2017 Investor Roundtable: TSLA Market Action

[erthquake]

Hmmm.

Joe Retail Investor? Perhaps.

But I'll be a monkey's uncle Warren Buffet if Fidelity, T. Rowe Price, Baillie Gifford, Tencent, Norway's statens pensjonsfond...et al are listening to leetle ol' us. They are the ones to whom I was referring about moving this stock and its price.

I wish this forum had some sway on the market. Can you imagine if we got TrendTrader on CNBC? He'd be the anti-Chanos X 10!

Just give us five minutes of airtime with with any of this forum's heavy hitters going against Chanos or Mark BS. That would send us to the moon.

 

[dakh]

You can think about a company the same way: a machine that makes a machine. Distinguish between what a company is and what it is currently producing. An anti-example would be, say, Netscape. They had amazing market share but their code base was *sugar* (because they were too focused on quick success and not fundamentals), they didn't have a vision or ability to execute well. Now look at Tesla, it is the exact opposite. The investments they make are pretty much exclusively into long term, fundamental value. They are also synergistic, amplifying returns on those individual fundamental investments since they together produce more than the sum of the parts. Name just about anything that they are going after and you'll see that. Their execution is very good, their vision is clear -- it's easy to see.

To bring it back on topic for this thread, this is, in essence, the market arbitrage opportunity. People who mostly focus on results will under-value the company because they can't predict what this machine is going to produce in the future. They see what is it producing now, kind of linearly extrapolate the future, and yell "short!".

 

[22522]

The accountant mentality takes customers for granted.

Traditional automotive industries are run by accountants.

Half the traditional automotive industry customers are "already out the door" psychologically. Maybe the "Body by Fisher" trim falling off on them, or the flash on the plastic touch points, or adhesive leaking down the trim 'as if blood from a horror movie' finally got to them.

They say contempt is an emotion that signals the end of a relationship. Auto industry customers have been treated with contempt for a long time. Those companies are done.

 

[TrendTrader007]

TT007,

I love your confidence and am also LONG TSLA. After taking a factory tour two months ago I find the short position unfathomable and ridiculously risky. And, since they are essentially betting against a bright future, I wish them nothing but ill will! But, would you change your position in any appreciable way if it became clear that the Model 3 rollout to employees would not begin until November or even December of 2017 and to the rest of the reservation holders beginning in 1Q18?

We all know the Model 3 has been designed with manufacturing ease and speed as core tenets. We also trust that TA has learned hard lessons from the Model X rollout. Nevertheless, TA is in uncharted waters when it comes to the scope and scale of the Model 3 ramp and rollout and delays are almost inevitable, especially given the bold decision to bypass traditional auto manufacturing timelines.

I think this is a very important question to consider for both short and medium term TSLA investment horizons. I don't think it will have much relevance past 3Q18, when the production numbers will begin rapidly accelerating and the Model 3 begins to capture the car buying public's imagination.

I'll liquidate all my J 2018 calls by August if it becomes clear by next ER that TSLA is not going to go parabolic this year and take my losses in calls. I'll continue to hold all my J19 calls
Common Stock however is not to be sold unless and until the stock goes super parabolic or for another several quarters whichever comes first
FYI all my calls are wildly profitable as of now with the exception of J19 $600s however if SP goes down the tube then I'll liquidate j18 by August. OTOH if SP continues its rise as I fully suspect then I'll decide when to liquidate my J18s
As of now I've been buying TSLA common and calls with both hands like there's no tomorrow

 

[TrendTrader007]

I wish this forum had some sway on the market. Can you imagine if we got TrendTrader on CNBC? He'd be the anti-Chanos X 10!

Just give us five minutes of airtime with with any of this forum's heavy hitters going against Chanos or Mark BS. That would send us to the moon.

I don't think too many of those know it alls on CNBC have $10 million of their own money riding on this stock
They buy stock with OPM and act brave on CNBC
If my trade succeeds I'll make more money in a day than most of those talking heads will make in a year
And as far as hedge fund managers or fund managers I'll supercede them too eventually despite my handicap as an individual investor
It's all about compounding

 

[T3slaTulips]

And what does Ford have to add to Tesla?

