Investors are surprisingly pessimistic. I am heavily invested in TSLA. I got out right before earnings call because CEOs like Elon don't seem to care about meeting Wall Street's expectations. I'll buy more in a week or two when the market is more favorable.
Almost all of the criticism I read of TSLA is regarding their financials. There is a lot of room for sentiment and investor confidence to improve. Things I care about(like Elon's track record & ridiculous amounts of ambition, improvements in battery technology, not using dealerships, the supercharger network, etc.) don't ever get mentioned.
Wall street seems to care about whether they'll be able to meet production goals, the amount of cash they have on hand to continue operations, etc.
Most importantly, as more consumers take delivery of their Model S' I'm expecting investor confidence and awareness to improve. They'll "see" the demand with their own eyes. My father is already mentioning to me that his friends are seeing Model S' pop up around town and people are talking about them. They want to know what it is. It's extremely common for retail investors to buy stock based on products that they see being used.
You're right in that I'm betting solely based on investor confidence improving. In my opinion, there is no other metric on which to price a stock.
This is otherwise known as the greater fool theory. I'm not saying that to suggest you're a fool. But you are a gambler, hoping for someone even more emotionally invested than you are to buy your shares. At the end of the day confidence is not sustainable. The bubble showed us that quite clearly. At some point, Tesla has to make sense, and there has to be a clear path from now until then or someone will lose a lot of money along the way.
Progress depends on the fool and the greater fool. The only way to be right always is to not take a position at all. Progress depends on people believing that the world can change for the better in unimaginable ways. Taking a position on unimaginable progress can appear foolish for pretty long periods of time and can ultimately also turn out to be foolish in retrospect. To be a pioneer you have to run the risk of being foolish.
Hype gets created automatically when someone credibly takes on a problem that most think cannot be done. The only way to sidestep is to do what Andrew Wiles did with the Fermat last theorem - but that might not be a valid strategy for a problem that requires more than a small team.
You hit the nail on the head with your question here. This guy does not sound like someone who really know what he's doing in the market. If you had already made the decision that you believe in Tesla and want to invest there is no reason to be buying and selling the stock based off of earnings reports. Particularly if you believe (as this guy does) that the CEO is not particularly concerned with Street estimates. Just buy and hold.
I too got out before earnings, and I'm not really sure where you get the idea that he doesn't know what he's doing.
I got out because I was up 20% (my target when I initiated the position) and my trailing stop was hit around the time the NYT story came out. I had set the trailing stop prior to earnings because their earnings typically lead to sell-offs because they aren't profitable (yet) and they were going to come up short of their initial estimates for cars delivered 2012 (even though it was revised down, people would still hold it against them). It had had a nice run in the weeks prior, so a correction seemed reasonably plausible anyway. It's just how the market goes, and I figured (correctly) that even if my stop got hit, it meant I would have an opportunity later to get back in at a lower price.
I believe in Tesla, but I also realize that there are going to be dips along the way that I can capitalize on. I think they'll turn a profit this quarter, and if they keep on track, their earnings reports won't be as volatile (at least in the negative direction) and I won't sell beforehand.
I guess it's just a matter of personal preference then. The difference between long term and short term capital gains tax makes what you describe here not worth the effort to me.
Well there are a lot of people who are long on a volatile stock who will get in and out to maximize their return in/cost basis etc. Holding and never exiting is another option but hardly makes you "unsavvy" if you're trading in and out. Having said that I agree options would be a better strategy if you feel comfortable that you can predict the short term market direction.
I think the NYT affair started cementing the idea of brand loyalty into the minds of their customers. US consumers love an underdog they can get behind in an "us vs them" type storyline.
Almost all of the criticism I read of TSLA is regarding their financials. There is a lot of room for sentiment and investor confidence to improve. Things I care about(like Elon's track record & ridiculous amounts of ambition, improvements in battery technology, not using dealerships, the supercharger network, etc.) don't ever get mentioned.
Wall street seems to care about whether they'll be able to meet production goals, the amount of cash they have on hand to continue operations, etc.
Most importantly, as more consumers take delivery of their Model S' I'm expecting investor confidence and awareness to improve. They'll "see" the demand with their own eyes. My father is already mentioning to me that his friends are seeing Model S' pop up around town and people are talking about them. They want to know what it is. It's extremely common for retail investors to buy stock based on products that they see being used.
You're right in that I'm betting solely based on investor confidence improving. In my opinion, there is no other metric on which to price a stock.