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

[TheTalkingMule]

Looks like these Shanghai updates got some people's attention.

 

[Discoducky]

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

and it has improved pre-market substantially...there's a nice spike, let's hope it holds today!

 

[2daMoon]

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...

Well said.

I've held the idea that his "immature Tweets and antics, distractions, what-have-you" are significant in drawing attention to him, and to his companies.

The lion's share of that attention has resulted in people eventually being exposed to the positive aspects of his works. This behavior also paints him as a regular guy with foibles which clearly demonstrate he isn't just another stuffed shirt of a CEO. People connect to Elon.

Twitter has been Tesla's primary "advertising" channel due to how effectively a tweet from Elon can bring this attention to focus. Heck, even those who disparage Elon over his antics draw attention.

Anything that draws eyes to Tesla and other Musk ventures opens a door for another open-minded person to learn more and decide for themselves what they think of Elon and his products.

I see this as a sort of Hyperspace Bypass around FUD that employs the FUD itself as a sort of catalyst.

It's all good. (Except for the Vogon Poetry, of course.)

 

[Xd85]

and it has improved pre-market substantially...there's a nice spike, let's hope it holds today!

jobs good, rates up, "growth" down
jobs bad, economy down, "growth" down

 

[ZachF]

P/E compression…

 

[The Accountant]

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

I think these details from the article are important:
"There also was some better news on the inflation front: Average hourly earnings continued to grow, but at a 0.3% level for the month that was a bit below the 0.4% estimate. On a year-over-year basis, earnings were up 5.5%, about the same as in March but still below the pace of inflation."

My thoughts: After adding 428k jobs, the unemployment rate stayed flat at 3.6% (the number of unemployed people stayed flat at 5.9M) . . .meaning more people are entering the workforce (higher participation rate). As more people enter the work force, it puts less pressure on wage inflation.

 

[CLK350]

If so, Elon hasn’t shown himself to be particularly great at anything to do with AI. As they were getting ready to roll out Mobileye way back when, he didn’t think AI was needed for FSD. Then they tried to replicate Mobileye using more simplistic AI. It wasn’t until they hired Karpathy before they had something decent. But even
then he has consistently overshot what the systems they built were capable of doing. He’s now making the same mistake with Teslabot. A robot that is trained at the factory isn’t going going to be flexible enough to work in most real world jobs. Driving a car is much, much simpler than what a humanoid AI would have to deal with. My point is that Elon hasn’t shown himself to add much value to AI efforts.

This argument is actually a huge credit to Elon: he does start with what seems the right approach. Like originally trying to fit the electric powertrain and batteries into a Lotus car frame - then when he realizes it was a mistake, re-examines and starts afresh. Same thing happened with the Model 3 ramp: it was overly automated, leading to major bottlenecks. Well, he realized he made a mistake and corrected course, hired and eventually bought the best specialists (Grohman) to help with automation.

In the case of AI, same thing. Once he realized the Mobileye approach wasn't working, he asked the most knowledgeable tech in the field (Karpathy) what could be done, whether he could do it. Then handed him a $100M budget to start the revamp. A few years later here we are, with Tesla being close to solving the AGI as it turned out to be a necessary ingredient to solving FSD.

The big item to watch, IMHO is Twitter. We've seen at the last Q1 earnings meeting, see in the TMC post above, The Limiting Factor notes , how well Elon's team is functioning. So all the teams are in place so that Elon only needs to address critical choke points

41:51 Leadership All Pulling in the Same Direction

Re Twitter, of course he doesn't master all the pieces necessary to make it a reasonably successful (financially and in terms of his objective, a townsquare type of place with freedom of speech - eschewing the many pitfalls this will entail - getting rid of bots probably the "easiest" item to tackle). Well, 1/ Elon is objective enough to know when he needs other's help, and he certainly will get the best help he can get, and 2/ Elon's not infallible, but he's shown he does recover v. well from initial mistakes*

TBH any small improvement to Twitter would be welcome (actually many new changes have already been implemented even before he takes a closer look). The conventional mass media that has been in the pocket of lobbyists etc since forever, all major FUD sters is clearly very concerned ... even our gov reacted with a "Disinformation Board", so he must be doing something big and right.

(*) Something to the effect that if you don't make mistakes you're not trying hard enough (SpaceX stories abound)

 

[ZachF]

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.

View attachment 801169

My conservative guess was ~286k.

