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

[lascavarian]

Just a hobby for a man like Elon.)

This will be reassuring to investors whose billions he is seeking fund efforts to remove bots, increase user charges and gut the present staff. Or they could put those dollars into Tesla and get a spectacular return. YMMV

 

[chiptoe]

True enough about Windows and Gates (not a fan), but at the same time, the original Mac OS was "stolen" from Xerox and their PARC os.

Apple actually paid for the opportunity to view/demo their GUI. Some of the mid-level Xerox guys were upset about showing it, but upper level approved it. No theft.

 

[Usain]

History is full of people who told Elon what he didn't have enough know-how to do and were as wrong as wrong could be. I suspect you will be in good (bad) company.

Elon can't reform Twitter because he doesn't understand the nuances of language. Free speech is a complex topic that Elon has no expertise in. Twitter has learned a thing or two as they became one of the most popular social networks to ever be devised. Elon cannot be effective here, he is out of his league.

Any questions?

I agree with you. Elon definitely has what it takes to be the world's greatest social media CEO. But I do have a few questions.

How much of Elon's time will it take to turn Twitter into the world's best social platform?
Why does humanity need Twitter to be the world's best social platform?
Is the free speech dilemma a solvable problem?

I don't expect anyone here to have answers to these questions. I do expect Elon will try to give us these answers over the next several months. And I think that's the basic problem with the discussion about it on this forum. Until the Twitter acquisition is wrapped up, Elon can't reveal all his thoughts on this topic.

We just don't know the full story yet. And that makes investors nervous.

 

[Nocturnal]

That makes best-case** in Shanghai for Q2 as approx. (6*7+4)*2600+4*6*1200 = 148,400 units. Note that Q1 was roughly 183K at GF3, so that's ~ 35K fewer.

Now toss in Berlin Q2 at 1,200/wk in Apr/May and 2,000 in June, that's approx. 18K. Maybe (i dunno) half-ish that from Austin? So maybe 17K fewer from the 3 new plants in Q2 as Shanghai alone in Q1? (NB: large error bars in this estimate, so YMMV*).

Then, Fremont becomes the wildcard. Let's say add similar additional S/X prod in Q2 as we saw in Q1, which was +1.1 K extra S/X. So if Fremont 3/Y prod. just matches Q1, then Q2 total production comes in at around 299K, with potential upside if S/X ramps faster.

Now I won't go all Chowdry on a Fremont 3/Y run rate, but l do note that in order to match Q1 total production, they only need to raise 3/Y Q2 total by 6,700 units, or about +40 cars per 10-hr shift). That's also about a 6% increase in production. We know Fremont has been supply constrained, not GA limited. So if those chips and such are available, I think +6% is quite doable. Paging

Throw in the increased pricing that will now be in effect, and maybe some of those tax credits and we get a rabbit out of the hat situation.

Absolutely. I believe that they will be driven by Dojo, which Elon is going to have run Twitter so it becomes super adept at human interactions. Add an smaller, powerful starlink connector and they will never be off line!

I believe this is MasterPlan part three. Genius. What could go wrong?

(Sorry, couldn't help myself).

So, I'm hearing that Twitter could be Tesla's first DOJO customer.

More revenue and a very public demonstration of it's capabilities.

 

[jeewee3000]

This will be reassuring to investors whose billions he is seeking fund efforts to remove bots, increase user charges and gut the present staff. Or they could put those dollars into Tesla and get a spectacular return. YMMV

They trust Elon, as do I.

Else they wouldn't invest into this venture.

Let's stop the worrying until Elon actually fudges this up, okay? (He won't)

 

[Xd85]

Now on to the perpetual P/E discussion. Does SP, as determined by how much "market" values and supply/demand equilibrium, drive the P/E ratio? Or does the "market" apply a PE ratio to get an SP range? Chicken, or egg?

 

[Max Plaid]

I remember all of those over the many years! It's hilarious thinking back while STILL seeing people doubt Elon's capabilities today. The very reason I own Tesla stock is because Elon has proven himself to be a "miracle worker".

I say let Elon be Elon and if you don't like it then don't own TSLA, very simple.

Yeah, I get frustrated too with some of the immature Tweets and antics, distractions, what-have-you, but I always return to the fact that under Elon's stewardship, my $TSLA-based portfolio went 40x initial investment, so he basically gets a pass from me to do what the hell he wants...

 

[brantse]

Now on to the perpetual P/E discussion. Does SP, as determined by how much "market" values and supply/demand equilibrium, drive the P/E ratio? Or does the "market" apply a PE ratio to get an SP range? Chicken, or egg?

