Sell Tesla?

ToneControl · November 2020

RandallFlagg said:

ToneControl said:

I tell you this stuff because when my pension funds dropped 50% in 2008, I felt very sick. I would not like anyone to have that happen.

After it dropped 50% what did you do? and what happened to the fund it was invested in?

All funds holding stocks/equities went down up to 50% in the 2008 crash but the majority recovered in 12-24 months.

I was down £70K earlier this year but it's all back now, plus.

what I'm trying to say is that there is no guarantee that it will recover again
your favourite Canadian thinks that the market "must" go up again. Why is

One theory is that the US is becoming "Japanified"
This is a widely-held belief

https://seekingalpha.com/article/4375527-japanification-of-united-states-is-complete
https://www.bloomberg.com/news/articles/2020-03-12/summers-says-u-s-economy-now-confronts-japanification
https://www.capitalgroup.com/institutional/insights/articles/japanification.html
https://www.marketwatch.com/story/heres-what-a-japanification-of-the-us-would-look-like-2019-12-09

etc

so
take a look at this chart
The Nikkei peaked in 1990 at 39k
It gradually went down to below 8k in 2004, that's more than an 80% drop
now it's near 26k
So that's a 30 year wait to lose only 35% of your money
No gains, no averaging up

Tell me why that "can't happen" in the US

RandallFlagg · November 2020

ToneControl said:

RandallFlagg said:

ToneControl said:

I tell you this stuff because when my pension funds dropped 50% in 2008, I felt very sick. I would not like anyone to have that happen.

After it dropped 50% what did you do? and what happened to the fund it was invested in?

All funds holding stocks/equities went down up to 50% in the 2008 crash but the majority recovered in 12-24 months.

I was down £70K earlier this year but it's all back now, plus.

what I'm trying to say is that there is no guarantee that it will recover again
your favourite Canadian thinks that the market "must" go up again. Why is

One theory is that the US is becoming "Japanified"
This is a widely-held belief

https://seekingalpha.com/article/4375527-japanification-of-united-states-is-complete
https://www.bloomberg.com/news/articles/2020-03-12/summers-says-u-s-economy-now-confronts-japanification
https://www.capitalgroup.com/institutional/insights/articles/japanification.html
https://www.marketwatch.com/story/heres-what-a-japanification-of-the-us-would-look-like-2019-12-09

etc

so
take a look at this chart
The Nikkei peaked in 1990 at 39k
It gradually went down to below 8k in 2004, that's more than an 80% drop
now it's near 26k
So that's a 30 year wait to lose only 35% of your money
No gains, no averaging up

Tell me why that "can't happen" in the US

Guarantee? You invest in stocks and shares and expect guarantees? There are none. Don't you read the small print?

Sounds to me like you bottled it and cashed out in the dip in 2008 and now live in fear. Millions and millions of people were invested in 2008 in mutual funds, as was I, and as I keep saying when the market crashes the best course of action is to do nothing and leave your portfolio alone, keep paying in regularly and get the benefit of dollar cost averaging.

Of course the US market can fall into slow decline but so can any market, anywhere. You have to take risk but being diversified in different sectors and markets helps limit the risk. It's not rocket surgery. It just adds to Ben Felix's assertion that investing in the Global Index is the best strategy.

Its not quite the way I invest but I am in 2 global funds, 1 small holding in a US only fund that holds 40 companies and a large chunk in UK small companies fund that holds about 50 companies. The global funds hold a sizeable percentage of US stocks as that's how the world market is shaped.

You clearly take a different path and strategy. That's your choice. I'm perfectly comfortable with mine, it's been road tested by millions of people worldwide.

ToneControl · November 2020

Image: https://static.seekingalpha.com/uploads/2010/5/14/saupload_nikkei_225_spx_nominal_overlay.png

https://seekingalpha.com/article/205192-learning-from-nikkei-monthly-moving-averages

ToneControl · November 2020

Image: https://www.zerohedge.com/sites/default/files/inline-images/2018-03-27_14-05-31.jpg?itok=BKN4Lnxe

RandallFlagg · November 2020

BBBlues · November 2020

In more recent months there seems to be a "rush to tech" as the safe haven, rather than the usual dash for cash (bond markets) as we've seen in the past during uncertain times (although this is still the case to a pretty high degree, also with gold markets). It's almost like the bet on emerging tech is being driven by future profits being so far away than it doesn't particularly matter that actual profits may be poor over the next 5 years... analysts are so keen to price in potential for 10yr+ (finding the next Apple, Microsoft, Amazon etc.) that tech prices run away from any form of EBIT and traditional quant/fundamental analysis. I guess the extra benefit of this rush to tech, is that when the market picks up again you don't have to then dump it like you'd do with value assets.

