2017 Investor Roundtable:General Discussion

[Krugerrand]

You're absolutely right, world needs mad geniuses who are ready to go all in, bet everything to something. But if we look things from investor's perspective, it is a different thing. For investor it is generally not a good thing to put all eggs in one basket.

Keyword highlighted.

 

[Matias]

Keyword highlighted.

Of course, it is best to only buy tenbaggers and go all in with them

 

[montefuego]

To quote the first half of the video (Buffett):

"The question is about diversification, and I've got a duo answer to that. If you are not a professional investor--if your goal is not to manage money such a way to get a significantly better return than the world--ah, then I believe in extreme diversification, I mean its.. so I believe 98 or 99 % maybe more than 99 % of people who invest .. should extensively diversify and not trade, so that leads them to an index fund type of decision with very low costs, cause all they're going to do is own a part of America and they made a decision that owning part of America is worthwhile.

I don't quarrel with that at all, that is the way that they should approach it, unless they want to bring an intensity to the game to make a decision and start evaluating businesses. But once you're in the business of evaluating businesses and, and you decide that you are going to bring the effort and intensity and time involved to get that job done, then I think diversification is a terrible mistake to any degree.

I got asked that question while I was at sun-trust the other day. If you really know businesses you really shouldn't own more than 6 of them. I mean if you can identify 6 wonderful businesses, that is all the diversification you need and you're gonna make a lot of money, and I will guarantee you that going into a seventh one is going to, rather than putting more money into you're first one, it's gotta be a terrible mistake. Very few people have gotten rich on their seventh best idea, but a lot of people have gotten rich on their best idea."

Edit:

Ultimately it depends on one's personal goals. When I was much younger and impecunious, I would listen to the stock market quotes and just wish I could get some money together to just track the indices. Now my circumstances are better and am more interested in individual stocks and being more active in the stocks. Still have my index funds, but am mixing more individual stocks as I learn more about investing, businesses, the market and trading.

Thank you very much for this video. Very profound, and opposite to the index fund quote which has been disseminated so widely. I really appreciate it.

 

[Reciprocity]

My investment strategy.. Just buy the F**king dip. Dont be dumb, just buy the F**king dip. Now if it where only that easy. I think I fall on the side of those who have some diversity but a large amount in Tesla. 401k is a bigger chunk for me and its a bit more conservative. I think this is important because of potential black swan type events. I have faith that the upside is nearly unlimited, but you cannot be sure and you dont want to mess with your retirement or risk eating cat food in your 80s. Cat food is terrible, Not an advice, it is really terrible.

 

[AlMc]

If you have 8-9 minutes this is a great video, She gets it and articulates the whole Tesla ecosystem very well.

 

[bdy0627]

My investment strategy.. Just buy the F**king dip. Dont be dumb, just buy the F**king dip. Now if it where only that easy. I think I fall on the side of those who have some diversity but a large amount in Tesla. 401k is a bigger chunk for me and its a bit more conservative. I think this is important because of potential black swan type events. I have faith that the upside is nearly unlimited, but you cannot be sure and you dont want to mess with your retirement or risk eating cat food in your 80s. Cat food is terrible, Not an advice, it is really terrible.

These dips look like great opportunities for the long term. Problem is, if I buy one more dip, I'll be out of money. Then what to do on the next dips?
It makes great sense to invest in at least a few good companies. Buffett mentions no more than 6. When 1 or even 2 run into struggles, the remainder keep your investment churning rather than tumbling hard. I prefer that approach but I find myself pulling more and more out of my other investments and into TSLA. That's not something Buffett would recommend and I should probably resist it. Someone invested in 6 good companies, with TSLA being 1 of those, will do so well in the long term that it is probably not worth the risk of shifting the balance heavily toward TSLA. I'll keep trying to tell myself that anyway.

 

[RobStark]

If I remember correctly he got it cleaned pretty well later in the video. Also, white is prone to staining, no matter if leather or fake leather. The rips are a problem though, but I think that´s more due to the perforation than the material.

Pretty clean isn't clean.

Yes, I think we all understand white in any material is more prone to staining, than say black.

Perforated leather in other vehicles is not ripping at ~45k miles.

 

[MitchJi]

What part doesn't make sense? They demoed their FSD software what 9 months ago? And EAP is no where near that good. Isn't that evidence enough that they have two separate software platforms right now?

It makes sense in that it gives them a product to sell now while they get the other one fully ready.

It's evidence of exactly what they said, that it's more difficult than they thought to replace mobile eye with multiple cameras.

It doesn't make any sense to solve problems same problems with multiple versions of software. Smooth and safe lane changes are one example.

But it's literally everything. EAP is a subset of FSD.

