I have been calling NFLX a dud for many quarters. Earning growth seems weak. Content so so. Small TAM. Hardly a bellwether for tech. It should move its ER dates to the end of the season as to not depress everybody out. And dont even get me started on PTON. Too much excess in the market that needs to be flushed out.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
ZachF
Active Member
Profits as a share of GDP are unnaturally high from government stimulus that is tapering down.
You are assuming a slowing economy with an inflation fighting fed will have no impact on profit margins… but look at the last time that happened in the early 80s:
During my own lifetime there are been episodes of mass hysteria, none of which actually needed conspiracy, only ignorance and fear of the unknown.
Here are TMC we have tended to be a rational bunch, biased in favor of our passion, to be sure.
Recently we've tended a trifle towards conspiracy visions to justify negative views of TSLA.
We need no conspiracies to understand these views:
1. Auto dealers cannot be expected to be favorably disposed towards a company that does not use them;
2. Petroleum companies might not favor entities which are devoted to excluding use of fossil fuels.
3. Can anybody imagine why an operator of a gasoline vendor would favor an entity that seeks their demise?
4. Should union leaders and advocates favor entities that do not have unionized workforces?
5. Why should rating agencies favor a company that does not issue new ratable securities?
6. Why would investment bankers favor entity that does not regularly issue new securities of any kind?
..and this list goes on.
No conspiracies required. All these and more are entities that are threatened directly by the business model and plans of an entity that thrives by unsetting the status quo.
We really should stop imagining coordinated action and simply understand that many parts of the commercial world are threatened by greater or lesser extent by Tesla, SpaceX and what they represent. They need not coordinate for their common interests are obvious to all of them.
It is transparently obvious that the massive TSLA derivatives are a successful attempt to make money when conventional means will not work. Gullible, ignorant and/or greedy speculators greatly ease their efforts. Importantly institutional investors can 'innocently' engage in securities lending that lets them reduce carrying costs from non-dividend-paying security while incurring little risk.
SO, what do they need to conspire? Obviously, they do not. It's less risky to just understand their shared interests.
Every time we berate volatility, understated that volatility keeps the whole marker thriving, for the major players.
Retail ones can never thrive in this environment, if they try to play the market makers.
OK, throw brickbats! Please, please think!
Here are TMC we have tended to be a rational bunch, biased in favor of our passion, to be sure.
Recently we've tended a trifle towards conspiracy visions to justify negative views of TSLA.
We need no conspiracies to understand these views:
1. Auto dealers cannot be expected to be favorably disposed towards a company that does not use them;
2. Petroleum companies might not favor entities which are devoted to excluding use of fossil fuels.
3. Can anybody imagine why an operator of a gasoline vendor would favor an entity that seeks their demise?
4. Should union leaders and advocates favor entities that do not have unionized workforces?
5. Why should rating agencies favor a company that does not issue new ratable securities?
6. Why would investment bankers favor entity that does not regularly issue new securities of any kind?
..and this list goes on.
No conspiracies required. All these and more are entities that are threatened directly by the business model and plans of an entity that thrives by unsetting the status quo.
We really should stop imagining coordinated action and simply understand that many parts of the commercial world are threatened by greater or lesser extent by Tesla, SpaceX and what they represent. They need not coordinate for their common interests are obvious to all of them.
It is transparently obvious that the massive TSLA derivatives are a successful attempt to make money when conventional means will not work. Gullible, ignorant and/or greedy speculators greatly ease their efforts. Importantly institutional investors can 'innocently' engage in securities lending that lets them reduce carrying costs from non-dividend-paying security while incurring little risk.
SO, what do they need to conspire? Obviously, they do not. It's less risky to just understand their shared interests.
Every time we berate volatility, understated that volatility keeps the whole marker thriving, for the major players.
Retail ones can never thrive in this environment, if they try to play the market makers.
OK, throw brickbats! Please, please think!
Profits as a share of GDP are high because the economy has never seen profit margins at massive scale that Big Tech is doing which really has little to nothing to do with government stimulus. Perfect example, both Apple and Microsoft grew earnings at double the rate of their revenue year over year. That is going to have profound impacts on profit as share of GDP. Tesla grew profits at a rate of 4X revenue YoY in Q3. This is leverage at play that is going to throw off everything when you look at the "old" economy/stock market.Profits as a share of GDP are unnaturally high from government stimulus that is tapering down.
You are assuming a slowing economy with an inflation fighting fed will have no impact on profit margins… but look at the last time that happened in the early 80s:
I mean just think about what Tesla is going to do to the traditional metrics of profits as share of GDP on the automotive side......Tesla is going to throw all sorts of traditional metrics into disarray because a "auto maker" isn't supposed to be making anywhere near the profit level Tesla will achieve.
And if you know anything about how the world economy works with Big Tech and software, then you know that is a stable and recurring source of earnings going forward. Just remind everyone, the period between 2010 and 2020 (and has been accelerating in 2021) is the best period of earnings growth in the history of the stock market.
