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Tesla Investor's General Macroeconomic / Market Discussion
- Thread starter FluxCap
- Start date
I will be out of the market in advance of the presidential election. Maybe Sept. This Bull market is very old and there is some scary outcomes. I see late this year as being the confluence of old Bull market, and reason to be cautious. Maybe Hillary being famously in the pocket of wall street would be the favorable outcome (said from a Democrat, don't ban me!). Other candidates would be a reason for concern.
Yep, I have very similar thoughts. I was curious if I was the only one. Guess not. We've recently seen how much Macro can effect TSLA. I plan to get out completely by October at the latest. Core shares and all. I may continue to play options a little depending on how things look.
The other reason I plan to get out is I may need the cash. Between building a house and needing to buy a car...
I've had vast amounts in cash for a long time, through the entire bull market, so you might guess that my macro prognostications have been more negative than they should have been. So ignore my thoughts. They're not investment advice. 
I tend to ignore macro trends unless they have a direct impact on the earnings of a company I own stock in, and frankly I think Tesla is immune to the macro trends right now, because Tesla is eating the *top end* of the car market, which is not nearly as influenced by general unemployment levels etc. as the rest of the market.
Anyway, I've been sucking up information on the state of the oil, natgas, coal, nuclear, wind, solar, battery, and electric car markets.
Oil I've figured out; it'll stay low for a while, and then creep back up as the fracked wells deplete, but be unable to get a sustained runup due to the inroads of electric vehicles and electric heat-pump heating. Volumes will drop and eventually it'll become a niche fuel. Alternatives to oil have cheaper TCO in every single use case except airplanes -- even with $20/bbl oil -- and they can't produce oil much cheaper than $20/bbl, so that's it for oil. It's just a question of how long it takes.
Coal I've figured out. Thermal coal is dead; even with a price of $0 at the minehead, the transportation cost makes it expensive at the power plant, and with very few exceptions it's cheaper to run natgas plants (and will continue to be even if natgas prices rise), cheaper to build wind turbines, cheaper to build solar farms, cheaper to build transmission lines, and of course coal has huge mercury and other toxic emissions which people are not going to tolerate much longer.
Nuclear has priced itself completely out of the market and (sigh) taxpayers will probably have to pay to clean it up.
Solar will keep following Swanson's Law. The excessive prices for rooftop solar in the US will eventually match those in Germany or Australia. It'll keep being installed at a roughly exponential rate.
Wind is already the cheapest form of electricity production and will get cheaper, so it'll keep on being installed at an exponential rate.
I'm sure y'all have already analyzed electric cars; suffice it to say they'll sell as fast as they can be produced.
Batteries will have a good "learning curve" on price and will immediately be adopted to replace "peaker" gas plants, and in remote "grid edge" locations, and to cut off "peak load" charges, and they'll just start showing up everywhere after a while.
The Natgas is the stumper which I can't predict. I know production will drop as the fracked wells run out and aren't replaced, which should bring the price up, but I can't figure out the demand profile. It competes with other electricity generation *and* it competes directly with oil for industrial feedstock *and* it competes for heating, which could lead to some very complex moves as businesses switch back and forth between alternatives; its behavior depends on the relative timing of the other trends. Shifts to and from natgas can delay or accelerate the other trends too, though.
All of this is fairly immune to the overall macro trend. A poor world economy means lower demand for everything, a strong world economy means higher demand for everything, but the substitution effects -- removing oil usage, adding solar and wind usage -- march on regardless. Except for natgas, where the demand shifts can swing the price to places which change the economics of substituting, which is why I'm not sure about natgas.
My core TSLA shares are based on my calculation of how much money they can make selling cars in 2018. I see no reason to change my position, since I don't need that money before 2018. If you need the money before then, you may have to do something else, of course.
I tend to ignore macro trends unless they have a direct impact on the earnings of a company I own stock in, and frankly I think Tesla is immune to the macro trends right now, because Tesla is eating the *top end* of the car market, which is not nearly as influenced by general unemployment levels etc. as the rest of the market.
Anyway, I've been sucking up information on the state of the oil, natgas, coal, nuclear, wind, solar, battery, and electric car markets.
Oil I've figured out; it'll stay low for a while, and then creep back up as the fracked wells deplete, but be unable to get a sustained runup due to the inroads of electric vehicles and electric heat-pump heating. Volumes will drop and eventually it'll become a niche fuel. Alternatives to oil have cheaper TCO in every single use case except airplanes -- even with $20/bbl oil -- and they can't produce oil much cheaper than $20/bbl, so that's it for oil. It's just a question of how long it takes.