 

[Reciprocity]

These dips look like great opportunities for the long term. Problem is, if I buy one more dip, I'll be out of money. Then what to do on the next dips?
It makes great sense to invest in at least a few good companies. Buffett mentions no more than 6. When 1 or even 2 run into struggles, the remainder keep your investment churning rather than tumbling hard. I prefer that approach but I find myself pulling more and more out of my other investments and into TSLA. That's not something Buffett would recommend and I should probably resist it. Someone invested in 6 good companies, with TSLA being 1 of those, will do so well in the long term that it is probably not worth the risk of shifting the balance heavily toward TSLA. I'll keep trying to tell myself that anyway.

Same, im out of money. Hoping things stay fairly constrained until Jan. 1 when I can drop more into for my IRA as a 2019 contribution as I have already made my 2018 contribution. Long and strong all the way!

 

[DragonWatch]

I don't know how they will do it; I am not an expert on manufacturing or the auto industry. I'm only pointing out what makes sense, and Tesla tends to make logical decisions.

The following are the pillars to my argument. If you (or anyone) can disprove any of them, then please to do so:

1. Demand for Model 3 is off the hooks. Nobody really knows how high it can go, but it seems to be surging.
2. No competitor is even close to meeting this surge in demand for all-electric cars by at least 5 years.
   
3. Tesla can significantly increase production plans if they deem it necessary. They have done so in the past, so it's possible.
4. Tesla's mission necessitates dominating as much of the all-electric market as quickly as possible. It's their core purpose.
5. They have, or can easily raise, the equity/debt capital needed to ramp production above 500k in 2018.
6. US governors and int'l heads of state are clamoring over Tesla to open the next Gigafactory in their jurisdictions.
7. EM & Tesla brands have hit inflection points, so the word is spreading like wildfire, even before July 28. Imagine after.

I expect to get a few answers to this (likely some from FUDsters), but I would be surprised if anyone can truly disprove any of the items I listed above. The weakest points in my argument: I don't know how quickly an additional line can be brought online or if Tesla can significantly increase lithium/cobalt etc. supply in one year.

Keep this in mind though: even if such steps would take more than 1-2-3 years, I'd be very surprised if Elon & Team, who saw the need for a Gigafactory at least five years of anyone else, hadn't been planning for a potential surge in demand that is now becoming a reality.

Gut feelings like mine and apparently like yours do not have the respect found on sites reflecting tried and true by the the numbers experts ranging from pie in the sky to down under empty plates. I am like the little guy that squats down as a batter making a pitchers life hard. Then when the perfect pitch looking like ball three is headed toward me, I pop up, swing and bring in all three bases focused as I slide across the home plate. Once the dust settles, I brush myself off and walk quietly away unnoticed.

Rising to the occasion is what Tesla does best.

 

[Intl Professor]

[snip] A mentor of mine used to say that every pleasure has a taste, but what is the taste of criticism?

Criticism is feedback which can be positive or negative. Positive is always sweet—sometimes too sweet—but when it's bitter that's the taste of truth and a test of one's character. The secret of Thai cooking, perhaps of all cuisine, is the proper balance of sweet and sour, or at least their alternation in sufficient measure.

If untrue, the foul taste of negative differentiates between friend and troll.

Trump is a good example of someone fearful of learning from experience—a perfect candidate for contemporary Republicans—but in his self-immolation we learn. His decline symbolizes the difference with Jesus on the cross, and I say that as a non-believer. His decline into a mere buffoon with power may be the only way his supporters can atone for their ignorance or lack of wisdom. For some believers he will become the anti-Christ.

We had a chance to choose between the politics of love or the politics of hate in the last election, but a true test of the issue was not provided by the Democratic Party, and so the anti-democratic elements of our Constitution prevailed. Again, the founders mistrust of parties was confirmed.

The denouement of our political contretemps is dependent upon the character of the American people as Madison warned in his prelude to Federalist 51. His alternate provisions "since men are not angels" have yet to prove sufficient as they are tested again as in the past.

No one really wants another civil war but many of us remain trapped by hubris and racial hatred. These are character flaws to be found everywhere at least thirty percent of the time in thirty percent of whatever population. (I'm aware the portions are WAG, but one data point is Trump's popularity in the polls.)

Edit for clarification: Above should have included "Trump sacrifices himself with every public utterance."

 

[bdy0627]

It's evidence of exactly what they said, that it's more difficult than they thought to replace mobile eye with multiple cameras.

It doesn't make any sense to solve problems same problems with multiple versions of software. Smooth and safe lane changes are one example.

But it's literally everything. EAP is a subset of FSD.

I think it is risky to assume FSD is progressing along smoothly and well-ahead of what we are seeing with AP2. I think it is more reasonable to assume AP2 represents where Tesla is at in terms of the technology. That being said, Musk has stressed that it will advance rapidly. The development sounds somewhat similar to a manufacturing S curve. He thought the steep part of the curve was going to come perhaps in March/April/May but it didn't, at least not according to what we have seen with AP2. With the recent improvements we are seeing now with AP2, it looks like it is approaching the steep part of the curve. I sure hope so.

