OT: Stock and Investment Talk

[BellyFullOfWhiteDogCrap]

You’ll never see these numbers posted on Teslarati or Teslanomics:

Americans are buying Teslas, not EVs, but experts say that's about to change

An influx of EVs — from a couple dozen today to estimates of hundreds by 2025 — are expected to eat away at Tesla's market share over time.

www.cnbc.com

"The competition is coming". Haven't heard that one before. Seriously, you can go back 5+ years and find an identical article.

Hertz CEO Mark Fields: “Tesla is the only manufacturer that can produce EVs at scale.”

 

[mdk01]

yeah. I've been using dividend income to buy protective puts on the stocks that have been shooting up, so it's using house money for hedging purposes.

I'm waiting til Nov 1 to put new money to work. Superstitious after seeing too many massacres the last week of October over the years.

Actually it's the 3rd week in October.

 

[jtung230]

"The competition is coming". Haven't heard that one before. Seriously, you can go back 5+ years and find an identical article.

Hertz CEO Mark Fields: “Tesla is the only manufacturer that can produce EVs at scale.”

I don’t think you’ll find any articles 5+ years ago that says any automaker putting dollar amounts committed to EVs. I think Tesla got help with the previous administration.

 

[RUAldo]

@RUAldo

personally, I think being associated with commercial fleet is a negative, especially for luxury segment. Short term, it’s great for Tesla. Long term, not sure it’s a positive for the brand.

100% agree. Tesla has always enjoyed the aura of exclusivity and “cool effect” like when Jay-Z helped put them on the map years back. Not sure how Hollywood, high net worth individuals, wanna-bes, etc. will feel about driving the same car that can be found 25 deep on a Hertz rental lot. It probably wouldn’t take much for Porsche to ramp up production and shift to influencer marketing and really push Tesla. Personally, my plan is to buy a Taycan in the next 3 years. Beautiful car.

 

[mdk01]

Better sell your Tesla before the wrath of the woke hits it. Musk channeling his inner Margaret Thatcher.

https://www.dailymail.co.uk/news/article-10130825/Elon-Musk-slams-Biden-new-billionaires-tax.html

 

[RUAldo]

"The competition is coming". Haven't heard that one before. Seriously, you can go back 5+ years and find an identical article.

Hertz CEO Mark Fields: “Tesla is the only manufacturer that can produce EVs at scale.”

But here’s the thing. Tesla can still do great and lose market share. The second Ford, VW, Audi, etc. rolled EVs off their lots the “competition is coming” rumor proved to be true.

 

[RUAldo]

Better sell your Tesla before the wrath of the woke hits it. Musk channeling his inner Margaret Thatcher.

https://www.dailymail.co.uk/news/article-10130825/Elon-Musk-slams-Biden-new-billionaires-tax.html

There is clearly something wrong with the tax system when I’m paying more than Elon Musk.

 

[T2Kplus20]

@RUAldo

personally, I think being associated with commercial fleet is a negative, especially for luxury segment. Short term, it’s great for Tesla. Long term, not sure it’s a positive for the brand.

Your hate is making you silly. Buy, hold, and enjoy the ride.

 

[mdk01]

There is clearly something wrong with the tax system when I’m paying more than Elon Musk.

You paid more than $455 million between 2014 and 2018? Do you have an unmarried sister? And as far as the rate goes, remember that they calculated it including unrealized capital gains. My guess is that your rate would go down, but not by as much as Musk's, if calculated in the same way.

 

[RUAldo]

You paid more than $455 million between 2014 and 2018? Do you have an unmarried sister? And as far as the rate goes, remember that they calculated it including unrealized capital gains. My guess is that your rate would go down, but not by as much as Musk's, if calculated in the same way.

Unless I heard it wrong, the news indicated he paid something like $60K in taxes last year or the year before.

 

[RUTBAY1]

Posing a question for the group and provide a hiatus from all of the Tesla navel gazing.

I am less than 5 years away from retirement and currently have a fairly aggressive position on my company's 401K and have done quite well in the last year. The 401K is managed by me with advice from some Edelman Financial Engine Tools. Although fairly successful I would consider myself a somewhat lucky investment novice.

I am hearing from several individuals whom I trust and who were way ahead of the whole 2008 meltdown telling me to consider going into an almost completely cash position for the next 6 months. I'm thinking today's situation is somewhat apples and oranges to what happened in 2008 so I'm not sure how much trust to put into the advice given. Any thoughts from the group here? Anyone in a similar position thought vis-a-vis timeline?

