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The Anatomy of a Tesla ($TSLA) Trader Analyst

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Hi, my name is …

Marco Papa. I am a techie by trade and very much a product of the first dot com boom (and bust) of the 90’s. I originally came to this country from Italy to pursue a PhD in computer science at USC, back in 1981.  I worked for 6 different dot-coms in the span of 10 years, starting as software developer, then system architect all the way to several CTO positions. All these companies, except one, no longer exist: they either were sold, or went bankrupt.  But in the process I learned a lot about company valuations, private placements, and raising tens of millions of dollars from VCs, banks and brokerage houses. And yes, like many other Internet executives of the time, I owned a Ferrari 355 spider convertible. I’ll come back later to the Ferrari.

After 10 years of high-stress jobs, I decided to move to slower-paced “environments”:  for the past 14 years I have held a daytime job working for state government and a nighttime job teaching Web Technologies at USC.

“Buy what you know”

But it is during the dot-com era that I started tinkering with Mutual Funds and stocks. For the initial 15 years I was an “investor”.  I would purchase mutual funds and stocks and hold them for a minimum of a year. Then in 2005 something changed: I consolidated all my retirement funds from the various companies I had worked for into a single SEP-IRA at E-Trade and strangely enough, after answering a simple questionnaire, E-Trade gave me access to Level 2 Options trading. I did not know much about options then, so I subscribed to a service called the Options Oracle from The Market Guys (http://www.themarketguys.com), which recommends entry and exit points for options trades for a fee. I learned a lot, but I felt frustrated that I was trading options of companies I knew nothing about. So I decided to follow an investment method that I had learned when I used to hold shares in Fidelity Magellan Fund (https://en.wikipedia.org/wiki/Magellan_Fund), a fund with $20B of stock investments, and the best performing one between 1977 and 1990, averaging over a 29% annual return. Peter Lynch, Magellan fund manager at that time, created the investment method commonly referred to as “Buy What You Know”: invest in businesses that you understand “personally”, especially if you buy and own their products. Since that time, I have tried to follow the “Buy What You Know” method in all my investments and trades.

Interestingly it is at that time that I started making my “switch” from Windows to the Mac. My first Apple purchase was an iPod; I subsequently trashed a ThinkPad and bought a MacBook, and finally trashed an HP desktop and bought a Mac Pro. Today I own probably close to 25 Apple devices, once I count all the iPhones, iPads, Apple Extremes, Apple TVs, and Apple Watches my wife and I use daily. In 2006 I started “investing” in Apple stock. After the stock market crash of 2007, I started “trading” Apple options. Between 2006 and 2014 I made more money trading AAPL than any other stock.  During that time, I added a few more stocks to my trading pattern: Netflix (NFLX), Amazon (AMZN), Google (GOOG), Facebook (FB), Starbucks (SBUX) and more recently Tesla Motors (TSLA). These are all companies that qualify for the “Buy What You Know” mantra: I either buy their products regularly or use them in my daily life.

$TSLA to P90D

I started reading about Elon Musk since he founded PayPal. I read about his promotion of sustainable energy as a way to save our planet. In 2012 I installed solar panels in my house in Redondo Beach, CA. In 2013 I replaced my energy-hog 2007-vintage Mac Pro with a low-energy Mac Pro (a.k.a. the “can”). In 2014 I switched all light bulbs in my house (over 300 of them) from incandescent to low-energy LEDs. And in 2015 I bought a red Tesla Model S P90D (a.k.a. Red Five X-wing). By now my carbon footprint is in pretty good shape.

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I started trading TSLA options in early 2014. By summer of 2015 I had enough profits from option trades in TSLA, AAPL and SCO to pay in cash 2/3 of the price of my P90D.

After trading TSLA for over two years I have a few opinions on how to invest or trade it. A stock for me is a good “investment” if it can be held for about 5 years, and provide annual stock gains of 5-10% per year. If you had purchased TSLA stock at the IPO in 2010 at about $19, you would be sitting pretty at a 10-bagger at $250, 6 years later. But if you had purchased it in March 2014 at $265 you’d be about even, two years later.  Twice in the past couple of years TSLA stock raised to $275, while slamming back to $140-180 in just 6 months, both times. Tesla in my opinion is not yet a good long term investment.

