Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[TheTalkingMule]

I don't see how spreading this inclusion over six months would dramatically lower the peak SP. Buying would continue in the same volumes, shareholders would likely be even LESS inclined to sell, and all sorts of +macro evens could pile on. The spike might be shaved by 10-20%, but I bet avg purchase price might end up even higher.

Lets say they spread it out through 2Q.....what happens when "500k achieved" is announced? Then what about when 2021 guidance is set for 100% growth(1M)? Then what about when 4Q earnings come out? Then 1Q? Then stimulus? Then a clearer Biden agenda is announced with Green New Deal traction?

There's no way out. These clowns should've just announced inclusion with a 7 day notice like usual. They decided to get cute and now there's no turning back. I would just do one day 12/21. It's gonna cause a spike, but the alternatives could be worse.

 

[JustMe]

Bloody poetry. Can nobody follow any of the unwritten curtesies of this thread anymore? Though shall not mention Apple and Tesla in the same sentence, though shall not write poetry, etc., etc., Never mind the fact, there is no question. We hold until the sky falls and the shares have to be pried from our cold, dead hands. What is wrong with all you people? This is why we can’t have nice things; every time people get a little bit of money, they lose their ever-loving minds. Not a single one of you is invited to my mountain. Ever.

People who write poetry about stocks are just the kind of people to crash someone’s mountain uninvited. I’ll bet some of them are even from Nantucket.

 

[Lessmog]

What a bunch of kittens and etrons. I scoff at all of them. You make the bed, you lie in it.

Here's a kitten I encountered Thursday, an Amur Tiger cub only a couple of years old trying to defend his/her lunch meat from some free magpies. Glad for the sturdy fence.

No moral to the story unless you fill it in ...
(From Nordens Ark park, host to three kinds of Asian leopards as well as other endangered species.)

 

[Featsbeyond50]

Whats being missed is that with fsd the number of new cars needed will be reduced significantly. I dont know the ratio, but gyessing it could be one fsd car replaces 4-5 regular cars.

What I think is being missed is doubling of cars on the road. Half the cars going to get someone and half the cars driving someone. I'm not sure if that's a bad thing or not. Maybe a bad thing for those who do not have fsd.

 

[UkNorthampton]

What I think is being missed is doubling of cars on the road. Half the cars going to get someone and half the cars driving someone. I'm not sure if that's a bad thing or not. Maybe a bad thing for those who do not have fsd.

As for demand for ICE - Teslas and many EVs are more reliable, have over the air (OTA) improvements and many don't have pointless facelifts. This might slow demand for ICE even further. Robotaxis, more reliable EVs, naff ICE offerings will probably mean people soldier on with old ICE rather than buy an embarrassingly & financially bad new ICE.

 

[Yuri_G]

Is there precedence for the S&P going back on their word? The statement they made on November 16 said Tesla will be added prior to the opening trade on Monday, Dec 21. I'm wondering if they are bound to this statement...

https://www.spglobal.com/spdji/en/d...362_tdec215addconsult.pdf?force_download=true

 

[StealthP3D]

That's a good perspective.

I can see how there has to be something in the "investor's eye" which causes them to buy. And it could be that the investors decide to keep buying based on a multitude of prior "good news" that just wasn't big enough to start the buying. I believe that.

But there are still two things.
1) The buying is often so far beyond what it should be.

That word "should" is what I'm talking about. In a previous post you said "There should have been" an appreciable rise in the share price after battery day. "Should" according to whom? I'm cautioning against thinking the market behaves in a predictable manner when analyzed using "common sense".

The best way to predict the market would be to put an AI computer on the task like Tesla's Dojo much in the same way AI is used to market to individuals based on past buying habits and other more invasive personal data. Doing this would allow you to front-run much of the human stock-buying behavior and make millions. People are already do that but your average retail investor does not have immediate access to that data.

And here's a key point: That AI activity in the market makes it even harder for someone without all that data to second guess the direction of the market. It would be like trying to compete with Tesla on FSD without their reams of driving data with which to feed to AI computers.

And even less understandable is
2) The buying stops abruptly. For no discernable reason. Nada! Like the day BEFORE the Split. It even lost 10%(guess). No news. Just a concerted effort of "profit taking" BEFORE the "expected" gains from the Robin Hooders piling in after the split.

I've been investing in individual stocks a long time and it's always like that. Your returns as an investor will be better if, rather than being baffled by it and trying to discover the cause/effect, you simply accept and embrace that it can and will do that. No reason is necessary other than humans are fickle and will turn on a dime. I understand there is a natural desire to learn and become better but some things don't lend themselves to that kind of simple understanding.

