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

[phantasms]

As we get closer and closer to launch, I get more anxious about wanting to see it in person. Unfortunately that’s a bit too much of a drive from Oregon. If they had a gig up here in Portland I’d be all over it.

While I haven’t seen the newest iteration I did see it in NYC when Elon brought it during SNL. It is truly astonishing. The photos and video do it zero justice.

FWIW I initially hated it.

 

[StealthP3D]

Amazon is easily the most over-valued mega cap. It should be worth <$500b.

It has a price to operating income ratio of over 100 with sub-inflationary growth.

Broken records went out in the 1990's. Yet here we are...

 

[ZachF]

Broken records went out in the 1990's. Yet here we are...

 

[Todd Burch]

I understood the key-man risk before we became cash flow positive, but now we have so much cash we can do BUYBACKS. And our product roadmap is criticized for being "too futuristic" with FSD and bots, so there's plenty in the pipeline. Also...our CEO basically runs like 3 major companies, so it's not like 100% of his time is on Tesla right now. The key man risk argument should be dead honestly.

Honestly almost all the risks are de-risked to some extent.

FSD never happens? Tesla survives.
Elon Musk dies? Tesla survives.
Meteor hits Fremont? Tesla survives.
China goes full-hostile and takes over Tesla's factory? Was a big concern for awhile, but now pretty sure Tesla survives.

It would literally have to take either (a) nuclear war or (b) some accounting scandal of historic proportions to take Tesla down.

Agree with you. WE know that. The problem is that the numbskulls on Wall Street don’t.

 

[elasalle]

Gary Black had an interview with Tom Nash a few days ago:

As we know, TSLA has a disproportionately low percentage of institutional holders vs retail holders.

Ignoring your opinions on Gary (I’m actually warming up to him a little bit as someone who can provide the “insight of Wall St”), Gary believes one of the key reasons the big institutions are hesitant to invest more in TSLA is key man risk.

We’ve all discussed this before. My personal belief is that Elon was essential in the early years to get production up and to establish the culture of the company.

He’s obviously still an important part of Tesla, but I am of the opinion that the company would do fine without him, because he’s instilled the necessary culture and frugality needed to succeed.

Having said that, we all want our TSLA investment to grow. I think it would be good for Elon to clearly and publicly appoint a successor, and to let that successor take the reigns a bit at Tesla to help institutions feel more comfortable with investing in TSLA.

Now would be a good time, as Elon could spend some time at Twitter, letting his #2 take the lead (at least publicly) for what is sure to be an “epic” quarter.

Thoughts?

Now that TWTR is almost over is Gary and Wallstreet coming up with another excuse

 

[Ogre]

Agree with you. WE know that. The problem is that the numbskulls on Wall Street don’t.

Its funny, the same numbskulls on Wall Street who claim key man risk is huge at Tesla seem to have completely ignored it at Amazon. But Amazon has fallen apart without Bezos. Or maybe Bezos got out when he saw the company had scaled beyond the capability of his business model to cope with.

#theyreallyjustmakeitup

 

[Prunesquallor]

Will be interesting to see the repercussions ot this. We have 2 huge Amazon warehouses being built east of Pasco, WA. They've already been delayed for a year, as well as the hiring events (which a lot of people were looking forward to aa they're good paying jobs). I wonder now if they'll even be finished. It would be a serious impact to the region, not only because of the loss of potential jobs, but the work that's been contracted on road modifications needed (and there will be a lot).

It will be interesting, that's for sure.

Yep. We have a huge one in Galveston County that is completed, but has been sitting unused for nearly a year.

 

[wipster]

Its funny, the same numbskulls on Wall Street who claim key man risk is huge at Tesla seem to have completely ignored it at Amazon. But Amazon has fallen apart without Bezos. Or maybe Bezos got out when he saw the company had scaled beyond the capability of his business model to cope with.

Would be hilarious if Bezos has to rent space on Falcon 9's to launch his Starlink competition satellites...

 

[KBF]

Amazon is easily the most over-valued mega cap. It should be worth <$500b.

It has a price to operating income ratio of over 100 with sub-inflationary growth.

Just want to say thank you (and others here) who convinced me that AMZN was overvalued - I dumped all my AMZN shares on Monday (bought more TSLA at $204 with half the proceeds, the rest is cash for now...)

Despite wading through increasing clutter (thanks, Mods, for your tireless work in herding us cats), I continue to learn a lot and appreciate those who deep dive into numbers and bring your diverse perspectives.

 

[daniel]

There are these new things investors, I mean day traders can use. They are called
Stop losses. Check with your broker at E trade. Maybe they can hook you up with some more ways to bet. Have fun at the casino!

