2017 Investor Roundtable:General Discussion

[Reciprocity]

Thank you for your insight.

How do you reconcile between the LA to NY demo later this year that Elon says will be able to handle dynamic rerouting with no controls touched at all throughout the whole trip which will include real city traffic in both cities and your prediction of level 5 FSD in ten years?

A limited test is always going to be a million times easier then being able to handle every situation. What struck me about Elon talking about the Dec demo and the ability to change the route had more to with how he suggested that our cars would be able to do the same, meaning a firmware update to coincide with the demo. This actually makes sense because you can't possibly demo something like this if you are not confident it will work, the same kind of confidence they have with releasing auto pilot features for example. I guess it could all be smoke and mirrors with the wizard of Oz behind the curtain driving the car, though I think that would be borderline fraud.

I am personally turn between the camp that say FSD is harder then anyone thinks and won't be here in 10 years and those who say it will be here by year end. I could see level 3 by December. My opinion is that the only difference between 4 and 5 is a human in the car. If you can do 4, 5 is only about validation and proof that it is 10x safer then a human. I believe the regulatory hurdles will be smaller then most because of the want to lead on technology and because of the potential lives saved could be tremendous.

So the question is what will it take to get from the demo in December to level 4. I believe Tesla had a proof of concept last year before releasing the new hardware and selling the features online. It would be borderline insane to do this without at least a proof of concept in something like a test town and supported my a fairly detailed simulation. There result was the video we say in October '16 related to the HW2 hardware.

The shear arrogance if Elon as it relates to autonomous driving gives me some confidence. Elon considers it solved and they only need time to train machine and prove it's 10x safer then a human. I know he is prone to exaggeration and hubris, but he is also someone who delivers the amazing on an almost monthly basis. Don't really know anyone similar.

In terms of stock price analysis. Even if FSD us more then 2 years away, I expect we will start to see FSD related safety features sooner then later. Red light and stop sign breaking, even if AP is not enabled or engaged for example. These features will certainly help if for no other reason then having a sub 2.3 second 0-60 helps. No one needs that, but when you see a P100D, you know it's faster then everything. When you see a Tesla you will know it's safer then anything.

 

[Reciprocity]

I was speculating to my self whether or not it is possible that they changed the battery cells in the S and X to the new format, and that caused the acceleration change? Seems unlikely since Elon just said they were not going to, but who knows?

Could have been the news today on electrek about the more powerful and efficient DC to AC inverters made from the ground up for the 3. It makes sense they would apply that to the S/X inverters before the 3 hits the road.

 

[ValueAnalyst]

I cannot wait for Tesla to end this FSD discussion once and for all as soon as possible.

 

[techmaven]

I was speculating to my self whether or not it is possible that they changed the battery cells in the S and X to the new format, and that caused the acceleration change? Seems unlikely since Elon just said they were not going to, but who knows?

Well, new cells aren't necessary. The 18650's Tesla has been using can handle 6C discharge. That's 6 * 75 = 450 kW, or 600 hp. No, the limitation was likely the inverter and software limits.

 

[tinm]

Uh oh

 

[Intl Professor]

Within 10 seconds of launch, Falcon 9 aborted. No news as to why and a "scrub" is underway.

 

[Intl Professor]

Apparently automated abort due to software anomalies as machine was checking GNC something or the other. I shut up now.

 

[Intl Professor]

Twitters unite in giving one for "gipper" Elon. We can wait for good news another day.

 

[Snapdragon III]

In praise of ValueAnalyst

I have been reading the last few days of posts on here and feel that ValueAnalyst has been getting an undeserved amount of criticism. I wanted to lay out some of the things I appreciate about her work, and some of the ways I think the criticism is misguided.

-Agree with the conclusions or not, it is undeniable that she has worked very hard to come to the valuation model she has, and is sincere in her good will. Definitely not a troll, and not forcing anyone to buy TSLA stock. While I personally think her model leans toward the best case, end of the spectrum, I appreciate her sharing it with us. While I think it is best case, I do not think it is impossibly overoptimistic, and I think there is at least as much value in considering what the best case may look like, as there is in considering any other scenario.

