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

[insaneoctane]

Buy the news, it's a tale as old as time!

The market currently believes this is the final rate hike and that rate cuts will be coming as early as March next year with a cut almost every single meeting after that.

The market is betting on things returning to recent years vs historical then. In the last 70 years, the Fed rate has averaged 4.62%, just slightly below where we are today. I enjoy free money and high PE ratios like the next guy, but history says Fed rates don't mathematically stay near zero...

 

[StarFoxisDown!]

The market is betting on things returning to recent years vs historical then. In the last 70 years, the Fed rate has averaged 4.62%, just slightly below where we are today. I enjoy free money and high PE ratios like the next guy, but history says Fed rates don't mathematically stay near zero...

View attachment 959847

Also note, the S&P return rates in years where Fed Fund rate was in the 4-6% range. Also the average P/E of the S&P during periods of rates being 4-6%.

Quick hint - The markets do just fine.

 

[EQC_]

... He's also said, multiple times, it's very hard to make. Listen to Elon, he tells you what you need to know.
...

Found an article from May 17, covering this years shareholder meeting...

They quoted Elon:

"Quarter million is a reasonable guess… it might be five hundred thousand, I don’t know. We’ll make as many as people want it and could afford it.”

He added that it’s not only the quantity and capacity of production that need to be improved, but also the cost of production.

“It’s gonna be hard to make the cost affordable because it is a new car, new manufacturing method,"


I found other quotes where he said it was difficult to design and even more difficult to make...but I do like that "affordable" is at least part of the equation.

I have no doubt that the first versions for sale will be pricier...but with time and scale I expect the production cost and consumer prices to come down. You don't invest in those huge gigapresses unless you plan to build a lot of trucks...and you can't build a lot of trucks if the price is too high to sell. Even 250,000 per year is a huge number and demands a reasonable price.

 

[Todd Burch]

Quarter point rise was not only unnecessary but an overcorrection.

It’s like the Fed never heard that thing about learning from history…

 

[SPadival]

Lots of speculation over his flip, the most likely being that he sold out of $TSLA just before it took off end 2019, and became bitter and twisted as a result

Or maybe he fell on his head as a child

But he turned into a nasty piece of work, like all the $TSLAQ brigade, they're just awful people full stop

I remember him tweeting a selfie taken with a former AG of California, a Mrs Kamala Harris.

 

[AndrewZ]

The market is betting on things returning to recent years vs historical then. In the last 70 years, the Fed rate has averaged 4.62%, just slightly below where we are today. I enjoy free money and high PE ratios like the next guy, but history says Fed rates don't mathematically stay near zero...

View attachment 959847

Yeah people talk about today's rates like they are unusually high, but we're really just at around the historical average and what was unusual was the period of super low interest rates + free money + low inflation and that might not be coming back for a few reasons

 

[Blue horseshoe]

Quarter point rise was not only unnecessary but an overcorrection.

It’s like the Fed never heard that thing about learning from history…

It's history that is guiding the fed today. In the 70s the fed lost control over inflation under Burns. At the first signs of easing inflation he stopped raising rates only to have inflation grow out of control. Burns resisted the push to ratchet up the rates to the heights some believed would be necessary to tame inflation.

https://www.npr.org/2023/02/03/1154...n-arthur-burns-time-as-fed-chair-in-the-1970s

Contrast that experience with Fed chair Volker who is credited with causing a recession, but taming inflation with his aggressive rate hikes.

How the Fed ended the last great American inflation — and how much it hurt

The fed will eventually pause rate hikes, and then bring rates down, but we will likely experience these rates for longer than people want

 

[2daMoon]

The truck itself will be great, but it's a disappointment for investors. We had an expectation it would outdo the F-150 and become a million vehicle product. If that was going to be the case it had the potential to move the share price. Now we know it's only going to be a niche product and that tells me it will be more expensive, have lower range, lower margins, and slower production rate then anticipated. I don't think the CT can have an upside impact on the share price but a rough launch and ramping may hurt the SP. The nearest catalyst I see for my retirement is a licensing agreement for FSD with Ford or BYD. Cybertruck will not contribute to our riches, imo.