You might find it comforting to know there was a time when that kind of investing worked a little bit better than it does now. In the 1920's,-1970's all you needed was access to more data, sooner, than most of the people making buy and sell decisions. But that was before the instant dissemination of info the Internet affords and the availability of AI technology and computer trading. The market is more likely than ever to respond to events before they actually happen.

Target figured out how to market items that expecting mothers might buy to pregnant women. In some cases Target knew a woman was pregnant even before her family did (or maybe even before she did) thanks to the power of AI. Now that's what I call "front-running"!

 

[Robocop]

Re: The addition of TSLA in a tranche during Q1 2021:

S&P specifically said "Due to the large size of the addition, S&P Dow Jones Indices is seeking feedback through a consultation to the investment community to determine if Tesla should be added all at once on the rebalance effective date or in two separate tranches ending on the rebalance effective date."

Those are pretty specific terms, while I understand they might not be technically bound to them, it seems far more likely that completing the addition by Dec 21 will happen, as opposed to a new idea of delaying to Q1. If they hadn't thrown in that 'ending on the rebalance effective date' I'd be open to a ton of ideas. But I really think it's gonna be what they said initially.

 

[StealthP3D]

Is there precedence for the S&P going back on their word? The statement they made on November 16 said Tesla will be added prior to the opening trade on Monday, Dec 21. I'm wondering if they are bound to this statement...

https://www.spglobal.com/spdji/en/d...362_tdec215addconsult.pdf?force_download=true

Common sense says they could change their mind. But that would come with significant liabilities and lawsuits including the fact that it would diminish their standing in the world. That's why II see it as unlikely. The only thing that makes it worth considering is that humans can be greedy, stupid, emotional and short-sighted. I have no information that says S&P is being managed by forward-looking people who are exceptional managers so anything is possible (however unlikely) in my book.

 

[Knightshade]

No, those two are completely different propositions.

1. The statement: "Competition is coming, because the incumbents can create Tesla-killer vehicles any time they want to" is a silly self-contradictory statement, because Tesla has cars that are significantly better than the ICE cars at the same price point. This means, if any incumbent were to create a car competitive with Tesla, that car would be -- by definition -- significantly better than their own ICE cars at the same price point, therefore it would kill their own ICE sales long before it would touch the Tesla sales.

2. On the other hand, building up Li-ion cell production is not rocket science

But building EVs isn't rocket science either.

And unlike building a battery factory- the legacy companies already know how to build cars

Many of them even build decent EVs today already (not as good as Tesla- but then the Kia Rio isn't as nice as a Lexus LS and Kia still sells plenty of em).


But they do NOT make batteries.

In fact- in most cases they could and would build many more of their existing EVs except for lack of batteries

So it's batteries- not EV production- where they're further behind

Thus the idea they can magically start churning out batteries easier than cars is demonstrably false.

Ford said they'd be able to make and sell lots more Mach Es but they lack batteries.

Hyundai/Kia said they'd make and sell a ton more Niros and such if only they had more batteries.

Audi had to actually cut back EV production because they lacked...batteries.


this was the entire point of battery day.

The lack of batteries is the biggest thing holding back widespread production and sale of EVs.

If these companies could magically spin up a ton of battery production they'd do so.

Evidence so far is they can't.

, there are several companies doing that and there were companies doing that long before Tesla started. Tesla battery tech is better and cheaper, but nobody claimed the other 20 million EV's cells had to be competitive with the Tesla cells. They just have to exist. That is a much lower bar to pass than making a Tesla-killer EV.

That is literally the same argument as competition is coming for cars

The cars don't have to beat tesla- they just have to exist.

Know the biggest reason they don't right now?

lack of batteries

Again Elon explained this in detail on battery day.

Just like as of today, Tesla has somewhere around a quarter of the EV market world-wide, which means there are more other EVs than Teslas and they have battery cells in them

Pretty big problem with your math here.

Tesla uses much larger packs than most of those other EVs being sold. The Zoe for example which is usually #1 behind Tesla uses a 22 or 41 kwh pack almost its entire production life... only this year offering a larger 52 kwh pack.

Which is still about 1/3rd smaller than the SMALLEST pack Tesla has used in years, and half the size of their larger pack.

Likewise the Leaf was 24-30 kwh most of its life, 2nd gen is 40 in most models sold and 62 optionally.

The E-golf which is discontinued but still selling super well recently has a 35.8 kwh pack.

This is fine making small-selling niche compliance or city cars... that's not going to work if you want to scale up to selling tens of millions of EVs to every market segment though.

. So assuming that Tesla only doubles its market share to 50% of EVs and does not take over 100% of the EV market is not "Magical Thinking".

....and nobody said it was.