-In a small way, I think ValueAnalyst projections may end up helping the Tesla stock price in the short to medium term. I think the main factor driving the share price of Tesla is the markets belief in their ability to execute on what Elon say's they are going to do. The nature of discounted cash flow models is that you can make them say whatever you want them to say by tweeting a few variables. These range from ValueAnalyst on the high end saying Tesla is worth Trillions, to Mark S on the low end showing Tesla is worth 0. My hope is that Tesla is going to execute the sugar out of the Model 3 launch and it will cause a market perception change that will change people's views from, "this guy is insane, that will never work," to "This guy is iron man, there is nothing he can't do!" When and if this happens, people are going to start casting around and looking to answer the question. "How big can this thing get? Have I missed it already?" When they go looking for an answer to this question, if they read ValueAnalysts work, and other super bullish work like it, even if they don't totally believe it, "Anchoring" will lock those high market cap numbers in their brains and make them more likely to invest at crazy valuations, thus benefiting the share price.

-Even if her DCF turns out totally wrong, it could still end up being right on investment wise. For example, I am sure there were ton's of analysts with DCF models for Amazon 10 years ago that showed fat profit margins starting in 2012 after they slowed down on infrastructure spending, and of coarse had zero income shown from AWS. Those models were totally wrong, the profits never came, and AWS is a huge source of revenue, but Amazon investors did just fine none the less. Anyone who claims that they are the one with the super accurate DCF model is a fool. The future is unknowable, and the best any of us can do is guess.

- Many of the people that are the most critical of ValueAnalyst (Dave T, for instance, (Who I think is great)), have, ironically, exactly the same investment strategy as far as I can tell. Long TSLA equity, with little to no leverage. I could see being critical if she was publicly advocating some supper aggressive options strategy based on super aggressive valuation models, but that is not the case.

- I feel like much of the worry about being overly optimistic is coming from people who have been invested in Tesla for years, were overly optimistic themselves a few years ago, had their dreams crushed, and are now fighting the last war. Whether or not the next war, will be the same as the last is a question yet to be answered, but I don't think it will do anyone any good to try and tamp down the optimism of everybody around them. My personal, not data supported in any way theory about price movements in the stock market is that they tend to follow the path that will be the most painful for every party involved. Even if the long term trend is wildly bullish, the volatility in the short to medium term will continually torture longs and shorts alike. It may even be painful enough to turn wildly bullish long time TSLA shareholders who are currently sitting on 10 baggers, to dramatically underestimate the future growth prospects of the company they love.

-And finally, you are all going to feel like huge D-bags, when you find out that you have been picking on a 16 year old girl!

Keep up the good work VA. I appreciate it.

Snapdragon

 

[Dennisj00]

TE is the AWS or more for Tesla- give it a year. . .

 

[SPadival]

Even Elon time is running slow today.. Is he personally scrubbing the launch or something?

 

[anticitizen13.7]

- Many of the people that are the most critical of ValueAnalyst (Dave T, for instance, (Who I think is great)), have, ironically, exactly the same investment strategy as far as I can tell. Long TSLA equity, with little to no leverage. I could see being critical if she was publicly advocating some supper aggressive options strategy based on super aggressive valuation models, but that is not the case.

- I feel like much of the worry about being overly optimistic is coming from people who have been invested in Tesla for years, were overly optimistic themselves a few years ago, had their dreams crushed, and are now fighting the last war. Whether or not the next war, will be the same as the last is a question yet to be answered, but I don't think it will do anyone any good to try and tamp down the optimism of everybody around them. My personal, not data supported in any way theory about price movements in the stock market is that they tend to follow the path that will be the most painful for every party involved. Even if the long term trend is wildly bullish, the volatility in the short to medium term will continually torture longs and shorts alike. It may even be painful enough to turn wildly bullish long time TSLA shareholders who are currently sitting on 10 baggers, to dramatically underestimate the future growth prospects of the company they love.

On the contrary, TSLA has exceeded my expectations over the past 5 years.

I "won" the last war and won big, at least on paper. My main concern is people jumping in and risking more than they should, expecting history to repeat.

-And finally, you are all going to feel like huge D-bags, when you find out that you have been picking on a 16 year old girl!

Keep up the good work VA. I appreciate it.

Snapdragon

My responses to VA would be the same regardless of whether they are a 16 year old high school student or a 60 year old investment professional.

I've met enough wise young people and blitheringly stupid older people to know that age and station in life isn't a guarantor of reasoning ability one way or the other.

 

[Dennisj00]

No guarantee but maybe some good info

 

[ValueAnalyst]

@MitchJi I believe you had put forth a per GWh cost estimate for building a Gigafactory. Would you mind reminding me your estimate?

I estimate ~100m per GWh for smaller Gigafactories, but this number should decline as the planned capacity goes up.

 

[ValueAnalyst]

In praise of ValueAnalyst

I have been reading the last few days of posts on here and feel that ValueAnalyst has been getting an undeserved amount of criticism. I wanted to lay out some of the things I appreciate about her work, and some of the ways I think the criticism is misguided.

