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Articles/megaposts by sleepyhead
- Thread starter sleepyhead
- Start date
bsd
Member
"Crippled" seems a bit of an exaggeration. I've yet to see a supercharger, and yet have managed several major road trips. And there are other DC charging protocols. The supercharger network is a great convenience, but hardly a necessity.
In 2016 too, according to your link. That's 60k BEVs in Beijing alone.
In that year, Model S/X production should be what? 120k? Beijing wants half of them.
Although with a dose of reality, many of those are very short range in-city cars served by low cost scooter class (NEV acronym actually originates as Neighborhood Electric Vehicle). That said, I personally believe China market is the Tesla perfect storm if handled right. Disagree with Sleepy that it will be huge though... I believe, ginormous may more accurate, requiring its own GigaGiga factory. I suspect they may be up for that as the population begins to choke on the dragon smaug
He said the wait time is accelerating, not that demand is accelerating. For example, if there were 10 orders a day and 5 cars built a day, wait time would be getting longer. If orders dropped to 8 per day, you would have dropping demand but still increasing wait time. All it takes is more orders than the current run rate (well, average run rate between time of order placed and date of delivery) to make wait time longer.
This happened with early us deliveries, and will happen with china, especially in the few months surrounding the start of deliveries as is the case now there. What Elon has said is not a secret message about demand. It is a recognition of early supply conditions which he learned through experience and had already expected even before it happened here through simple projections.
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A supercharger network doesn't preclude some other entity from building another charge network, just as it isn't stopping other networks in North America or Europe. If it is important to China policy makers, I hardly see why they would inhibit Tesla.
This may come across as pedantic, but given Elon's training in physics I doubt his use of the word "accelerating"--which means something distinct from "increasing"--was an accident.
In the first example you gave, wait times would be increasing at a constant rate of 1 day per day but not accelerating. If demand drops to 8, wait time would still be increasing, but would be *decelerating*. The specific use of the word "accelerating" implies that the rate of change of the rate of change (second derivative) of wait times is positive, implying growing demand.
Thank you for your post. This is exactly how I understand it as well. A lot people dismiss things that Elon says, but if you actually listen to him then you can see that he is telling the whole story; while the whole world is ignoring him. Then a month later a "breaking news" story comes out and the stock goes crazy, even though Elon already hinted this will happen in a previous comment he made. I love listening to Elon, because he always spills the beans, but in a cryptic way. In the case of Chinese demand, I though they were pretty clear on the conference call in what they meant to say.
My Current Opinion on TSLA the stock:
Considering that TSLA went up 30% in 3 weeks, I think that it moved a little too much too fast. There is not enough catalysts out there to push it through the 50 day moving average right now. Therefore, a technical bounce and reversal should have been expected. I still think that we are going to be range bound in the $135 - $155 range until we get a big catalyst, be it positive or negative. I picked this range for a reason in my last megapost on 12/5/2013:
http://www.teslamotorsclub.com/showthread.php/23461-Articles-megaposts-by-sleepyhead/page16
The reason I picked this range is because the last great catalyst we got (German clean bill and positive analyst notes) was good enough to break us through the strong resistance around $134 (which became very strong support), but not enough to break us through the next strong resistance of ~$155 or the 50 day moving average. Since my post on 12/5 TSLA traded in a range from just under $135 to just under $155. Therefore, I was exactly correct (until now) in my range and it was not just pure luck:
When you look at stock charts you have to look for the very strong resistance and support levels, and then think how strong the catalysts need to be in order for the stock to break through those levels. At this point in time, there is nothing out there that will move above the 50 SMA or below the 20 SMA. I think that we will see a short consolidation period in the mid $140's and a pennant will form. Then a strong catalyst in either direction will signal which way TSLA will break out of this pennant. The 50 SMA and 20 SMA will continue to converge and squeeze TSLA into a very tight coil and coincidently there will be some big news story on the day that the 20 and 50 cross each other.
That last part is just pure speculation on my part, but overall I am expecting a 1-3 week consolidation period from TSLA in the mid $140s.
No, I didn't because I slept in. I didn't think that the news was big enough to warrant a 10% move. But the weeklies I would have bought at market open would have been the Dec27 $155's. They were selling at $0.60 at low today, and already above $2.70 at high. Easy money, but I didn't think this news is 10% worthy though.
A lot of people are on vacation and stocks can do weird things around these holidays when a news story pops up.
