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

[Knightshade]

Thanks for linking this. Having just read it, I believe you can learn all that Mr Buffett has to teach about business from this annual letter alone, rather than reading all of them. The world is changing.

Three of Berkshire's four largest holdings ("the family jewels") are:

1) insurance companies, soon to be disrupted by FSD and Tesla Insurance

While they do have significant exposure to car insurance via Geico- Tesla isn't going be "disrupting" most of their insurance business which is not vehicle related anytime soon.

(and I think you might even then be overestimating the amount of disruption to car insurance given even the timetables elon has suggested for when EVs would a majority of all cars on the road)

2) a railroad (run on and transporting fossil fuel), soon to be disrupted by FSD, Tesla Semi, and electric vehicles

Good article on this here:

Tesla Semis Are Cheaper Than Rail Enough Of The Time To Reshape Ground Freight

It points out trains are also electrifying (well, mostly outside the US, but it'll come here too- the trains are ALREADY running on electric, they're just getting it from local diesel generators, Europe and China are already removing the diesel part)-

And guess what company is currently developing electric freight rail locomotives for use in the US?

BNSF leads the charge on testing battery electric locomotive | Rail Talk

In contrast their biggest competitor- Union Pacific- seems to consistently say electrification is too expensive and hard and they're not seriously considering it.... so I'd be a lot more worried as a UP investor than in Berkshires rail holdings.



EV semis, especially driverless, WILL steal business from rail freight, but it's not going to replace it.... (diesel trucks, and their drivers, are a lot more in trouble than folks who own rail- though it will require adaptation/modernization of those rail systems as other countries are doing).

3) an electric utility investing in long-distance transmission, soon to be disrupted by Tesla Energy (local generation and storage, microgrids, virtual power plants)

BHE has one of the largest renewable energy portfolios in the US- they're not just an LD transmission company or something... they own wind farms in half a dozen states, 10 geothermal plants in CA, multiple solar plants in CA as well as others in TX, MN, and AZ, and even a hydro plant in Hawaii.




I think a lot of folks assume all industries Tesla is disrupting will just get taken over by Tesla or something.

That's folks misunderstanding the mission.


Tesla has no interest in doing any of this alone- the only reason they're doing it at all is nobody else was.

They want others to also accelerate the transition to sustainable energy, and if Tesla scaring them into doing so gets that done- great.


If Tesla disrupting with the Semi gets the US train system to move to pure electric sooner to keep up- that is advancing Teslas mission even though it's not Teslas trains


If Tesla disrupting energy means other companies invest more heavily in renewable sources (which will still need transmission- local is great but it's a long long way from scaling enough, and we're gonna still need a central grid for lots of stuff) that is advancing Teslas mission even if it's BHE opening more solar plants instead of Tesla.

(Tesla might well end up selling batteries to either though- so win-win)



Now I don't think Warren is personally leading these modernization efforts I mention for trains or power or anything else... but it doesn't appear the folks who ARE actually running those companies are unaware of where the wind is blowing, and seem to be taking at least some steps to move in relation to it.

And Tesla is certainly a major reason that wind IS blowing- and to the degree it's doing so... but again Elon wants to get the whole fleet there (thought doubtless a few boats will sink on the way), not just the boat named Tesla.

 

[Doit]

Thanks for linking this. Having just read it, I believe you can learn all that Mr Buffett has to teach about business from this annual letter alone, rather than reading all of them. The world is changing.

Three of Berkshire's four largest holdings ("the family jewels") are:

1) insurance companies, soon to be disrupted by FSD and Tesla Insurance

2) a railroad (run on and transporting fossil fuel), soon to be disrupted by FSD, Tesla Semi, and electric vehicles

3) an electric utility investing in long-distance transmission, soon to be disrupted by Tesla Energy (local generation and storage, microgrids, virtual power plants)

Berkshire's smaller holdings include several banks (currently being disrupted by the fintech companies in ARKF), telecoms (vulnerable to Starlink?), Chevron and GM (nuff said).

Mr Buffett also tells folksy stories of investing in gas stations, brick-and-mortar retailers, and a candy maker (in a country with soaring obesity and diabetes). He also proudly reports buying back Berkshire shares, rather than investing in new and innovative companies such as Tesla.