They'd let us call it Model E.

 

[ValueAnalyst]

I'll liquidate all my J 2018 calls by August if it becomes clear by next ER that TSLA is not going to go parabolic this year and take my losses in calls. I'll continue to hold all my J19 calls
Common Stock however is not to be sold unless and until the stock goes super parabolic or for another several quarters whichever comes first
FYI all my calls are wildly profitable as of now with the exception of J19 $600s however if SP goes down the tube then I'll liquidate j18 by August. OTOH if SP continues its rise as I fully suspect then I'll decide when to liquidate my J18s
As of now I've been buying TSLA common and calls with both hands like there's no tomorrow

I couldn't send you a PM, but can you please start a conversation?

 

[Cattledog]

They'd let us call it Model E.

I'd like that since I bought teslamodele.com a few years ago in speculation!

 

[ValueAnalyst]

I wish this forum had some sway on the market. Can you imagine if we got TrendTrader on CNBC? He'd be the anti-Chanos X 10!

Just give us five minutes of airtime with with any of this forum's heavy hitters going against Chanos or Mark BS. That would send us to the moon.

My guess is that we're already going against them on multiple platforms.

 

[ZsoZso]

that's precisely where i disagree... this board represents the consumer sentiment of TSLA... again... my opinion... but the majority of this board is made up of Tesla vehicle owners... stock owners and vehicle owners... it's a strange mix when looking at something like F... where's the F board where the vast majority are F enthusiasts?

Bingo! This is exactly the point! Those who own and drive a Ford are NOT enthusiasts and do not become advocates and investors, they do not love the car, they put up with it as a cheap solution that is (barely) acceptable to them and complain a lot about it.

I bought the car in 2014, then became an investor. If I have to drive an ICE car for a day (e.g. a rental on trip) I feel extremely uncomfortable and HATE the experience, can't wait to get back into my Tesla. I would never buy another ICE car in my life, would not even accept one to drive if it was given to me for free. I might consider a different brand EV if it was better than a Tesla, have not seen any offering that came even close to that yet, though. This is the reason I am investing in Tesla.
The Model 3 will open up the market for millions of people to experience the same as what I experienced in the past 3 years. That will change the market possibilities forever. This is what you are not getting.

 

[SBenson]

2016 deliveries: F + GM + BMW + Mercedes + VW = 35.00m+
2016 deliveries: TSLA = 00.08m

you just declared "toast" of 5 companies because Telsa delivered 0.2% product they did...

does this really make sense to you?... or anyone?

if Tesla delivers 120k cars in 2017... does that change the equation?... let's see...

yeah... it does... it changes it to 0.34%... PERCENT!!!!

how about if Tesla delivers 300k cars in 2018... how does that change the equation?

0.85 PERCENT!

ok... how about if Tesla delivers 1m cars in 2020...

2.85 PERCENT!

so the most dramatic goal for Tesla is 1m by 2020... and now they've "stole" 2.85% of the market that you've declared "toast"

ok... how about 4m by 2024

11.42 PERCENT!!!!

wow... man... those guys should be crying in the fetal position by now... right?

EDIT:

question for those that are capable of simple math... what is 11.42% of the combined market caps of those declared "toast"?

hint: it's roughly $35b... or 30% LOWER than TSLA's market cap today!

Fact 1: I'm going to regret this.

- What is the iPhone market-share in terms of #units?
- What is iPhone market-share in terms of profits in the mobile phone market?

Fact 2: Nobody can knock sense into you. Way too many people tried for months together on TMC. Neither you stop, nor do we. What a worthless exercise.

 

[elasalle]

Fact 1: I'm going to regret this.

- What is the iPhone market-share in terms of #units?
- What is iPhone market-share in terms of profits in the mobile phone market?

Fact 2: Nobody can knock sense into you. Way too many people tried for months together on TMC. Neither you stop, nor do we. What a worthless exercise.