Instead I bought some Twitter puts. The stock has gone parabolic, is in a bubble and the gap open will have to get filled very quickly. I don't know anything about TWTR other than its way overpriced, but this is a short term speculative trade.
As far as TSLA goes, I think that the market already priced in 90% of a clean bill from NHTSA. After Germany the Model S the stock has gone up like 20% and now another 10% with NHTSA 5-star crash rating for 2014. I think that the market has taken these two these as a precursor for a clean bill.
If NHTSA does give a clean bill then it will move TSLA a little. But if the bill is far from clean then it will move TSLA a lot. Be careful guys and stay prepared for both possibilities.
That said, I am fairly certain the bill will be clean, but that is just an educated guess on my part.
I'm in this same camp (on both actually). Been looking for a good TWTR entry, almost pulled sub $40 but it's way over priced currently. Planning to short it with puts as well but will wait closer to the reality of reporting time
Back on TSLA, also agree, I think the fire cycle is nearly complete both down and up, the better bull catalyst will be in 4-6 weeks when several events coalesce to form a reality shift for TSLA shorts
I find it so ironic to see people on this forum talking about shorting an overpriced, overhyped, high-flying tech stock based solely on valuation.
Yeah, that's a fair point. Especially with my example of TWTR which I believe has a solid future. Your point would carry more weight if TSLA was not 25% off its all time high though - not true of any of the other examples. But still a valid point.
I can't decide however, whether
Tesla Investors Forum posters are bullish on TSLA (shocker),
bearish on non-TSLA all time high stocks, or
your observation of irony is perhaps, ironically overly assumptive.
In the spirit of the season,
I'll leave it to the reader.... Happy Holidays all!
InTheShadows
Active Member
I am bullish on technology that changes our lives and the way we live. Solar panel manufacturers and TSLA both fit these bills.
My thoughts are nearly identical to sleepys as far as the future of both tsla and solar. He just has way more investing experience and ways to quantify my gut feelings.
Btw, all of my suppliers have told me price increases for solar next quarter. 2-3 cents/watt.
My thoughts are nearly identical to sleepys as far as the future of both tsla and solar. He just has way more investing experience and ways to quantify my gut feelings.
Btw, all of my suppliers have told me price increases for solar next quarter. 2-3 cents/watt.
I think that the correct word would be "hypocritical" instead of "ironic" :wink:
Anyway, my short put position in TWTR is not "based solely on valuation" and as a matter of fact is not based on valuation at all. I wrote that it is a short-term trade, because the stock has gone parabolic and I am expecting some profit taking on Thursday. I am looking at this as a trade and hope to cash out by the end of the week. If I were shorting TWTR based on valuation, I would be buying Jan'16 puts (well actually I would never buy them, because they are ridiculously expensive and it is impossible to make money on them).
Thanks for the update on solar module prices. I am glad to hear that prices are not going down (but sorry to hear this from your business perspective). The good news is that you can hedge your business module prices by purchasing stock in the companies you buy from. I am interested to hear how are the "soft" costs coming down in the US when it comes to rooftop installations?
This also confirms my suspicions that module prices are not going to come down 10% in 2014 like IHS predicts. That is why I always look to do my own primary research on the solar industry. If IHS says that panel prices are going down 10% it might cause a sell-off in solar stocks. But my research says it is not true, so I can buy these stocks at a discount thanks to IHS. Then some time in the spring or summer of 2014 the market will realize that ASP's are stabilizing and not going down like IHS said. The stocks will have to go up a lot in order for the share prices to reflect this "new" reality that I knew would happen all along.
This is how you can make the big returns in the stock market. I am not saying here that I am right and IHS is wrong. I am saying that I expect to be right and that I think IHS is wrong. And I am placing my bets accordingly. If I turn out to be right, then I should make a lot of money in the stock market. If I am wrong then these stocks should not go down too much from here, and I will lose a lot less than I could have won if I was right. That is what I call good risk/reward in my own book.
Remember that IHS (or myself) is just a group of guys sitting in front of computers all day trying to look into a crystal ball. While Theshadows is out there in the field actually buying and installing these products. Who are you going to believe when it comes to module ASP's?
Here is a well balanced article on solar that I linked to in the alternative energy thread:
First-Tier Manufacturers May Gain Profit as PV Demand Reaches 42GW in 2014_EnergyTrend PV
Even though it is a balanced article it still has many flaws in it (as do the things that I write on solar) and that is why you have to do your own research on the topic. They write:
As for USA, they may start lower the price to win market share.
