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

[MikeAtkinson]

The pound is also weak, partly due to the strength of the dollar.

As one commenter put it, "abandoning all fiscal discipline is not good for the strength of the pound.

This makes a difference for TSLA investors in the UK as when converted into pounds TSLA has gained 15% extra. Some forecasts have the pound falling another 10% this year.

 

[MikeAtkinson]

There is also a mini-budget in the UK today. Mini in name, but with larger spending increases and tax reduction changes than most full budgets.

Actually not a mini-budget, it is called a fiscal statement, as they don't want the Office of Budget Responsibility giving their opinion (which is likely to be damming).

It is supposed to be all about growth, but the measures leaked will only have a marginal effect on growth IMHO.

Tesla were right to rule out Britain for a gigafactory, long term prospects for the economy look bleak.

 

[jeewee3000]

Why would they ship Berlin built Model Y to Taiwan? And then ship shanghai built Y to Europe?

That doesn't make much sense.

I can only answer the second question.

When I visited the local Tesla showroom last weekend I received a detailed explanation of exporting logic as of now.

Right now Giga Berlin only makes white and black Model Y's (2170's) and will continue to do so until they have ramped some more. New colours in Giga Berlin are only expected to start production at the earliest late this year (he said December), but more likely early 2023 (he said January/February).

This is why the delivery times in EU for a white or black Model Y are shorter than for any of the other colours.

The other colours (like my blue Y) are currently produced and shipped from Shanghai early in the quarter, to arrive in EU by mid-to-end of quarter. My Model Y will most likely arrive by end of February, i.e. produced early January in Shanghai.

(The waiting list is too long for my car to be produced and shipped from Shanghai in Q4. I should tell Your Mom.)

This explains why Shanghai is shipping Y's to EU: spread out production of certain trims to keep wait times in check around the globe.

The guy did tell me that IF Giga Berlin were to start production of other colours before January 2023 there's a good chance I would receive my car only days after production, which would be December. (Transport from Giga Berlin to Belgium is apparently only 1 day, max 2, whilst Shanghai takes weeks. I knew Berlin was quicker but damn).

 

[CorneliusXX]

Nice Morgan Stanley note on the advantages the IRA bill gives Tesla.

Spoiler: page 1

View attachment 855866

Spoiler: page 2

View attachment 855867

"For the first time since its 2010 IPO, $TSLA may soon find itself as a consensus 'long' in the institutional investor community. This has never happened before"

This is an excellent note. Even though we have talked about the insane benefits of the IRA (particularly wrt Tesla) I still think they're being drastically understated. There are huge investment funds that will redeploy many hundreds of billions of dollars into the green sector in the US over the coming years that otherwise would have gone to either other regions or other asset classes. It's not just batteries, it's going to be through charging, H2, Ammonia, software management tools, CCS - basically anything that gets favourable treatment under the IRA is about to receive a deluge of investment.

If I were more ambitious I'd start any sort of green company today and sell it to an investment fund in a couple of years - I think it's likely they'll buy anything that fits under the IRA influence for an outrageous price. You could put any sort of crazy growth projections in your business model and just say it is underwritten by the government - which could be a convincing story.

 

[UncaNed]

Wall Street is only interested in churning shares so they can collect the vig. They keep telling people that they have too many shares of skyrocketing companies and need to decrease risk by buying more losers like Ford and GM. Some of us here have learned the hard way that the way to make money is to ignore the sharks and HODL. You and I see the future but all the sheep selling today just see what the MMs want them to see.

Not Advise just my observations after 30 years of being hosed by the market makers until I figured out that I'm not who they were concerned about.

The "vig"??

 

[Tachyon]

The "vig"??

Found on wiki
Vigorish (also known as juice, under-juice, the cut, the take, the margin, the house edgeor simply the vig) is the fee charged by a bookmaker (or bookie) for accepting a gambler's wager.

 

[ZachF]

The pound is also weak, partly due to the strength of the dollar.

As one commenter put it, "abandoning all fiscal discipline is not good for the strength of the pound.

This makes a difference for TSLA investors in the UK as when converted into pounds TSLA has gained 15% extra. Some forecasts have the pound falling another 10% this year.

The pound is headed to parity.

Honestly, the whole of Europe is in a huge negative paradigm shift, similar to what occurred in the US in the 1970s. Just like the US in the 1970s, Europe’s global economic standing is going to drop considerably in the next few years.

