Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[KarenRei]

This is not MIC Model Y. I guess this order page has always been open. MIC SR+ Y is not going to cost ¥444k vs Model 3 at ¥300k.

I agree its absurd to think MIC Y production is imminent. Though I think we could see cars before the end of 2020.

Agreed - I fully expect Tesla to sandbag Chinese Model Y order pricing - and possibly timing - the exact same way they did with the US, to avoid the Osbourne effect.

But the people who were expecting it today were just being ridiculous.

 

[ReflexFunds]

$17 EPS in the near future is extremely unlikely. This is not the way Musk operates. When the current operation starts to print money Tesla will use that money to start new products, features that initially will take time to become profitable. You should read the secret plan. it is not to make money as fast as possible, but to advance sustainable transportation, etc. Being profitable is important, some programs being very profitable is also important to help starting projects. This will not be a dividend play as long as Musk is the CEO.

Faster growth does come at the expense of short term profits due to higher R&D, higher product ramp costs, higher depreciation etc.
However this just lowers profits, it does not make profits impossible.
You need to look at every company in detail on a case by case basis to see where the growth vs profits tradeoff balances out.
In Tesla's case it looks very likely that they have hit escape velocity and profits can grow significantly while still investing to grow at its maximum rate (bottlenecked by other factors such as management bandwidth, regulatory permits, labour availability etc).
A key reason why it looks like they have reached this profit escape velocity is because of the extreme R&D efficiency at Elon's companies. They can invent a huge number of things and bring a huge number of products to market on a relatively small R&D budget. R&D would have to grow in the 100s of %s to cancel out gross profit growth.
They have also worked to increase capex efficiency, but it is harder to have as dramatic an advantage here as they have for R&D relative to the market. I think Tesla may step up capex (and M&A) as profit and operating cash flow grow to maximise volume growth and run the company to free cash flow neutral. However I think this will still deliver rapidly increasing profits from here.

 

[CaliBear1]

Forget FSD, THIS could be the final nail in the Short coffin (mass grave?)!

Edit: I forgot to give credit to EV-Enthusiast! Sorry!

EV-Enthusiast wrote:

Good to see Tesla keeps looking for future growth potential.
Elon mentioning a new and smaller vehicle designed and built in China during the Model 3 MIC first deliveries ceremony is just one more growth opportunity for the next years.
There are currently so may other projects generating continued growth for Tesla of about 50% per year like Semi, Model Y, Gigafactory 4 and so on.
I would not bet against Tesla growth trajectory, they have a pretty damn good track record since their early days.

I didn't realize this happened?
Very cool, Elon!!

 

[uselesslogin]

So TSLA is not on the shortable stock list at Interactive Brokers. Yesterday there were a million shares available and today none. This is weird, the last time this happened was July and there were a lot fewer shares available then on the surrounding days. I don’t know if that means someone shorted massively yesterday and utterly failed to contain the price, someone will try to short massively today, or that it is just some kind of weird glitch. It is interesting nonetheless.

 

[ev-enthusiast]

Is there currently any coverage on the MIC Model 3 delivery news from CNBC / Cramer in the US?
Thanks.

 

[ev-enthusiast]

BTW rising oil prices could provide some mid term tailwind.

 

[ReflexFunds]

We are well past the point of no return on climate change. I don't think anyone wants to admit that yet, but the only real solution we have left is massive-scale carbon sequestration on a planet-wide level that I don't think we have even invented the technology for yet. We better invent it soon. All the scientists are in consensus that even if we reduce our net carbon emissions to zero by 2025, the planet will still warm to the 1.5 degrees limit that has been arbitrarily set as the value where nothing seems to change from how things are today. There is no way in hell we will have our net carbon emissions at zero in 5 years. Yes, we are f*cked unless we attempt a Snowpiercer solution and hopefully not freeze the planet by accident while attempting it.

