2017 Investor Roundtable:General Discussion

[Drax7]

A ten year old incident without penalty, monetary or otherwise, and one "matter." Cf NYT:
https://www.nytimes.com/2016/12/19/business/imf-trial-christine-lagarde-france-verdict.html

Operative conclusion: "'She has been a very effective leader,'” said Edwin M. Truman, a specialist in international finance formerly at the Federal Reserve and the United States Treasury...." snip
“'At bottom, it’s all about French politics,' Mr. Truman said."

I must admit in my sexist way I've always thought her good looking and worried, like you, I suppose, that she might be risking skin cancer. Did you notice that after a significant round of discussion she responded in order to three comments by different participants in a foreign language from memory without notes!? I am prejudiced in favor of smart women, too. Apparently Trump is also, despite his reputation he has chosen women to run his companies in one TV report "because they will work harder due to previous discrimination by society." (Not direct quote, but clear meaning.) So far as I know she hasn't been accused of rape, at least not yet, in contrast to her predecessor. I suppose its a matter of what is important to the observor. What is the French phrase, "à chacun son goût?"

Larry did make some brilliant observations. How historically populism backfires, how the widespread integration of supply chain Manufacturing is not easy to undo, how the Mexican peso devaluation makes Mexico even more compelling, etc.

What sort of guidance should we expect at the next earnings report, is my preoccupation.

 

[GBleck]

With this lawsuit out now, no one is going to touch Aurora with a ten foot pole. Well, except maybe a company that thought they were extra-judicial and had a bad track record with IP. Hmmm... FF?

they have no money to buy Aurora with.

 

[3Victoria]

they have no money to buy Aurora with.

At this point it has to be pretty cheap ... likely a negative value.

 

[neroden]

Larry did make some brilliant observations. How historically populism backfires,

Technically true, but for some reason nobody in the elite talks about how historically *elitism* backfires, which is actually much more relevant and important right now. We're watching the consequences of an out-of-touch anti-democratic elite, in many countries including the US and the EU.

This situation usually leads to bloody revolution or civil war, but this can be avoided by actions like the Great Reform Act of 1830, the British buyout of the slaves, controlled decolonization of the British Empire-- or in the US, the New Deal. (It's interesting how many of the "elites avoid revolution" examples are from Britain; I know of three more British examples off the top of my head, but I'm having trouble finding non-UK examples.)

I finally listened to that roundtable at Davos. The elites are all concerned about a repeat of the 1930s but most of them were not worried a decade ago when the 1920s were repeating. *I* was worried about the repeat of the 1920s (and as a result, sold lots of stocks just before the 2008 crash), but the elites weren't.

Christine Lagarde is a very very smart woman and almost everything she says is exactly correct, right down to having warned the elites three years ago and having been ignored. (Larry Summers does not impress me.)

how the widespread integration of supply chain Manufacturing is not easy to undo,

Elon's trying to undo it Interesting, eh?

how the Mexican peso devaluation makes Mexico even more compelling, etc.

What sort of guidance should we expect at the next earnings report, is my preoccupation.

Frankly, the political situation makes me think it's more urgent to expand Tesla. I've stated elsewhere that I think fixing the political environment requires eliminating dependence on oil. So I hope Tesla will be able to expand *faster*.

I don't think we'll be able to tell this at the next earnings report, but hopefully later in the year once they're through the ramp-up of Model 3 and Powerwall 2 and the Solar Roof, we'll be able to get some guidance on future expansions.

 

[3Victoria]

The trouble with these arguments regarding "elites" is that there will always be "elites", who by definition are the richest, most powerful, best educated etc. Trump is obviously an elite. The only way to not have elites is to have pure communism or possibly pure libitarianism.

However, I agree that it is a matter of degree. When 8 individuals have as much wealth as the bottom billions it can only result in a revolution. Whether that is armed or not depends on how hard the top tier wants to hold onto their power/wealth.