 

[RUAldo]

You paid more than $455 million between 2014 and 2018? Do you have an unmarried sister? And as far as the rate goes, remember that they calculated it including unrealized capital gains. My guess is that your rate would go down, but not by as much as Musk's, if calculated in the same way.

In 2018, Musk paid no federal income tax. The records show he paid $68,000 in 2015 and $65,000 in 2017.

 

[jtung230]

@RUTBAY1

When do you need the money from your 401k? Can you give us more on your aggressive position?

generally speaking, equity allocation is going up even in retirement years. But you should manage to beta of no greater than the s&p 500.

 

[rutgersdave]

Posing a question for the group and provide a hiatus from all of the Tesla navel gazing.

I am less than 5 years away from retirement and currently have a fairly aggressive position on my company's 401K and have done quite well in the last year. The 401K is managed by me with advice from some Edelman Financial Engine Tools. Although fairly successful I would consider myself a somewhat lucky investment novice.

I am hearing from several individuals whom I trust and who were way ahead of the whole 2008 meltdown telling me to consider going into an almost completely cash position for the next 6 months. I'm thinking today's situation is somewhat apples and oranges to what happened in 2008 so I'm not sure how much trust to put into the advice given. Any thoughts from the group here? Anyone in a similar position thought vis-a-vis timeline?

I‘m retired for several years and I’m cautious with my investments. Since inflation and interest rates will be going up next year, it might be wise to allocate a portion to cash, either 30-60% until interest rates are increased later in 2022. The previous ten years interest rates were going down which helped boost the stock market, now it’s going up. After the earnings season, end of this week, I will be either 20-30% in the market. However, I trade and will be buying selective quality stocks when they go down 10-15%.

Almost everyone believes there will be a correction and will adjust for the change in PE ratios.

 

[mdk01]

Posing a question for the group and provide a hiatus from all of the Tesla navel gazing.

I am less than 5 years away from retirement and currently have a fairly aggressive position on my company's 401K and have done quite well in the last year. The 401K is managed by me with advice from some Edelman Financial Engine Tools. Although fairly successful I would consider myself a somewhat lucky investment novice.

I am hearing from several individuals whom I trust and who were way ahead of the whole 2008 meltdown telling me to consider going into an almost completely cash position for the next 6 months. I'm thinking today's situation is somewhat apples and oranges to what happened in 2008 so I'm not sure how much trust to put into the advice given. Any thoughts from the group here? Anyone in a similar position thought vis-a-vis timeline?

IMHO that comes from the "if it's worth doing it's worth overdoing" school of investment. You're most likely either keep the 401(k) with your employer or put it into a Rollover IRA when you retire. I assume you're not going to spend it on necessities in the first year of your retirement. So if the market goes down you will have some time to let it recover. If you're nervous, increase you cash position. I'd do it by selling what you consider your most risky holdings. But no way should you go 100% cash.

 

[mdk01]

Unless I heard it wrong, the news indicated he paid something like $60K in taxes last year or the year before.

The article said between 2014-2018 he reported $1.52 billion in income and paid $455 million in taxes. If he didn't recognize any capital gains, exercise options or had the restrictions on restricted stock expire in 2020 he may well have only paid 60k. As far as I can tell, he does not take a gigantic salary. And if exercises a boatload of options in the near future as someone suggested that tax amount will skyrocket.

 

[RUAldo]

The article said between 2014-2018 he reported $1.52 billion in income and paid $455 million in taxes. If he didn't recognize any capital gains, exercise options or had the restrictions on restricted stock expire in 2020 he may well have only paid 60k. As far as I can tell, he does not take a gigantic salary. And if exercises a boatload of options in the near future as someone suggested that tax amount will skyrocket.

He’s one of those billionaires that takes out loans against his stock in order to avoid selling and triggering cap gains. I’m amazed at the nonsense these billionaires get away. All you need to do is look at the carried interest debacle and then you know who really runs this country.

 

[RUTBAY1]

@RUTBAY1

When do you need the money from your 401k? Can you give us more on your aggressive position?

generally speaking, equity allocation is going up even in retirement years. But you should manage to beta of no greater than the s&p 500.

Not looking to need any of the money until retirements at 62 and just looking to maximize my funds by then without unreasonable risk.

The plan currently is organized such that allocations for current balance and future investments are limited to a set of available funds representing a typical mix of SP500, Russell, International, Bonds, etc. When I look at how I've allocated across that set of funds I get a Edelman assessment on risk as being "Very Aggressive" given my retirement timeline.

