tsla at what price?

Saul, I know you have owned Tesla in the past. Is there a price that you would consider getting back in? I know they are not profitable till 2020, and so are really just a story stock, but I have to admit I really like the story.

I feel like it keeps dropping because of oil, but I don’t think the story has changed.

I guess if I just buy a miniscule position I wouldn’t worry about it but I could enjoy owning it.

Anyway, just wondering what your thoughts are since you had a similar story with SZYM. Actually, I dont feel Musk is misleading people. Maybe it is more like Amazon in that they dont seem to care about profits. I don’t even find that to be accurate. I think the profits are important to Musk, but he seems to have a bigger view of what it takes to get there.

What are your thoughts Saul?

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I feel like Tesla keeps dropping because of oil, but I don’t think the story has changed. I guess if I just buy a miniscule position I wouldn’t worry about it but I could enjoy owning it.

Hi tdonb, I no longer follow TSLA, but I’m not sure “keeps dropping” is accurate. It was $160 a year ago and is now $200 so that’s up 25% in a year. I think holding a minuscule position would be a fine idea.

Anyway, just wondering what your thoughts are since you had a similar story with SZYM… Maybe it is more like Amazon in that they dont seem to care about profits.

TSLA is nothing like SZYM which never was successful at anything. Tesla is very successful at what it set out to do. My problem with it is that it’s primarily a very capital intensive automobile company, and is priced like an internet company. Also that Musk is on a mission to change the world to electric cars, and that comes first to him rather than being profitable. I like his goal, just have other things to invest in.

Saul

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Tesla on sale this morning. If you are interested, listen to Musk at the auto show and determine if China sales are a problem or FUD.

http://www.bloomberg.com/video/tesla-s-musk-on-china-sales-m…

Robert

Also that Musk is on a mission to change the world to electric cars, and that comes first to him rather than being profitable. I like his goal, just have other things to invest in.

Saul

An interesting remark worth commenting upon. George Gilder praises capitalism precisely for wanting to change the world but in a more materialistic (realistic?) way I prefer look at it in Geoffrey Moore’s terms of core and context. McDonald’s would likely fail without clean restrooms but clean restrooms are not core for them but context, no one would say: “Let’s go to McDonald’s, they have such clean restrooms.” For Fuller, restrooms are core. People hire then for how well they clean restrooms.

No one is going to buy a Tesla to make Musk rich hence profit is not a core activity for Tesla as it might be for an investor. But if Tesla succeeds in their core activity, making the best cars in the world, profits should follow as they did in Musk’s earlier enterprises.

Paul Getty, the oil millionaire, was asked when he made his first million. He replied something to this effect: “I don’t know, I get up in the morning thinking about finding oil not about money.”

On a personal note, in my first business I though a lot about our effect on the world. Later I though about making a comfortable living working less. Maybe that’s why I never got stinking rich.

Denny Schlesinger

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At about minute 48 Musk was asked about the stock price and that it peaked at 289. Musk shook his head indicating he knew that. A CEO that follows the stock price. I like it.

Robert

Elon is a class act. Bloomberg had a nice documentary on him under the ‘Risk Takers’ series. It’s available on Netflix.

Anyways, I hold TSLA, since it was about $75 or $80, and have written puts on it. Given all I know now, and following Alex S’s excellent coverage over at Stock Advisor I believe TSLA around $160 – $170 would be a fair price. A little more contraction and I will consider adding to my position.

Right now, contemplating a put spread action or just a long-dated put.

Anirban

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