 

[RobStark]

"The [California Air Resources Board] staff has said that to meet this goal, as much as 40 percent of new-vehicle sales will need to be zero-emission or plug-in hybrid vehicles by 2030."

California Warns of Break From Washington on Clean-Air Rules

Elon recently predicted more than half of new car sales would be all-electric by 2025. That's 40+ million all-electric cars per year.

One side is very off in their estimate.

They are estimating two different things.

CARB is estimating the minimum sales of ZEVs and PZEVs required to meet California's emissions/CO2 goal.

Elon is estimating BEV market share based on price of battery cells per kWh and the superiority of BEVs.

 

[Alketi]

It's evidence of exactly what they said, that it's more difficult than they thought to replace mobile eye with multiple cameras.

It doesn't make any sense to solve problems same problems with multiple versions of software. Smooth and safe lane changes are one example.

But it's literally everything. EAP is a subset of FSD.

I agree with Mitch. It would make NO sense from a software maintenance or code standpoint to have two entirely separate systems, duplicating work, fixing two different sets of bugs, etc. It would be both highly inefficient and ultimately dangerous.

It's much more likely that the lane-keeping behavior you see now is the same that will be used in FSD. The differences are that FSD will incorporate street/traffic sign awareness, pedestrians, parking lots, etc. etc.

Musk is clearly counting on a step-change behavior in AP to hit his end of year deadline. Tesla, to note, did just turn on the data spigot in May, and this last release, if the version number change is an indication, appears to be Karpathy's first. It made some noticeable improvements, but it still has a long way to go.

 

[MTL_HABS1909]

Methane should by most accounts weigh more than just one C.

Green house gas factor?

Global Warming Potential (GWP)

Understanding Global Warming Potentials | US EPA

Methane vs. Carbon Dioxide: A Greenhouse Gas Showdown

Besides the moral implications of the commercial livestock industry, another main reason I recently stopped eating beef/pork/chicken is the huge amounts of methane generated by all these animals. Therefore I'm glad Tesla is switching to all Vegan interiors.

 

[MitchJi]

I'll be surprised if Tesla builds only 350k-400k Model 3's in 2018. I estimate the waiting list will reach 1m by end-2017, Tesla will increase its production plan once again. They can't have people waiting for two years for their cars.

Just because they need to do something to expedite their business doesn't mean that they will do it.

If you want proof of that statement I'm sure that you remember the MX production problems.

 

[ValueAnalyst]

Just because they need to do something to expedite their business doesn't mean that they will do it.

If you want proof of that statement I'm sure that you remember the MX production problems.

They still intended to produce as many as possible, but ran into issues. The intent to maximize market share is still there, and the company is now in a better position to ramp up model 3 production without signifiant issues for various reasons (design, experience etc).

 

[RobStark]

1. Tesla can significantly increase production plans if they deem it necessary. They have done so in the past, so it's possible.
2. Tesla's mission necessitates dominating as much of the all-electric market as quickly as possible. It's their core purpose.

It is a lot easier to go from 25k vehicles produced to 80k vehicles produced than go from 80k to 800k vehicles produced per year.

It is not only lithium and cobalt, but finding qualified workers and getting them trained properly.

When Tesla has gone through 50% plus growth quarters quality suffers. This happens virtually in all complex manufacturing. Growing 200%-500% quarter over quarter will only exacerbate this.

Tesla is no longer asking their blue collar employees at Fremont to work 50 plus hours per week. The more overtime they work the more tired they get which results in more work place injuries. Elon has made worker safety a key priority now.


Tesla's mission does not necessitate dominating as much as the EV market as quickly as possible.

Tesla has said it can't do it alone. It is willing to share the Supercharger network etc. If Tesla does not allow others to have any meaningful sales they will likely stop trying to compete in the EV space and redouble their efforts to stop Tesla/EV market share growth by government fiat.

 

[Alketi]

They still intended to produce as many as possible, but ran into issues. The intent to maximize market share is still there, and the company is now in a better position to ramp up model 3 production without signifiant issues for various reasons (design, experience etc).

How do they ramp next year beyond the production and paint capacity at Fremont? Is there room for a 2nd Model 3 line at that factory? What are the latest figures on painting capacity? I think both may be limiting factors.

If they are, then Tesla needs more factories, which they'll announce this year -- possibly including that secretive Michigan plant. But, those will take time to come online in a meaningful way.

 

[GoTslaGo]

Thank you very much for this video. Very profound, and opposite to the index fund quote which has been disseminated so widely. I really appreciate it.

Video credit goes to @EnergyMax!

I had always assumed the index fund quote as well. This video was supremely eye-opening to me as well, which is why I spent the time to transcribe it. "Wow!" was my reaction when I heard it.