In general the tool has allowed me to allocate to a mix that has produced a fairly high ROI for the year in the order of 13 - 17 % YTD. Unfortunately the site is currently down so I can't really provide much more info than that right now and will try again tonight. If I remember correctly I'm currently in no more than 17% of total investment in Bonds and Cash related categories with the rest in the various market funds.

I'm not looking to stay in any particular position near to mid and will likely maintain a mid range of risk. The question was more along the lines of the group's feelings about if another 2008 type of event in the very near future may occur from which it might be difficult to recover in 3 - 5 years. Right now I'm on current trajectory of being able to hit over 80% of my pre-retirement income working in Aerospace even if I significantly reallocate my portfolio to a mix deemed to be "conservative".

 

[mdk01]

He’s one of those billionaires that takes out loans against his stock in order to avoid selling and triggering cap gains. I’m amazed at the nonsense these billionaires get away. All you need to do is look at the carried interest debacle and then you know who really runs this country.

Taking out a loan has nothing to do with carried interest. It's also clearly legal and is a byproduct of the Fed keeping interest rates as low as they can. I don't think that's being done for the benefit of Musk and the other billionaires.

 

[BellyFullOfWhiteDogCrap]

The article said between 2014-2018 he reported $1.52 billion in income and paid $455 million in taxes. If he didn't recognize any capital gains, exercise options or had the restrictions on restricted stock expire in 2020 he may well have only paid 60k. As far as I can tell, he does not take a gigantic salary. And if exercises a boatload of options in the near future as someone suggested that tax amount will skyrocket.

Correct. He earns a minimum wage salary from Tesla. All of his wealth (from Tesla) is in the form of stock based compensation. Not sure what the deal is with SpaceX.

 

[BellyFullOfWhiteDogCrap]

I don’t think you’ll find any articles 5+ years ago that says any automaker putting dollar amounts committed to EVs. I think Tesla got help with the previous administration.

What do you mean by help? Tesla has borrowed money from the government. $465 million from the dept. of energy which was paid back 10 years ahead of schedule, with interest. Not a handout like some other autos got. Currently $2B of debt vs $16B cash.

Any auto maker can commit to EVs, but until they actually produce at scale (the hard part), I stand by my point. US legacy auto had better wake up. China isn't taking the slow and steady approach. The fact that GM still plans on producing 50% ICE vehicles in 2030 shows where their heads are.

 

[RUAldo]

Taking out a loan has nothing to do with carried interest. It's also clearly legal and is a byproduct of the Fed keeping interest rates as low as they can. I don't think that's being done for the benefit of Musk and the other billionaires.

Correct - the two issues are not directly related. And I never said it was illegal. But if you don’t think hedge funds deploy an army of lobbyists on DC every time carried interest comes up you clearly haven’t been following the issue. Again, nothing illegal about taking loans out against stock to avoid cap gains but should billionaires really be doing it to avoid paying any taxes or nominal amounts? I’m not even trying to get political but I think there is a moral obligation to pay something reasonable.

 

[BellyFullOfWhiteDogCrap]

But here’s the thing. Tesla can still do great and lose market share. The second Ford, VW, Audi, etc. rolled EVs off their lots the “competition is coming” rumor proved to be true.

"EV market share" is the folly of the TSLAQ losers. There is no such thing. It's a vehicle market share. Total vehicles produced and delivered. That's the only thing that matters.

 

[mdk01]

What do you mean by help? Tesla has borrowed money from the government. $465 million from the dept. of energy which was paid back 10 years ahead of schedule, with interest. Not a handout like some other autos got. Currently $2B of debt vs $16B cash.

Any auto maker can commit to EVs, but until they actually produce at scale, I stand by my point. US legacy auto had better wake up. China isn't taking the slow and steady approach. The fact that GM still plans on producing 50% ICE vehicles in 2030 shows where their heads are.

I'd say the ability to sell alternative energy credits which was a source of cash is help from the government.

 

[jtung230]

What do you mean by help? Tesla has borrowed money from the government. $465 million from the dept. of energy which was paid back 10 years ahead of schedule, with interest. Not a handout like some other autos got. Currently $2B of debt vs $16B cash.

Any auto maker can commit to EVs, but until they actually produce at scale, I stand by my point. US legacy auto had better wake up. China isn't taking the slow and steady approach. The fact that GM still plans on producing 50% ICE vehicles in 2030 shows where their heads are.

Don’t want to get political on this thread. What I mean by help is that the big 3 were held back from making the EV move because it didn’t follow the administration’s view.