He sounds more like a "Trade from my laptop from Wendy's on RobinHood" kinda guy...JMHO of course

Nope. My real investments are low-cost index funds and some diversified bond holdings. On very rare occasions I sell a holding, but mostly I just hold. Sometimes, as in the case of TSLA, I kvetch and kick myself for not selling when I should have. As when it went from $400 to $200.

I bought most of my TSLA for around $35 or $40 (around $1.50 in today's shares) back in 2011 or 2012 because I really liked my Roadster. At that time Tesla was a risk. There was no telling if it would succeed or go bust. I also bought SCTY when it went public because I liked the idea, and I bought some solar bonds to help finance the growth of solar. Those shares converted to an unequal number of shares of TSLA when Tesla bought Solar City. When TSLA hit around $1,600 (around $110 in today's shares) I sold 1/3 of my shares, convinced that it was vastly overpriced. The capitalization vs production numbers compared to other car companies just made no sense. I've held onto the other 2/3 since then.

I'm not a day trader. I live on the income from my holdings, and TSLA, which pays no dividends, is just something I bought on a whim because I liked the car (and Solar City's now-defunct business model of providing solar at no up-front cost). My shares of TSLA do me no good, as they pay no dividends, but I keep them because I like the company for pushing electric transportation and leading the conversion from gas to electric. And now, in hindsight, I wish I'd sold them when they were high. I'm not going to sell them now that the bottom has fallen out.

Several years ago I sold my Roadster and now drive a Model 3. The Roadster was way more fun, but the 3 is more convenient.

 

[StealthP3D]

Ignoring your opinions on Gary (I’m actually warming up to him a little bit as someone who can provide the “insight of Wall St”), Gary believes one of the key reasons the big institutions are hesitant to invest more in TSLA is key man risk.

We’ve all discussed this before. My personal belief is that Elon was essential in the early years to get production up and to establish the culture of the company.

He’s obviously still an important part of Tesla, but I am of the opinion that the company would do fine without him, because he’s instilled the necessary culture and frugality needed to succeed.

Having said that, we all want our TSLA investment to grow. I think it would be good for Elon to clearly and publicly appoint a successor, and to let that successor take the reigns a bit at Tesla to help institutions feel more comfortable with investing in TSLA.

Now would be a good time, as Elon could spend some time at Twitter, letting his #2 take the lead (at least publicly) for what is sure to be an “epic” quarter.

Thoughts?

It would be nice if the world was so tidy and nice that you could just appoint a successor years in advance but things change. Some short-sighted people on this forum have questioned the value the board brings to TSLA shareholders and this is the answer to that question and why it is important to have board members that believe in the mission as well as being people that "get it". These are the people charged with directing the corporation in times of need, should the unthinkable happen to Elon. I have complete confidence that they would make the right decision in the unfortunate event that was necessary.

The board exists and keeps abreast of the business as a stabilizing force. There is no need to re-invent the way corporations name successors and there is a lot of combined wisdom represented by the Board of Directors. I'm not sure anyone could exactly match Elon's outsized reputation and accomplishments but there are a number of good picks, both within the company and at least one I can think of who has already left but may be willing to return if it became necessary to fill that role. One thing TSLA has going for it as an investment is that a wide swath of very intelligent people strongly desire that Tesla succeed because of how critical they are for the future of humanity. That in itself is a stabilizing force and a primary reason why so many employees are willing to go above and beyond the normal call of duty.

 

[jerry33]

Its funny, the same numbskulls on Wall Street who claim key man risk is huge at Tesla seem to have completely ignored it at Amazon. But Amazon has fallen apart without Bezos. Or maybe Bezos got out when he saw the company had scaled beyond the capability of his business model to cope with.

#theyreallyjustmakeitup

Amazon never had a product map. Apple is successful after Jobs because there was a product map. Tesla is the same.

 

[Snerruc]

Depends greatly on what you order and where you live for logistics purposes. Model 3 goes out to Dec. Model Y goes out as far as April.

There are 20 Model3s available for immediate purchase in Florida.

 

[betstarship]

Nope. My real investments are low-cost index funds and some diversified bond holdings. On very rare occasions I sell a holding, but mostly I just hold. Sometimes, as in the case of TSLA, I kvetch and kick myself for not selling when I should have. As when it went from $400 to $200.