Let's agree that 2016 deliveries: F + GM + BMW + Mercedes + VW = 35.00m+ are produced.

However, do also consider that with Model 3 success, the number of people buying from the above will/can go down. So it's not what's produced, but what's consumed (supply/demand eco 101) ...

 

[ValueAnalyst]

I wish bears didn't hijack the thread here so we could increase the quality of discussion further.

I am convinced that bulls know the risks to Tesla 10x better than bears.

 

[kenliles]

^^^looking in the wrong place and in the wrong context for TSLA valuation---

Alphabet’s self-driving Waymo unit could be worth $70 billion, more than GM, Morgan Stanley says

"
The firm's Waymo estimate puts the self-driving unit about on par with Uber's current private valuation and is way bigger than Ford's current public market cap.

Morgan Stanley told investors Alphabet's autonomous driving unit Waymo could be worth $70 billion and its significant potential isn't being properly valued in the company's current stock price

"Waymo is a potential spin-out candidate (over time) and our scenario analysis shows how Waymo could be worth $70bn+...adding ~12%+ to GOOGL's current EV [enterprise value]," analyst Brian Nowak wrote in a note to clients Tuesday.

Uber is likely valued at around $50 to $70 billion. The market value for Ford, which just fired its CEO for a lack of progress with sharing and autonomous vehicles, is about $44 billion. GM's market value is currently about $50 billion.

The analyst cited Waymo's recent partnership with Lyft, which will give the company more access to important "miles-driven" data. He also laid out the case for Waymo's "potential to be a material value creator" for its Alphabet-parent:

"If we assume that Waymo can grow to ~1% of global miles driven by 2030 (based on a fleet of ~3mn cars each driving ~65k miles/year) and that Waymo can generate on average ~$1.25 in revenue per mile driven, it implies a ~$70bn Waymo enterprise value. More miles/year and revenue/mile could lead to an enterprise value of ~$140bn."
"

Map that assessment to TSLA and the entire preceding discussion would be looking in the wrong space entirely,
and a waste of conversable bandwidth IMO.

Recommend clearer thinking for disruptive investments -
analogous comparatives with spaces occupied in the past, yield exactly the wrong investment decisions---
my 2 pennies

 

[JRP3]

I wish bears didn't hijack the thread here so we could increase the quality of discussion further.

All I see are arguments with clueless ghosts. You could all have the same experience, and the board would improve.

 

[SunCatcher]

All I see are arguments with clueless ghosts. You could all have the same experience, and the board would improve.

Ditto. Most people, when ignored, go away. When given attention, tend to stick around for more. Just saying.

 

[anticitizen13.7]

I wish bears didn't hijack the thread here so we could increase the quality of discussion further.

I am convinced that bulls know the risks to Tesla 10x better than the bears themselves.

I have no problem with bears. I have a problem with trolls, but that's a philosophical disagreement between myself and the site admins.

 

[Reciprocity]

^^^looking in the wrong place and in the wrong context for TSLA valuation---

Alphabet’s self-driving Waymo unit could be worth $70 billion, more than GM, Morgan Stanley says

"
The firm's Waymo estimate puts the self-driving unit about on par with Uber's current private valuation and is way bigger than Ford's current public market cap.

Morgan Stanley told investors Alphabet's autonomous driving unit Waymo could be worth $70 billion and its significant potential isn't being properly valued in the company's current stock price

"Waymo is a potential spin-out candidate (over time) and our scenario analysis shows how Waymo could be worth $70bn+...adding ~12%+ to GOOGL's current EV [enterprise value]," analyst Brian Nowak wrote in a note to clients Tuesday.

Uber is likely valued at around $50 to $70 billion. The market value for Ford, which just fired its CEO for a lack of progress with sharing and autonomous vehicles, is about $44 billion. GM's market value is currently about $50 billion.