The future is grim

Sorry to post this, it's grim and maybe heavily slanted towards the worst outcomes, but the the breadth of what humans are doing to the earth is hard to wrap your mind around and this does as good a job as anything else i have read at covering it.

the general apathy of humanity and our inability to fathom longer span major macro events where causation is clear is kind of hard to understand.



If there is to be any hope, and I am not sure there is...companies like Tesla must succeed. Even SpaceX could be important here if some outer space related solution (short of humanity "moving to mars") could possibly help in cooling our earth.

I don't agree with these fatalistic views on the climate and think they are damaging to our hopes of doing anything to limit the damage.

We know the climate is warming, we know humans are causing it and we know the more it warms the more it damages our lives, our planet and our economy. We don't know exactly how climate feedback loops and damping effects balance out and exactly how CO2 emissions will map to degrees of warming, but we do know the less CO2 we emit, the less warming we will get and the less damage we will experience. We also know exactly what to do to reduce emissions: Build Solar, Wind, Batteries and EVs and plant trees. And we know that we can do this profitability (read financially sustainably) using capitalism's feedback loop to reinvest profits in capex to deliver compounding growth of renewables & EVs. We know this would be done almost instantly if we were to remove fossil fuel indirect subsidies (by reattaching indirect costs to the company generating the revenue via a carbon tax), but any lesser political support for the Clean Energy transition will also accelerate it.
These things are ultimately all that matters and a fatalistic belief that we can't do anything is counterproductive.

Fossil fuel & ICE Auto propaganda/lobby/PR teams have crafted several very successful narratives to prevent action on climate change:

• The Climate isn't warming. And its variant we don't know with 100% certainty it is warming and hence we should assume it isn't.
• The Climate is warming but humans aren't causing it so humans shouldn't change anything. And its variant we don't know with 100% certainty humans cause the warming and hence we should assume they aren't.
• Economic growth is 100% correlated to Fossil fuel emissions. Hence doing anything to lower emissions lowers growth, reduces wealth and increase poverty and this is worse than global warming. This has the implicit assumption (already falsified but still pushed) that it is impossible for renewables/EVs to be cost competitive with fossil fuels.
• Renewable Energy and EVs are worse for the environment than fossil fuels. Dead birds from wind, a few mines for batteries and lots of false studies etc.
• Climate Change is now inevitable, so there is no point doing anything about it or changing anything.
• Renewables have financial subsidies while fossil fuels do not and subsidies are worse than climate change. They also try to hide the many orders of magnitude greater indirect subsidies received by fossil fuels.

The saddest thing about all of this is how often they convince people to fight for something counter to their own interest and counter to their own political or environmental beliefs.

For example conservatives on the political right should particularly want to conserve the current environment from change, and yet many have been made to believe climate change isn't real or isn't caused by humans or that any solutions inevitably reduce economic growth, and hence they fight against conservation.

Many libertarians have been made to vigorously defend fossil fuel subsidies while fighting against the much smaller subsidies for renewables. Somehow this group has been made to believe that direct financial costs are the most important thing in the world while indirect costs (which are actually almost exactly the same and can easily be written in financial terms) are completely irrelevant.

Many people on the left and environmentalists have been made to believe that capitalism and economic growth inevitably consume fossil fuels. And so they fight against capitalism which first of all is a losing battle and a waste of energy and secondly is the only tool we have powerful enough to use to grow EVs and renewables and prevent climate change before its too late.
Similarly many people in these groups have been made to believe renewables & EVs are bad for the environment and so they fight the only realistic solutions to global warming.

Some people from all groups have also been made to believe it is too late to make any difference so we should not bother to focus on the problem. I'm not saying anyone here thinks like this, but it is how some people think when they are told climate change is now inevitable.

