Tesla [TSLA] Roaring Into 2021 As Short Sellers Lose Record $38 Billion

[RV_]

Wow!

Excerpt:

"Ihor Dusaniwsky, a managing director at S3 Partners, told Bloomberg that this “is not only the largest mark-to-market loss for any stock this year, it is the largest yearly mark-to-market loss I have ever seen.”

On the topic of the short squeeze, Dusaniwsky said, “The short squeeze has been going on all year. It’s been an angled straight line down,” adding that, the big thing about Tesla, as opposed to any other stock, is that the vast majority of retail shareholders will never be sellers. They love the stock, they love the car, they love Elon Musk and they are adamant long shareholders.”

Source with much more: https://cleantechnica.com/2021/01/02/tesla-tsla-roaring-into-2021-as-short-sellers-lose-record-38-billion/

 

[NDBirdman]

I guess I don't understand what a short seller is.  It stands at $729 at the moment and if you purchased this year under $400, just how did anyone lose $$?  Unless they bought when it was hovering around 1k/share... then you don't sell til it goes back up again.  This stuff is way too complicated for my simpleton butt..... LOL

[durangodon]

36 minutes ago, NDBirdman said:

I guess I don't understand what a short seller is.  It stands at $729 at the moment and if you purchased this year under $400, just how did anyone lose $$?  Unless they bought when it was hovering around 1k/share... then you don't sell til it goes back up again.  This stuff is way too complicated for my simpleton butt..... LOL

Let's say that the current price of a stock is $500 per share.  You believe that the price will go down to $400 in a month, so you promise to sell shares at $450 in one month.  You're thinking that you can buy them for $400 and sell them for $450.

If the price goes to $600 in one month, then you have to pay $600 per share to sell for $450 in order to deliver on your promise.  So, you lost $150 per share on your promise.

A lot of traders bet that Tesla's bubble would pop in the past year.  Instead, it kept getting bigger.

I'm not an educated trader, that's just how I understand short selling. 

[RV_]

Durango has it right. Another way to look at it is Shorts bet a stock will go down, longs like me just buy regular stocks and bet they are going up.

The advantage is to longs because they are not on a deadline when they have to sell. The shorts usually are and their losses can mount up fast and be lots more loss if they try to wait.

Shorting is not smart for me. Many who say they did well with it are like casino gamblers. They only talk about their wins. Day trader types and other big gamblers like to short. I. like many amateur investors would lose my ass!

[jcussen]

Yep, the Tesla short sellers got their just rewards. I too am only educated enough to buy stocks that I think will go up. But still not smart enough to hang on to the Tesla stocks I bought at $220 before the split. But that's the stock market, like RV said, somewhat like a casino.

Edited January 5, 2021 by jcussen

[bigjim]

Not naming names but no gloating please.☺️

[NDBirdman]

20 hours ago, durangodon said:

Let's say that the current price of a stock is $500 per share.  You believe that the price will go down to $400 in a month, so you promise to sell shares at $450 in one month.  You're thinking that you can buy them for $400 and sell them for $450.

If the price goes to $600 in one month, then you have to pay $600 per share to sell for $450 in order to deliver on your promise.  So, you lost $150 per share on your promise.

Again, I'm not the smartest but that sounds really .... STUPID...  I've been doing stocks, well, funds most my adult life and have won some and lost some but no way in heck would I bet the farm on something like this.  IF you have a couple dollars to gamble like this, the craps table at any casino is a better bet... IMHO

[durangodon]

3 hours ago, NDBirdman said:

Again, I'm not the smartest but that sounds really .... STUPID...  I've been doing stocks, well, funds most my adult life and have won some and lost some but no way in heck would I bet the farm on something like this.  IF you have a couple dollars to gamble like this, the craps table at any casino is a better bet... IMHO

I don't do it, but it's not as risky as it sounds.  Any time I buy or sell a stock I am gambling on the future of that stock.  I believe either the stock is going up or going down.  Short sellers are doing the same and I'm sure that many are successful at it.  They've just missed the mark with Tesla at an alarming rate.

