Hi, I’m a short seller

[beamthegreat]

ROE does nothing directly for shareholders.

Assuming, ROE = 16%, PE = 6 DIVIDENDS = 0%:

BV = book value
E = earnings
MCAP = marketcap

BV E MCAP
100
116 16 96
135 19 111
156 22 129
181 25 150
210 29 174
244 34 202

I'm not wasting my time arguing someone with no basic financial background.

 

[Boomer19]

No they're not. There's nothing preventing Daimler/BMW/other major auto players from switching to EV when the times come but there's simply not enough economic incentives to do it right now. Also, I'm not betting against electric cars. In the long run, EV vehicles will be as common as ICE vehicles and Tesla will just be another car company, assuming it doesn't bankrupt before then.

one factor, how many years do you think it will take them to build battery factories that can churn out enough to make a few million cars a year (or more, hopefully). or will they purchase the batteries from others, which would impact their margins.

i don’t contest that they are excellent at building cars. but the cost to convert to EV production won’t be 0. nor can they just flip a switch. some of them are well capitalized, so they will be able to convert. but this still takes time to do, in volume. along with building/partnering with a charging network (probably likely partnering and sharing costs across makers)

i too think that many companies will be successful with EV. but some of the reasons they took so long to take the plunge is 1) market, until tesla proved there was one, and 2) the expense. the transition will hurt near term earnings for them as they phase down/out ice production and depreciate that off the books, while adding capex for EV production. you’ll probably have better opportunities to buy lower if that’s the LT investing plan..

 

[Esme Es Mejor]

A stock bubble paying a dividend of 6.3% and trading at a P/E ratio of 6? Lol.

I like big dividends & I cannot lie. But when your dividend is high because you have no growth & SP is under pressure, and your P/E is low because investors are starting to price in your future earnings decline— yep, it’s a bubble. Doesn’t feel like it, but it is. Earnings fall off a cliff & that low P/E becomes astronomical.

For example, GameStop. A couple years ago, it had a great dividend & a low P/E. But it was a trap— luckily, I could see it coming & stayed away from it:
GME : Summary for GameStop Corporation - Yahoo Finance

 

[mongo]

Assuming, ROE = 16%, PE = 6 DIVIDENDS = 0%:

BV = book value
E = earnings
MCAP = marketcap

BV E MCAP
100
116 16 96
135 19 111
156 22 129
181 25 150
210 29 174
244 34 202

I'm not wasting my time arguing someone with no basic financial background.

Given neither BMW nor Daimler have issued any significant additional shares in the last 10 years, and their stock price is stagnant, I do not see how they have had any increase in market cap, let alone this doubling you are referencing. Book value is also not moving in a good direction. Perhaps your base assumptions are flawed?

But then, I'm just a cave man....

 

[beamthegreat]

I like big dividends & I cannot lie. But when your dividend is high because you have no growth

DAIMLER AG Revenues
2008-12 96100
2009-12 78924
2010-12 97761
2011-12 106540
2012-12 114297
2013-12 117982
2014-12 129872
2015-12 149467
2016-12 153261
2017-12 164330
TTM 165533

Given neither BMW nor Daimler have issued any significant additional shares in the last 10 years, and their stock price is stagnant, I do not see how they have had any increase in market cap, let alone this doubling you are referencing. Book value is also not moving in a good direction. Perhaps your base assumptions are flawed?

You forgot to factor dividends into account. Shareholders will see their portfolio more than double if they reinvested their dividends. And the market cap will double ~7 years from now, ceteris paribus. The reason there is no appreciation in market cap is because the stock trading at repressed PE ratios, which is great for value investors like me.

 

[hacer]

You forgot to factor dividends into account. Shareholders will see their portfolio more than double if they reinvested their dividends. And the market cap will double ~7 years from now, ceteris paribus. The reason there is no appreciation in market cap is because the stock trading at repressed PE ratios, which is great for value investors like me.

Wow you've come full circle. First it was all about the dividends and when shown that 6% doesn't quadruple in your time frame you say it's all about the price appreciation, then when shown there isn't historic price appreciation you're back to it's all about the dividends. Pretty sure next @mongo's going to show total return graphs including reinvested dividends and then you really won't have anything to fall back on. At least that graph will gradually increase over time, but nothing like the rate you're predicting for the future.

 

[beamthegreat]

Given neither BMW nor Daimler have issued any significant additional shares in the last 10 years

This is hilarious. Tesla shareholders act like this is a good thing. Rotfl.

 

[beamthegreat]

Wow you've come full circle. First it was all about the dividends and when shown that 6% doesn't quadruple in your time frame you say it's all about the price appreciation, then when shown there isn't historic price appreciation you're back to it's all about the dividends.

Wow has anyone ever taken any financial or investing courses here?

Companies only do 2 things with their profits.
1. Reinvest them.
2. Pay them to shareholder (dividends,buybacks,etc)

IF the company do not pay back to their shareholders, they automatically reinvest all of their profits. If they pay back all of their profits, they do not reinvest back into their companies.

In my example, I made it so that the company reinvested all of their profits. If earnings yield = returns on equity, it doesn't matter what the company do with their profits, assuming they are able to perfectly reinvest it back with the same ROE.

 

[Reality]

Wow has anyone ever taken any financial or investing courses here?

Welcome to TMC


and from what i can tell, the answer is very very few

 

[hacer]

This is hilarious. Tesla shareholders act like this is a good thing. Rotfl.

