Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

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

This site may earn commission on affiliate links.

These so-called experts always ask the wrong question. It isn’t: is Tesla’s P/E too high?

The correct question is: why are the P/E’s of General Motors and Ford so low? Why are investors only willing to pay 6.5 and 7.6, a third of the average S&P 500 P/E?

Could it be because they don’t see a very profitable future for these legacy companies, already buried in debt and with hundreds of billions more needed to invest in EV tech and production capacity, while at the same time writing down ICE assets and selling more and more unprofitable EVs? Could it be they see no future at all?
 
So if (as was posted nearby above) Wednesday‘s pop was due to a delta option squeeze, I wonder if Tesla’s decision to release FSD Beta to everyone was related. Releasing it the day before Thanksgiving was an odd choice. Normally, you’d release big roll outs a) in batches and b) on a Monday or something to have maximum number of workers on hand should something bad happen.

So I do wonder if Elon saw the short sellers piling on and said **** it, let’s burn them.

Anyways, I got my FSD Beta yesterday!
 
These so-called experts always ask the wrong question.

It isn’t: is Tesla’s P/E too high?

The correct question is: why are the P/E’s of General Motors and Ford only 6.5 and 7.6? Why are investors only willing to pay less than half of the average S&P 500 P/E for these stocks and does only a return of 15% suffice?

Could it be because they don’t see a very profitable future for these legacy companies, already buried in debt and with hundreds of billions more needed to invest in EV tech and production capacity, while at the same writing down ICE assets and selling more and more unprofitable EVs? Could it be they see no future at all?
Something that I've recently come to understand (again thanks to @The Accountant) F/GM make most of their money from loans! Almost nothing from making cars.
Ford's Argo AI impairment of $2.7B was booked in Other Expense (below the Operating Income line).
Ford actually shows some improvement in Operating Income Margin.
I corrected the GM number from a previous posting (I had an input error).

Auto Operating Margins:
Ford Improving
GM Flat
Tesla Rules

View attachment 867927
Do you know who also has very low P/Es historically? Banks!

Citigroup: 6.61
JPMorgan Chase: 11.5
WellsFargo: 12.3

I think the market places such low P/Es on F and GM not just because they have little to no growth, but because they are basically just banks that happen to make cars for basically no profit!
 
Indeed.
It's only the city center, about half the city's population, and is >300km from Shanghai.
View attachment 877833
There are high speed rail lines that go direct from the Zhengzhou city centre north to Beijing and south to Shanghai, so the transmission paths for Covid within China are wide open now in many directions. Personally I do not see how China can continue to pursue a zero-covid strategy much longer, they will be forced to pivot.


 
If only I had known this back in 2018 so I could have sold my shares at that time!


200 at this price out of your 2600 share stack should be okay down to a very low share price. The problem is that every time this works, it gets easier and easier to overdo it.
At the worst possible time, you will go too deep into margin and get chewed up by the market.
It happened to me exactly as you described. The result was i exited the last dip with less shares instead of more.

In my case, greed took over, and I levered up to 15% too early. The 15% (very quickly) ballooned to >30% and I couldn’t take anxiety it caused; so I trimmed near the bottom. In reality I was well clear of a margin call but I couldn’t take the pressure cooker.

I’ll admit I can see how leverage could help an excellent investor to increase gains. But for this investor, all its good for is decreased gains.

Be very careful also, what your margin interest rate is. Mine is market rate +1%… But even that has quadrupled (edit:for math 🥴) tripled on me over the past year (1.6%-> 4.7%) as the Fed rate went to the moon and TSLA followed a different trajectory.
 
Last edited:
So if (as was posted nearby above) Wednesday‘s pop was due to a delta option squeeze, I wonder if Tesla’s decision to release FSD Beta to everyone was related. Releasing it the day before Thanksgiving was an odd choice. Normally, you’d release big roll outs a) in batches and b) on a Monday or something to have maximum number of workers on hand should something bad happen.

So I do wonder if Elon saw the short sellers piling on and said **** it, let’s burn them.

Anyways, I got my FSD Beta yesterday!
Elon Tweeted about Thanksgiving release last week so not related to Wednesday price action.
Also, Thanksgiving is a huge travel period, so a great opportunity for drivers/ passengers to see what it can do. Especially with non-typical routes to get togethers.

 
I am somewhat worried of bad press with FSD. I have had my worst experiences with FSD on the latest version and was hoping they would do the wide on V11. First time for me that it accelerated into a stationary vehicule and that I had to stop (at 56cm). it was also going to run a red light (very clear light and was doing it well with previous versions). Hopefully it’s anecdotal.
 
Here's a little good cheer for the market holiday...