You're moving goalposts now.

We're discussing all vehicle sales.

Tesla plans to take 25% of THOSE (roughly) by 2030 per Elons own words (about 20 million cars a year).

So do you believe all other battery producers will scale/ramp as fast or faster than Tesla by 2030?

Because that's the only way you get another 20 million EVs available to be sold by anybody else to get you to roughly 50% EVs by then.


I find it very very unlikely the entire rest of the industry will magically start scaling as fast on EVs or batteries as Tesla has... and without that the math simply does not work for making that many non-Tesla EVs in the next 10 years.

The rest of the cell producers do not need to "catch up" with Tesla, they just need to scale up slower than Tesla does. Currently, the vast majority of cells are not produced by Tesla but by someone else.

Tesla Gigafactory | Tesla

Tesla currently produces more batteries in terms of kWh than all other carmakers combined.

Again- most of the other EVs have been getting by on tiny batteries and crap range. That's not going to work going forward to scale up to tens of millions of sales.


per battery day-Tesla is targeting 3 TWH of internal battery production by 2030- and they've mentioned the intend to continue buying from external suppliers on TOP of their internal production for some time still

Someone else (or several someone elses) will need to produce a similar amount of capacity by then to have any shot at supplying the OTHER 20 million EVs you need to replace half the worlds vehicle sales on top of the 20 million Tesla will produce.


As I say I remain exceedingly dubious the rest of the industry will move or scale as quickly as Tesla will.

 

[Nocturnal]

What I think is being missed is doubling of cars on the road. Half the cars going to get someone and half the cars driving someone. I'm not sure if that's a bad thing or not. Maybe a bad thing for those who do not have fsd.

Smart governments will institute real time tolls/taxes to provide an incentive to spread traffic out during the day.

 

[ggr]

But building EVs isn't rocket science either.

And unlike building a battery factory- the legacy companies already know how to build cars

Many of them even build decent EVs today already (not as good as Tesla- but then the Kia Rio isn't as nice as a Lexus LS and Kia still sells plenty of em).


But they do NOT make batteries.

In fact- in most cases they could and would build many more of their existing EVs except for lack of batteries

So it's batteries- not EV production- where they're further behind

Thus the idea they can magically start churning out batteries easier than cars is demonstrably false.

Ford said they'd be able to make and sell lots more Mach Es but they lack batteries.

Hyundai/Kia said they'd make and sell a ton more Niros and such if only they had more batteries.

Audi had to actually cut back EV production because they lacked...batteries.


this was the entire point of battery day.

The lack of batteries is the biggest thing holding back widespread production and sale of EVs.

If these companies could magically spin up a ton of battery production they'd do so.

Evidence so far is they can't.




That is literally the same argument as competition is coming for cars

The cars don't have to beat tesla- they just have to exist.

Know the biggest reason they don't right now?

lack of batteries

Again Elon explained this in detail on battery day.





Pretty big problem with your math here.

Tesla uses much larger packs than most of those other EVs being sold. The Zoe for example which is usually #1 behind Tesla uses a 22 or 41 kwh pack almost its entire production life... only this year offering a larger 52 kwh pack.

Which is still about 1/3rd smaller than the SMALLEST pack Tesla has used in years, and half the size of their larger pack.

Likewise the Leaf was 24-30 kwh most of its life, 2nd gen is 40 in most models sold and 62 optionally.

The E-golf which is discontinued but still selling super well recently has a 35.8 kwh pack.

This is fine making small-selling niche compliance or city cars... that's not going to work if you want to scale up to selling tens of millions of EVs to every market segment though.






....and nobody said it was.


You're moving goalposts now.

We're discussing all vehicle sales.

Tesla plans to take 25% of THOSE (roughly) by 2030 per Elons own words (about 20 million cars a year).

So do you believe all other battery producers will scale/ramp as fast or faster than Tesla by 2030?

Because that's the only way you get another 20 million EVs available to be sold by anybody else to get you to roughly 50% EVs by then.


I find it very very unlikely the entire rest of the industry will magically start scaling as fast on EVs or batteries as Tesla has... and without that the math simply does not work for making that many non-Tesla EVs in the next 10 years.







Tesla Gigafactory | Tesla





Again- most of the other EVs have been getting by on tiny batteries and crap range. That's not going to work going forward to scale up to tens of millions of sales.


per battery day-Tesla is targeting 3 TWH of internal battery production by 2030- and they've mentioned the intend to continue buying from external suppliers on TOP of their internal production for some time still

Someone else (or several someone elses) will need to produce a similar amount of capacity by then to have any shot at supplying the OTHER 20 million EVs you need to replace half the worlds vehicle sales on top of the 20 million Tesla will produce.