[RV_]

13 hours ago, bigjim said:

Not naming names but no gloating please.☺️

Gloat gloat! 🤣

[RV_]

On 1/5/2021 at 3:47 PM, NDBirdman said:

Again, I'm not the smartest but that sounds really .... STUPID...  I've been doing stocks, well, funds most my adult life and have won some and lost some but no way in heck would I bet the farm on something like this.  IF you have a couple dollars to gamble like this, the craps table at any casino is a better bet... IMHO

ND,

Durangodon is right, some do short and make money. But even going long without a time limit something can come bite me in the butt. Like my 5000 shares of ACB becoming 416 shares when they did a reverse 12 times split. That one $30k loss can't be overcome by waiting. My NBEV is about even. I made about 1500% on my first Tesla shares and bought more just after the split @$350.00 285 shares and it has more than doubled.

The important thing is I made Tesla my first individual stock buy in 2010 after retiring again from building up a steel building company as general manager. My petty cash account paid for it and it was discretionary funds to date. Our retirement is separate so, discretionary.

My point is I've made significant gains and paid a lot of income tax. For 2018.

For each it is different. But my wins would not have happened if I had to win and needed the money. Then I'd be like the casino gambler gambling the rent money. Too emotional and unable to see the right decisions easily. I have to be detached in reality.

And this is entirely different than folks living off dividends with lower but more secure yields. Once we find a local great tax person we can then develop a strategy to limit taxes to the minimum when I finally sell. Or pass it along in our wills. We are 68 and 66 so it will be a few more years before we have to begin to withdraw the IRA incrementally.

Edited January 7, 2021 by RV_

[jcussen]

2 hours ago, durangodon said:

I don't do it, but it's not as risky as it sounds.  Any time I buy or sell a stock I am gambling on the future of that stock.  I believe either the stock is going up or going down.  Short sellers are doing the same and I'm sure that many are successful at it.  They've just missed the mark with Tesla at an alarming rate.

Agree, a lot of people make good money on short selling. In Tesla's case, see a lot of Tesla trash talk on many forums and news articles hoping to drive the stock price down. As you said, obviously that did not work well.

No gloating here, but Tesla bought a good portion of my Tesla.

 

[bigjim]

11 hours ago, RV_ said:

Gloat gloat! 🤣

OK ,a  little bit since you guys sort of deserve it.  Everyone else hold down the envy. (admiration is OK)

[Kirk W]

22 minutes ago, bigjim said:

OK ,a  little bit since you guys sort of deserve it. 

I always enjoy reading posts about how much money people have made on the investments that they bought, and still hold. When you buy anything as an investment, until you sell it you have not made nor lost a single dollar. Yes, I enjoy seeing reports that my investments are increasing in value, but until I sell it is just a numbers game. 

[NDBirdman]

I still don't get why someone, anyone would gamble on a company's failure or loss in value (shorts, if I understand it right), that's just betting on a failing economy, IMHO.  I am invested now, most of my stocks are up over 100%, some over 300%.  I figured out how to invest in stocks myself this spring and during the huge drop, dumped a lot of $$ (to me anywayz) into about 30 stocks, I gambled on the companies ability to survive and grow, not die off....  I also had shares of ACB before the back split but with the liberal take-over of our gubermint, pot will probably be legalized and pot stock will go up again.  The right thing for that company to do when they start climbing is to do a 15 to 1 split to reward those that held faith in them by investing in them.  Yea, I know, that's a pipe dream.... LOL  Now if I could figure out how to cash my stocks out without the gubermint raping me on taxes.

[durangodon]

23 minutes ago, NDBirdman said:

I still don't get why someone, anyone would gamble on a company's failure or loss in value (shorts, if I understand it right), that's just betting on a failing economy, IMHO.

I don't think these short sellers were betting on Tesla's failure.  They just looked at their stock price compared to earnings and thought the stock was overpriced and would take a hit.

I'm not a big trader nor short seller but I like to dabble a bit with stocks.  I'll give you an example of why I would buy or sell a stock.

I read up on a company called Quantumscape (QS).  QS is a battery technology company.  As far as I know, they've never delivered a single battery or made a dollar's profit, but I liked what I read about them.  They went public late in 2020.  I put in an order for a couple hundred shares when the price was $37.  I got the stock at $48.  For a couple of weeks the stock didn't move much. 

Then, an article came out about how they had made a breakthrough in technology.  The stock price went north quickly.  I put in an order to sell half my shares at $108 and sold immediately.  The stock eventually went to about $130 share.  However, within a few days it was back down around $50.  Right now, it is selling for $68.