In the early 1970s the US had to start importing lots of energy after local oil production peaked, competing with Europe and Japan for the same energy resources. The loss of cheaper local energy caused an economic paradigm shift that echoed throughout the industrial economy severely hurting several industries. This was made worse by much of the top engineering talent being siphoned off by the weapons industry.

The same thing, but a little different is happening to Europe right now. Europe has been falling steadily behind the US and Asia in technology. Now because of the mistake of relying on Russia for their energy, they have the highest energy prices in the world, and they will for the foreseeable future. They also have the highest taxes and regulatory cost in the world, and on top of this, their workers work less hours than any workers in the world. They *might* be able to swing this if they were leaders in technology, but as I’ve said above they’ve fallen deeply behind. For instance, California spends more on R&D now than Germany, France and Britain …combined!

Now europe is getting an adjustment just like the US did in the 1970s.

 

[hobbes]

Interesting... Wonder if this is true as Shanghai is somewhat closer

https://twitter.com/x/status/1573181809994924037

@Troy

 

[Knightshade]

IIRC, Scott Adams was complaining many news outlets cancelled Dilbert because of this cartoon (or maybe on another one on the same ESG topic).

He was.

He's objectively wrong of course- what happened was one company that owns a bunch of newspapers decided to slash their comics spending budget and make their few remaining ones uniform across all the many newspapers they owned... they removed DOZENS of comics in this move, Dilbert was just one of many.

 

[MikeAtkinson]

It has just occurred to me that there are about 16 weeks or 80 trading days to Q4 earnings. To avoid P/E compression the share price has to rise rapidly till then.

I am on a phone at the moment so it is not too easy to compute the weekly and daily average rise, based on the earnings estimates in the financial prediction thread. I think it must be nearly 5%/week or 1%/day.

Unless there are really adverse macros or Tesla specific news (even more than over the last few months) there is nothing to hold back a significant rise.

 

[H Mak]

The pound is also weak, partly due to the strength of the dollar.

As one commenter put it, "abandoning all fiscal discipline is not good for the strength of the pound.

This makes a difference for TSLA investors in the UK as when converted into pounds TSLA has gained 15% extra. Some forecasts have the pound falling another 10% this year.

I very rarely adjust the £/$ rate on my investment spreadsheets, but when I did do it recently - wow what a positive impact on my bottom line

 

[mongo]

Interesting... Wonder if this is true as Shanghai is somewhat closer

https://twitter.com/x/status/1573181809994924037

@Troy

Inspired by a Twitter post... in or around 2011 Taiwan was going to set a quota limit on vehicle imports from the mainland (ECFA). Not sure what the levels/ rules/ existence is these days.

 

[ZachF]

This is an excellent note. Even though we have talked about the insane benefits of the IRA (particularly wrt Tesla) I still think they're being drastically understated. There are huge investment funds that will redeploy many hundreds of billions of dollars into the green sector in the US over the coming years that otherwise would have gone to either other regions or other asset classes. It's not just batteries, it's going to be through charging, H2, Ammonia, software management tools, CCS - basically anything that gets favourable treatment under the IRA is about to receive a deluge of investment.

If I were more ambitious I'd start any sort of green company today and sell it to an investment fund in a couple of years - I think it's likely they'll buy anything that fits under the IRA influence for an outrageous price. You could put any sort of crazy growth projections in your business model and just say it is underwritten by the government - which could be a convincing story.

Yes, there is a surprisingly good amount of stuff in the IRA. Also, there is a permit reform bill up that would really turbocharge the new energy sector.

 

[Paracelsus]

Would not have made a difference what the FED did leading into 2008.

Real estate exploded based on Ninja loans and all the mortgages were sold like hot radioactive garbage by their originators. When the music stopped playing whoever was holding the derivatives was screwed. What was required to mitigate that business cycle collapse was real loan origination regulation and also real credit ratings agencies.

Oh, wait. I just made a funny.

I did laugh at that @traxila .........because it is funny. And then I sighed, because deep in my gut I feel the set up for the next lending crisis is already well underway. This crisis too will be driven by "hot radioactive garbage" loans, ones that will be created for residential and commercial solar and other renewable projects that are supported by the "Historic Clean Energy..........and Clean Energy Lending Bill." Never underestimate coincidence. Powell just raised rates 75 basis points while Elon and others were calling for 25 basis points. But the bigger news was the signaling to raise rates an additional 1.25 basis points in the remainder of this year. Thus adding 2% interest or more on any renewable energy loan given by Wall Street for any renewable project supported by our latest Historic Clean Energy bill since it was passed. Nobody thought that was coming, except maybe Wall Street.

