2017 Investor Roundtable:General Discussion

[erthquake]

This is stil clueless FUD, but I guess this what progress looks like. So now Tesla won't go to zero, they'll just be 6th or 7th.

Tesla will survive — but still won't rule the electric-car future

 

[22522]

Thank you. I agree that there is risk in estimating the future. I use an appropriate discount rate for similar size companies with similar balance sheet characteristics.

I recently built a financial model that estimates future path of enterprise value by quarter. I created it from scratch. It seems to do okay when backtestig, but of course there are absolutely no guarantees that it will work as well in the future. The $1,000+ level I indicated is for 2Q18.

Yeah, I think bad mouthing from the shorts will cause a valuation lag of 9 months. Some people make decisions based on what other people say, and then because they are insecure about the foundation for their actions, remain committed out of a "need to be right." Sometimes I say, "Committed to Can't."

So a lot of people have a negative first impression of Telsa stock, that will suppress the price. I would expect a stock price lag, because, wrt Tesla, they are out.

So the market is smaller, for a while. When the fresh look people enter, we should see $1000. But I think that is in September when the new ICE comes out and nobody wants it.

 

[AlMc]

I personally would like to talk about holding $330, then moving on to 350+, then $400 in 2017 before even putting up numbers like $1,000 for the SP in 2018 or beyond.

Build me any model you want (sizzle) but give me
Execution, execution, execution. (Steak)

Then SP will rise.

 

[EinSV]

But every time a short post about their position they claim they timed the market perfectly or almost perfectly.

Shorted at a peak and covered at a trough.

Possible for some, but short sales peaked as the SP hit bottom late last year so on average most shorts are on the dreaded sell low, cover high plan:

11/30/2016: Short interest 35.7M SP $189.40
6/30/2017: Short interest 27.3M SP $361.61

Short interest down 23.5% as the SP went up 90.9%.

 

[larmor]

Once delivery in high numbers of m3 and TE and solar, onlookers and fudsters will be priced out. That is why there is so much news swirling to keep tsla down. Unlike a social media company with advertising revenue can be had all online, Tesla is delivering durable goods, so the production of high numbers of product has all ready begun.
Much like the cargo ships and trains with 3000-4000 ms/mx in transit- that's like $30 million in inventory.

 

[bdy0627]

Some of the news is just to be in sync with stock movement. When TSLA was rocketing up, we were actually seeing some favorable articles on Tesla. There are 3 articles on Google Finance right now about Musk's interview at the Gov's meeting. They aren't negative or positive. None mention his comment about the stock price. I have no doubt that will be highlighted once we get closer to the opening bell on Monday.

 

[GoTslaGo]

Fortune article about the meeting (focused on his comments on AI):

Elon Musk: Artificial Intelligence Is the 'Greatest Risk We Face as a Civilization'

Final paragraph:

Quote:

Musk’s comments on AI only took up a small part of the hour-long exchange. He also speculated about the future of driverless cars and space travel, and mourned that meeting the sky-high expectations surrounding him was "quite a difficult emotional hardship" and "a whole lot less fun than it may seem."

End quote.

 

[kenliles]

Where was Macron at the beginning of the Election cycle?

Most were predicting whoever won the Republican nomination would unite the center right and win the elections. Macron was an independent, a man without a party.

No one takes Manifestos seriously, least of all the French auto industry.

Lest they would already have Gigafactories being built in France.

It is easy to prognosticate after the fact.

No...
Both French and China edicts on ICE were loudly proclamated and easily prognosticated- Given Paris Accords and many other accelerating drivers, including economic -
In France, before, during, and following the election, now 2 months past. These (ICE edicts) were never difficult events to forecast, just as more will be coming in the months ahead, increasingly distancing from whoever is in Political control. This is all now firmly channeled from an economic and investment perspective

This same lack of foresight also led to your demise at the Red Wedding

 

[Buddyroe]

Or not? GM just went bankrupt, Chrysler filed chapter 11 bankruptcy and went through a managed buyout and is now part of Fiat. Ford borrowed $22 billion dollars ($15.9 billion in commercial paper, $5.9 billion in ATVM loan) during that period. U.S. taxpayers ended up paying around $9 billion to bail them out. Chrysler was also bailed out in 1979 with $1.5 billion dollars.

