Case Study: Buy low, Sell high

Discussion in 'Tesla' started by bwilson4web, Oct 1, 2018.

  1. bwilson4web

    bwilson4web Well-Known Member Subscriber

    Recently, I put in an order for Tesla stock (TSLA) at $265/share. My broker had received a modest withdraw from my 401k and there was supposed to be withholdings tax. But they didn't take it out so I kept the 20% Federal and 2% State in the brokerage account reserve pending filing. I had contacted the broker and they are investigating what happened. Then Friday, I saw a very nice price for TSLA but I didn't put my order in before the market closed because I didn't want to touch the withholdings taxes:
    [​IMG]
    On Saturday, my thinking was I could put in a low bid and if the brokerage decided they needed to send the withholding, now already 45 days late, we could just sell enough stock and problem solved. In effect, playing with the withholding before 2019 when I'll have to pay 2018 taxes but I was too slow. Had I gotten in on Friday, I would have potentially made $305 - $165 ~= $40 profit per share.

    There is a silver lining in the volume of shares on Friday. A 'short' seller interested in getting out would see the low price and buy enough to close or reduce their borrowed shares (i.e., a margin account.) Assuming they want to get out, NASDAQ reported there was ~$34 million shorted shares a week ago. But can they resist the temptation to squeeze the 'shorting' teat?

    This sudden drop in TSLA price was triggered by the SEC charging Elon and Tesla over the "funding secured." The irony is Elon might have bought more TSLA stock when the price was SEC triggered low and improved his ownership of TSLA ... a back-door way of going private. We need to see the trading volume.

    Bob Wilson
     
    Last edited: Oct 1, 2018
  2. bwilson4web

    bwilson4web Well-Known Member Subscriber

    "Seeking Alpha" is having a change of heart:
    https://seekingalpha.com/article/4216113-tesla-far-fast

    ... The important fundamentals lie in the numbers, and right now, the numbers are finally starting to shift in the bulls' favor. ...​

    [​IMG]

    Looking at a longer-term weekly chart, we can also see we've got a decent amount of accumulation going on. The green weekly bars are nearly twice the size of the largest red selling bars during the same period, and the most recent weekly bar was one of the largest on last week's jump. This is a sign that funds are likely accumulating the stock, and has the potential to be fuel for the stock long term.

    Bob Wilson
     
  3. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    One single blog post doesn't mean much there. There are usually multiple new Tesla-related blog entries (I won't dignify such propaganda pieces by calling them "articles") posted there every day, and there have always been a minority -- maybe 20-25% -- that are pro-Tesla. Last time I actually looked at one, the comments were running even more heavily against Tesla than I remembered; maybe 90% anti-Tesla. In the past, I'd estimate them at about 80% anti. But perhaps that was an unusual day.

    Very few indeed of the blog entries at SA appear to be people giving their honest opinions; nearly all are people pushing the short or the long position... pumping or dumping.
    :(
     
    bwilson4web likes this.
  4. bwilson4web

    bwilson4web Well-Known Member Subscriber

    Good point. I was doing a review and saw this one. I kept waiting for a "neneer neneer" but didn't find it. This could be the blind hog's acorn.

    Bob Wilson
     
  5. bwilson4web

    bwilson4web Well-Known Member Subscriber

    Rats!

    I hate to say this but I’ll have to increase my ‘sell’ order from $420 to $460. There is a realistic probability of reaching $420/share.

    Bob Wilson
     
  6. bwilson4web

    bwilson4web Well-Known Member Subscriber

    Well I took profits on 20 shares TSLA to diversify with 365 shares KL, gold mining, and I’m fairly confident. If Trump kills the economy, gold will hold value. If things don’t crash, TSLA will be the milk cow.

    Bob Wilson
     
  7. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    If so, no doubt some Tesla "longs" will be doing a 4:20 to celebrate. Especially in California, where it's now legal!
    :D
     
  8. bwilson4web

    bwilson4web Well-Known Member Subscriber

    The good news is I'm close, ~$2k, to my original, $25k, 401k draw even after the withholding tax.

    Bob Wilson
     
  9. bwilson4web

    bwilson4web Well-Known Member Subscriber

    So this is how the last two months looked:
    [​IMG]
    • KL (gold) - continues to be counter-cyclical on the large scale. I suspect this rise is more the result of wider stock market declines. But I can't rule out KL finding new, high quality gold reserves and their capital investment in improving refining technology.
    • TSLA - it looks like the further Tesla is away from a quarterly report, the more effect Tesla skeptics have ... their ability to lie by omission. For example, the "3,000 unsold Teslas" appear to be 3,000 / 60,000 ~= 5% of the Q4 production: 3,000 * $75,000 = $0.225 B. Then you read the Q3 report and find $1.72 B "Finished goods." These were unsold cars and energy products in route to customers.
    Bob Wilson
     
    Last edited: Jan 1, 2019
  10. bwilson4web

    bwilson4web Well-Known Member Subscriber

    Now that we have actuals:

    in transit to customers / total sales
    (1,010 + 1,897) / 90,700 = 3.2%​

    Bob Wilson
     

Share This Page