 

[KarenRei]

To be clear about the "Chinese-built European-style small hatchback" speculation, what was actually said was:

---
"We plan to continue making significant investment and increasing investment in China, making the Model 3 and the Model Y and future models also in China. And I think something that would be super cool would be, and so we're going to do it, try to do it... is to create a China Design and Engineering Centre to actually design an original car in China for worldwide consumption. I think this will be very exciting. I think China has some of the best art in the world. And I think it's something that would be appreciated on a worldwide basis, and it should be done, and we're going to do it. We're going to try something kind of radical, like the Cybertruck. Nobody's expecting that, you know? And that's, so, I think, try do be something that's cool and different and something the world hasn't seen before. That really moves their heart. Gets you right there. That's the kind of product we want. We wish there were more of those things in the world. So that's what we're going to do."
---

Observations:

• "Small" or "smaller" was never said, nor anything about Europe, hatchbacks, or anything else.
• It will not be any sort of "normal" car. It will be radical.
• They haven't even built the facility to design whatever it will be, let alone designed it, let alone matured it, let alone built lines to make it
• Musk did not say that the car would be made locally for worldwide export. He said it would be designed locally for worldwide consumption.

That said, I do fully expect Chinese-made Teslas to end up exported to some countries outside of China, due to China having better trade agreements with some third parties than the US or Europe.

 

[mrdoubleb]

To be clear about the "Chinese made European-style small hatchback" speculation, what was actually said was:

"We plan to continue making significant investment and increasing investment in China, making the Model 3 and the Model Y and future models also in China. And I think something that would be super cool would be, and so we're going to do it, try to do it... is to create a China Design and Engineering Centre to actually design an original car in China for worldwide consumption. I think this will be very exciting. I think China has some of the best art in the world. And I think it's something that would be appreciated on a worldwide basis, and it should be done, and we're going to do it. We're going to try something kind of radical, like the Cybertruck. Nobody's expecting that, you know? And that's, so, I think, try do be something that's cool and different and something the world hasn't seen before. That really moves their heart. Gets you right there. That's the kind of product we want. We wish there were more of those things in the world. So that's what we're going to do."

Observations:

• "Small" or "smaller" was never said
• It will not be any sort of "normal" car.
• They haven't even built the facility to design whatever it will be, let alone designed it, let alone matured it, let alone built lines to make it
• Musk did not say that the car would be made locally for worldwide export. He said it would be designed locally for worldwide consumption.

That said, I do fully expect Chinese-made Teslas to end up exported to some countries outside of China, due to China having better trade agreements with some third parties than the US or Europe.

I agree, that's how I understood those words as well.

Coincidentally, now that the documentation on some of the GF4 paperwork is out, Tesla is referencing Model 3, Model Y and "future product" production at the site as well. On the one hand, clearly not an announcement, just some language to get the permits covering all eventualities. However, if the 25k, smaller, cheaper car is to become reality, I always thought GF4 would be the primary production site for that. Not that China doesn't like smaller cars, but Europe would eat up a Golf sized hatchback for that money. RIP BMW 1 series.

 

[jbcarioca]

This conversation is getting increasingly surreal. What do any of:

* Engineering in general
* Energy consumption of European-style small hatches
* Overall cost of manufacturing European-style small hatches, with particular emphasis on battery needs
* Indirect costs to Tesla of vehicles with higher energy consumption
* Whether Tesla would make European-style small hatch
* Where Tesla would make a European-style small hatch

... have to do with investment strategies?

Possibly I'm more tolerant in the New year or maybe just becoming senile but:

None of those topics should be in these threads, obviously. The overall issue is another thing entirely. Short-term automotive revenue growth will be quite unaffected by any of these issues. From ~ two years from now growth will be constrained without several new vehicles, mostly smaller than those currently in production. We should be discussing those speculations somewhere else, those discussions should be entertaining and possibly informative.

In these threads we should be addressing the prospects for continued growth, including each component of that growth. Thus, I think this becomes a grey area. Were we to address specific demand/product issues elsewhere we would invent new ways to subvert discipline here. We have proven our ability to resist any operational definition of 'OT'.