 

[BellyFullOfWhiteDogCrap]

I'd say the ability to sell alternative energy credits which was a source of cash is help from the government.

Those aren't exclusively for Tesla.

 

[mdk01]

Correct - the two issues are not directly related. And I never said it was illegal. But if you don’t think hedge funds deploy an army of lobbyists on DC every time carried interest comes up you clearly haven’t been following the issue. Again, nothing illegal about taking loans out against stock to avoid cap gains but should billionaires really be doing it to avoid paying any taxes or nominal amounts? I’m not even trying to get political but I think there is a moral obligation to pay something reasonable.

Hedge funds deploy an army of lobbyists. Unions deploy an army of lobbyists. Almost every interest group deploys an army of lobbyists. And I think your "moral obligation" is better applied to the stepped up basis than unrealized gain, which has never been taxed in the 100 year history of the income tax. The problem there was administration. Non-billionaires can get a HELOC for all sorts of expenses. And until recently it was even deductible.

 

[mdk01]

Those aren't exclusively for Tesla.

But it's STILL help from the government.

 

[T2Kplus20]

Not looking to need any of the money until retirements at 62 and just looking to maximize my funds by then without unreasonable risk.

The plan currently is organized such that allocations for current balance and future investments are limited to a set of available funds representing a typical mix of SP500, Russell, International, Bonds, etc. When I look at how I've allocated across that set of funds I get a Edelman assessment on risk as being "Very Aggressive" given my retirement timeline.

In general the tool has allowed me to allocate to a mix that has produced a fairly high ROI for the year in the order of 13 - 17 % YTD. Unfortunately the site is currently down so I can't really provide much more info than that right now and will try again tonight. If I remember correctly I'm currently in no more than 17% of total investment in Bonds and Cash related categories with the rest in the various market funds.

I'm not looking to stay in any particular position near to mid and will likely maintain a mid range of risk. The question was more along the lines of the group's feelings about if another 2008 type of event in the very near future may occur from which it might be difficult to recover in 3 - 5 years. Right now I'm on current trajectory of being able to hit over 80% of my pre-retirement income working in Aerospace even if I significantly reallocate my portfolio to a mix deemed to be "conservative".

All of this seems very reasonable. Perhaps you can move to 25% bonds/fixed in your 401k? As for the equities, I would stick with broad market funds at this stage. S&P 500 index or Total Market Index like VTI (or the mutual fund version). I would keep some modest exposure to mid and small caps, perhaps 10%. Little exposure to international (5-8%).

Talking about a potential crash. Bears have been predicting this for years and years. Will they eventually be right? Yes, but who the hell knows when. See my sig below. Be careful going to all/most cash.

 

[jtung230]

@RUTBAY1

sounds like you got it covered.

IMHO, 2008 is once in a lifetime event. There will be corrections for sure but not nearly as dramatic as 2008. You can always increase cash allocation but going 100% cash in a cash deferred account is crazy talk. Plus, look how the market recovered after the crash. As long as you don’t need the funds right when the market crashes, you should be fine.

I went 50% cash in 2008 and bought it all back close to the bottom. Too bad 50% wasn’t a lot of money back then.

 

[RUAldo]

Hedge funds deploy an army of lobbyists. Unions deploy an army of lobbyists. Almost every interest group deploys an army of lobbyists. And I think your "moral obligation" is better applied to the stepped up basis than unrealized gain, which has never been taxed in the 100 year history of the income tax. The problem there was administration. Non-billionaires can get a HELOC for all sorts of expenses. And until recently it was even deductible.

We are probably headed down the political path here but I don’t put billionaires and Unions in the same category. Although both can be problematic. The fact is that billionaires have a million tax tricks up their sleeves yet I’m still paying the f’in AMT. Carried interest is joke of epic proportions. The AMT is archaic but nobody cares about the middle to high income earners.

 

[mdk01]

We are probably headed down the political path here but I don’t put billionaires and Unions in the same category. Although both can be problematic. The fact is that billionaires have a million tax tricks up their sleeves yet I’m still paying the f’in AMT. Carried interest is joke of epic proportions. The AMT is archaic but nobody cares about the middle to high income earners.

You're paying AMT after the 2017 legislation with the SALT limitations? The Interior Dept. is going to have you on the endangered species list.

 

[RUAldo]

You're paying AMT after the 2017 legislation with the SALT limitations? The Interior Dept. is going to have you on the endangered species list.

Yeah, total joke. And I’ve talked to other accountants. Unless I want to get “creative” I remain among a relatively small number that’s trapped.