Wow, the arrogance! Tesla, by Musk's own admission, would have been bankrupt also without the MB investment and the gov't loan.

Look, I'm as big a fan as anyone of Tesla. In fact, I follow the supercharger build-out with the passion of a cult follower (don't ask me why, I just find it interesting). But, when I think with my brain instead of my heart, I know Tesla and EVs in general have a LONG way to go. Less than 1% of sales in America is not something that points to a take-over. If Tesla or EV sales in general can reach 1 million in sales in America, then I'll believe there's a chance. But even then, there's a good chance that a huge chunk of those sales could be GM or Nissan.

 

[vgrinshpun]

Is Tesla Model 3 The Next Toyota Camry?

It is interesting that info graphic that presumably came from the investment note shows no maintenance cost for Model 3 until third year of ownership. Does Gene Munster knows something we don't (yet)? Hard to imagine that he could have made a glaring mistake of not including the maintenance cost during first and second year of ownership.

No need for maintenance until third year of ownership could generate a lot of additional enthusiasm for Model 3 (and some lament from Model S owners if the yearly maintenance requirement will remain).

 

[GoTslaGo]

It is interesting that info graphic that presumably came from the investment note shows no maintenance cost for Model 3 until third year of ownership. Does Gene Munster knows something we don't (yet)? Hard to imagine that he could have made a glaring mistake of not including the maintenance cost during first and second year of ownership.

No need for maintenance until third year of ownership could generate a lot of additional enthusiasm for Model 3 (and some lament from Model S owners if the yearly maintenance requirement will remain).

The other interesting thing is he gave the Camry a 5 year lease at 0.52% interest, vs. 3% for the Model 3. So he stacked the base price against the Model 3 to start too.

 

[tinm]

I thought Elon's comments on AI were the most provocative comments of the event. So much so that I suspect they were for the governors too, but the governors will probably roll their eyes and do nothing (if AI's so dangerous why isn't everyone talking about it, etc) due to lack of understanding and no staff to help them understand.

Of course, I would argue nuclear weapons are a larger risk to civilization than AI, but maybe what he means is, AI could quickly control the nukes, I don't know.

Compared to the car and battery and solar and energy talk, the AI stuff was by far more chilling and makes me want to know more.

 

[eloder]

Of course, I would argue nuclear weapons are a larger risk to civilization than AI, but maybe what he means is, AI could quickly control the nukes, I don't know.

I think the example he was given is that a corporation could create an AI that could influence world events/politics (i.e., use social media to flare tensions and start a war) in order to drive up stocks for said corporation. Not a Skynet type scenario.

Which is sort of what already happened with the US election, where AI presence on social media obtained one specific outcome that's heavily favorable to the foreign country that spearheaded such efforts. Even now you see an absolute legion of AI-bots commenting on news media articles in order to influence the public. It's absolutely scary stuff.

A lot of news articles are heavily AI-generated or AI-written nowadays, so it's also heavily relevant to the FUD assaulting Tesla day-in and day-out.

 

[GoTslaGo]

I thought Elon's comments on AI were the most provocative comments of the event. So much so that I suspect they were for the governors too, but the governors will probably roll their eyes and do nothing (if AI's so dangerous why isn't everyone talking about it, etc) due to lack of understanding and no staff to help them understand.

Of course, I would argue nuclear weapons are a larger risk to civilization than AI, but maybe what he means is, AI could quickly control the nukes, I don't know.

Compared to the car and battery and solar and energy talk, the AI stuff was by far more chilling and makes me want to know more.

Yes, I suspect that is what the last governor was asking as well (Arizona?). I think the governors (as well as me) were hoping for a more concrete set of metrics to develop a regulatory framework. That being said, Elon's answer about just creating a regulatory agency to start looking is a good idea.

