Our little flea is up this morning. The real winner, though, is XPEV (symbol for XPENG) which announced cost savings because of a new production platform. XPEV is up 12%!!!! Recall that TSLA announced MAJOR cost savings during their investor's day, but the lack of hype actually caused a decline in stock price.

I was supposed to watch the Starship launch before market open today. However, I woke up a little late (I am on Pacific time), and I thought I would get just a replay. However, I just heard the Flight Director announce that the countdown will be halted at T-10 seconds.

Rovlram: Finally, you have set out a valuation for Tesla that I have been mulling but have been somewhat afraid to put out. Do you realize that Tesla's current market cap is not even $600 Billion? Therefore you are implying that Tesla is undervalued by a factor of FIVE!

While I agree with you, you have to remember that the stock market is still stuck in incrementalism. The better than 10X jump in Tesla stock price between March 1, 2020 and March 1, 2022 was a humongous shock to Wall Street. Actually the stock price was EVEN higher on Oct 1, 2021; therefore, the 10-bagger took just 19 MONTHS! THIS PERFORMANCE TRAJECTORY IS UNLIKELY TO BE REPEATED. However, the P/E multiplier SHOULD BE increasingly set by actual growth rates than theoretical margin cuts. THEREFORE, I can see the P/E climbing to close to 100 after Tesla delivers a few quarters of earnings growth of better than 50% per year. Mind you, the climb will be extremely gradual, and will not be continuous.

Therefore, my predictions are as follows:

Stock price by end of 23 = 300

Stock price by end of 24 = 400

Stock price by end of 25 = 600

Stock price by end of 2030 > 1,000

Note that we hit a market cap of $3 trillion when the stock price hits about $950. Thus I do not see TSLA realizing its $3 Trillion market cap until late in the decade.

I am very aware that these numbers are extremely conservative. And will disappoint many bulls out there. However, I have become sadly aware of the power of doubters on Wall Street.

Rovlram: Like you I am very confident that TSLA will report a substantial beat of the expected earnings figures (currently 85-86 cents). However, the Street has a tendency to move expectations up for companies it is not too keen on. A good example was the P&D report, for which expectations were beat by a little but the SP went down about 6% the following day, because of a miss! Therefore, I suggest following the Moon strategy for next week. Buy calls, and puts in order to provide upside potential, no matter which way the market moves the stock. A losing position is created by NO MOVEMENT. At the moment, I am holding calls at 200 and 205, and puts at $175.

By my positions, you can see that I am expecting a significant move up in the SP. However, I do not intend to wait beyond about noon on the Thursday following the earnings report to exit my positions. Therefore, it is not necessary for the SP to move beyond my strike prices, although that is what I am hoping for.

Megapacks will be part of the icing on the cake. Except, in this particular case, it may grow to be half or more of the cake. And leave the icing for another Tesla business!

rovlram: With you I get the feeling I am preaching to the choir! BUT I am almost certain about the longer-term prospects for Tesla. It has the vision and the capital to make the vision reality.

Since this board is filled with individuals who are more intent on hiding their opinions than help the public at large, I am once again forced to be the first to respond to my own question.

I am of the opinion that Tesla's price cuts had two principal objectives:

1. Increase demand.
2. Eliminate the possibility of OBSCENE PROFITS.

A third less important objective was putting the competition on notice. GET YOUR COSTS UNDER CONTROL if you wish to stick around.

The relatively calm Tesla CFO, Zach Kirkhorn, said in the Q4 conference call: "So based upon these metrics here, we believe that we'll be above both of the metrics that are stated in the question, so 20% automotive gross margin, excluding leases and credits," The 20% gross auto margin is FAR HIGHER than the average auto margin of about 7-10% for the period 2015-2020. "Between 2015–2020, the average profit margin for major automotive companies worldwide was nearly 7.5%."Tthis quote is taken from https://ztcorporate.com/blog/determining-automotive-industry-profitability-for-2021-and-beyond/

Assuming a gross profit margin (AFTER PRICE CUTS) of 20% leads me to believe that our profitability for Q1 is being misunderstood, and is being used unfairly to depress the stock price. I fully expect our net profits for Q1 to be in the range of $1-$1.09. THAT is the reason I expect SP to jump after hours on Wednesday.

The ONLY cloud on Tesla's horizon is China. However, I believe that even if China were to choose the BAMBOO CURTAIN instead of ALL the favors the world has bestowed on it and asked VERY LITTLE in return, CHINA will be the loser. Tesla will experience some short-term pain and will prosper, longer-term. See

https://www.investors.com/news/u-s-china-trade-war-over-technology-heats-up-what-it-means-for-apple-micron-tesla/?src=A00220

for some perspective.

Here is another story from the public domain. This one is saying, LOUDLY AND CLEARLY to open unbiassed ears that legacy auto companies are doomed.

https://finance.yahoo.com/news/bidens-gift-to-elon-musk-and-tesla-195528708.html

In keeping with the BOARD's recent preference for OTHERS' opinions over those of the board members' opinions, here is a story that is screaming BANKRUPTCY for a Tesla rival:
https://www.thestreet.com/technology/tesla-rival-lucid-shows-alarming-signs?puc=yahoo&cm_ven=YAHOO

EVERYTHING I have read, and continue to read about TSLA leaves me confused about the lack of a warm embrace from Wall Street and the average consumer. The ONLY explanation I have been able to come up with is politics!

What is your earnings estimate for Q1, 2023?