Coal I've figured out. Thermal coal is dead; even with a price of $0 at the minehead, the transportation cost makes it expensive at the power plant, and with very few exceptions it's cheaper to run natgas plants (and will continue to be even if natgas prices rise), cheaper to build wind turbines, cheaper to build solar farms, cheaper to build transmission lines, and of course coal has huge mercury and other toxic emissions which people are not going to tolerate much longer.
Nuclear has priced itself completely out of the market and (sigh) taxpayers will probably have to pay to clean it up.
Solar will keep following Swanson's Law. The excessive prices for rooftop solar in the US will eventually match those in Germany or Australia. It'll keep being installed at a roughly exponential rate.
Wind is already the cheapest form of electricity production and will get cheaper, so it'll keep on being installed at an exponential rate.
I'm sure y'all have already analyzed electric cars; suffice it to say they'll sell as fast as they can be produced.
Batteries will have a good "learning curve" on price and will immediately be adopted to replace "peaker" gas plants, and in remote "grid edge" locations, and to cut off "peak load" charges, and they'll just start showing up everywhere after a while.
The Natgas is the stumper which I can't predict. I know production will drop as the fracked wells run out and aren't replaced, which should bring the price up, but I can't figure out the demand profile. It competes with other electricity generation *and* it competes directly with oil for industrial feedstock *and* it competes for heating, which could lead to some very complex moves as businesses switch back and forth between alternatives; its behavior depends on the relative timing of the other trends. Shifts to and from natgas can delay or accelerate the other trends too, though.
All of this is fairly immune to the overall macro trend. A poor world economy means lower demand for everything, a strong world economy means higher demand for everything, but the substitution effects -- removing oil usage, adding solar and wind usage -- march on regardless. Except for natgas, where the demand shifts can swing the price to places which change the economics of substituting, which is why I'm not sure about natgas.
My core TSLA shares are based on my calculation of how much money they can make selling cars in 2018. I see no reason to change my position, since I don't need that money before 2018. If you need the money before then, you may have to do something else, of course.
A shortened version of the following was posted earlier on the Short-Term Investing Thread.
You might be interested in a Charlie Rose Interview with John Kerry. It is totally off topic so I will shortly post a more extended review on the long-term and macro threads.
John Kerry; Tina Brown
Despite nearly forty years teaching about foreign policy, with some direct practice at the microbe level within the Federal policy bureaucracy, I learned a lot from Kerry.
Rose often annoys me with his questions but most of the time in this program they are spot on. Rose asked what foreign leaders think of our elections today. Kerry reluctantly responded but gave one example of the dangers others perceive. One candidate suggested the North Korean problem could be solved if we gave the nuclear weapon to South Korea and Japan. “That can’t happen.”
The most interesting to an academic theorist was his observation in the last century most international politics was about state actors. Now with a few contrary examples, which he listed—Russian Ukrainian hotspots (I would add our aborted effort at nation building in Iraq)—non-state actors recently show they have and will continue to dominate the bulk of international relations problems in this century. He then launched into a very humane and civilized listing of the causes of terrorism, his concern about the widespread examples of poor governance, the ghettoizing of Muslims in the so-called advanced western countries, widespread corruption, and poverty. Social media coalesces this discontent with the status quo into very real threats almost everywhere. That also correlates with my view the Trump/Sanders popularity is due to a failure of our party system to accurately serve the broader public interest.
Social media and international relations? That sounds like an interesting 21st century course in politics among nations.
Kerry was quite firm in support of Obama as Charlie Rose battered him unsuccessfully with questions the great-unwashed use to cut down the president. Nonetheless, he was not defensive.
For example, on the macro thread I have firmly criticized Obama for drawing a red line in Syria over use of chemical weapons. The president should never draw a red line and then not be prepared to go to war if necessary when it is violated. Without defensiveness, Kerry pointed out there were backchannel communications among the administration and both Russian and Iranian authorities on this issue, including direct communication between Obama and Putin over the problem, until they agreed upon an alternative which Putin could take credit for! There was a mutual interest of Iran, Russia, and the U.S. to see a broader reduction in all of Syria’s chemical arms lest they fall into terrorist hands. Putin had to be given credit as sponsor of Assad who had to eat crow or die.
Is Trump that sophisticated at negotiation?
There are other examples woven into this interview of negotiations with adversaries over Syria.