 

[neroden]

The trouble with these arguments regarding "elites" is that there will always be "elites", who by definition are the richest, most powerful, best educated etc. Trump is obviously an elite. The only way to not have elites is to have pure communism or possibly pure libitarianism.

That's not my argument, really. Of course there will be elites; the question is how the elites *behave*.

Look up the debates over the Great Reform Act of 1832. The debate in the House of Lords was a debate entirely among elites (they were all Lords with inherited titles!) The Tories were insistent on *not giving an inch*, on keeping every power they had and demanding more.

The Liberals (aka Whigs), under Lord Grey, were stating a different and more pragmatic message. They said that there were new, large, and powerful industrial classes, ranging from the factory owners to the skilled factory workers. These classes were unrepresented and felt (accurately) that they had no voice in government. They were large in numbers and they were powerful. The Whigs argued that these new classes needed to be "cut in on the deal" so that they *cared* whether the British system of government survived -- if they were cut in on the deal, then the existing elites would do all right. If they were not cut in on the deal, they would overthrow the existing elites, take all their property, and probably kill them.

The Liberals could point directly to the French Revolution for evidence. Despite this, the Tories STILL wouldn't budge. Unbelievable pig-headed stupidity.

Anyway, Lord Grey's Liberals won, and as a result, the English noble families are still rich and powerful. In places where the elite didn't budge... well, what's the last time you heard about French or Russian aristocracy?

When I listen to a discussion at Davos, a discussion among elites, I would hope that those elites would have learned the lessons of history and be at least as wise as the Liberals in 1832... but until very recently they haven't been.

However, I agree that it is a matter of degree. When 8 individuals have as much wealth as the bottom billions it can only result in a revolution. Whether that is armed or not depends on how hard the top tier wants to hold onto their power/wealth.

 

[3Victoria]

.... the question is how the elites *behave*. .......

We basically agree. The elites need to look beyond their noses. Short term gain does not garantee long term gain. Unfortunately, most appear to look only as far as the next quarter .... and don't seem to worry about their childrens' futures.

 

[Off Shore]

We basically agree. The elites need to look beyond their noses. Short term gain does not garantee long term gain. Unfortunately, most appear to look only as far as the next quarter .... and don't seem to worry about their childrens' futures.

FWIW, most are paid good money by their employers to look only as far as the next quarter. It's amazing what you get a person to believe when you pay their salary.

 

[Intl Professor]

FWIW, most are paid good money by their employers to look only as far as the next quarter. It's amazing what you get a person to believe when you pay their salary.

Summers is better when he is not an administrator. His Harvard presidency and as an aid to Obama who squelched Christine Romer's estimate of a much higher stimulus are certainly concerning. (Krugman and my neighbor, a retired economics colleague, agreed the stimulus should have been three times larger.) Speaking of appearances, he certainly did not look well in this video. Worrying.

There was one occasion of dry visual humor when they talked about the elites of Davos speakers.

Edit: For TMCers without time to view the entire video: the gentleman from Italy was brutal in blaming Europe for not being swift at policy changes while the commentator from Brazil had to remind us time and again that globalization has been fine for the middle classes of developing countries. Although the forum covered most of the needed changes what worries me in the U.S., is our misplaced focus on free trade and free flow of investment and personnel when the major focus should be on education at all levels, not privatization of public education, and concern for the deleterious effects of robots and even more, AI applications. A lot of the members here are on to that. Wish the policy-makers were too!

 

[Drax7]

How can I hold a large position going into the earnings report , knowing the
Numbers are not going to be favorable. Deliveries were a miss, hence
Revenues will be weak.
Autopilot 2 revenue recognition may not help.
TE is still in infancy.
Solarcity is unlikely to help.
Moreover the threat of an equity capital raise is always present.

Maybe all of that is fully discounted and irrelevant.

A saving grace could be great production guidance concerning model 3.
I think this is crucial to sustain present price levels.