No, the whole point was that with a stable float (no new stock or splits) the share price alone is perfectly adequate to describe the non-dividend return. You seemed to not understand that because you went off on some bogus market-cap based on ROI table to explain that the stagnant stock price wasn't the true story. Historically, it is the true story for BMW and Daimler. The only thing you have left is dividends, and that's not enough to support your thesis. Never mind that their earnings are likely to tank soon as well.

 

[hacer]

Wow has anyone ever taken any financial or investing courses here?

Companies only do 2 things with their profits.
1. Reinvest them.
2. Pay them to shareholder (dividends,buybacks,etc)

IF the company do not pay back to their shareholders, they automatically reinvest all of their profits. If they pay back all of their profits, they do not reinvest back into their companies.

In my example, I made it so that the company reinvested all of their profits. If earnings yield = price/earnings, it doesn't matter what the company do with their profits, assuming they are able to perfectly reinvest it back with the same ROE.

Good god, the historical charts show that even if you want to claim that the book value went up due their "reinvestment" in themselves, the charts prove that nothing like 16% annual ROI has accrued to the shareholders. You know you're a shareholder right?

 

[Reality]

Good god, the historical charts show that even if you want to claim that the book value went up due their "reinvestment" in themselves, the charts prove that nothing like 16% annual ROI has accrued to the shareholders. You know you're a shareholder right?

i have no idea what you are trying to say

 

[sundaymorning]

DAIMLER AG Revenues
2008-12 96100
2009-12 78924
2010-12 97761
2011-12 106540
2012-12 114297
2013-12 117982
2014-12 129872
2015-12 149467
2016-12 153261
2017-12 164330
TTM 165533




You forgot to factor dividends into account. Shareholders will see their portfolio more than double if they reinvested their dividends. And the market cap will double ~7 years from now, ceteris paribus. The reason there is no appreciation in market cap is because the stock trading at repressed PE ratios, which is great for value investors like me.

A little fact for the Mercedes fanboys:

Daimler Electric Car Rollout Might Be Delayed Until 2019

“Stockholders in the company are also nervous about the news, given that Daimler's stock on the NASDAQ market has dropped more than 11 percent in the past few months.”

Shareholders want to see future growth, the past is the past.

 

[Unpilot]

But...but ....they can flip a switch and crush Tesla whenever they want!

 

[sundaymorning]

But...but ....they can flip a switch and crush Tesla whenever they want!

If the Germans don’t hurry and phase out their ICE in favor of EVs, they’ll begin to flip that manufacturing plant switch in 2025, to “Lights OFF.”

 

[UnknownSoldier]

Have you seen this? FIA approved all electric race car series based on P100D. Basically a bone stock P100D drivetrain with some safety requirements, suspension, and brake mods, and lightened interior. They haven't mentioned any other changes to cooling system. Electric GT's first race-spec Tesla Model S hits the track

Just to be clear, the Electric GT series that runs S's limits each race to an interval of 2 minutes. Do you know why? It's because the 2012-era AC induction motors on the S will overheat and throttle power back after 2 minutes of running at full power. This is well-documented by people who have run the S on the Nurburgring.

Now the 3, having switched to permanent magnet motors, can run for long periods at full power without overheating. An Electric GT series running Performance 3's can probably do a full race which lasts a lot longer than 2 minutes and we can expect as the Performance 3's make it to market that the Electric GT will consider adding such a series.

 

[mongo]

But...but ....they can flip a switch and crush Tesla whenever they want!

Not this switch:

And here is the other shoe:
Daimler Electric Car Rollout Might Be Delayed Until 2019

"The company, which also makes Mercedes-Benz vehicles, announced it won't be until 2019 before it's able to make the EQC SUV line commercially available. Assessing the economics of creating the line as well as modifying factories to build the model are to blame for the delay, even though a Daimler executive declared on Monday that things were going as planned to put the vehicle on the market this year."

 

[skitown]

Weird, now Audi is signaling a delay to their Tesla killer.

Subscribe to read | Financial Times

Audi postpones electric SUV launch in wake of CEO arrest
Audi has cancelled the official launch event for its all-electric SUV, the e-tron, citing “organisational issues” one week after chief executive Rupert Stadler was arrested.

Audi, Volkswagen’s most profitable unit, said late on Monday that the Audi Summit, set for August 30 in Brussels where the e-tron will be built, has been cancelled. Instead, the summit will take place at an undetermined time and location in the United States......

 

[Pale Blue Dot]

Weird, now Audi is signaling a delay to their Tesla killer.

Even after all these cars launch, the dealerships won't put effort into selling them until they make up the majority of the portfolio. There's minimal service maintenance and repair revenue from them. And they won't make up the majority of the portfolio until the major's retire their ICE offerings. the major's won't retire those offerings until they've made ROI on the R&D for those models. It will be a slow process for the competition, Subaru just announced their first hybrid for the JDM only.

 

[Esme Es Mejor]

DAIMLER AG Revenues
2008-12 96100
2009-12 78924
2010-12 97761
2011-12 106540
2012-12 114297
2013-12 117982
2014-12 129872
2015-12 149467
2016-12 153261
2017-12 164330
TTM 165533

Coal production had years of growth, too, until 2008. Then, no more growth:
https://upload.wikimedia.org/wikipe...l_production.png/800px-US_coal_production.png

Daimler has managed to grow their revenues as the economy and auto market has grown. What are they going to do as the market for ICE vehicles decline? They’re facing a triple threat of recession, oil prices, and EV disruption.

It isn’t just coal. Blockbuster Video had years of growth until the market changed. Ditto for Barnes & Noble, Toys R Us, Nokia, and Blackberry. Change is coming, and instead of investing to be part of it, Daimler is investing in dividends.