As I say I remain exceedingly dubious the rest of the industry will move or scale as quickly as Tesla will.

Mostly agree. But the also lack software expertise.

 

[capster]

It's not just fund managers that take time to absorb information and change their mind about something and act on it - humans, in general, don't naturally work like this. Most humans are not accustomed to absorbing complex information and immediately acting on it with real dollars. It takes time to soak in, ferment, and to assimilate new perspectives and ideas. Not everyone can make the transition from thinking Tesla is an automaker to accepting that Tesla is also a battery manufacturer (amongst other things). Most people don't know enough about Tesla to understand how they use first principles thinking to shorten the path to success and how likely Tesla is to succeed at battery making (and a lot of other things also). It takes time for ideas and new info to rattle around in their brains for a while before they start to understand and develop a new perspective based upon (for example) Battery Day. People are resistant to changing their world view and where everything belongs in that view.

Waves of buying and selling are driven by humans. And may I suggest that their behavior tends to not be very rational and machine like. Because they're humans. Tesla has been on a bull run that was kicked off when the S&P announced inclusion but ALL of the gains are not due to inclusion, that was just the catalyst that kick-started the wave of buying. These things take on a life of their own and you can be sure the info that was disseminated on battery day is kicking in and helping power the wave along with the original driver, inclusion.

It's not productive to try to attribute every movement of the share price to a particular thing or things as if the share price should react to each new piece of information nearly instantly, perfectly rationally and to the degree that thing or things justifies. Stock prices don't behave that way.

"Fortune favors the prepared mind." Louis Pasteur

 

[pz1975]

I wonder if there might be some trepidation Monday about the S&P addition decision. The market doesn’t like uncertainty. We may get a nice dip to add more shares/calls for the inevitable inclusion event(s).

 

[EVMeister]

I wonder if there might be some trepidation Monday about the S&P addition decision. The market doesn’t like uncertainty. We may get a nice dip to add more shares/calls for the inevitable inclusion event(s).

Perhaps. But weren't people here expecting a dip this Friday just passed? It seems the stock has plenty of nice upside momentum at the moment and doesn't always react as you might expect.

 

[M|S|M MYP]

Let's hope macros are in our favor for a December to remember!

 

[Robocop]

Perhaps. But weren't people here expecting a dip this Friday just passed? It seems the stock has plenty of nice upside momentum at the moment and doesn't always react as you might expect.

No that was me. I sold a small % to swing trade on said dip, so it went up on Friday as a result. My apologies. A lot of you aren't aware that the market moves in the opposite direction of all my actions. Reliable indicator.

 

[traxila]

As I say I remain exceedingly dubious the rest of the industry will move or scale as quickly as Tesla will.

Past performance is no indication of future returns.

The rest of the industry has access to hundreds of billions of dollars. This was until recently a huge issue for Tesla. Where would they be right now if they had been handed 100 billion cash in 2013?

That does not include the trillions sloshing around the world looking for a home with margins.

Everything you say is spot on, but nine years is a long time.

E.G. QuantumScape. They claim to have the SS battery issue figured out. 500 mile range batteries. 15 minute charging. They claim they just need two to three years to work out the kinks and then they can ramp hard (sound familiar? Any other companies need a couple of years to perfect their battery ramping process?). They have a number of heavyweights who seem to believe: VW. Some deep pockets I will not mention. And Tesla’s very own JB Straubel.

Do your calculations change if they are for real? Maybe just smoke and mirrors....

Do you honestly believe there are not other multiple companies we have never heard of working on batteries right now? Do you think all of them will fail?

Keep in mind, any batteries under a certain price point and over a certain performance point will have an unlimited market for a couple of decades. There is a small matter of a fossil infrastructure to dispose of.....

Next decade will be roaring for sure.

All the best!

 

[EVCollies]

Yes, this makes sense. If Tesla can deliver on the 40-50% annual growth, Tesla can become a monster if they also manufacture their own parts. They can produce the lowest cost parts at the highest quality, and no one would come close. We also have to remember that robotaxis will displace a large number of personally-owned vehicles, so that also provides a massive squeeze on the competitors. They may never be able to scale up and get their costs down to compete.

And after Tesla disrupts the auto/truck market, will Elon ask his engineers to work on the Hyperloop and disrupt the short haul airline market?

 

[Mich]

Do you honestly believe there are not other multiple companies we have never heard of working on batteries right now? Do you think all of them will fail?

In my model Tesla has a 15%-20% market share. Even this is enough to get to a 10x within the decade. (and we know the market is forward looking. We just don't know how much forward and how it weighs the risk of failure. We also don't know at what point in time the market will honor it)