Having read less-folksy reports from ARK Invest, I believe Mr Buffett's company is a sitting duck for major industrial disruptions coming soon, although he may not live to see the duck fully cooked.

But how about another jewel, the original sugar water company? Even Steve Jobs enticed the CEO of its fiercest competitor to run Apple, it got to be good, right?

 

[Sofie]

I have been dipping my toes into technicals so take this FWIW. 660 first and then solid support at 615-620. If the macros are bad and it loses the 620 support the next level of support is at 575-580.

On the upside we need to break the resistance at 708 first, then 745 and 780. If it breaks 780 again then we are back in the bullish trend.

Thank you!!! Very helpful!

 

[AudubonB]

Out of the blue, my mother-in-law who loves to give advice (is that redundant?) talked about tesla and upon hearing we have "some" stock said sell because competition is coming. I had a mask on but forgot that doesn't hide an eye roll. Haven't taken her advise in 15 years so I think I'll keep that streak going.

Edit: I will add it came up because of the Texas power grid, someone told her cyber trucks can be used to power your house in a black out. I was saying all week, Tesla is going to gain so much from this whole mess. Also yes Mom, I've heard of the cybertruck when asked if I've heard of it.

You also forgot that when it comes to mothers-in-law, it is neither a face mask nor very dark eyeglasses that are de rigeur, but well-functioning ear plugs.

 

[EVMeister]

I don't believe this has been posted yet. Fantastically insightful video, with @DaveT and James Douma discussing the merits of Tesla's FSD system vs. Lidar. As a Tesla investor I found this a great confidence boost that Tesla is on the right path with their approach to FSD. Not that I ever doubted them, but I still found this reinforced that opinion.

 

[winfield100]

in honor of Curt Renz
(I tried to find New Christy Minstrals “green green, it’s green they say on the far side of the hill” but no dice, )

 

[capster]

and what is your opinion about a broken record?

@Matias, it was not my intention to participate in cancel culture here. I was trying to be witty but maybe this was a bit mean.

My apologies if you were offended.

 

[ZsoZso]

OK, but the video was talking about the fuel usage. You can single-out the lithium transport and ignore the rest of the manufacturing footprint. As I recall, a BEV typically has a 10% overhead compared to a similar ICE, so yes, it's higher, but not much.

I love the hypocracy of the entire red-herring argument about EV manufacturing being dirtier / more CO2 than ICE manufacturing. When you dig down to the bottom of it, turns out the only thing dirty about EV manufacturing is the diesel burnt during the transportation and mining of various materials. So fundamentally it comes down to: we should not transition from burning diesel to EVs because burning diesel is dirty --- AHA, logic!
No, don't even think about transitioning ALL transportation and mining equipment to EVs, because that would break your brain...

 

[TheTalkingMule]

Anyone posted this? Lol!

Morgan Stanley’s Adam Jonas calls this stock as his sleeper electric vehicle pick

Adam Jonas, a prominent auto analyst at Morgan Stanley, told CNBC on Friday there’s one electric-vehicle startup that stands out from the rest of its newly public brethren.

“Fisker, we think from a risk-reward basis, is a lot more attractive than meets the eye,” Jonas told CNBC’s “Squawk Alley.”

 

[Curt Renz]

Wealth UP - Friday:

 

[Prunesquallor]

Anyone posted this? Lol!

Morgan Stanley’s Adam Jonas calls this stock as his sleeper electric vehicle pick

Probably because of their cool solid state batteries. Oh, wait...

 

[capster]

https://www.berkshirehathaway.com/letters/2020ltr.pdf

For those that haven't yet noticed, Buffett's Annual Letter to Shareholders has been posted. I commend reading this to everybody interested in business or investing, whether you agree with his individual investment choices, or whether you're invested in Bershire or not (I'm not, haven't ever been, and am unlikely to ever be).

Though I haven't made the time to do so, I've got a good case for going back and reading all of the letters to share holders. I think they've got them online back to 1980. I have been reading these annually since somewhere early in the 2000s.

I know that Berkshire has showed up as a point of conversation recently, and there is a fair bit of disdain from many here for Buffett and his stated intent to mostly stay away from tech companies. You'll learn why he's made that choice (and it IS a choice), but again - my suggestion to read these is more for a broad understanding of business.