If you take out Tech's earnings, that changes that chart/graph immensely. The notion that government spending is the key reason is hilarious to me.
And again....you're assuming slowing economy and inflation fighting fed even though there just as much evidence of the contrary is coming. Even if the actual result is somewhere in the middle, the worst off is that in 6 months the index's are essentially flat. Because just 6 months of Big Tech earnings growth will take the S&P's P/E multiple from 25 into the teens.
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Rumor with some evidence that Performance Model Ys being built in Berlin right now.
From Telsa? If that’s how far their writing standards have fallen, I’m selling my shares Monday.
In Germany they are saying MY can be ordered now and delivered in March. That's much sooner than expected.
And? Might want to go and look at how much earnings have increased since the pandemic as well.
I don’t get why people point out how much an index has increase without also including how much earnings have increased. They’re tied at the hip. For whatever reason that’s always left out when people claim a crash is coming
Let The Wild Rumpus Begin*
Today in the U.S. we are in the fourth superbubble of the last hundred years, and for the first time in the U.S. we have simultaneous bubbles across all major asset classes.
www.gmo.com
crash is coming.
I’m buying more. Clearly margin is going up. English majors can weigh on expenses quite a bit.
Now can you articulate for yourself why you’re so certain a crash is coming? Because these same people have been calling the market a bubble for 10 years nowLet The Wild Rumpus Begin*
Today in the U.S. we are in the fourth superbubble of the last hundred years, and for the first time in the U.S. we have simultaneous bubbles across all major asset classes.www.gmo.com
crash is coming.
ZachF
Active Member
You’re assuming the public’s capacity for massive rent-seeking by giant tech monopolies is infinite. Public opinion on these tech monopolies has been dropping precipitously…. And don’t kid yourself, most of the margin increase from Facebook, Google and Apple is pure monopoly rent.
The probability that the current party loses and the next one decides to Teddy Roosevelt on big tech is growing rapidly IMHO.
And there is lots of evidence the economy is slowing. It’s inevitable if the fed can’t get inflation under control and real wages continue to drop.
Also, profits as a share of GDP have a strong inverse correlation with rates. Compare that chart to the fed funds rate chart
My last post on macro economics and the stock market since I feel like I'll probably be at risk of getting a warning
But after reading that, I'm VERY comfortable with the market today. That research report is exactly the type of example of someone that is from the old economy/stock market that fundamentally doesn't understand the market today or the dynamics. As expected, he uses exaggerations to create the fear while completely ignoring the underlining basics of what has been happening over the past 10 years.
How is the economy slowing and yet can't get inflation under control? You can one or the other as they are polar opposite.
Sigh, alright one more post then I promise no more on the topic.
You view tech's profits/earnings as rent-seeking? Wow........I can't even remotely get on the same thought process as you. Consumers CHOOSE to use tech's products/software and as consumer has shown with their money, they love the aspects that tech bring into their lives.
Public opinion on tech dropping precipitously? So I guess you're applying the sentiment of FB to all other tech companies? And now the debate is resorting to Congress stopping tech's earnings....When your argument rests on tech's earnings won't continue the trend they've been on for 10 YEARS because of Congress.....yeah I don't know what to say.
Edit: Sorry for the offtopic, my last post on it. Won't derail the thread anymore.
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I am trying to understand that article.My last post on macro economics and the stock market since I feel like I'll probably be at risk of getting a warning
But after reading that, I'm VERY comfortable with the market today. That research report is exactly the type of example of someone that is from the old economy/stock market that fundamentally doesn't understand the market today or the dynamics. As expected, he uses exaggerations to create the fear while completely ignoring the underlining basics of what has been happening over the past 10 years.
According to the article
1. House is in a bubble
2. Equity market is in a bubble
3. Energy is in a bubble
4. Bonds are in a bubble
5. High inflation so cash is trash
6. Commodities are in a bubble
If everything is in a bubble then there is no bubble. It's kind of how things work. There's nothing to flee to. Covid as of today have continued to trash value company earnings except perhaps those involved in home construction.
Correlation does not mean causation. Both are tech ideas that have exploded into the scene over the past few years. Lots of articles discuss the ownership of BTC by Tesla as well.
ZachF
Active Member
The economy is slowing because inflation is biting into consumer purchasing power.
In order to fight inflation, the fed is going to have to raise rates, which will also likely slow the economy.
It the same thing that happened in the 70s and then the 80s, only on a much smaller and less severe scale. 70s stagflation led to the early 80s recession.
It’s a good thing the fed is doing it now rather than later, as the medicine would become more painful.
Note, I’m not expecting a giant crash and a collapse, but think a slowdown and a pullback (perhaps as high as 30%) is highly likely, then it will be back to business… that some of you think any type of slowdown ever is utterly impossible is odd to me and shows a lack of historical context.
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