Bad grammar aside, this contradicts what Theshadows just wrote in this thread. Once again, who are you going to believe? Correct me if I am wrong, but Theshadows has already received multiple price increases over the last two quarters.
IHS predicts 41GW's of solar installations in 2014:
IHS predicts 41 GW of PV installations in 2014 | Sun Wind Energy
While Energy Trend (linked above) is predicting 42GW's.
Solarbuzz came out with a new report the other day at 49GW's
Strong Growth Forecast for Solar PV Industry in 2014 with Demand Reaching 49 GW, According to NPD Solarbuzz | Solarbuzz
That is a huge 20% difference from IHS to Solarbuzz. Who are you going to believe?
Solarbuzz just 7 months ago was predicting 31GW's of demand in 2013, now it is up to 36GW's.
IHS is saying 9.8GW's in Q4 2013, Solarbuzz is saying 12GW's in Q4. Once again, who are you going to believe?
Source: Solarbuzz article linked above
Looking at the graph, the trend is pretty clear and if anything it is accelerating.
Tier 1 Chinese module suppliers are going to get the lion's share of business, because they have best perceived quality and they are great at cutting costs, so you can't simply compete with them based on cost anymore.
Here is another article (not sure if this will be official policy, and you have to take these articles with a grain of salt):
China hands to 75% of solar cell makers- Nikkei Asian Review
The Chinese government is pushing for a drastic shakeout of the country's overcrowded solar cell industry, supporting only a quarter of players and practically telling the rest to get out of the business.
Such a policy would ensure further consolidation in the industry which will lead to bigger profits by the top players in the industry.
I fear that if we really do hit 50GW's of demand in 2014 and the industry continues consolidating, then we will see a panel shortage in 2014. In the short run the stock prices of companies like CSIQ, JKS, TSL, JASO and maybe even YGE, SOL, and others will see huge spikes. In the medium term though the supply/demand imbalance will cause some unpredictable outcomes: such as higher ASP's that will lead to increased competition (from new entrants) and lower demand. Maybe we will see higher poly prices by a lot, it is really hard to predict the outcome.
If the Tier 1 players (both for cell and module makers as well as poly and wafer producers) are smart then they will not allow APS's to climb too high too fast, because this could lead to new capacity and cause another boom and bust cycle. If they are smart, then they will keep ASP's low and stable enough to earn a decent profit, but not enough for any newcomer to make a profit. They will then make their big profits from the downstream business, which is really hard to break into.
The key to investing in the solar industry going forward is to do your own research and not rely on what anyone else has to say. E.g. based on my research I believe that JASO should benefit from industry conditions immensely and the share price does not reflect this opportunity at all. If I am wrong though, then I can blame myself and won't care too much about it. But if I bought the company because someone on the internet recommended it (such as some random guy named sleepyhead) then I would be really upset if the stock went down, and I bought it without doing my own research. I would also be upset if I didn't invest in the solar industry because I believed in the IHS research and then it turned out to be incorrect.
There are a lot of misconceptions on the solar industry and all news stories, articles, and even "independent" research shops continue perpetuating these myths (such as huge overcapacity). If you really want to invest in this industry then you should spend at least a dozen hours per week researching solar. If you don't have the time to commit then I would recommend looking elsewhere to invest. The industry dynamics are constantly changing and individual stocks can quickly fall out of favor (such as SOL) and be good long candidates one day and great short candidates the next day.
The one thing I can recommend is to dismiss all research reports and news stories on solar and do your own PRIMARY due diligence.
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Sleepy, thanks again for your tips and your repeated warnings to not rely on your tips. What would be even more helpful to us who want to take your advice would be to hear why you think JASO should benefit immensely (what company features? what industry conditions?). That would help us learn to fish, rather than give us fish and warn us not to eat it.
Merry Christmas to all fishermen.
Sleepy, thanks again for your tips and your repeated warnings to not rely on your tips. What would be even more helpful to us who want to take your advice would be to hear why you think JASO should benefit immensely (what company features? what industry conditions?). That would help us learn to fish, rather than give us fish and warn us not to eat it.
Merry Christmas to all fishermen.