Another one to watch which is having a comeback based mainly on speculation is bitcoin. I think Paypal are now accepting transactions with bitcoin, as well as some other apps. The derivatives market for bitcoin is also growing.

ToneControl · November 2020

https://morningporridge.com/the-morning-porridge/f/blain’s-morning-porridge-–-nov-25-2020-rationally-irrational

crunchman · November 2020

https://www.standard.co.uk/business/why-elon-musk-won-t-be-the-second-richest-man-in-the-world-for-long-b79216.html

RandallFlagg · November 2020

crunchman said:

https://www.standard.co.uk/business/why-elon-musk-won-t-be-the-second-richest-man-in-the-world-for-long-b79216.html

I don't disagree with some of the sentiment in that report but with regards to this point:

"From a practical point of view, Tesla does not have enough European presence which means they are likely to run into all sorts of problems with transporting their wares and with tariffs.Moreover, if you have an accident in a BMW, the dealership up the road can get you the replacement parts you need very quickly. It might take Tesla months."

The author appears to have ignored the fact that construction of the Tesla Berlin Gigactory is steaming ahead at an incredibly fast rate and it will service European production:

crunchman · November 2020

I think a lot of the share price is based on their battery technology rather than the cars.

That could make it vulnerable if there is a move towards hydrogen fuel cells, or alternative forms of energy storage for the grid.

http://greenbarrel.com/2020/07/30/liquid-air-energy-storage/

That project won't need any lithium or cobalt, which are going to be scarce and expensive. It will last longer than batteries as well. I'm sure batteries on the grid will last longer than the 2 years that phone batteries do, but they will still need regular replacement. Recyling them is unlikely to be simple or cheap.

On a system like that one, you might need to replace the bearings on the turbines, but apart from that, there is no reason that the parts couldn't last 5 times as long as batteries.

With hindsight, I wish I'd sold a couple of expensive guitars at the beginning of the year and bought Tesla shares. There is no way I would buy in at the current price though, and I'd be cashing out if I did have some.

RandallFlagg · November 2020

crunchman said:

I think a lot of the share price is based on their battery technology rather than the cars.

That could make it vulnerable if there is a move towards hydrogen fuel cells, or alternative forms of energy storage for the grid.

http://greenbarrel.com/2020/07/30/liquid-air-energy-storage/

That project won't need any lithium or cobalt, which are going to be scarce and expensive. It will last longer than batteries as well. I'm sure batteries on the grid will last longer than the 2 years that phone batteries do, but they will still need regular replacement. Recyling them is unlikely to be simple or cheap.

On a system like that one, you might need to replace the bearings on the turbines, but apart from that, there is no reason that the parts couldn't last 5 times as long as batteries.

With hindsight, I wish I'd sold a couple of expensive guitars at the beginning of the year and bought Tesla shares. There is no way I would buy in at the current price though, and I'd be cashing out if I did have some.

Tesla already well on the way to eliminating Cobalt from their batteries:

https://www.forbes.com/sites/jamesmorris/2020/07/11/teslas-shift-to-cobalt-free-batteries-is-its-most-important-move-yet/?sh=7993832f46b4

ToneControl · November 2020

To me, tesla cars look quite basic
I test drove one, and the interior trim of the £100k car was like a typical £30k BMW

BMW and Merc, etc. have decades of manufacturing experience of car building. swapping engines and a fuel tank for batteries and electric motors should be a lot easier than learning to build a world class car manufacturing business.

As already pointed out, batteries may not be the endgame anyway, and as I've already said, Tesla are something like 5% of the battery market.

In what way are they "years ahead" of anyone else? Because they were making batteries first?
Various phone makers are years ahead of Apple for technical patents, but Apple seems to do rather well
Merc and BMW will continue to dominate I reckon

btw: although Teslas are fast, all the rich IT guys I know in Cali drive fast petrol European-made cars. Image matters a lot.

crunchman · November 2020

ToneControl said:

btw: although Teslas are fast, all the rich IT guys I know in Cali drive fast petrol European-made cars. Image matters a lot.