I bought most of my TSLA for around $35 or $40 (around $1.50 in today's shares) back in 2011 or 2012 because I really liked my Roadster. At that time Tesla was a risk. There was no telling if it would succeed or go bust. I also bought SCTY when it went public because I liked the idea, and I bought some solar bonds to help finance the growth of solar. Those shares converted to an unequal number of shares of TSLA when Tesla bought Solar City. When TSLA hit around $1,600 (around $110 in today's shares) I sold 1/3 of my shares, convinced that it was vastly overpriced. The capitalization vs production numbers compared to other car companies just made no sense. I've held onto the other 2/3 since then.

I'm not a day trader. I live on the income from my holdings, and TSLA, which pays no dividends, is just something I bought on a whim because I liked the car (and Solar City's now-defunct business model of providing solar at no up-front cost). My shares of TSLA do me no good, as they pay no dividends, but I keep them because I like the company for pushing electric transportation and leading the conversion from gas to electric. And now, in hindsight, I wish I'd sold them when they were high. I'm not going to sell them now that the bottom has fallen out.

Several years ago I sold my Roadster and now drive a Model 3. The Roadster was way more fun, but the 3 is more convenient.

My dude - it takes foresight, benevolence, and fortitude to do such a thing just based on the Roadster.

 

[Singuy]

I understood the key-man risk before we became cash flow positive, but now we have so much cash we can do BUYBACKS. And our product roadmap is criticized for being "too futuristic" with FSD and bots, so there's plenty in the pipeline. Also...our CEO basically runs like 3 major companies, so it's not like 100% of his time is on Tesla right now. The key man risk argument should be dead honestly.

Honestly almost all the risks are de-risked to some extent.

FSD never happens? Tesla survives.
Elon Musk dies? Tesla survives.
Meteor hits Fremont? Tesla survives.
China goes full-hostile and takes over Tesla's factory? Was a big concern for awhile, but now pretty sure Tesla survives.

It would literally have to take either (a) nuclear war or (b) some accounting scandal of historic proportions to take Tesla down.

I believe the key man risk has nothing to do with Tesla the company but has everything to do with Tesla the stock. It's a controversial stock and most institutional investors see it as an over valued car company with competition looming. This is why stupid articles about nothing burgers can bring down the stock price all the time. Just imagine the stock price with Elon's death. I can see stock dropping 50% easy.

Just remember, a lot of the times the stock price has nothing to do with the company but has a lot to do with the sentiment of the company.

 

[JRP3]

As we get closer and closer to launch, I get more anxious about wanting to see it in person. Unfortunately that’s a bit too much of a drive from Oregon. If they had a gig up here in Portland I’d be all over it.

Do you really think it's going to look different in any meaningful way in person, enough that it would change your purchasing decision? Personally I'm fine if the first time I see it is getting dropped off in my driveway.

 

[Words of HABIT]

Revenue:
Google Q3 2021 $65.1B, Q3 2022 $69.1B, increase YOY 6%, P/E 17
Apple Q3 2021 $83.4B, Q3 2022 $90.1B, increase YOY 8%, P/E 24
Amazon, Q3 2021 $110.8B, Q3 2022 $127.1B, increase YOY 15%, P/E 99
Tesla, Q3 2021 $13.8B, Q3 2022 $21.5B, increase YOY 56%, P/E 77

Tesla is growing revenue 9.4X faster than Google, 7.0X faster than Apple and 3.7X faster than Amazon,
yet Tesla's P/E is only 4.5X that of Google and 3.2X that of Apple, while Amazon's P/E is 29% higher than that of Tesla.
Google, Apple and Amazon are mature companies that have limited growth upside potential.
Tesla still has its best growth years ahead of it, for many years to come.
Tesla needs a higher P/E. Plain and simple.

EDIT: Tesla is starting from a smaller $ base, but still very impressive growth. Q4 2022 results will continue to accelerate while FAANG growth will continue to slow.

 

[Xepa777]

survives.
China goes full-hostile and takes over Tesla's

I believe the key man risk has nothing to do with Tesla the company but has everything to do with Tesla the stock. It's a controversial stock and most institutional investors see it as an over valued car company with competition looming. This is why stupid articles about nothing burgers can bring down the stock price all the time. Just imagine the stock price with Elon's death. I can see stock dropping 50% easy.

Just remember, a lot of the times the stock price has nothing to do with the company but has a lot to do with the sentiment of the company.

Those are short term events though. Only matters if you’re a option holder or need to sell short term. Something something voting can weighing machine

 

[Singuy]

Those are short term events though. Only matters if you’re a option holder or need to sell short term. Something something voting can weighing machine

Well fund managers Gary is talking about needs to practice more risk management because they have clients to answer to who doesn't know a lick about Tesla or any business they have investments in. All they see is "okay so in this Q half of my money is gone...why?". This is why they like to avoid companies with potential black swan events tied to the well being of one person.

 

[phantasms]

Deal is done.