My second exposure to education about international relations occurred when I took a graduate seminar in theories of international politics from the great “power theorist” Hans Morgenthau who was moonlighting at Harvard one summer.
IR wonks will remember Morgenthau, George Kennan, and other prominent practitioners and academics were writing about the need for a more confrontational “power” approach to international threats in the post World War II period. Their view was contrary to the focus during the interwar period on “idealism” or peace through international law and organization. However, professor Morgenthau always said there was a moral element to his theory: it must assure the outcome is expedient. Eventually at the height of the Vietnam War he held a press conference at the Pentagon announcing he would no longer consult for the Defense Department because the Vietnam War was inexpedient.
Somewhere in one of his books, or in the class, I can’t remember, he said something to the effect when monarch’s ruled countries dynastic ties between rivals had a moral characteristic. Relations between states headed by persons could have moral accountability. To illustrate, Barbara Tuchman says somewhere in The Guns of August that Kaiser Wilhelm cursed on hearing of Russian mobilization, “if grandmother were alive, this never would have happened.” Grandmother was Queen Victoria.
Just as social media has the deleterious effect of compounding terrorist ambitions, swift communication in our age can also make transparent, because secret, communication among world leaders more effective. My view of Obama went up because of this interview as the Syria/chemical weapons discussion shows. Kerry also hinted at personal communication channels in many negotiations underway with world leaders. His approach is very similar to what Roger Fisher and others have called getting to yes. You focus on a process of communication toward what you ought to have agreement. Build the playing field and then they will come.
This familiarity adds at least a personal element to diplomacy redolent of the morality possible in the personal relations of monarchs in ages past. Kerry, for example, has spent hours talking with Putin. At one point Rose interrupted when he spoke about finally being able to negotiate with the Iranians. He clarified diplomatically, something to the effect; it was hard finding someone who had enough clout to be able to talk with us about a settlement.
Another point was asking Kerry to assess what was his most important accomplishment, “the Iran nuclear deal?” Kerry responded that was a matter for future historians. I’m not a historian but I have nodding acquaintance with diplomatic history. I would rank him with Jefferson and Charles Francis Adams, our “Minister” to the Court of St. James, not at the rank of Ambassador since we were such an unimportant country. (For you wonks: Adams kept the British neutral during our Civil War.)
Several years ago a prominent arms control theorist in academia lamented of his experience working in the White House, “I kept looking for the adults who were in charge. There were none.”
A patient viewer comes away after this interview confident that the adults are in charge. Perhaps even Putin is an adult on some issues and that’s an admission coming from a self-professed “extinguished professor of Soviet Government and Foreign Policy.”
You might be interested in a Charlie Rose Interview with John Kerry. It is totally off topic so I will shortly post a more extended review on the long-term and macro threads.
John Kerry; Tina Brown
Despite nearly forty years teaching about foreign policy, with some direct practice at the microbe level within the Federal policy bureaucracy, I learned a lot from Kerry.
Rose often annoys me with his questions but most of the time in this program they are spot on. Rose asked what foreign leaders think of our elections today. Kerry reluctantly responded but gave one example of the dangers others perceive. One candidate suggested the North Korean problem could be solved if we gave the nuclear weapon to South Korea and Japan. “That can’t happen.”
The most interesting to an academic theorist was his observation in the last century most international politics was about state actors. Now with a few contrary examples, which he listed—Russian Ukrainian hotspots (I would add our aborted effort at nation building in Iraq)—non-state actors recently show they have and will continue to dominate the bulk of international relations problems in this century. He then launched into a very humane and civilized listing of the causes of terrorism, his concern about the widespread examples of poor governance, the ghettoizing of Muslims in the so-called advanced western countries, widespread corruption, and poverty. Social media coalesces this discontent with the status quo into very real threats almost everywhere. That also correlates with my view the Trump/Sanders popularity is due to a failure of our party system to accurately serve the broader public interest.
Social media and international relations? That sounds like an interesting 21st century course in politics among nations.
Kerry was quite firm in support of Obama as Charlie Rose battered him unsuccessfully with questions the great-unwashed use to cut down the president. Nonetheless, he was not defensive.
For example, on the macro thread I have firmly criticized Obama for drawing a red line in Syria over use of chemical weapons. The president should never draw a red line and then not be prepared to go to war if necessary when it is violated. Without defensiveness, Kerry pointed out there were backchannel communications among the administration and both Russian and Iranian authorities on this issue, including direct communication between Obama and Putin over the problem, until they agreed upon an alternative which Putin could take credit for! There was a mutual interest of Iran, Russia, and the U.S. to see a broader reduction in all of Syria’s chemical arms lest they fall into terrorist hands. Putin had to be given credit as sponsor of Assad who had to eat crow or die.