Given the size of the US, and the distances they sometimes travel, range is probably a factor in that. We might get away with batteries in this country, but in countries that are physically much larger, with lower population densities, I still think that they will end up going towards hydrogen rather than batteries. Even if they make batter batteries with double the capacity of the current ones, they will just run up against the limitations of the grid when charging them, and they will still take a long time to charge.

The other thing to bear in mind is what the car ownershop model will look like in 10 or 15 years time. For a lot of people in big cities like London, it's cheaper to get an Uber a few times per week than it is to own your own car. Driverless cars are on the way. When Uber don't have to pay a driver, which is the biggest part of the cost, then they will get cheaper still. A lot of people will not bother owning their own car any more. That will happen in every large city worldwide

In that situation, there is no reason a driverless Uber can't be on the road for 12 to 15 hours a day, as opposed to an hour or two for the average car now. The total number of cars on the road will be significantly smaller than it is now. The cars will do more miles, and might get replaced a bit sooner, but the overall market for cars is likely to shrink.

The government is also actively looking to reduce car usage. It's likely that there will be subsidies for electric bikes next year from what I have read. With 20mph speed limits being imposed in a lot of urban areas, it will be quicker for a lot of commuters to get to work on a bike, as well as a lot cheaper.

In this country, and the rest of Europe, we are probably at or past peak car. I'm not sure that has been factored into these share prices. Like I said above, I would be cashing out now if I owned any shares in Tesla.

Snap · November 2020

I'm holding Tesla, I think they have a long way to go yet. Making cars isn't their long term strategy at all, it's about the infrastructure under alternative power to combustion.

ToneControl · November 2020

https://www.bbc.co.uk/news/technology-55103706

ToneControl · November 2020

https://en.swissquote.lu/will-growth-stocks-tesla-soon-make-value-stocks-look-great?utm_source=dianomi&utm_medium=native&utm_content=economic-news&utm_campaign=trading-product

RandallFlagg · December 2020

Tesla stock still climbing. Another $5BN share float capital raise announced by Tesla today as they stockpile a massive amount of cash.

The institutional short sellers looking more and more like anachronisms as each day passes as the Millennials pile in. Forecast prices being revised upwards.

Less that 2 weeks to S&P500 inclusion day when $70BN is estimated to be bought/sold by the index funds to maintain profile.

A fascinating story. I personally think Tesla stock could go much, much higher yet., $1200, $1500+

ToneControl · December 2020

RandallFlagg said:

Tesla stock still climbing. Another $5BN share float capital raise announced by Tesla today as they stockpile a massive amount of cash.

The institutional short sellers looking more and more like anachronisms as each day passes as the Millennials pile in. Forecast prices being revised upwards.

Less that 2 weeks to S&P500 inclusion day when $70BN is estimated to be bought/sold by the index funds to maintain profile.

A fascinating story. I personally think Tesla stock could go much, much higher yet., $1200, $1500+

how much would you invest, and for how long?

the Robin Hood guys are all sat on stop losses

RandallFlagg · December 2020

ToneControl said:

RandallFlagg said:

Tesla stock still climbing. Another $5BN share float capital raise announced by Tesla today as they stockpile a massive amount of cash.

The institutional short sellers looking more and more like anachronisms as each day passes as the Millennials pile in. Forecast prices being revised upwards.

Less that 2 weeks to S&P500 inclusion day when $70BN is estimated to be bought/sold by the index funds to maintain profile.

A fascinating story. I personally think Tesla stock could go much, much higher yet., $1200, $1500+

how much would you invest, and for how long?

the Robin Hood guys are all sat on stop losses

Personally I'm indirectly invested through a couple of funds that hold Tesla in their top 10 holdings and will be holding these funds and paying in monthly for as long I remain working, and then hold and drawdown from them until my end of days.

If I did invest in single stocks, I would pick Tesla, happily commit £20-30K. I would buy now, even at these prices and hold for at least 10 years, maybe top slicing annually or bi-annually along the way to enjoy the profits.

ToneControl · December 2020

RandallFlagg said:

ToneControl said:

RandallFlagg said:

Tesla stock still climbing. Another $5BN share float capital raise announced by Tesla today as they stockpile a massive amount of cash.

The institutional short sellers looking more and more like anachronisms as each day passes as the Millennials pile in. Forecast prices being revised upwards.