Will the market look beyond the valley and the stock price not recede
This time around. That's exactly what happened after qtr 4 deliveries numbers were reported.
The miss punctuated the bottom.

Frankly , There is no way of knowing.
The relevant question maybe what is my risk tolerance.

 

[Intl Professor]

Frankly , There is no way of knowing.
The relevant question maybe what is my risk tolerance.

Stay long. Funny from me with less time.

 

[Navin]

So the way I'm handling earnings and recent chaos caused by trump (markets don't like chaos) is that I went off Margin and sold higher strikes calls on my leap call position - created a bull call spread.

For my shares - I sold way out of the money leap 2019 calls against the position to give me a bit of a hedge - if tesla goes up - my shares will do well. If tesla - tanks - I can certainly buy calls with all the dry powder I have. Best trading advice is to have a plan if tesla goes up or goes down.

 

[MitchJi]

Edit: For TMCers without time to view the entire video: the gentleman from Italy was brutal in blaming Europe for not being swift at policy changes while the commentator from Brazil had to remind us time and again that globalization has been fine for the middle classes of developing countries. Although the forum covered most of the needed changes what worries me in the U.S., is our misplaced focus on free trade and free flow of investment and personnel when the major focus should be on education at all levels, not privatization of public education, and concern for the deleterious effects of robots and even more, AI applications. A lot of the members here are on to that. Wish the policy-makers were too!

In a lot of the developing countries the middle class are the elites. In the US the middle class is disappearing.

The focus on privatization of education is really a focus on making money from education.

It's similar to "Obamacare", which should really be called big pharma care or insurance company care.

 

[Ovulation]

In a lot of the developing countries the middle class are the elites. In the US the middle class is disappearing.

The focus on privatization of education is really a focus on making money from education.

It's similar to "Obamacare", which should really be called big pharma care or insurance company care.

Some argue that the developing world would be better of today when they had developed like the US and Europe also Japan with protectionism, China comes in mind. I see the globalization only as an attempt from the elites to let the lower classes outcompete each other, to lower wages and get the surplus in their pockets. This Brazilian guy seems to believe the neoliberal narrative, I certainly don't.

 

[RobStark]

The focus on privatization of education is really a focus on making money from education.

Yes, black children in DC and New Orleans taking vouchers to Catholic schools to escape failed government schools is a big money maker for the Vatican.

It is funding the next Crusade to Constantinople.

 

[Intl Professor]

Some argue that the developing world would be better of today when they had developed like the US and Europe with protectionism, China comes in mind. I see the globalization only as an attempt from the elites to let the lower classes outcompete each other, to lower wages and get the surplus in their pockets. This Brazilian guy seems to believe the neoliberal narrative, I certainly don't.

Did joining the WTO accelerate China's growth? The government certainly wanted admission but are there any economic studies settling the question you raise? I dunno nuttin.

 

[CALGARYARSENAL]

Damned it you do...

This guy never has a single nice thing to say. The worst reporter I know.

 

[RobStark]

Some argue that the developing world would be better of today when they had developed like the US and Europe also Japan with protectionism, China comes in mind. I see the globalization only as an attempt from the elites to let the lower classes outcompete each other, to lower wages and get the surplus in their pockets. This Brazilian guy seems to believe the neoliberal narrative, I certainly don't.

Obviously, Elon Musk and his engineers don't have to compete with the best around the world since it is government supported with income taxes from the lower class.

Because the standard of living in mercantalist powers like Japan is greater than that of the US.

Protectionism has served the average Chinese so well over the last 30 years that is why poverty levels are near US levels despite the fact the US imports poverty from all over the world.

 

[3Victoria]

Obviously, Elon Musk and his engineers don't have to compete ...
.... the fact the US imports poverty from all over the world.

Do you have any proof for these statements?

 

[Navin]

While we debate things mostly outside our control - lets turn our attention to something really cool - this weekend's hyperloop competition which will be live streamed at space-x later today. Here is a link
Hyperloop