if you don’t get greedy and you have the knowledge is relatively low risk. I ONLY trade and hold TSLA and thanks to the latest dips, my average cost is about 700 (,58 to be precise), so I will be really happy when It will finally recover and get to a new ATH. WHEN? WHO knows, maybe by the end of the year, maybe in 12 months but, by then I will have my money doubled, plus the day trading profits which is not huge because I’m VERY prudent, but it’s several thousands per month on average: enough for me.
TeslaSmurf OP : You may have a point, but what I really try to do (always, not only in this particular case) is to fight against all the misinformation and viciously interpreted “news” on Tesla: I consider it part of my job as a Tesla trader and holder (I do many other things too, but I don’t really work in the “usual” sense).
B3llo : Enough self convincing yourself, see you at 200![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Masakaki_C : the reason to fight against misinformation is to support your position... if you have true conviction about something the lower it goes the happier you are and not openly say u will avg down.... see all the hedge fund manager when they want lower they will keep quiet and execute.. it sound to me that you do not wish to continue buy more at cheaper price so you give the correct perspective and true information to all the ppl here in hope that the price will keep dropping... why I say this because if you observe the fund behaviour when they haven't fully enter their idea position size they won't say but when they full got their position size they start to giv a clearer view or even upgrade the price target.. but nevertheless like your information but not sure about ur intention
TeslaSmurf OP Masakaki_C : The fact that I will make money buying the dip doesn’t mean that I enjoy it, nor I enjoy the stress and the tiring effort of day trading in these unstable conditions: I prefer making money on the upper side trading two hours per day, three or four days a week rather than having to stay on the charts for many and many hours, every working day from the pre market to the after market.
Don’t you find it to be a relevant reason ?
About the WHY: I really believe in Tesla’s “mission” and I can see no reason not to make such a little effort to support it in any way I can.
Masakaki_C : yea I don't like to waste time looking at chart too so I developed my own machine learning to do some prediction for me and I thought I am wrong yesterday but when I wake up.... bingo my AI is right again... yea I do agree with you about Tesla potential but I won't giv this kind of alpha out unless I have no more capital to buy and want the market to support it from dipping
TeslaSmurf OP Masakaki_C :
Not yet, not yet. I sold the 2/3 last year, after tripling my capital and now I’m just buying back. I know it will have two or three more legs down and I have the bullets for that, plus there is all the margin for an EXTREME buying necessity, but I’m sure I won’t need it.
I was thinking to triple again this year, but with all this trouble it may only double within 6 or 12 months… I’m not in a hurry. Plus, with all this volatility the profits from day trading are not bad at all.
Masakaki_C : that why my original idea when coding my AI is to profit in the market in all circumstances with both call and put...but I am surprised you do take profit because you sounds very convicted in your attempt to clear misinformation... seem like the only one that is convicted is Catherine wood
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