Less that 2 weeks to S&P500 inclusion day when $70BN is estimated to be bought/sold by the index funds to maintain profile.

A fascinating story. I personally think Tesla stock could go much, much higher yet., $1200, $1500+

how much would you invest, and for how long?

the Robin Hood guys are all sat on stop losses

Personally I'm indirectly invested through a couple of funds that hold Tesla in their top 10 holdings and will be holding these funds and paying in monthly for as long I remain working, and then hold and drawdown from them until my end of days.

If I did invest in single stocks, I would pick Tesla, happily commit £20-30K. I would buy now, even at these prices and hold for at least 10 years, maybe top slicing annually or bi-annually along the way to enjoy the profits.

I still think the price will fall, there's no value or earnings behind the price
Amazon had a USP, I don't see that with Tesla

I have another high-risk recommendation for £20k that looks more likely to succeed, tell me if you are interested

BBBlues · December 2020

In other news... huge federal lawsuit just filed against Facebook in the States for abuse of monopoly power. If it’s successful could end with a breakup of the group. Amazon and google will be watching closely. A shake-up of the S&P500 giants would be very interesting.

ToneControl · December 2020

RandallFlagg said:

so it took 25 years for the stock market to recover from 1929?

are you ready to wait 25 years to retire?

meltedbuzzbox · December 2020

Buffet sounds fucking awful there.

Doesn't seem half as sharp and poised as he usually does

RandallFlagg · December 2020

ToneControl said:

RandallFlagg said:

so it took 25 years for the stock market to recover from 1929?

are you ready to wait 25 years to retire?

No, and I won't need to. I don't hold 100% US funds, I am diversified, UK, Global and US.

You seem to have a blinkered aversion to US stocks based on irrational fear.

It's highly unlikely that the erratic Federal monetary policies of the 1920/30s that lead to the 1929 stock sell off and subsequent depression will repeat in the US, highly unlikely. If and when current US “bubble” as you put it bursts stock prices will simply revert to the mean which over the longer term is healthy and steady gains. I don't expect any more than the long term average for my retirement planning.

It's my UK holdings that have underperformed this year (they are picking up now and I hope 2021 will be a good strong year for UK stocks) but being diversified with some high flying US stocks in the portfolio has balanced things out so my retirement plans remain on track. My biggest effort towards retirement at present is getting debt free and paying off the mortgage, I pile in with big salary sacrifice after that from 2022 onwards, that's when the investing sums ramp up big time.

RandallFlagg · December 2020

meltedbuzzbox said:

Buffet sounds fucking awful there.

Doesn't seem half as sharp and poised as he usually does

He was addressing an empty arena due to COVID, Charlie Munger wasn't by his side, he is 90 years old and the pandemic impact was unfolding at that very time. Not really surprising he wasn't his usual chipper self.

ToneControl · December 2020

RandallFlagg said:

ToneControl said:

RandallFlagg said:

so it took 25 years for the stock market to recover from 1929?

are you ready to wait 25 years to retire?

No, and I won't need to. I don't hold 100% US funds, I am diversified, UK, Global and US.

You seem to have a blinkered aversion to US stocks based on irrational fear.

It's highly unlikely that the erratic Federal monetary policies of the 1920/30s that lead to the 1929 stock sell off and subsequent depression will repeat in the US, highly unlikely. If and when current US “bubble” as you put it bursts stock prices will simply revert to the mean which over the longer term is healthy and steady gains. I don't expect any more than the long term average for my retirement planning.

It's my UK holdings that have underperformed this year (they are picking up now and I hope 2021 will be a good strong year for UK stocks) but being diversified with some high flying US stocks in the portfolio has balanced things out so my retirement plans remain on track. My biggest effort towards retirement at present is getting debt free and paying off the mortgage, I pile in with big salary sacrifice after that from 2022 onwards, that's when the investing sums ramp up big time.

I'm not attacking your retirement plans
I'm attacking the idea that people investing primarily in the US market (like your Canadian favourite guru) don't need to worry about dips and crashes because the market will recover quickly. It didn't in the US in 1929, and it didn't in Japan more recently.
Reverting to the mean in the US means a very big drop

Anyway - more importantly for you:
your salary sacrifice idea is good, I've done the same, but you need to read up on UK tax / pension law
If you increase your annual contribution by more than 10% a year, they classify it as money recycling (I think that's the term), and they will apply a 55% tax penalty on the contributions, I will try to find the detail for you later.