 

[mdk01]

Picked up some TSLA Dec 795 puts today towards the close. I have a funny feeling this week is gonna get ugly. May as well make some money for Christmas gifts.

So far so good. I picked up a Jan 950 put this morning and am up 20% in 3 hours. Bull, bears and pigs issue here along with having the opportunity to defer the gain until 2022.

 

[BellyFullOfWhiteDogCrap]

Don’t want to get political on this thread. What I mean by help is that the big 3 were held back from making the EV move because it didn’t follow the administration’s view.

That's pretty weak. Nothing was preventing the big 3 from making a compelling EV. In reality, the big 3 are dragging their feet because their ICE business is more profitable than their EV business. They're yet to figure out how to flip that, and reluctantly, Tesla is dragging them into the future.

 

[RUAldo]

You're paying AMT after the 2017 legislation with the SALT limitations? The Interior Dept. is going to have you on the endangered species list.

Plenty of HENRYs getting screwed by the AMT - i.e., High Earners Not Rich Yet.

 

[WhichReligionIsRight]

Posing a question for the group and provide a hiatus from all of the Tesla navel gazing.

I am less than 5 years away from retirement and currently have a fairly aggressive position on my company's 401K and have done quite well in the last year. The 401K is managed by me with advice from some Edelman Financial Engine Tools. Although fairly successful I would consider myself a somewhat lucky investment novice.

I am hearing from several individuals whom I trust and who were way ahead of the whole 2008 meltdown telling me to consider going into an almost completely cash position for the next 6 months. I'm thinking today's situation is somewhat apples and oranges to what happened in 2008 so I'm not sure how much trust to put into the advice given. Any thoughts from the group here? Anyone in a similar position thought vis-a-vis timeline?

Going to all cash is attempting to time the market. Don't do it. Imagine selling everything. OK, that's easy. When do you get back in? Can you mentally handle buying back everything at 10% higher than what you sold at. If you jumped out 4th quarter 2018 or 1st quarter 2020 and then bought back six months later, you would have missed out on a lot of upside. If you are really a novice, don't time the market. You will lose.

Sometimes, you have to push back on the panic - the history of the stock market is that the market always goes up over the long term.

I've done quite a bit of personal retirement analysis. I will probably do fine if the market does somewhere between okay and well during first two or three years of retirement. If the market takes a big downturn when I first retire (even if temporary), that can cause some long-term retirement problems. If I can make it past the first few years, I should be able to recover from a big shock that occurs somewhere down the line. One can make up a spreadsheet to calculate this out on your own very easily. Plug in a bunch of different annual rates of return for each year to see how you might do given different market outcomes.

What does this point to: Perhaps consider a "soft" retirement, such as working part time for a few years instead of jumping right into retirement.

I'd also consider ways to transform the investment mix from all growth to a mix of growth + income producing products. For example, investing in tech companies is a great thing to do for long term success. However, if you have to sell off 4 to 5% of your portfolio each year, then you are effectively eating your seed corn.

I've been putting more money into some REITs with high interest rates + QYLD. I'm also putting more money into great companies with strong dividends. NO to value traps like AT&T, but yes to AVGO, HD, etc. Bonds are almost universally all trash and will likely be poor investments for quite a long time. This isn't comprehensive, just a few things that can easily be done within your investment account. Google the concept of barbell investing.

I'm interested to learn how much you are paying for investment advice and whether they've improved your returns enough to justify the expense. I pay for a few subscriptions - IBD and Motley Fool, but that's about it.

 

[WhichReligionIsRight]

IMHO that comes from the "if it's worth doing it's worth overdoing" school of investment. You're most likely either keep the 401(k) with your employer or put it into a Rollover IRA when you retire. I assume you're not going to spend it on necessities in the first year of your retirement. So if the market goes down you will have some time to let it recover. If you're nervous, increase you cash position. I'd do it by selling what you consider your most risky holdings. But no way should you go 100% cash.

This is reasonable advice. Reasonable means not panicking that the market is about implode. Move investments to safer products if the fear is keeping you up at night. Your investment account should include tools to help understand the risk and return of each investment.

 

[mdk01]

Don’t want to get political on this thread. What I mean by help is that the big 3 were held back from making the EV move because it didn’t follow the administration’s view.

Not shedding any tears for GM with the bailout they got back in 2009. Ford might have a gripe.

 

[mdk01]

Plenty of HENRYs getting screwed by the AMT - i.e., High Earners Not Rich Yet.

Plenty? I don't think so. Back before 2017 clearly yes.