Almost certainly, both GF-3 and GF-4 will be producing smaller vehicles of some sort just as soon as Model Y is up and running. Those vehicles are probably in some stage of development right now. The only part of that in question is product definition, and those will surprise us, as will the gigantic demand that will 'magically' result. The only real 'magic' is that TSLA will not rest, nor will it remain static.

As investors we will always be curious what next technological advances will astonish/dismay observers. As speculators and longs we only need to decide if we're confident that TSLA can exceed our expectations.

Automotive News regularly provides industry outlook including schedules for new models, refresh, factories and supply chains as well as partnerships. Tesla is the least forthcoming about such topics. Why? I suspect because the Tesla management and board all know that the actual plans would be greeted by derision. No one is equipped to understand how revolutionary it is to apply advanced design, manufacturing, distribution and support techniques to hidebound industries like autos, peaker plants, energy storage and roofing. Bluntly, almost all of us aren't either.

Therefore what we do is prognosticate about smaller things we can understand, like smaller BEV models.

it is very possible I'm wrong about all that. I think it partly explains why we all become so giddy, then dismayed. Thus we forecast the demise of large classes of competitors and confidently predict physics-defying instant advances by Tesla. I also think most of this is harmless enough even though it means we must wade through pages of irrelevancy.

Human nature tends to resist imposed order.

 

[Vad42]

Some people misinterpret the word "engineering" to mean "magic".

Umm..

 

[KarenRei]

Possibly I'm more tolerant in the New year or maybe just becoming senile but:

None of those topics should be in these threads, obviously. The overall issue is another thing entirely. Short-term automotive revenue growth will be quite unaffected by any of these issues. From ~ two years from now growth will be constrained without several new vehicles, mostly smaller than those currently in production. We should be discussing those speculations somewhere else, those discussions should be entertaining and possibly informative.

In these threads we should be addressing the prospects for continued growth, including each component of that growth. Thus, I think this becomes a grey area. Were we to address specific demand/product issues elsewhere we would invent new ways to subvert discipline here. We have proven our ability to resist any operational definition of 'OT'.

Almost certainly, both GF-3 and GF-4 will be producing smaller vehicles of some sort just as soon as Model Y is up and running. Those vehicles are probably in some stage of development right now. The only part of that in question is product definition, and those will surprise us, as will the gigantic demand that will 'magically' result. The only real 'magic' is that TSLA will not rest, nor will it remain static.

As investors we will always be curious what next technological advances will astonish/dismay observers. As speculators and longs we only need to decide if we're confident that TSLA can exceed our expectations.

Automotive News regularly provides industry outlook including schedules for new models, refresh, factories and supply chains as well as partnerships. Tesla is the least forthcoming about such topics. Why? I suspect because the Tesla management and board all know that the actual plans would be greeted by derision. No one is equipped to understand how revolutionary it is to apply advanced design, manufacturing, distribution and support techniques to hidebound industries like autos, peaker plants, energy storage and roofing. Bluntly, almost all of us aren't either.

Therefore what we do is prognosticate about smaller things we can understand, like smaller BEV models.

it is very possible I'm wrong about all that. I think it partly explains why we all become so giddy, then dismayed. Thus we forecast the demise of large classes of competitors and confidently predict physics-defying instant advances by Tesla. I also think most of this is harmless enough even though it means we must wade through pages of irrelevancy.

Human nature tends to resist imposed order.

I do think it's understandable that people want to discuss this topic, however. Any new product would be big for Tesla's future.

It does seem, however, to be pretty far off at this point.

 

[KarenRei]

Umm..

View attachment 497461

Touché

 

[LJS22]

Is there currently any coverage on the MIC Model 3 delivery news from CNBC / Cramer in the US?
Thanks.

They are obsessed with him dancing haha they’ve just mentioned they started delivering in China with a video of him dancing. No good commentary yet

 

[LJS22]

$460 pre market!

 

[bhtooefr]

Umm..

View attachment 497461

I mean, Clarke's third law.

