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

[Krugerrand]

I see the apple does not fall far from the tree......

That’s not actually true, but if it’ll keep people in line then we can go with it.

 

[CHGolferJim]

Added some Jan 24 1100 calls .... waiting for splits ville
If CPI is bad next week, will need to take losses/manage ...

I just noticed I could have pocketed a nice piece of change by closing my Jan 24 $1000-$1400 LEAPs on Thursday and rebuying same or similar yesterday. I haven’t really been daytrading these LEAPs, but this somewhat predictable SP move sure suggested the benefits when you get the direction right.

 

[capster]

I don't know if I'd classify the ramp as going pretty well. It's ok, fine, etc. but it's certainly behind the original schedule now and there's 6-12 months to get volume production up to speed before it starts to have an impact on growth expectations - which again is fine but nothing to write home about.

If the cell ramp does get delayed further and we end up with lower than expected growth in 2023 then that will have an impact on the stock price until the problem is resolved. Exiting 2022 at a 2m production rate means we'll already have a minimum of around 40% growth baked in for 2023 - a strong result but below guidance (although I don't know where Austin/Berlin will get enough NMC cells to reach 500k/yr MY capacity each without Tesla cells - possibly they will need to start producing LFP MY).

We would also end up with lower than expected margins if we have a couple of factories that remain below production capacity or need to tilt the product mix towards SR MYs with LFP packs.

It isn't a long term concern but 2023/4 could see a few bumps in the road when comparing to 50% annual growth. Even at battery day I was expecting the stated timelines to slip due to the huge amount of new technology going into the process - Elon even says that he specialised in turning impossible into late.

Though perhaps even Optimus optimists here might have underestimated the rate of progress on the humanoid robot front.

Hmm, I wonder if, at the LA supercharger showcase restaurant Elon mentioned, we will see Optimi on roller skates/blades delivering shakes and burgers to folks in their Teslas who are watching those famous movie clips?

That’d be sweet.

 

[Skryll]

I just noticed I could have pocketed a nice piece of change by closing my Jan 24 $1000-$1400 LEAPs on Thursday and rebuying same or similar yesterday. I haven’t really been daytrading these LEAPs, but this somewhat predictable SP move sure suggested the benefits when you get the direction right.

You have discovered the secret to unfathomable richdom. Let me know next time you plan to get the direction right, I am in

 

[Xepa777]

I would say there is some positive and some negative news:

- 12-15 years life on a battery pack. I've been telling people 25 years. If you have to replace expensive batteries every twelve years - on average - that's a huge expense. I'd love some clarification on that from Tesla.

- Dojo not ready. I thought that it was up and running. "Soonish" is not reassuring. Dojo is way behind and could still fail putting FSD at further risk.

- No nice words about Andrej. No replacement announced. I maintain that he would not have left if they were close to finishing FSD.

- 90% on Chuck's intersection. Not good. I've been waiting for them to tackle a really tough problem. When they finish that, I'll have confidence that it's just a matter of time to check off the rest of the boxes. My fear is that we get FSD down to the one yard line but never can punch the ball into the end zone. That the problems get exponentially more difficult at a rate faster than AI improves. I'm losing confidence in FSD (unsupervised driving) anytime in the next five years. The laugh after the "end of this year" comment was chilling more than funny. If we have to solve limited AGI for FSD to work, then isn't Elon saying we have a very long way to go without saying we have a very long way to go? (I worked for a company where the CEO said "Don't buy a house" in a meeting. That was his way of telling the truth when he couldn't tell us the truth.)

- 4680 way behind. Could disrupt ramp if it isn't sorted out fast.

The value of Tesla is a function of their progress in developing and producing great products. To me, and Elon, the biggest step change in value for Tesla will come from AI. This was not a good report in that regard. The bad news was tangible, the good news was more like smoke. (We've got great products I can't tell you about.)

My comments are not meant as a balanced summary of the meeting. I'll leave the many, many positives from the meeting to others to report on. This is an incredible company and I agree that it will become the most valuable company in the world. But, this meeting pushed that day back a little in my mind.

Careful, say anything negative about FSD here and you’ll get showered with dislikes. It’s the same conversation that we’ve had since 2017 with Elons coast to coast aspirations for FSD and how that slowly melted away. Then I’m the 2019 crisis where Elon said all Tesla had to do was not go bankrupt until FSD was complete.

And you’ll find the same pro-comments over and over again if you look up post history from those years (when I was more of a lurker).

People here are forgiving about it because Tesla stock has made anyblongtime investor rich already and the non FSD roadmap is still a pathway to a multi trillion dollar company. But yah, being blindly religious about something is typically where the worst scandals pop up.