PeterJA,
I just used JASO as an example, but even if I told you exactly why I like JASO it is still not teaching anyone to fish because it is based on my own personal assumptions. I like CSIQ most as a Chinese solar play, and I like SPRW best as far as overall risk/reward long term. JASO is a gem in the rough type of play that might work out and pay off big, or it doesn't. I like JASO for the following reasons:
It was not running at full capacity, but it is now (or will be very shortly). This alone cuts costs by a penny or two due to under utilization. Capacity is at 1800MW module and 2500MW cell (plus 1000MW wafer). 300MW of module is not used due to manual process and will be updated and automated soon. New orders for machinery have been reported. And it looks like they are adding another 400MW-500MW of module capacity. If they get this all together then we are looking at 2200MW module capacity that will about cover all of their cell capacity. That is 540MW of module capacity per quarter.
In Q3 they sold about 300MW of modules and 200MW's of cells. Sometime next year they might be selling 500MW's of modules (and some cells). They also guided towards $0.02 cent reduction in in-house costs for Q4 and 3%-4% more in 2014. ASP's have been gradually going up for JASO as well. Gross margins should increase and lead to profitability shortly.
They guided towards 200MW of completed projects in 2014 as well. If you add all of this up then you will get close to $1.7b-$1.8b in sales in 2014. Even if they don't get the module capacity up to speed until Q2 2014, they can still earn over $1.5b in sales in 2014 which will easily beat analyst estimates.
But the real key with JASO will be margin expansion due to cost cutting in Q4 and 2014. But if ASP's continue to increase then it is only a bonus to them. They have higher quality products than other Chinese and they have a lot of mono products which are more suitable for distributed generation due to higher efficiency. DG is the future of solar and that is another reason I like SPWR.
Overall there are many things that can go wrong for JASO too, but if things go as expected this stock is an easy double. Something unexpected would have to happen to JASO in order for them to not do well in 2014.
Oh, and they have the best balance sheet when compared to Chinese peers and that will help a lot since they can leverage it to build projects, expand capacity, etc.
I just don't see much downside to JASO, but once again I am not really teaching how to fish here. I am expressing my own expectations for a company as well as the industry it is in. You have to teach yourself how to fish in this industry. The only way to do it is to do your own research by reading company conference calls, PR's, etc. read industry news, etc. and come up with your own ideas.
There will be a lot of great investment opportunities in solar, but there will also be plenty of losers. It really requires a lot of research just to have a chance to make the right decisions.
You are showing us what kind of information you analyze, which is certainly better than nothing when we head to the lake. Thanks again.
If you want feedback or other ideas about your expectations, you have to tell us what they are, as you just did. How is your solar website coming?
Sleepyhead: I don't normally join in to write write praise or just say "+1" when others do, but in this case it is more than deserved. I really appreciate your reasoning, analysis, and (occasionally) something that is so compelling that I treat it as a tip despite your own advice. You're performing a real service here. Thank you.
Thanks. This is my way of giving back to all of the great people here at TMC. I have learned a lot from everyone and believe that we have a great community here. Hopefully in the investors section we can all help each other make money with TSLA on the way up, but more importantly on the way down by hedging and/or taking directional bets.
As much as people would like to see TSLA go up in a straight line, it is not going to happen. There will be many pullbacks along the way and if we spot them in advance then we will have a chance to protect our profits. I know that some people here don't like it when I (or others) have negative things to say on TSLA, but those discussions are necessary to make good investment/trade decisions; as long as the person has honest intentions. I try to stay objective even if I do have a lot of money tied up in a stock. It is easy to get caught up in the exuberance when TSLA is making new highs every day, which makes it that much harder to spot the pullbacks when they do occur.
As far as TWTR goes, I cashed out my puts at a loss today. But before doing so I doubled down at market open and bought some Dec. $70's when TWTR was above $73. I cashed those out quickly for a 30% gain to offset the majority of the losses I took on my other TWTR puts (net loss was minimal). I knew that the stock would come back after the great open today; there was no news stories to support the move. My mistake in shorting TWTR on Christmas Eve was that I did not see the Wunderlich (who?) research report that came out that day. I checked the news feeds quickly to see if there is any reason for the TWTR rally but didn't see anything. It wasn't until after I bought the puts that I realized that there was a research report praising TWTR.
Even though I knew TWTR would pull back today, I still didn't have the guts to hold on the puts as long as necessary. I didn't want to waste more money trying to short a "cult" stock. I am treating this is a great learning experience, since now I know how the TSLA shorts felt this year. It really is hard to watch a stock go up like crazy and miss out on it. So then you decide to short it, and it goes up more. Then you double down, because you are stubborn...
Sounds familiar?
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