Is Trump that sophisticated at negotiation?
There are other examples woven into this interview of negotiations with adversaries over Syria.
My second exposure to education about international relations occurred when I took a graduate seminar in theories of international politics from the great “power theorist” Hans Morgenthau who was moonlighting at Harvard one summer.
IR wonks will remember Morgenthau, George Kennan, and other prominent practitioners and academics were writing about the need for a more confrontational “power” approach to international threats in the post World War II period. Their view was contrary to the focus during the interwar period on “idealism” or peace through international law and organization. However, professor Morgenthau always said there was a moral element to his theory: it must assure the outcome is expedient. Eventually at the height of the Vietnam War he held a press conference at the Pentagon announcing he would no longer consult for the Defense Department because the Vietnam War was inexpedient.
Somewhere in one of his books, or in the class, I can’t remember, he said something to the effect when monarch’s ruled countries dynastic ties between rivals had a moral characteristic. Relations between states headed by persons could have moral accountability. To illustrate, Barbara Tuchman says somewhere in The Guns of August that Kaiser Wilhelm cursed on hearing of Russian mobilization, “if grandmother were alive, this never would have happened.” Grandmother was Queen Victoria.
Just as social media has the deleterious effect of compounding terrorist ambitions, swift communication in our age can also make transparent, because secret, communication among world leaders more effective. My view of Obama went up because of this interview as the Syria/chemical weapons discussion shows. Kerry also hinted at personal communication channels in many negotiations underway with world leaders. His approach is very similar to what Roger Fisher and others have called getting to yes. You focus on a process of communication toward what you ought to have agreement. Build the playing field and then they will come.
This familiarity adds at least a personal element to diplomacy redolent of the morality possible in the personal relations of monarchs in ages past. Kerry, for example, has spent hours talking with Putin. At one point Rose interrupted when he spoke about finally being able to negotiate with the Iranians. He clarified diplomatically, something to the effect; it was hard finding someone who had enough clout to be able to talk with us about a settlement.
Another point was asking Kerry to assess what was his most important accomplishment, “the Iran nuclear deal?” Kerry responded that was a matter for future historians. I’m not a historian but I have nodding acquaintance with diplomatic history. I would rank him with Jefferson and Charles Francis Adams, our “Minister” to the Court of St. James, not at the rank of Ambassador since we were such an unimportant country. (For you wonks: Adams kept the British neutral during our Civil War.)
Several years ago a prominent arms control theorist in academia lamented of his experience working in the White House, “I kept looking for the adults who were in charge. There were none.”
A patient viewer comes away after this interview confident that the adults are in charge. Perhaps even Putin is an adult on some issues and that’s an admission coming from a self-professed “extinguished professor of Soviet Government and Foreign Policy.”
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An interesting article about the current election.
Democracy Spring and the US Voting Matrix: How Much of the Electoral Process Is Illusory?
Truth Out is clearly a progressive publication but both Sanders and Trump supporters alike will share anger over the complexity of the process of elections. Earlier on this page or the long-run I referenced a book widely used in Government 1 classes across the nation which described our system as “a populist system of elite reconciliation.” The referenced article adumbrates the erosion of those populist aspects by law, the media, and the main political parties. What I find most offensive is the extreme decentralization of voting and the near majority of states permitting tallies by machines without audits through independent paper balloting.
Democracy Spring and the US Voting Matrix: How Much of the Electoral Process Is Illusory?
Truth Out is clearly a progressive publication but both Sanders and Trump supporters alike will share anger over the complexity of the process of elections. Earlier on this page or the long-run I referenced a book widely used in Government 1 classes across the nation which described our system as “a populist system of elite reconciliation.” The referenced article adumbrates the erosion of those populist aspects by law, the media, and the main political parties. What I find most offensive is the extreme decentralization of voting and the near majority of states permitting tallies by machines without audits through independent paper balloting.
sundaymorning
Active Member
Japan is doing quite well, a beat on GDP, oil inching up beyond $48
Japan quashes recession fears with surprise Q1 GDP beat on leap-year boost
Japan quashes recession fears with surprise Q1 GDP beat on leap-year boost
Anyone have any thoughts on the UK referendum to leave the EU? If they vote yes, that would be a major blow to confidence in the European project, and will likely panic the markets.
Anyone positioning to sit this one out? Myself, I'm thinking of protective puts on some European funds, but don't have a strategy formed yet.