There is nothing I've seen which indicates in any way that CT will be beaten in any metric by the other offerings. Nor, that it will be a niche product. (please elucidate upon the factors that define "niche") We have no numbers from Tesla on the CT from which to compare.

If you prefer to believe your feels, go for it. Just don't try to pass it off as if they are any kind of valid reference point to measure against other offerings.

Frankly, it is quite a stretch to imagine a "niche" product where 2 million people have been reserving their place in line several years in advance. Maybe this is happening with Rivian, Ford, GM, and Ram pickup offerings , but I've seen no indication of a million plus reservations for these. Have you?

Would this mean that those others in low production, without reservations, and/or not in production at all are even more of a niche BEV Pickup product than is the CT? It seems odd how you single out the CT when in context it may be the least niche of them all.

 

[AndrewZ]

It's history that is guiding the fed today. In the 70s the fed lost control over inflation under Burns. At the first signs of easing inflation he stopped raising rates only to have inflation grow out of control. Burns resisted the push to ratchet up the rates to the heights some believed would be necessary to tame inflation.

https://www.npr.org/2023/02/03/1154...n-arthur-burns-time-as-fed-chair-in-the-1970s

Contrast that experience with Fed chair Volker who is credited with causing a recession, but taming inflation with his aggressive rate hikes.

How the Fed ended the last great American inflation — and how much it hurt

The fed will eventually pause rate hikes, and then bring rates down, but we will likely experience these rates for longer than people want

I personally have little doubt that prices would explode upwards if central banks even thought about cutting rates any time soon, Q1 next year is likely too optimistic but that's just IMO.

Heck some people hope rates are cut specifically because it would give Tesla increased pricing power and ASP + margins would march upwards but somehow that price inflation wouldn't result in even harsher monetary policy. Prices need to come down and they need to stay down, that's the whole point of this. New + used autos, along with housing, are among the most rate-sensitive items and what has been targeted, the pandemic surge in demand + supply chain issues and resulting price increases are part of why we are where we are now.

 

[M|S|M MYP]

Lots of speculation over his flip, the most likely being that he sold out of $TSLA just before it took off end 2019, and became bitter and twisted as a result

Or maybe he fell on his head as a child

But he turned into a nasty piece of work, like all the $TSLAQ brigade, they're just awful people full stop

Note to self: Never go FULL GREG!

 

[navguy12]

But does it "phantom accelerate"?

Nope. Only phantom brake.

 

[Big Time]

Watching META perform well after earnings is barftastic.

Watching the macro creep towards ATHs is also disheartening with TSLA only currently recovered perhaps 55% of the drop off.

It will hit 300 soon, just hope the next leg won’t take as long as the last.

We tapped the Fibonacci band and got rejected, hopefully a retest soon and swell to $350 the final .78 band on the road to recovery.

 

[Featsbeyond50]

That's such a positive and upbeat attitude.

There is nothing I've seen which indicates in any way that CT will be beaten in any metric by the other offerings. Nor, that it will be a niche product. (please elucidate upon the factors that define "niche") We have no numbers from Tesla on the CT from which to compare.

If you prefer to believe your feels, go for it. Just don't try to pass it off as if they are any kind of valid reference point to measure against other offerings.

Frankly, it is quite a stretch to imagine a "niche" product where 2 million people have been reserving their place in line several years in advance. Maybe this is happening with Rivian, Ford, GM, and Ram pickup offerings , but I've seen no indication of a million plus reservations for these. Have you?

Would this mean that those others in low production, without reservations, and/or not in production at all are even more of a niche BEV Pickup product than is the CT? It seems odd how you single out the CT when in context it may be the least niche of them all.

Again, Elon called it a niche product.

You are right, there are close to 2 million reservations (I have two of them). That being the case, why would Elon still call it a niche product? My conclusion is there are factors Elon knows about that will either stifle the demand or they won't be able to make them fast enough. Or margin will be so low they won't have an interest in meeting demand.

I'm open to hear everyone's thoughts on why Elon would say it's niche and expects production to be 250K.

 

[StarFoxisDown!]

Watching META perform well after earnings is barftastic.

Watching the macro creep towards ATHs is also disheartening with TSLA only currently recovered perhaps 55% of the drop off.

It will hit 300 soon, just hope the next leg won’t take as long as the last.