 

[Artful Dodger]

I don’t know if that means someone shorted massively yesterday and utterly failed to contain the price,

Yes, that's precisely what happened yesterday. And it was largely done by FINRA reporting entities (likely hedge funds). 30 days of daily data available here:

I track the reported FINRA short volume daily, then subtract FINRA-reported total volume from NASDAQ reported end-of-day volume.

The daily difference between NASDAQ - FINRA volume reported is a proxy for Market Maker's daily trading volume, which then permits statistical inference testing on MMs daily short selling.

I have just over 14 months of daily data. Validated by the bi-monthly short interest reported by NASDAQ, 'best-fit' curves can be validated and std-error of estimate obtained.

Note 1: a 'T-score' of -1.52 indicates an event that ranks in the 6th percentile of a normal distribution (ie: you expect this extreme to occur about 6 times in 100 trials).

Note 2: I have 274 data points in my data set. The Jan 6, 2020 t-score of -1.52 ranks #11 out of 274, or 0.040 in the distribution, which should be compared to the population estimate (based on my sample) of the 6th percentile.

@Fact Checking also asked if he was missing something. Yes, it's hidden, but can be teased out of the data.

Note that on Options Expiry Fridays, especially when large numbers of Options expire, we often see the opposite swing in the (NASDAQ - FINRA) volume metric: a higher proportion of trading is conducted by non-FINRA reporting entities (ie: MM's).

I'll try to put out another report after end-of-trading this Friday, but be aware that the largest Options Expiry event this month looks (at this point) to occur on Fri, Jan 17th, 2020.

 

[Tslynk67]

$460 pre market!

Photo, or it didn't happen! Here, I made one for you:

 

[avoigt]

$460 in market trading! Clear new record.

What I like about this squeeze is its going in daily volumes but continues just like that and that the SI is still very high.

We may enter irrational levels if we didn't do already which is a normal part of investor sentiment which can bring us to $480 or $500 until the last ones who missed the ship wake up.

What an enjoyable time these weeks and months comparing to the boring trading for years between $280 and $380.

Congrats to all buy and hold traders.

 

[JusRelax]

I'm thinking TSLA will be up early in the week as well. Friday was one of the most convincing days for me that the stock price was deliberately manipulated to minimize ITM calls. On Monday/Tuesday, there should be much less of that.

Yes, that's precisely what happened yesterday. And it was largely done by FINRA reporting entities (likely hedge funds). 30 days of daily data available here:

I track the reported FINRA short volume daily, then subtract FINRA-reported volume from NASDAQ reported end-of-day volume.

The daily proportion of NASDAQ - FINRA reporting reveals MM daily trading volume, which then permits statistical inference testing on MM daily short selling.

I have just over 14 months of daily data. Validated by the bi-monthly short interest reported by NASDAQ, 'best-fit' curves can be validated and std-error of estimate obtained.

View attachment 497459

Note 1: a 'T-score' of -1.52 indicates an event that ranks in the 6th percentile of a normal distribution (ie: you expect this extreme to occur about 6 times in 100 trials).

Note 2: I have 274 data points in my data set. The Jan 6, 2020 t-score of -1.52 ranks #11 out of 274, or 0.040 in the distribution, which should be compared to the population estimate (based on my sample) of the 6th percentile.

@Fact Checking also asked if he was missing something. Yes, it's hidden, but can be teased out of the data.

Note that on Options Expiry Fridays, especially when large numbers of Options expire, we see the opposite shift in the FINRA - NASDAQ metric: a higher proportion of trading is conducted by non-FINRA reporting entities. I'll try to put out another report after this Friday, but be aware that the largest Options Expiry event this month occurs on Jan 17th.

I was thinking I was all smart yesterday when I saw that the SP rose yesterday, confirming my thesis that there would be less SP manipulation yesterday compared to last Friday. Apparently, I was wrong and the SP rose despite even greater attempted SP manipulation!

Talk about bullish AF....