 

[unk45]

I don't particularly agree. For a few reasons:

• Tesla already directly finances vehicles in certain countries - where is your cutoff between what they do now and selling your shares? (this is a good faith question)
• Asset finance has been hugely successful for multiple decades for legacy automakers - only when lending standards dropped did they fall into trouble. Certainly while Elon is there this is not likely to happen. From my read of your post it seems you are only looking at the downfall of captive finance in the GFC or equivalent crises, and not the massive benefit of expanding the market for new technologies that originally inspired captive finance - happy to be proven wrong.
• Seamless finance is an excellent driver of demand and an improvement in customer satisfaction - while it's not necessarily needed for vehicles as the asset class is very well known (even thought tesla finances vehicles), it could remove a real ball ache for people wanting to finance solar roofs, HVAC systems or the tesla bot as these are new technologies which would likely be difficult to finance or would incur increased costs (what's the RV on a Tesla Bot?)
• If Tesla uses their own cash to finance loans their treasury would be competing against their other options that are relatively low yielding (government bonds, etc) or against Bitcoin, which they mostly sold. A decent captive finance arm should easily be able to outperform these options.
• The vast majority of funding for captive finance arms is provided by outside investment (e.g. securitising loans) - so the impact on Tesla's liquidity is minimal, and could in fact improve the overall liquidity as Tesla has the timing option on when to sell down leases/loans.

I think you have presented a very good view of the positives, but for your 'optimistic' view of history.
Belaboring these points probably isn't the finest use of weekend passes on TMC. I'll only say that in good times Captives do very well. In bad times they are normally bailed out by the parent (normally the captives are contractually direct parent obligations anyway. Apart from subvention of interest rates, credit risk and/or resale risk few captives really are profitable. They almost never look that way because of all the parental support.

There are amazing cases that never reach public disclosure and a tiny handful that do. It takes a major catastrophe like GMAC venture in US mortgages (buying Nationwide destroyed them ) to be public:

Feds throw GMAC $6 billion lifeline - Dec. 29, 2008

There is a very long list of failures and bailouts in quite a few countries. Most, as I mentioned, don't become public. Almost always the buyers of their securitized assets do not lose money. Why? All of them have clauses that require the originator to substitute good paper for bad and overcollaterize anyway plus only allowing aged paper in the pool anyway. Those things do create an illusion of low risk.

 

[Curt Renz]

 

[Cobbler]

It's Saturday night.
And Tesla related

 

[Captkerosene]

Careful, say anything negative about FSD here and you’ll get showered with dislikes. It’s the same conversation that we’ve had since 2017 with Elons coast to coast aspirations for FSD and how that slowly melted away. Then I’m the 2019 crisis where Elon said all Tesla had to do was not go bankrupt until FSD was complete.

And you’ll find the same pro-comments over and over again if you look up post history from those years (when I was more of a lurker).

People here are forgiving about it because Tesla stock has made anyblongtime investor rich already and the non FSD roadmap is still a pathway to a multi trillion dollar company. But yah, being blindly religious about something is typically where the worst scandals pop up.

I spent twenty plus years (2,000 - 2,022) debating investment ideas on the Motley Fool Berkshire Hathaway board. The last three plus years as a strong proponent of Tesla and Elon. Sometimes fifty negative recommendations (a little different system) on well thought out and argued pro TSLA posts. I was less popular there than I am here ... which is hard to do. (Funny not funny.)

Very few changed their minds after years of discussion and they still - even after all the evidence to the contrary - think Elon is a huckster and criminal.

I left that board out of frustration and boredom, but, with a pretty good batting average and a willingness to think independently.

If you think the TSLA board can get repetitive, try twenty years of arguing over the BRK dividend policy ... riveting stuff.

 

[WattsHappening]

We used to have an expert on Brazil here, but sadly he ghosted us to probably

1) go run for Brazilian president
2) win
3) get caught in some scandal
4) claim Elon Musk is attempting a coup to get Brazilian minerals

5) film more Dos Equis commercials

 

[hobbes]

WuWa reporting on Giga Shanghai (text from video description):

Renovation completed, full production to resume next week​

Tesla's Shanghai factory, which entered semi-production in July, ended on August 7, a month-long renovation and optimization of the first and second phase of the production line is finally over, and according to Tesla's expectations, after the renovation of the production line, the capacity will be greatly increased. However, the announcement of the location of the second factory in Shanghai has not yet been made and will reportedly be announced at the next Tesla shareholders meeting. To solve the current problem of Shanghai factory capacity, the construction of the second factory is inevitable, the current first factory has been overloaded in July, the Shanghai factory's high capacity, overload workload has made the production line of some employees can not bear the pressure and leave. Therefore, the construction of the second factory in Shanghai is imminent

 

[Todd Burch]

In addition, after seeing how much production Tesla has been able to squeeze out of Freemont alone they might need to build 'only' 3-4 gigas more.

The incredible production improvement along with constant new developments might make this possible.


I really dispise folks who just plug in the numbers based on old trends and sell it as some sort of discovery without using their brains for a bit. Whomever that tfitter guy is he's a tool.

2 perfect examples of this:

1. The dry battery electrode process uses much less factory square footage than the wet process.

2. The Gigacastings save tons of stamping floor space and robots, reducing consumed factory volume significantly.

These types of innovations will continue, allowing factories to become more and more dense.