1669303017682.png

...another SELL has migrated to HOLD. Can't argue with that change of outlook.

The rest of the table is holding its own nicely. So am I. :cool:

HODL
 
So if (as was posted nearby above) Wednesday‘s pop was due to a delta option squeeze, I wonder if Tesla’s decision to release FSD Beta to everyone was related. Releasing it the day before Thanksgiving was an odd choice. Normally, you’d release big roll outs a) in batches and b) on a Monday or something to have maximum number of workers on hand should something bad happen.

So I do wonder if Elon saw the short sellers piling on and said **** it, let’s burn them.

Anyways, I got my FSD Beta yesterday!
it's just holiday gifts :)
 
  • Like
Reactions: Artful Dodger
I am somewhat worried of bad press with FSD. I have had my worst experiences with FSD on the latest version and was hoping they would do the wide on V11. First time for me that it accelerated into a stationary vehicule and that I had to stop (at 56cm). it was also going to run a red light (very clear light and was doing it well with previous versions). Hopefully it’s anecdotal.
Yes, well, when I last had FSD beta in my previous Model X, I would turn it on saying “ok car, how are you going to try to kill me today?” It was a fun game. And please, no moralizing responses about how I’m gambling with peoples lives. I very much pay attention when it is on.
 
Here is my list of what I am thankful for this Thanksgiving....in no particular order.

1 My health and family
2 TMC (my extended family...so many similarities to real life family...dysfunction...humor...discord .....strong opinions!)
3 Tesla for the amazing cars they make (drove my son's M3 while in town to visit him....so different from my MS yet every bit as smart)
4 Freedom to chose how and where I want to live thanks to TSLA
5 Retirement to do as I please thanks again to TSLA
6 My partner in life, who by being such an amazing strong woman makes me a better person.
7 My son who saved my life 26 years ago by being born ....(I was not on a good path prior to his birth)......and growing into a strong, healthy person.
8 My dog who loves me no matter what
9 hope for the future because we have people who are willing to work harder than I ever have to make the world a better place.
10 Beer because life is better with a mid-strength brew.
 
i'm sure @OrthoSurg and others who work >>24h can also attest to, I'm thankful for AP / FSD replacing parts of my brain rotted away from on call that long in a row .
The parallels with aircraft operation and autopilots are confirmations of your point. Tired pilots have higher accident rates, for cars and airplanes, probably every type of device, although I have reviewed copious data on the aircraft and road vehicles, not others.

FSD, as it has been, and aircraft autopilots, require constant user supervision. What AFAIK has not been evaluated is whether accident rates would rise were tired people to operate without those operator assistance tools. My opinion, admittedly not informed by direct evidence, is that tired people without the FSD or Autopilots probably would perform even worse.

Supporting my logic is a close surgeon friend who has transitioned almost entirely to robotic surgery within the last few years. He has remarked that he is much less tired when doing robotic surgery than he was with more invisible traditional techniques.

Perhaps Tesla, and others, might find it valuable to consider the role FSD and other driver aids has when supporting impaired drivers. Obviously, it is relevant too that such aids may encourage more risky choices by those impaired people.

This kind of issue is certainly directly relevant for Tesla when coping with regulators and critics. At best they reduce risk, at worst they may encourage risky behavior. Obviously the simple answer is that accidents are driver error, not FSD.

I raise this is this Forum as an issue for share price precisely because we seem to be on the verge of income recognition with:









THE ACCOUNTANT

@CPAinNYC
·
2h

FSD Beta NA Wide Release Estimated Financial Impact In addition to the $922m deferred revenue recognition upside ($0.26 EPS), $TSLA may now recognize 100% of revenue on all new purchases of FSD in NA (60% previously). This adds $0.04 to Q4 EPS & approximately $0.20 EPS to FY'23
 
@The Accountant posted this on twitter:

Current P/E: 56.5
Q4 P/E (w/ ~consensus GAAP of $1.20): 48.7
Q4 P/E (w/ ~consensus GAAP + deferred rev recognition of $0.26): 45.6

Using the earnings from the last calculation, a 50 P/E would be $201/share

(Updated to use $1.20 as approx GAAP consensus earnings. It's hard because analyst estimates are primarily non-GAAP, but P/E uses GAAP)


Curious if @The Accountant included the pre March 2019 FSD buyers in his #s? From my reading they shouldn't be included, as unlike the post 3/19 buyers they are still owed (significantly) more ability/features so revenue recognition can't be 100% yet- there's still a deliverable owed, which much be accounted for as a liability- not revenue.


That said, those folks are a minority of the fleet at this point, and they also paid WAY less for FSD (2-4k typically) so I don't expect it's a huge revenue difference, but curious if his math includes them or not.