Yes. There's no rules. The market and price for anything is the merged point where buyers and sellers meet. PE ratios are used to try to assess value to companies, but it's a very fluid process and everything will continue to change over time.

The more important thing to focus on is defined as "alpha", which is relevant information that you are aware of, but you don't think the rest of the market is, which will cause upward price movement sometime in the future, when the market learns about it.

Alpha for me is and always has been:
1. Demand
2. Competition ain't even close

 

[nativewolf]

Apple actually paid for the opportunity to view/demo their GUI. Some of the mid-level Xerox guys were upset about showing it, but upper level approved it. No theft.

Xerox had the opportunity to purchase $1mln in Apple stock. They did and then almost immediately sold it for a 20% profit, $1.2 million. Held until today it would have been worth over $2 billion, a good investment. Remember this was 1978/9 (I dont' remember).

 

[jbcarioca]

... If that's your belief, we'll just have to agree to disagree.

On this final point I must disagree with you. When dealing with matters of fact it is crucial to have all sides of an argument share comment factual data. In this situation we do have demonstrable facts.

In this case, the poster to whom you responded was factually incorrect. No room for opinion, hence no need to 'agree to disagree'.

Obviously I others strongly agree with you post. The evidence is overwhelming.

 

[Xd85]

Yes. There's no rules. The market and price for anything is the merged point where buyers and sellers meet. PE ratios are used to try to assess value to companies, but it's a very fluid process and everything will continue to change over time.

The more important thing to focus on is defined as "alpha", which is relevant information that you are aware of, but you don't think the rest of the market is, which will cause upward price movement sometime in the future, when the market learns about it.

Alpha for me is and always has been:
1. Demand
2. Competition ain't even close

But-

How does the upward price movement related to alpha even happen if market cannot learn or discounts its value?

 

[The Accountant]

(6*7+4)*2600

On the math above: is that 6 weeks at 7 days per week (plus 4 more days for the partial week)?

 

[Krugerrand]

This will be reassuring to investors whose billions he is seeking fund efforts to remove bots, increase user charges and gut the present staff. Or they could put those dollars into Tesla and get a spectacular return. YMMV

Yes, it should be reassuring to all the PRIVATE investors who CHOOSE to invest in a private Twitter, otherwise they are free to take their billions somewhere else. For the record, they won’t and they’ll finish richer than they started.

Some likely already have money in Tesla, and if not might very well choose to invest in Tesla after the fact. They do after all like to be diversified.

Don’t worry about the billionaires, they aren’t worried about you.

 

[Krugerrand]

We just don't know the full story yet. And that makes investors nervous.

You’re right of course, but if a bear poops in the forest it makes investors nervous.

Let me explain why that is;

Too much emphasis and money worship.
Inability to process fear and give it the appropriate amount of attention it deserves, which is minimal.
Micro analyzing every little unimportant detail and missing the forest for the trees.
Falling for the constant stream of lies that they are bombarded by on a daily basis.
Not playing dead.

 

[brantse]

But-

How does the upward price movement related to alpha even happen if market cannot learn or discounts its value?

"In the short term the market is a voting machine, in the long term it's a weighing machine." Eventually, the market can't ignore it.

I think alpha can go both ways, to be honest. Last year, my sister told me that a friend of her's (who has very little savings and no knowledge or interest in Tesla) bought some TSLA. I think when people like this create "artificial" buying interest, bubbles start to form. At this point, I'm sure that she and many others who were just buying TSLA because they heard it kept going up, have been shaken out.

 

[ZachF]

Xerox had the opportunity to purchase $1mln in Apple stock. They did and then almost immediately sold it for a 20% profit, $1.2 million. Held until today it would have been worth over $2 billion, a good investment. Remember this was 1978/9 (I dont' remember).

On that note, I’m pretty sure the stake Daimler purchased in Tesla more than a decade ago would be worth more than Daimler itself if they still had it… lol

 

[betstarship]

Good job growth numbers

Payroll growth accelerated by 428,000 in April, more than expected as jobs picture stays strong

Nonfarm payrolls grew by 428,000 for the month, a bit above the Dow Jones estimate of 400,000. The unemployment rate was 3.6%.

www.cnbc.com

 

[Krugerrand]

Now on to the perpetual P/E discussion. Does SP, as determined by how much "market" values and supply/demand equilibrium, drive the P/E ratio? Or does the "market" apply a PE ratio to get an SP range? Chicken, or egg?

Neither.

P/E is a made up metric by the ‘’market’. It’s not real. The ‘market’ then weaves an appropriate story to ‘explain’ a current P/E for a specific company.