Part of the reasons is that good long term investments are based on “fundamental” analysis of stocks. Fundamental analysis is based on analyzing the characteristics of a company in order to estimate its “value:” high earnings, income, high profit margins, and small debt are what investors are looking for. According to a recent thestreet.com article, “Tesla Motors has a ‘sell’ rating and a letter grade of D+ at TheStreet Ratings because of the company’s deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and feeble earnings per share growth.”

So if I would not recommend TSLA stock as an investment, why would I even consider TSLA for my trades? Because TSLA is a wonderful stock to trade, not on the basis of “fundamental” analysis, but on the basis of “technical” analysis. In finance, technical analysis is a security analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume. The “value” of the company does not matter. Even just 10 years ago, trading on the basis of technical analysis was only for the pros: brokerage houses, money managers and hedge fund managers. Today individuals have access to tools, indicators, and “conditional” trades that make trading, and especially options trading, much easier and safer.

I consider myself a “swing” trader: I normally enter an option trade when at least 3 indicators are firing on all cylinders; I put conditional stops to lower my losses when the market goes against my trade, and get out of trades when indicators are turning negative.

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Coming up

It turns out that TSLA is a fairly good “swing” stock, where the above methodology has worked well in the past. In the next few weeks, while covering the news about the company that can affect its stock price, I will introduce some of the tools, indicators and techniques that any trader can use to profit on TSLA. You’ll hear names like moving averages, pay-day cycles, MACD indicator, Heikin-Ashi charts, support and resistance lines. You will see that none of these are rocket science.

I will write a column, a couple of times a week, providing TSLA stock analysis, information on investing and trading TSLA stock and options, and covering TSLA earnings and all rumors and news that can affect the stock.

Now back to the Ferrari. The F355 Spider that I purchased in 1996 was priced at $137,000, had a top speed of 183mph, 375hp, 268lb-ft torque, and performed 0-60mph in 4.5s and the quarter mile in 12.9s.

The Tesla Model S P90D (Insane) I purchased in 2015 has a very similar price, $142,000, but with a top speed of 155mph, 691hp, 713lb-ft torque, and performs 0-60mph in 3.1s and the quarter mile in 11.7s. The Tesla sedan beats the Ferrari in all but the top speed rating.

But while you needed a Formula 1 driver to obtain those numbers in the Ferrari, mainly to change the gears at the exact right time, effectively anyone can get the Tesla numbers just by flooring the accelerator.  The only thing I miss from the Ferrari is the “roar” of the engine; for everything else the Tesla is so much more fun.

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Disclosure: I currently have no positions in any stocks mentioned, but I may plan to initiate positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Teslarati). I have no business relationship with any company whose stock is mentioned in this article.

 

Elon Musk

Elon Musk affirms Tesla commitment and grueling work schedule: “Daddy is very much home”

The remarks came as Tesla shares crossed the $400 mark on the stock market.

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Tesla CEO Elon Musk reiterated his commitment to the electric vehicle maker and its future projects this week, responding to speculation following his $1 billion purchase of TSLA stock. 

The remarks came as Tesla shares crossed the $400 mark on the stock market, extending a rally fueled in part by Musk’s TSLA purchase.

Elon Musk’s nonstop work schedule

Amidst the reaction of TSLA stock to Musk’s $1 billion investment, Tesla owners such as @greggertruck noted that “Daddy’s home.” Musk replied, stating that “Daddy is very much home.” He then shared details of a packed weekend of work, which was definitely grueling but completely within character for a “wartime CEO.”

Musk did note, however, that he had lunch with his kids during the weekend despite his extremely busy schedule.

“Daddy is very much home. Am burning the midnight oil with Optimus engineering on Friday night, then redeye overnight to Austin arriving 5am, wake up to have lunch with my kids and then spend all Saturday afternoon in deep technical reviews for the Tesla AI5 chip design. 

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“Fly to Colossus II on Monday to walk the whole datacenter floor, review transformers and power production (excellent progress), depart midnight. Then up to 12 hours of back-to-back meetings across all Tesla departments, but with a particular focus on AI/Autopilot, Optimus production plans, and vehicle production/delivery,” Musk wrote in his post

Wartime CEO

Wedbush analyst Dan Ives described Musk as operating in “wartime CEO mode,” highlighting autonomous driving and AI as a trillion-dollar market opportunity for Tesla. Musk reiterated this point late last month as well, when he outlined the several projects he is juggling among his numerous companies. At the time, Musk stated that he was busy with Starship 10, Grok 5, and Tesla V14. This was despite his notable presence on X. 