-Agree with the conclusions or not, it is undeniable that she has worked very hard to come to the valuation model she has, and is sincere in her good will. Definitely not a troll, and not forcing anyone to buy TSLA stock. While I personally think her model leans toward the best case, end of the spectrum, I appreciate her sharing it with us. While I think it is best case, I do not think it is impossibly overoptimistic, and I think there is at least as much value in considering what the best case may look like, as there is in considering any other scenario.

-In a small way, I think ValueAnalyst projections may end up helping the Tesla stock price in the short to medium term. I think the main factor driving the share price of Tesla is the markets belief in their ability to execute on what Elon say's they are going to do. The nature of discounted cash flow models is that you can make them say whatever you want them to say by tweeting a few variables. These range from ValueAnalyst on the high end saying Tesla is worth Trillions, to Mark S on the low end showing Tesla is worth 0. My hope is that Tesla is going to execute the sugar out of the Model 3 launch and it will cause a market perception change that will change people's views from, "this guy is insane, that will never work," to "This guy is iron man, there is nothing he can't do!" When and if this happens, people are going to start casting around and looking to answer the question. "How big can this thing get? Have I missed it already?" When they go looking for an answer to this question, if they read ValueAnalysts work, and other super bullish work like it, even if they don't totally believe it, "Anchoring" will lock those high market cap numbers in their brains and make them more likely to invest at crazy valuations, thus benefiting the share price.

-Even if her DCF turns out totally wrong, it could still end up being right on investment wise. For example, I am sure there were ton's of analysts with DCF models for Amazon 10 years ago that showed fat profit margins starting in 2012 after they slowed down on infrastructure spending, and of coarse had zero income shown from AWS. Those models were totally wrong, the profits never came, and AWS is a huge source of revenue, but Amazon investors did just fine none the less. Anyone who claims that they are the one with the super accurate DCF model is a fool. The future is unknowable, and the best any of us can do is guess.

- Many of the people that are the most critical of ValueAnalyst (Dave T, for instance, (Who I think is great)), have, ironically, exactly the same investment strategy as far as I can tell. Long TSLA equity, with little to no leverage. I could see being critical if she was publicly advocating some supper aggressive options strategy based on super aggressive valuation models, but that is not the case.

- I feel like much of the worry about being overly optimistic is coming from people who have been invested in Tesla for years, were overly optimistic themselves a few years ago, had their dreams crushed, and are now fighting the last war. Whether or not the next war, will be the same as the last is a question yet to be answered, but I don't think it will do anyone any good to try and tamp down the optimism of everybody around them. My personal, not data supported in any way theory about price movements in the stock market is that they tend to follow the path that will be the most painful for every party involved. Even if the long term trend is wildly bullish, the volatility in the short to medium term will continually torture longs and shorts alike. It may even be painful enough to turn wildly bullish long time TSLA shareholders who are currently sitting on 10 baggers, to dramatically underestimate the future growth prospects of the company they love.

-And finally, you are all going to feel like huge D-bags, when you find out that you have been picking on a 16 year old girl!

Keep up the good work VA. I appreciate it.

Snapdragon

Thank you; I very much appreciate this. I look forward to discussing the full spectrum of scenarios together.

Most importantly, however, I can neither confirm nor deny that I am a 16-year-old girl.

 

[LargeHamCollider]

In praise of ValueAnalyst

I have been reading the last few days of posts on here and feel that ValueAnalyst has been getting an undeserved amount of criticism. ...

-And finally, you are all going to feel like huge D-bags, when you find out that you have been picking on a 16 year old girl!

Keep up the good work VA. I appreciate it.

Snapdragon

If VA is a 16 yo girl she deserves criticism for claiming to have 20 years of experience (or something like experience). I don't mind VA being here, though VA's post-count to value-contributed ratio is high. Also I can confirm that VA is female.

 

[ValueAnalyst]

If VA is a 16 yo girl she deserves criticism for claiming to have 20 years of experience (or something like experience). I don't mind VA being here, though VA's post-count to value-contributed ratio is high. Also I can confirm that VA is female.

Enough about me. Where's this "news?"

 

[AlMc]

Enough about me. Where's this "news?"

You mean instead of all of this speculating (sizzle) you want news(steak)?

PS: I am sort of sorry to drag out my old sizzle/steak thing but we are all bored and waiting for EM (as usual)

 

[Intl Professor]

Most importantly, however, I can neither confirm nor deny that I am a 16-year-old girl.

I don't care. He)she is separated only by a rib anyway.

 

[AlMc]

Stolen from TEG on another thread