I bought the stock because I believed it would go up in value over a few months time.  I sold half of my stock because I believed that after that brief bubble it would go back down quickly.  I was right on both.  Now, I have 100 shares of it to sit on and already have gotten more than my investment out of it by selling the other 100 shares.  I will probably hang onto the 100 shares for the long term because I believe this company has a bright future in the EV and solar market.

If someone wants to make money in the market and not dabble with stocks, the best way is to just buy into index funds and let them ride.  Over a 15 or 20 year period they will make money like you have done.  I have done that for 40 years and it has created a nice nest egg for me.  I also enjoy playing some stocks.

[NDBirdman]

I've sold most everything investment wise, just have a few stocks to ... play... with.  I'm thinking hard about investing my $$ in some farm-land.  Land is not being made anymore, will always be worth $$, have a good renter to take care of it, good for income yearly.  I won't farm it, that's for the youngins... did enough of that, plan on staying retired.  With crap going on like happened today, just how long before the market crashes hard?  We can't even get along well as americans, what's to happen to stocks/$$?

[RV_]

ND, having a Victory Garden sure helped during the WWII shortages I've read about. I'm too old for working a large property as well. Hell five acres was kicking my butt in the 100° plus summers. Now it's a small backyard and medium front yard. I still get out of breath here, and the non stop bright sun burns without strong sunblock. No place is perfect, that anyone but the 1% can afford like oceanfront San Diego. But the weather patterns changes are increasingly volatile and wildfires are the problem with this drying climate in the Rockies and western states. We only have a two week supply of last resort freeze dried Mountain House meals for us two.

[NDBirdman]

10 hours ago, RV_ said:

We only have a two week supply of last resort freeze dried Mountain House meals for us two.

We still have 5 acres filled with fruit trees, large garden and 3 poultry houses/runs.  The only thing I have going at the moment is the fruit, garden, 2 roosters and 3 hens so we can survive, I have a room full of canned produce and a couple freezers full of beef/pork/chicken and some fish so we can/will survive quite well.  Yea, even down to where we are now is more work than I can handle some days but, I can manage/survive when the SHTF.  I have had, can get back to if needed, 1000 head of poultry in 3 different locations but you talk about work..... wow... also access to ~20 quarters of land.  We were in the process of shutting everything down, live here for summer and snow bird in warm weather but covid screwed us.... not leaving here for atleast a couple more years for safety's sake, wife and I both have health issues.  Atleast we are young and have time.  Better half is 66, me 63 so we have time.  Thinking of selling camper and truck this spring, they are just sitting not getting used.  IF something happens in the next month like I think it is.... going to get bad for us (my family) anywayz so alot will get changed... but... we will always have more than 2 weeks of supplies, I love to can/fish/hunt.

Back to stocks...

This morning with stocks going nuts/higher, I'd like to cash out most of them.  Many of them blew way over 300%, I'm good, time for me to bail out.  Having never done individual stocks like this, just how can I sell them without the gubermint raping me on taxes?  Most I picked up between march through aug.

[rpsinc]

16 minutes ago, NDBirdman said:

just how can I sell them without the gubermint raping me on taxes?

Good luck with that one.  Gains are income, at least according to IRS codes, and as such are regarded as income and thus taxed accordingly.  That being said, if that was the end of the journey, that would be OK for me, BUT, then you may have to pay estimated taxes because your income in this year would be seen as higher than typical and the IRS may want their $$ up front for future earnings at that level(which they now have figured will be similar to what is reported on those earnings, you know it may be a once in a decade or lifetime experience, but the IRS doesnt provide latitude like that).  So pay the estimated tax next year and then file the following year to retrieve your overpayments.  

What a racket!!

[jcussen]

Yes. a racket. several years ago, took $!20K out of my IRA, [I am retired]. My accountant does my taxes for me, and she did not receive notice from my financial consultant of that withdrawal, and I forgot about it and paid my usual taxes. Three years later, IRS informed my I owed $31K in taxes on that amount, which I paid immediately, Six months after that, got another bill for $8000 for not paying on time, paid that, last week got another bill for $75, for a miscalculation on that amount, wonder if it will ever end. I know it was my fault for not paying more attention, but have to wonder if they did not inform me for 3 years, just so they could collect that extra $8000.

[NDBirdman]

IRS.... I can't think of one good thing about them and their... codes....  The way I look at it, I used *MY* money, which I have already paid too much taxes on to make this money.  *I* used *MY* $$, not theirs to earn this, not their $$.  Gawd Dayum thieves, the whole lot of them.  I have no problem paying taxes on my pay, no problem paying it on $$ I work for, but this, charging a person out the backside for using already taxed $$, dayum thieves.  Yes, I know, not a darn thing I can do about it albeit seriously wrong theft on their part.