ToneControl · December 2020

they've updated this a bit:
https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/pension-lump-sum-recycling

talks about 30% of total tax free amount

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm133830

What is the cumulative basis on which the significant increase of contributions is based?
An individual planning to increase contributions significantly to a registered pension scheme when taking a pension commencement lump sum does not avoid the “significant increase” test by increasing contributions piecemeal or gradually over time. It does so by providing for contributions to be measured over a set period of time in determining whether or not there has been a significant increase in contributions.
The period of time is:

the tax year in which an individual takes a pension commencement lump sum with the intention of using it to make significantly increased contributions to a registered pension scheme

the 2 tax years immediately preceding the tax year in which the individual took the lump sum, and

the 2 tax years immediately following the tax year in which the individual took the lump sum.

for this reason, I calculated when my "safe" date to retire is after contributing heavily for the last 3-4 years

I suspect this won't catch you, but it's too risky to just assume that, so I'd have a look at this and call them for advice

RandallFlagg · December 2020

Checked it a couple of years ago, that relates to recycling tax free lump sums taken from DC pensions, it's not applicable to lump sums taken from a DB pension nor salary from a job. We can pay in £40K a year salary sacrifice (including your employers contribution) and more with the 3 years backdate of any unused previous allowance.

RandallFlagg · December 2020

ToneControl said:

RandallFlagg said:

ToneControl said:

RandallFlagg said:

so it took 25 years for the stock market to recover from 1929?

are you ready to wait 25 years to retire?

No, and I won't need to. I don't hold 100% US funds, I am diversified, UK, Global and US.

You seem to have a blinkered aversion to US stocks based on irrational fear.

It's highly unlikely that the erratic Federal monetary policies of the 1920/30s that lead to the 1929 stock sell off and subsequent depression will repeat in the US, highly unlikely. If and when current US “bubble” as you put it bursts stock prices will simply revert to the mean which over the longer term is healthy and steady gains. I don't expect any more than the long term average for my retirement planning.

It's my UK holdings that have underperformed this year (they are picking up now and I hope 2021 will be a good strong year for UK stocks) but being diversified with some high flying US stocks in the portfolio has balanced things out so my retirement plans remain on track. My biggest effort towards retirement at present is getting debt free and paying off the mortgage, I pile in with big salary sacrifice after that from 2022 onwards, that's when the investing sums ramp up big time.

I'm not attacking your retirement plans
I'm attacking the idea that people investing primarily in the US market (like your Canadian favourite guru) don't need to worry about dips and crashes because the market will recover quickly. It didn't in the US in 1929, and it didn't in Japan more recently.
Reverting to the mean in the US means a very big drop

Anyway - more importantly for you:
your salary sacrifice idea is good, I've done the same, but you need to read up on UK tax / pension law
If you increase your annual contribution by more than 10% a year, they classify it as money recycling (I think that's the term), and they will apply a 55% tax penalty on the contributions, I will try to find the detail for you later.

Ben Felix doesn't advocate that, not at all, he advocates holding the entire market in a global equity tracker, not just the US. He actually critiques the S&P500s performance as being almost statistically impossibly good, so agreeing that it's inflated.

RandallFlagg · December 2020

Sell Tesla?

If I was one of the "Teslanaires"...yes I would, I would sell today on the eve of Tesla joining the S&P500 index...that would have been retirement sorted!

"Brandon Smith does not own one of Tesla Inc.’s sleek electric cars. In the small town south of Milwaukee where he lives, even seeing one on the road is rare.

But in late June 2017, Smith poured $10,000 of savings into Tesla’s stock. He said it was the first time he’d ever invested in a company. That was just the start. Each paycheck, Smith, a video producer, would pay his bills and then buy additional shares with the rest.

“I don’t make six figures, and I don’t know anything about puts and options,” Smith, 32, said in a phone interview. “I’ve just bought and held the entire time. I’ve never sold a single share.”

Now Smith has joined the ranks of the “Teslanaires,” as some of the company’s investors call themselves, with a holding that he says has ballooned to over $1 million, fueled by a rally of nearly 684% this year as of Thursday’s close."

https://www.bloomberg.com/news/articles/2020-12-18/tesla-s-tsla-stock-price-an-army-of-millionaire-retail-traders-hold-on

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What is the cumulative basis on which the significant increase of contributions is based?