Q3 should be 400k+ easy.

 

[MadScientist23]

What is with this market, that was at worst a neutral jobs report, yet the overall market is down about 2%. I know it's Friday and we tend to have dips Friday morning for stupid MM stuff but come on. Sorry just needed to rant.

 

[ZachF]

I think these details from the article are important:
"There also was some better news on the inflation front: Average hourly earnings continued to grow, but at a 0.3% level for the month that was a bit below the 0.4% estimate. On a year-over-year basis, earnings were up 5.5%, about the same as in March but still below the pace of inflation."

My thoughts: After adding 428k jobs, the unemployment rate stayed flat at 3.6% (the number of unemployed people stayed flat at 5.9M) . . .meaning more people are entering the workforce (higher participation rate). As more people enter the work force, it puts less pressure on wage inflation.

The jobs numbers are strong but the wage and productivity numbers are pretty horrible TBH.

 

[ZsoZso]

Is this groundhog-day all over or my browser is broken and won't update properly?
I seem to see the same hard dropping pattern as I saw yesterday morning...
Not even a dead-cat* bounce after yesterday's blood-bath ?

* Apologies to @Krugerrand

 

[Nocturnal]

jobs bad, economy down, "growth" down

I posted the same thing to twitter a few seconds ago.

 

[mongo]

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.

For a non-growth, all profits to dividends (or cash pile) company, P/E allows comparisons to fixed rate vehicles.
P/E of 20 is roughly equivalent to 5% interest.
For Tesla which is none of that, it's less meaningful.

 

[ZachF]

What is with this market, that was at worst a neutral jobs report, yet the overall market is down about 2%. I know it's Friday and we tend to have dips Friday morning for stupid MM stuff but come on. Sorry just needed to rant.

Job growth above the rate of overall economic growth is actually pretty bad, because it implies negative productivity growth.

Productivity growth is essentially the cornerstone of a growing standard of living.

 

[betstarship]

I'm putting this in the Tesla investor thread, lots of comments on how the following create a huge moat for Tesla compared to Rivian:

- mostly expansive, private supercharging network
- service center availability
- the tech (mobile app + in-car navigation)
- lots of people missing autopilot after switching to Rivian

Rivian customer noted advantages?
- space + storage
- quality of the interior
- ride quality

Shared advantages as EV's:
- OTA updates as reliable (Tesla is more frequent updates than Rivian)
- charging networks

Threats
- Electrify America just sucks as a charging network
- Uncertainty about the EV market outside of Tesla

One quote (Model S user back in the day pre-supercharging build out):

"I’ve definitely gotten used to just telling the car where I want to go and letting it figure out the charging."

Surprisingly many are comparing the Rivian R1S to the Model Y, not the Model X.

https://www.reddit.com/r/Rivian/comments/uiy7gk

 

[thx1139]

I have been investing since 1988 and I cant remember a market more afraid of its own shadow.

 

[ZachF]

Stack ‘em deep, stack ‘em cheap.

 

[JRP3]

Sorry, but is this a joke? I don't want to be too insensitive, but this is TWITTER. Elon is literally a rocket scientist, that lead the push to build the first re-usable rocket. He's mainstreamed EVs AND made them cool.

I don't question his technological and engineering skills I just don't think Twitter is a technological and engineering problem. Sure he might be able to get rid of some bots, great, but other than that I don't see any massive innovation coming to transform the platform. My main point is Twitter is not that important and not worthy of his time which could be better spent at the four companies he already runs. It's quite likely that at some point another social media platform will come along and Twitter will go the way of MySpace.

 

[TheTalkingMule]

I have been investing since 1988 and I cant remember a market more afraid of its own shadow.

It's been a long run since 2009, people are scared of what they don't understand. The Fed is raising! And that means.....

All I see is our PE below 115 and the wider market dropping below what I'd consider a neutral PE for the level of earnings we've been seeing.

Volatility is the new normal. Would not be surprised to see a green close for TSLA today. It's madness!

 

[Nocturnal]

The old gal still has some fight left in her!

Job growth above the rate of overall economic growth is actually pretty bad, because it implies negative productivity growth.

Productivity growth is essentially the cornerstone of a growing standard of living.

Productivity suffers when inputs are lacking (people being out sick for covid didn't help). I still say much of our "inflation" is directly attributable to lack of supply, vs excess money.