 

[TheTalkingMule]

Careful, say anything negative about FSD here and you’ll get showered with dislikes. It’s the same conversation that we’ve had since 2017 with Elons coast to coast aspirations for FSD and how that slowly melted away. Then I’m the 2019 crisis where Elon said all Tesla had to do was not go bankrupt until FSD was complete.

And you’ll find the same pro-comments over and over again if you look up post history from those years (when I was more of a lurker).

People here are forgiving about it because Tesla stock has made anyblongtime investor rich already and the non FSD roadmap is still a pathway to a multi trillion dollar company. But yah, being blindly religious about something is typically where the worst scandals pop up.

It's literally a fan site. Can we issue some warnings for these whiney-preambles about fans acting like fans on a fan site?

You could definitely drive a FSD beta 99.9% coast-to-coast tomorrow. You'll have to pardon the riff raff for finding that exciting.

 

[larmor]

2 perfect examples of this:

1. The dry battery electrode process uses much less factory square footage than the wet process.

2. The Gigacastings save tons of stamping floor space and robots, reducing consumed factory volume significantly.

These types of innovations will continue, allowing factories to become more and more dense.

The factory is the product…

 

[Singuy]

It's literally a fan site. Can we issue some warnings for these whiney-preambles about fans acting like fans on a fan site?

You could definitely drive a FSD beta 99.9% coast-to-coast tomorrow. You'll have to pardon the riff raff for finding that exciting.

Yeah I can get onto my hwy system without interventions most days. Once that happens the car just need to go straight for 5k miles on EAP. Don't find this particular challenge very meaningful except that Tesla is the only car that can do it.

 

[2daMoon]

She’s still not talking to me about it. She’s a great grudge holder.

Could you tell her you are asking for a friend who highly values her opinion?

 

[Cosmacelf]

I disagree with the premise ‘people’ have a hard time valuing a straight forward auto company. We know how to value it and I contend the head of WallStreet knows exactly how Tesla should be valued. But they don’t make money valuing it and keeping it properly valued. They make money valuing it all over the place but where it should be, and creating various narratives to tell lies.

Please don't take a single sentence out of a paragraph, removed from context and argue against it.

I said: "Look, you and I think Tesla is underpriced, but that doesn’t mean the market does. You proposed combining everything into one giant public company. What you and I think it is worth is meaningless, as we don’t have $1T hanging around to invest in it. People already have a hard time valuing a pretty straight forward auto manufacturer. Combine in a bunch of speculative investments (and a failing social media company!) and it won’t get any better."

So I was talking about the stock market in aggregate as "people". What I was saying is that the stock market isn't valuing Tesla correctly according to long term investors - we all think Tesla is worth more. Combining a bunch of disparate companies under one umbrella will make this situation worse.

 

[Singuy]

Please don't take a single sentence out of a paragraph, removed from context and argue against it.

I said: "Look, you and I think Tesla is underpriced, but that doesn’t mean the market does. You proposed combining everything into one giant public company. What you and I think it is worth is meaningless, as we don’t have $1T hanging around to invest in it. People already have a hard time valuing a pretty straight forward auto manufacturer. Combine in a bunch of speculative investments (and a failing social media company!) and it won’t get any better."

So I was talking about the stock market in aggregate as "people". What I was saying is that the stock market isn't valuing Tesla correctly according to long term investors - we all think Tesla is worth more. Combining a bunch of disparate companies under one umbrella will make this situation worse.

I think the market is valuing Tesla correctly (minus the bs volitility created by the options market).

1. Tesla has leading operating margins, however will it continue when or if competition sets in?
2. The market is NOT valuing FSD and optimus incorrectly like Elon keep saying. Without these projects solved, then they are just stories. Stories are way out of the money call options, which gets a premium but not overly so.
3. Will Tesla have demand issues after hitting 3 to 5M cars without lowering ASP? Will lowering ASP affect margins if FSD is still not solved?
4. What if someone else solves FSD first?

Lots of unanswered questions only hindsight can answer. Tesla is trying their best to make sure every question above will go in their favor, but no one said it's guaranteed because we don't have a time traveler telling us the ending.

 

[Cosmacelf]

I think the market is valuing Tesla correctly (minus the bs volitility created by the options market).

1. Tesla has leading operating margins, however will it continue when or if competition sets in?
2. The market is NOT valuing FSD and optimus incorrectly like Elon keep saying. Without these projects solved, then they are just stories. Stories are way out of the money call options, which gets a premium but not overly so.
3. Will Tesla have demand issues after hitting 3 to 5M cars without lowering ASP? Will lowering ASP affect margins if FSD is still not solved?
4. What if someone else solves FSD first?

Lots of unanswered questions only hindsight can answer. Tesla is trying their best to make sure every question above will go in their favor, but no one said it's guaranteed because we don't have a time traveler telling us the ending.

I don't disagree. It all depends on individual detailed analysis.

 

[willow_hiller]

The Inflation Reduction Act has received the CBO score that Democrats were hoping for and voting is happening right now. Live stream on CSPAN: U.S. Senate | Event | C-SPAN.org

EDIT: Small clarification that this is the first vote to proceed. And then limited time for debate, and then amendments. The final vote is expected late tonight.