With Tesla Master Plan Part IV being partly released, the company is entering what could very well be its most ambitious stage to date. To usher in an era of sustainable abundance, Tesla would definitely require a “wartime CEO,” someone who could remain locked in and determined to push through any obstacles to ensure that the company achieves its goals.

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Elon Musk

Tesla analyst says Musk stock buy should send this signal to investors

“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish.”

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(Credit: Tesla)

Tesla CEO Elon Musk purchased roughly $1 billion in Tesla shares on Friday, and analysts are now breaking down the move as the stock is headed upward.

One of them is William Blair analyst Jed Dorsheimer, who said in a new note to investors on Monday that Musk’s move should send a signal of confidence to stock buyers, especially considering the company’s numerous catalysts that currently exist.

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

Dorsheimer said in the note:

“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish. This purchase is Musk’s first buy since 2020. To us, this sends a strong signal of confidence in the most important part of Tesla’s future business, robotaxi.”

Musk putting an additional $1 billion back into the company in the form of more stock ownership is obviously a huge vote of confidence.

He knows more than anyone about the progress Tesla has made and is making on the Robotaxi platform, as well as the company’s ongoing efforts to solve vehicle autonomy. If he’s buying stock, it is more than likely a good sign.

Tesla has continued to expand its Robotaxi platform in a number of ways. The project has gotten bigger in terms of service area, vehicle fleet, and testing population. Tesla has also recently received a permit to test in Nevada, unlocking the potential to expand into a brand-new state for the company.

In the note, Dorsheimer also touched on Musk’s recent pay package, revealing that William Blair recently met with Tesla’s Board of Directors, who gave the firm some more color on the situation:

“We recently participated in a meeting with Tesla’s board of directors to discuss the details of Musk’s performance package. The board is confident of its position in the Delaware case and anticipates a verdict by end of year. It does not expect a similar situation to occur under new Texas jurisdiction. Musk has the board’s full support, and we expect he’ll get more than enough shareholder support for this to pass with flying colors.”

Tesla stock is up over 6 percent so far today, trading at $421.50 at the time of publication.

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Elon Musk

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

Prior to this latest move, Musk’s most recent purchase was for about 200,000 shares worth $10 million in 2020.

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Gage Skidmore from Surprise, AZ, United States of America, CC BY-SA 2.0 , via Wikimedia Commons


Tesla (NASDAQ:TSLA) shares rose on Monday after CEO Elon Musk disclosed a rare insider purchase of company stock worth about $1 billion. 

A filing with the U.S. Securities and Exchange Commission (SEC) revealed that Musk acquired 2.57 million shares last Friday at various prices. The move represents Musk’s largest TSLA purchase ever by value, as per Verity data.

Elon Musk’s TSLA purchase

The disclosure sent Tesla shares up more than 8% in premarket trading Monday, as investors read the purchase as a notable vote of confidence, as stated in a CNBC report. Tesla stock had closed slightly lower Friday but remains more than 25% higher over the past three months. It should be noted that prior to this latest move, Musk’s most recent purchase was for about 200,000 shares worth $10 million in 2020.

Market watchers say the purchase could help shore up investor sentiment amid a volatile year for TSLA stock. Shares have faced pressure from a variety of factors, from year-over-year sales challenges due to the new Model Y changeover, political controversies tied to Musk, and reduced U.S. incentives for EVs under the Trump administration. Nevertheless, analysts such as Wedbush’s Dan Ives stated that Musk’s purchase was a “huge sign of confidence for Tesla bulls and shows Musk is doubling down on his Tesla A.I. bet.”

Tesla and Elon Musk

Musk already owns about 13% of Tesla, and his latest purchase comes as the company prepares for a key shareholder vote in November. Investors will decide whether to approve a compensation package for Musk that could ultimately be worth as much as $975 billion if ambitious market value milestones are achieved. The package has a long-term target of pushing Tesla’s market capitalization to $8.5 trillion, compared with about $1.3 trillion at Friday’s close.

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Wall Street’s current consensus price target still implies a roughly 20% decline from current levels, though some Tesla bulls remain optimistic that the company could shift its focus toward autonomy, AI, and robotics. Musk has also asked shareholders to approve an investment into his latest venture, xAI.

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