Think about it like a moving scale of smooth to crunchy peanut butter. Randomly grab a jar off the shelf, then decide whether it’s too smooth, not smooth enough, too crunchy, or not crunchy enough depending on whether or not the color of the label matches your underwear. For the record, 360 days of the year you’re not wearing underwear and the label doesn’t match the other 5 days.

 

[jbcarioca]

...



... The Progressives can't imagine other solutions to problems besides the ones they know. They are not first-principles thinkers

Elon will hire first-principles thinkers to redesign Twitter, just as he has done for all his companies. How about we see what they come up with before we join the alarmists fearing disaster.

I would fully agree with your point were you to have noted that "extremists" rather than only "Progressives" are the people with the problems you note. There is now histrionic Elon Musk support coming from the 'radical right' and dismay from the 'radical left' when neither side is paying attention to the Principles on which Elon decisions are based. Depending on the subject and the momentary tenor of discussion he appears to please one or another extreme. In truth, we all should know by now that he is neither extreme left nor right. Hence he is ultra-conservative in that he si trying to conserve humanity. He is ultra-progressive in that he is trying to add the transition to renewable energy while largely eliminating fossil fuels. Of course neither conservative nor progressive has leading capital letters because the protagonists are misusing the words in both cases.

It is not helpful for any of us to attempt to place Elon Musk on a political spectrum. OMG, he's moving to Texas, he must be a radical right extremist Republican! OMG, he's moving to Austin, that hotbed fo radical leftists in Texas. he must be a closet left wing Democrat! But..he manages to cultivate both, depending on the situation. OMG, he's a capitalist!

Is it not wise to accept that First Principles outweigh narrow partisan politics?

This topic, sadly, has become very much On Topic for TSLA investors because Politics is interfering with the core mission of Tesla. Whether with labor union preferences or anti-direct sales laws, factory operations nd construction issues politics enters every moment.

Is it not wise to accept that First Principles demand using the tactics we can use to advance the human probability of survival? I understand that such an idea tends to be exaggerated into crass expediency, so it is very difficult to execute. There are few humans who seem able to do that, and one such is certainly Elon Musk.

 

[The Accountant]

That makes best-case** in Shanghai for Q2 as approx. (6*7+4)*2600+4*6*1200 = 148,400 units. Note that Q1 was roughly 183K at GF3, so that's ~ 35K fewer.

Now toss in Berlin Q2 at 1,200/wk in Apr/May and 2,000 in June, that's approx. 18K. Maybe (i dunno) half-ish that from Austin? So maybe 17K fewer from the 3 new plants in Q2 as Shanghai alone in Q1? (NB: large error bars in this estimate, so YMMV*).

Then, Fremont becomes the wildcard. Let's say add similar additional S/X prod in Q2 as we saw in Q1, which was +1.1 K extra S/X. So if Fremont 3/Y prod. just matches Q1, then Q2 total production comes in at around 299K, with potential upside if S/X ramps faster.

Now I won't go all Chowdry on a Fremont 3/Y run rate, but l do note that in order to match Q1 total production, they only need to raise 3/Y Q2 total by 6,700 units, or about +40 cars per 10-hr shift). That's also about a 6% increase in production. We know Fremont has been supply constrained, not GA limited. So if those chips and such are available, I think +6% is quite doable. Paging @The Accountant



Giga Shanghai was running a single 12-hr shift, 6 days per week during that time. So I put it at 24 days @ 1,200 (though their may have been some ramp-up time in the first 2-3 days, per local reports)

Cheers to the longs!
*deliberately obfuscated to confuse the bots and scalpers.
**Edt'd for GF3 in Q2 is ~2600*7*12 = 218.4K

This is not my forecast for Q2 - I'm trying to model some numbers based on your post.
I'm arriving at a lower number for Shanghai. I have 132,800. Let me know where my math or assumptions are off. I'm assuming 6 day work weeks.
The 3rd month of June for Shanghai seems low with 67,600; if the supply chain for parts is fine for June, I think Shanghai should be well above 70,000 units (that would be more than 2,600 per day).
The modeling below shows Q2 below Q1 by 12,807 units. Tesla will need more production from Shanghai in June and higher production from Berlin and Austin to meet the Q1 production numbers.

Edit: I ran a manufacturing site for 3 years that supported a $12B business (yes, I was not only an accountant). When you have a motivated workforce, they can take production to unimaginable levels when a crisis is on hand. I think Tesla's line workers will see this as a challenge and will rise to the occasion to surprise all of us.