Anyone positioning to sit this one out? Myself, I'm thinking of protective puts on some European funds, but don't have a strategy formed yet.
I think the UK referendum will have less long-term practical effect than most people think either way; the UK was already refusing to do most of the European integration (retaining border controls, its own currency, etc.). And the European project is frankly a zombie project thanks largely to gross economic mismanagement by the German government, which is the 80-pound gorilla; the EU as currently administered is correctly perceived as "German Empire 4.0" and until that changes the project is going to keep deteriorating, no matter how the UK votes.
The markets will probably swing wildly shortly before and after the referendum. Good time for swing traders to make money.
The markets will probably swing wildly shortly before and after the referendum. Good time for swing traders to make money.
New Hyundai 10000. New tesla 35 40000. Where's the savings? 25000 dollars of fuel and oil changes it will be 20 years before you get that 20000 difference back from your fuel saving tesla. Most people can't afford a 35000 car. Raw materials lithium graphite ect. Everybody is an exploration stage company but no one is digging or almost no one. All have new technology to refine raw materials but not digging them up. Why not? Somebody is full of poo here. Tesla is a new car, never be the first to buy a new model or new car Co. No track record no miles the bugs have not been worked out yet. Where are the dealerships for sales and repairs? I'm from Canada and haven't seen a dealer yet but seen a few Teslas. I would like to humbly ask Who would buy this car? Why take a risk? Why go 40000 in the hole. No savings versus most regular vehicles. Keep in mind you just spent minimum 15000 more right off the bat so you have to wait some time before you make it back. Why would I be a long term investor in Tesla? Sure make a couple bucks then jump out. I'm getting a scam feeling here. Could someone help me out here?
I'll try to help.
First piece of advice: buy a Hyundai if you feel so strongly about it. Second: short the stock if you think it might be a scam. Third: write your post in a thread that is relevant to what your post is about.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
You shouldn't. Also you're in the wrong thread (this one is about the macroeconomic climate).
By any chance, have you ever gave a thought to why car brands like Audi, BMW, MB, Porsche manage to even exist for some time now, after Hyundai came into existence? You might be surprised, but millions of people around the globe chose significantly more expensive cars from these brands every year over the 10K Hyundai.
A similar version of this was posted earlier today on the short-term thread.
I think the Bloomberg interview of Jeremy Siegel of the Wharton School provides further ammunition in support of Baron's, not Barrons', faith in Tesla. It may be available as further news, but I couldn't find a link this morning nor recently. Siegel deals with the macro economy and investing in general. He believes we are at the beginning of a long run bull market for dividend stocks given the mismatch between equity and bond yields (if I said that correctly). When pressed, he said he expected p/e ratios in the U.S. indices might return to lower levels and since they are lower already in Europe, if he's right, that might be an even better speculative venture there he suggested. Earlier he expressed worry about our last jobs report but relief that Yellon said no rate rise now, but possibly in July. I'm sure Paul Friedman is also relieved. Siegel's belief mirrors El-Erian's warning we will likely receive another increase this year.
If Baron is right about the capital-light transition underway for Tesla, along with his other arguments, Tesla is consistent with the secular trends Siegel sees. Unfortunately, I have no dry powder but whether a long speculator or a day trader his interview may be helpful.
I think the Bloomberg interview of Jeremy Siegel of the Wharton School provides further ammunition in support of Baron's, not Barrons', faith in Tesla. It may be available as further news, but I couldn't find a link this morning nor recently. Siegel deals with the macro economy and investing in general. He believes we are at the beginning of a long run bull market for dividend stocks given the mismatch between equity and bond yields (if I said that correctly). When pressed, he said he expected p/e ratios in the U.S. indices might return to lower levels and since they are lower already in Europe, if he's right, that might be an even better speculative venture there he suggested. Earlier he expressed worry about our last jobs report but relief that Yellon said no rate rise now, but possibly in July. I'm sure Paul Friedman is also relieved. Siegel's belief mirrors El-Erian's warning we will likely receive another increase this year.
If Baron is right about the capital-light transition underway for Tesla, along with his other arguments, Tesla is consistent with the secular trends Siegel sees. Unfortunately, I have no dry powder but whether a long speculator or a day trader his interview may be helpful.
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sundaymorning
Active Member
For the first time in a very long time, oil inventories finally dropped. Crude jumps to $52
Oil prices near 2016 highs as US crude inventories drop
Oil prices near 2016 highs as US crude inventories drop
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