I am absolutely confident that there will eventually be more loans written for renewable energy projects under this bill than there were garbage mortgage loans that resulted in that collapse. And while I am pleased that this will be taking us towards a more sustainable energy future, it seems this is being orchestrated in a way that feeds a lot of already fat hogs first. We are personally moving forward with a very large solar and storage project at our residence. And the number of lenders offering us loans with 0% down, no payments for several months, and no interest on a large portion of the loan if paid off in full in 6-12 months is concerning to me. It suggests to me that the incentives to write these loans far exceeds the need to collect any interest on them. It suggests that those writing these loans don't intend to hold them long. And it suggests that there is an expectation that there should be plenty of lenders wanting to focus on scooping up these potentially bundled renewable project loan packages and be happy to do so because Mr. Powell intends to add a sweet 2% to that rate before the year is over. Most importantly though, I am absolutely unaware of any of those lenders digging deep into the details of our solar+storage project to see if-and-how it's sizeable cost was fully justified. That sounds a lot like the last of the mortgage loans that were written before the collapse............................and we are literally still at the starting line for projects under the Inflation Reduction Act. That might make a few of us that remember the last crisis sit up and pay a bit more attention. 'The Big Renewable Short' might be the next documentary. TSLA will of course fare well, but there will be an epic number of renewable portfolios that get rode hard and hung up wet when this is over.

If I were more ambitious I'd start any sort of green company today and sell it to an investment fund in a couple of years - I think it's likely they'll buy anything that fits under the IRA influence for an outrageous price. You could put any sort of crazy growth projections in your business model and just say it is underwritten by the government - which could be a convincing story.

Per my previous comments above, I absolutely agree with the portion of your post that I highlighted @Cornelius . And this is bittersweet..........moving towards a cleaner future - but not until The Green New Deal was rewritten in a manner that ensures the current energy paradigm can own the new energy paradigm, and doing so once again with massive unrestrained profiteering and the likelihood of all the little guys holding the next bag of loan bailouts for all the renewable energy generation projects sitting on residential roofs and paid for by residential owners that will benefit existing grid operators. The Green New Deal that was written to specifically benefit everyone fairly equitably while it significantly benefited the planet didn't benefit the Old Paradigm enough in the process, or we could have implemented a more sustainable future for our planet many years ago.

 

[TheTalkingMule]

WTI has dropped below $80 and crude futures traders are officially considering going back to prostitution as their primary profession.

Powell was right to force the entire globe to deal with this right now. I admit I didn't want him to be so heavy handed, but he did the right thing. Breaking the majority of this inflation now lets us hike at much safer .25 chunks or even pause heading into Nov/Dec/Jan.

 

[Favguy]

This is an excellent note. Even though we have talked about the insane benefits of the IRA (particularly wrt Tesla) I still think they're being drastically understated. There are huge investment funds that will redeploy many hundreds of billions of dollars into the green sector in the US over the coming years that otherwise would have gone to either other regions or other asset classes. It's not just batteries, it's going to be through charging, H2, Ammonia, software management tools, CCS - basically anything that gets favourable treatment under the IRA is about to receive a deluge of investment.

If I were more ambitious I'd start any sort of green company today and sell it to an investment fund in a couple of years - I think it's likely they'll buy anything that fits under the IRA influence for an outrageous price. You could put any sort of crazy growth projections in your business model and just say it is underwritten by the government - which could be a convincing story.

Please do excuse my ignorance of how US politics works, and this isn't meant to be a political post at all, but in the event of republican wins in the house, senate, and presidency, wouldn't all of this (the IRA) get cancelled in short order?, or is it a case of once started, it can't be turned back, sort of thing?

 

[woodisgood]

Hmm, 2025 LEAPs starting to look tastier.

 

[AndrewZ]

WTI has dropped below $80 and crude futures traders are officially considering going back to prostitution as their primary profession.

Powell was right to force the entire globe to deal with this right now. I admit I didn't want him to be so heavy handed, but he did the right thing. Breaking the majority of this inflation now lets us hike at much safer .25 chunks or even pause heading into Nov/Dec/Jan.

We already know the funds rate is going to low to mid 4s at least by the end of year, crude is selling off because everyone is preparing for the economic pain headed our way both domestically and globally.

 

[strago13]

Could use a bit of help from the MM's today....$296 is a long way off

 

[henchman24]

The slap down at close was a sign I guess. 10,800 has to hold for the nasdaq or we will re-test lows. Who knows what ends up happening there… If we get a rejection and recovery, would be a large double bottom. But new lows are certainly possible right now.