I have heard that if you hang onto the stocks over a year, the theft (taxes) drop?  Honestly, I see this as punishment by the gubermint for trying to improve one's standard of living.  Anywayz, time to change subject, not wanting to make this about all the political thieves getting rich while digging deep into our shallow pockets.

[RV_]

Here's a good article that may help. I recently paid a very large tax bill over $30k. We live on a fixed income and have a tax lady. This was after we were both on Social security and Medicare. Well, the SS and Medicare decided we made too much and decided they would pay less and charge us more per month respectively. So they reduced my SS by $400/mo and charged us $30 or $40.00 more per month for medicare. that was for a large capital gain selling my Tesla stock. The gains occurred in 2019 and so the did that for all of 2020 and 1 Jan 21 Ten days ago they raised my medicare charge and are again paying us our old SS amounts.

That hurt. Especially when I see the rich paying little to nothing. Had we not had retirements we would have had to go bankrupt. I have no deductions zip, nada.

I am holding off selling my ACB at a big loss until I need it.

[jcussen]

15 minutes ago, RV_ said:

Here's a good article that may help. I recently paid a very large tax bill over $30k. We live on a fixed income and have a tax lady. This was after we were both on Social security and Medicare. Well, the SS and Medicare decided we made too much and decided they would pay less and charge us more per month respectively. So they reduced my SS by $400/mo and charged us $30 or $40.00 more per month for medicare. that was for a large capital gain selling my Tesla stock. The gains occurred in 2019 and so the did that for all of 2020 and 1 Jan 21 Ten days ago they raised my medicare charge and are again paying us our old SS amounts.

That hurt. Especially when I see the rich paying little to nothing. Had we not had retirements we would have had to go bankrupt. I have no deductions zip, nada.

I am holding off selling my ACB at a big loss until I need it.

The trouble is with RMD's [required minimum distribution} is that the more your stocks grow, the more you must take out as income, which is added to your S.S. and with the new tax laws, may put you in a higher tax bracket. It was waived in 2020, right after I took my RMD. This year you have to take it anyway. You can't win for losing.

 

[RV_]

Gary, my wife really stressed out over it. I am not happy about them adding insult AND injury to the tax bill. But what I told Lyn was simply, we got to keep 88% of that windfall. I am OK with paying taxes of 12% capital gains. Not more. Making significant gains and paying tax beats no gains and paying nothing.

Don't get me wrong, I'd prefer not to pay any. I certainly don't want to lose money to avoid taxes. But like our member who was smart enough to invest in NIO at under $10.00 which has skyrocketed in 2020, having gains to pay tax on beats no gains. Death and taxes, right?

As far as age trigger for withdrawals, i believe that has to do with 401s and other retirement funds. I believe I can keep my stocks which are not in any retirement funds until my son inherits. We are getting with our legal office and probably a Navy Federal investment advisor to make our final will and adjust our living wills for Colorado State law. 

[jcussen]

1 hour ago, RV_ said:

Gary, my wife really stressed out over it. I am not happy about them adding insult AND injury to the tax bill. But what I told Lyn was simply, we got to keep 88% of that windfall. I am OK with paying taxes of 12% capital gains. Not more. Making significant gains and paying tax beats no gains and paying nothing.

Don't get me wrong, I'd prefer not to pay any. I certainly don't want to lose money to avoid taxes. But like our member who was smart enough to invest in NIO at under $10.00 which has skyrocketed in 2020, having gains to pay tax on beats no gains. Death and taxes, right?

As far as age trigger for withdrawals, i believe that has to do with 401s and other retirement funds. I believe I can keep my stocks which are not in any retirement funds until my son inherits. We are getting with our legal office and probably a Navy Federal investment advisor to make our final will and adjust our living wills for Colorado State law. 

 RMD's are mandentary at 72, although legiestation is changing on all IRA accounts, so if you invested while younger in tax free 401K's etc, you will be required to take some money out of your IRA and pay tax on it. If a Roth and you paid tax on it before putting it in your IRA, think you are okay with pulling that money out without paying income taxes on it. My Required Minimum disbursement  this year plus my S.S. put me in a 24% tax bracket, and probably higher next year.