The analyst cited Waymo's recent partnership with Lyft, which will give the company more access to important "miles-driven" data. He also laid out the case for Waymo's "potential to be a material value creator" for its Alphabet-parent:

"If we assume that Waymo can grow to ~1% of global miles driven by 2030 (based on a fleet of ~3mn cars each driving ~65k miles/year) and that Waymo can generate on average ~$1.25 in revenue per mile driven, it implies a ~$70bn Waymo enterprise value. More miles/year and revenue/mile could lead to an enterprise value of ~$140bn."
"

Map that assessment to TSLA and the entire preceding discussion would be looking in the wrong space entirely,
and a waste of conversable bandwidth IMO.

Recommend clearer thinking for disruptive investments -
analogous comparatives with spaces occupied in the past, yield exactly the wrong investment decisions---
my 2 pennies

Thinking about this Tesla network a bit and the advantages that they might have today. The car does not have to be level 5 to start to be usable in a network. As long as the person renting the ride has a valid drivers license it could start as more of a Maven or even Turo like car sharing service. All the cars would need to do is be able to get to a location where they could meet the drivers. In places where Maven operates, typically in congested areas where there are tons of people and those people dont always have cars, like downtown Chicago for example. When you go to work in the morning, you could leave your car in a public parking lot, with charging of course and renters could pickup the car. This could all be done through an app. You dont even have to line things up in advance, renters just have a map where they can pickup a cars that are available. They get charged by the mile/hour. They would have to go through a process to be confirmed as being able to drive, much like Turo does. The cars could be taken for hours or days depending on the settings set by the owner. Towards the end of the year, the cars should be able to exit the freeway and park in lots that are accessible from the train lines or shuttle lines from the airport.

The issue is returns. People use Uber as two distinctly different one way trips or more, but typically different drivers each time. Though the car could take another ride from where it is left and if the person does need a 2 way trip, they can reserve it for 2 way and its basically their car until it is returned. Costs could be adjusted based on where the car is returned, higher costs for being returned at a different location then where it is picked up and higher charges for returns far away from congested areas where the car could find another renter. I dont think they would do this, but someone could build an app and use the APIs to allow the car to be unlocked and started. Please cut me in for 2% gross revs if you do use this idea. You can pay me in Tesla stock.

 

[1kEE]

I enjoy reading some of the bear comments... especially from bears that are flexible enough to be bullish short term despite their firm bearish long-term sentiment. Mixes well with the long-term bulls that are short term bearish!

And now is the perfect time to see all angles, considering we really don't have a good read on short-term direction.... anyone's prediction may come true tomorrow.

 

[Snapdragon III]

I think most of the estimates on how much a self driving car will earn are way, way off base. Elon seems to agree. My understanding of his position, which I agree with, is that very soon self driving cars will be the norm, and the cost of ride sharing will plummet due to competition between companies. Elon has mentioned that "Taking an autonomous ride share will be cheaper than the bus." "The income from the Tesla network will mostly offset purchase price of Model 3." (Paraphrase from memory of exact quotes)

I still think it will be a profitable business, and good self driving will be necessary to sell any cars in the future, as nobody will buy a car without it, but taking anything close to current ride share pricing and applying it to self driving cars 3 or more years out, is a huge mistake in my opinion. The upside to this is that as the prices crash, the addressable market will grow dramatically. This will be especially good for companies like Tesla, who's model has the customers paying for the cars, and won't have to invest 100's of billions of their own money in a fleet of cars, that will run on very thin profit margins. I believe that if they can set it up, so customers have a close to free car, if they put it in the network when they are not using it, they will have more demand than they can possibly build for years to come. My guess for the best case scenario over the medium to long term is that a customer buys a $40,000 Tesla which they put in the network, and over the next 5 years the car makes around $50,000. $40,000 goes back to the customer, and Tesla skims off the other $10,000. This sounds like a good business to me, but nowhere near the $1.25 per mile Morgan Stanley is talking about. If this scenario turns out to be close to how it play's out, Tesla's other huge advantage seems to be that the hardware for their self driving system appears to be much cheaper, and built with much larger scale than what Waymo, and others seem to be putting together.