 

[TradingInvest]

I thought Elon's comments on AI were the most provocative comments of the event. So much so that I suspect they were for the governors too, but the governors will probably roll their eyes and do nothing (if AI's so dangerous why isn't everyone talking about it, etc) due to lack of understanding and no staff to help them understand.

Of course, I would argue nuclear weapons are a larger risk to civilization than AI, but maybe what he means is, AI could quickly control the nukes, I don't know.

Compared to the car and battery and solar and energy talk, the AI stuff was by far more chilling and makes me want to know more.

If someone figures out how to mimic one billionth of a human brain, they will quickly figure out one millionth, then one tenth of a human brain. By that time it may take a few months to reach an AI level that's one billion times more intelligent than human. Because the AI will improve AI at lightening speed. Then the best case is that human becomes irrelevant. More likely we will be eliminated. The likely hood for this to happen is so high, stopping the progress is so difficult, it's frightening when I think about it.

 

[skitown]

I thought Elon's comments on AI were the most provocative comments of the event. So much so that I suspect they were for the governors too, but the governors will probably roll their eyes and do nothing (if AI's so dangerous why isn't everyone talking about it, etc) due to lack of understanding and no staff to help them understand.

Of course, I would argue nuclear weapons are a larger risk to civilization than AI, but maybe what he means is, AI could quickly control the nukes, I don't know.

Compared to the car and battery and solar and energy talk, the AI stuff was by far more chilling and makes me want to know more.

@tinm if you're not a reader of Waitbutwhy.com already, I recommend you check out Tim's excellent "article series" on Elon proper - but was thinking you'd likely enjoy this two part article on AI specifically to learn more.

The Artificial Intelligence Revolution: Part 1 - Wait But Why

 

[Curt Renz]

Elon is no dummy. He undoubtedly realizes that the valuation question will frequently be posed to him. He appears to have developed a pat answer that is delivered in a manner that seems off the cuff while boosting his credibility.

He is not a stock market analyst and should not be considered an authority on the subject. Of course most of the pros really should not be considered authoritative either. A stock is worth what the market consensus thinks it is worth. Standard valuation models may sometimes serve passably well for established companies in stable industries. For innovative young companies disrupting their industries by investing in growth, standard valuation models are useless. Instead market participants in their collective wisdom attempt to determine the discounted future values of such companies, even if not so knowingly as individuals. Some may call this SWAG (Scientific Wild Ass Guessing). Those who cannot deal with this should not be playing TSLA either long or short.

Elon must know this, but has to give a somewhat conventional answer when queried by the media or in this case governors. Elon is likely aware that the market appears to have become inured to his standard response regarding TSLA valuation. The long run benefit to shareholders should be quite positive when Elon’s answers enhance his credibility in the eyes of influential people such as governors. He gets it.

 

[NicoV]

I don't remember seeing a lot of sympathy press for how much money he lost a few weeks ago.

He didn't loose any money. It was just some number that changed. He still owns the same part of Tesla as a month ago.
I use the same reasoning for my TSLA holdings. You only loose money when you actually sell.

 

[ValueAnalyst]

It is interesting that info graphic that presumably came from the investment note shows no maintenance cost for Model 3 until third year of ownership. Does Gene Munster knows something we don't (yet)? Hard to imagine that he could have made a glaring mistake of not including the maintenance cost during first and second year of ownership.

No need for maintenance until third year of ownership could generate a lot of additional enthusiasm for Model 3 (and some lament from Model S owners if the yearly maintenance requirement will remain).

What maintenance cost does a Tesla has in the first two years now??

 

[FutureTSLACEO]

Looking at the iPhone stock app - under Tesla's daily news feed - there are 6 articles published today from the Street all on tesla. What's so disgusting is that not one actually says anything meaningful. I'll challenge anyone to extract one real piece of news or insight from the articles. It's just straight up noise.

I'm glad that you think the same way as I do. Lots of random and BS articles out that. I would restrain myself from reading (clicking) their articles (plus many others like Forbes etc) from now on, so I would not help them make money with advertisement...

Personally, I prefer electrek and inverse. Nonetheless, news from Elon himself.