Oh - and I find his writing style humorous, well crafted, and easy to understand. As a liberal arts major in my first attempt at college, I appreciate everything that is well written.

Interesting comment given recent discussions about the 10-year bond yield:

"And bonds are not the place to be these days. Can you believe that the income recently available from a 10-year U.S. Treasury bond – the yield was 0.93% at yearend – had fallen 94% from the 15.8% yield available in September 1981? In certain large and important countries, such as Germany and Japan, investors earn a negative return on trillions of dollars of sovereign debt. Fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future."

 

[StarFoxisDown!]

I'm finding it quite hilarious reading comments on the The Kilowatts twitter post with the Yoke Pics.

So many people questioning how you can make full turns. They apparently don't realize Tesla engineers have been driving around the Cybertruck and Roadster with yoke steering wheels for like a year now. You'd think it would have been called out in the first day of testing those prototypes to find out "Hey guys I can't make a complete turn, this is going to be an issue".

Pretty funny how people speak out without putting logic behind what they're questioning. Note they're not simply asking "Wonder how it makes a U-Turn". Instead their comments are "This will never work" "Terrible idea".

 

[StealthP3D]

Volkswagen ID.4: Should Tesla Worry About This New Electric Rival?

According to the article the answer is ‘Probably not’. Reading the article, I’d leave out the ‘probably’.

This is my favorite line of the part that wasn't pay-walled:

Compared to this light-footed, sweet-singing creature, gas-burning competitors feel like puttering, muttering nincompoops.

The misguided people who think the transition to mostly EV's will take decades and strict government mandates don't know this yet.

 

[Mengy]

The misguided people who think the transition to mostly EV's will take decades and strict government mandates don't know this yet.

There are two kinds of people on the subject of EV's: those who have driven one, and those who have not yet. And those who have driven an EV know the unavoidable truth that the ICE industry has it's days numbered now. It's as inevitable as Thanos.

 

[TheTalkingMule]

Whatever happened to the rumblings of all VW EVs being recalled due to "major software issues"? It was posted here a few weeks back, but apparently nothing official ever happened?

 

[StealthP3D]

Wish they would have included the energy required to extract and transport the lithium...and other materials like nickel etc. Could even follow that up with how Tesla is addressing that with the local extraction and battery production in Nevada and how on a long enough timeline it all gets replaced with recycling.

You may have noticed the video also didn't address the electricity required to pump the gas from the underground tank into the car. Or the mining required for all those catalytic converters. Or all the brake replacements a car with electromagnetic braking avoids.

The difference in embodied energy between an EV and ICE is minuscule relative to their respective lifetime impacts. The video addressed the biggest ones.

The video did address the impact of lithium mining relative to oil refining. And if you've been following along, you know that Tesla's newest batteries require zero cobalt.

Batteries are getting cleaner but if we stick with oil it will keep getting dirtier as we switch to tar sands, fracking and ever deeper and more remote oil deposits.

 

[OrthoSurg]

My part for next quarter.

went in store to order a SR 7 seater Model Y. They told me it was discontinued.

pulled the trigger for a LR AWD 7 seater. Forget the 13,000$ incentives, YOLO.

 

[j6Lpi429@3j]

Do we know what price tesla bought their bitcoin at? given todays' price, I'm wondering if they are now *down* on the deal...

 

[MXWing]

I'm finding it quite hilarious reading comments on the The Kilowatts twitter post with the Yoke Pics.

So many people questioning how you can make full turns. They apparently don't realize Tesla engineers have been driving around the Cybertruck and Roadster with yoke steering wheels for like a year now. You'd think it would have been called out in the first day of testing those prototypes to find out "Hey guys I can't make a complete turn, this is going to be an issue".

Pretty funny how people speak out without putting logic behind what they're questioning. Note they're not simply asking "Wonder how it makes a U-Turn". Instead their comments are "This will never work" "Terrible idea".

Been around since 2016. I've some some sugar.

ehhhh no one wants a car where the speedometer is not right in front of you
ehhhh no one wants a car with so few buttons
ehhhh no one wants a car with an iPad as a dash
ehhhh no one wants a car they are going to burn up inside because of too much glass on the roof
ehhhh no one wants a car with so few customization options
ehhhh no one wants a car that everyone else wants cuz differentiation.