1. Higher than $1.19 (Q4, 2022)
2. Exactly $1,19
3. Between $1,10 and $1.18
4. Between $1 and $1.09
5. Below $1.

Almost ALL stocks did well today. In my list of closely watched stocks, Tesla finished fifth. It tied with META for that finish, but it was outpaced by Apple, Amazon, Ethereum, and Moderna. That is a bit of a surprise; but perhaps it is a sign of how the expected earnings number for TSLA, currently $0.85, will be manipulated to result in a miss for TSLA.

JJ: I am TRULY surprised. In my little group of about 10 close friends, I would say the split is about 60-40 against Tesla.

Moon, Dan: please let me know the Moon strategy for selling/unwinding ITM options. I basically have two questions.

1. Does the winning option have to make enough profit to offset the cost of the other option?

2. How much of the proceeds are re-invested?

My put order hit; however, the call order is further off, now that the SP is rallying a bit.

I have orders in to buy the calls at $5 per share, and the puts at $4.90 per share.

Current cash outlay at market prices (which I NEVER recommend) is almost $1,500 per contract. I would recommend lower bids in order to catch lower prices on the calls on days like today (down market) and on the puts on up days.

Suggestion for playing the Q1 earnings next week.

Buy calls at 185 and puts at 175. Both with an expiration date of 4/21.

PRECISELY!

One more thing. I traded in my 3-year old Model Y for a brand new Model S in mid-Jan, soon after the price reduction. I would have done it even without the price reduction but the extra $15K sure helped make up my mind.

My reasoning for the trading were as follows:

1. Better chance of being upgraded to HW4.
2. My Model S had FSD, which I rarely used. I lost it soon after I got it, primarily because I was too complacent. The new Model Y has no enhancement to the Autopilot.
3. My net cost for the trade-in was essentially tax and license.
4. The car DEFINITELY qualifies for the Uncle Joe tax credit. I was going to make it fit under the $55K by dropping FSD. As it turns out, that was not necessary.

biotech:

I would recommend trading in your gas-powered truck asap, because trade-in values for ALL gas-powered vehicles are falling NOW. Unlike EVs these trade-in values (and by extension, all retail used-car prices) will NOT recover. The price decline is not caused by the looming recession or any macro factors. The price decline is being caused by obsolescence.

I hope NOT!

Possible business opportunity for Tesla:\\

https://www.cnbc.com/2023/04/06/outdated-us-energy-grid-tons-of-clean-energy-stuck-waiting-in-line.html

chk:, My short-terms trading in Tesla options has convinced me that Tesla is NOT a short-term play. THAT is the reason, I have kept my main focus on my longer-term buy-and-hold strategy. In fact I a going to use the Moon strategy sparingly going forward. I'll save it for major news items that can move the stock price big in short order, but the direction of the movement is hard to predict. My first test of the new strategy shall be for earnings week, the week after next.

The question remains: Was it a beat or a miss?

Broken: in a recession, I personally think that you want to own the stock of a company that can stay cash flow positive even with a 10-20% price cut.

It depends on where you saw the ‘rumor’.

I would love be to see the stories that cause yu the believe that?

PLEASE POST YOUR CONFIRMATION!!!

I think ALL the legacy companies are barking up the wrong tree. They think they can reduce costs incrementally without making drastic changes to management structure, and manufacturing technology. One of the reasons is that they are going to show upstart TESLA a thing or two! Hopefully, by the time they realize that the secrets of Tesla's success are:

1. Enlightened leadership.
2. A disposition to make continuous improvements, even to winning combinations.
3. Giga-castings.

Tesla wil have improved beyond reach again.

Yes, indeed. The ONLY true statement in your long post is: These EV’s are bankrupting major automotive companies left and right and the entire global market…Somehow Elon has mastered the technique of making EV's safe and FUN!!!

By the time you get in TSLA will be at 1,000+!

Thanks Dan. As you know, I jumped the gun and did another setup. Once more I think I am going to luck out, if the FED does not have an unpleasant surprise for us tomorrow!

By the way have you heard from Moon lately?

starbux: I have been trading options for almost 10 years now. BUT I am relatively new to the MOON strategy. That is the reason, I request opinions every once in a while.

I always follow my own counsel.

BUT thanks for your advice, anyways.

Unless I receive some sort of feedback, this will be my LAST post on this board. As intimated earlier I was debating with myself about whether to sit on my profits or do a reset. Finally, I decided on a reset. So now I am sitting on 195 calls and 197.5 puts. As of now both are in the money. I am hoping one or the other will make enough to pay for both of my purchases while the other guards against a price reversal. Moon, Dan: I am hoping for some guidance-dance. The questions I have:

1. I did NOT invest 100% of the proceeds from the sale. Is that the right thing to do?
2. Is Tuesday ok for a reset?















I spent some of the proceeds from my call sale to pay f

One thing I have learnt from my experimentation. KEEP THOSE PUTS, in case the price reverses.

GLORY BE! My sell order ht on the CALL side. Now I have the question: what do I do with the proceeds? Reset or not. Keep in mind it is only TUESDAY! If it were Thursday or Friday I would not hesitate, Wednesday would cause ne a lot of heartache. BUT SURELY, a reset is per Moon's strategy. By the way where is MOON? Has anybody heard from him>

The dreaded sideways trading! I have placed limit orders on my puts and calls. if either one hits at my ask, I'll recover the total cost of my investment plus make a bit of a profit.

Thanks rovlram. I just got the TD app.