We tapped the Fibonacci band and got rejected, hopefully a retest soon and swell to $350 the final .78 band on the road to recovery.
View attachment 959869

I personally think the earnings call had enough uncertainty/ambiguity in there to where I doubt TSLA moves any higher during Q3.

Wall St going to list off :

- Production/Delivery concerns regarding the factory shutdowns
- Continued margin concerns because Elon and company didn't sound confident in no further price cuts
- Lack of Cybertruck for Q3. Elon clearly downplayed the release date of the Cybertruck.

So I expect a continued sideways trading if the macro's stay stable (250-290 trading range) or a pullback to 225/share area if the macro's pullback, which I think is pretty likely. I'm very bullish on the outlook of the markets, economy, and inflation over the next 12 months but everything's run up too much without consolidation.

Maybe TSLA breaks out from the macro's during mid Sept if there's a Cybertruck/Highland announcement for deliveries....even if those deliveries start in Q4.

 

[2daMoon]

Again, Elon called it a niche product.

You are right, there are close to 2 million reservations (I have two of them). That being the case, why would Elon still call it a niche product? My conclusion is there are factors Elon knows about that will either stifle the demand or they won't be able to make them fast enough. Or margin will be so low they won't have an interest in meeting demand.

I'm open to hear everyone's thoughts on why Elon would say it's niche and expects production to be 250K.

Worth a ponder. Here's the definition.

Elon could have meant either of the two shown emphasized below.

niche​

1​

a : a recess in a wall especially for a statue​

b : something (such as a sheltered or private space) that resembles a recess in a wall​

2​

a : a place, employment, status, or activity for which a person or thing is best fitted, finally found her niche​

b : a habitat supplying the factors necessary for the existence of an organism or species​

c : the ecological role of an organism in a community especially in regard to food consumption​

d : a specialized market ​

2a seems apropos, and
2d could as easily describe pickups as being a niche market among autos in general.

But, I'm leaning toward 2c, because I think the Cybertruck is gonna eat everyone's lunch.

 

[jerry33]

Worth a ponder. Here's the definition.

Elon could have meant either of the two shown emphasized below.

niche​

1​

a : a recess in a wall especially for a statue​

b : something (such as a sheltered or private space) that resembles a recess in a wall​

2​

a : a place, employment, status, or activity for which a person or thing is best fitted, finally found her niche​

b : a habitat supplying the factors necessary for the existence of an organism or species​

c : the ecological role of an organism in a community especially in regard to food consumption​

d : a specialized market ​

2a seems apropos, and
2d could as easily describe pickups as being a niche market among autos in general.

But, I'm leaning toward 2c, because I think the Cybertruck is gonna eat everyone's lunch.

The CT is niche because it's geared towards North America only (and Australia of course). For the rest of the world it has limited application--not that some couldn't be sold but it wouldn't be a significant percentage of vehicle sales due to the size. Niche doesn't mean Tesla won't sell as many as they can make for years.

 

[2daMoon]

The CT is niche because it's geared towards North America only (and Australia of course). For the rest of the world it has limited application--not that some couldn't be sold but it wouldn't be a significant percentage of vehicle sales due to the size. Niche doesn't mean Tesla won't sell as many as they can make for years.

We're on the same page. CT won't be any more niche than is the F-150.
Elon's comment may very likely have been an observation from the global perspective you describe.

 

[Drumheller]

Again, Elon called it a niche product.

You are right, there are close to 2 million reservations (I have two of them). That being the case, why would Elon still call it a niche product? My conclusion is there are factors Elon knows about that will either stifle the demand or they won't be able to make them fast enough. Or margin will be so low they won't have an interest in meeting demand.

I'm open to hear everyone's thoughts on why Elon would say it's niche and expects production to be 250K.

Elon said he expects the ramp to target 250k / year and then assess.

 

[insaneoctane]

Even 250,000 per year is a huge number and demands a reasonable price.

For the for F-series truck (ICE): For 2018, the average transaction price, according to Kelley Blue Book, for an F-150 was $47,174. Also in 2018, Ford moved more than 909,000 versions of the pickup.

So, while Ford sells many loaded, highly priced versions of the F-series, clearly the volume is for more affordable versions.

 

[zoomer0056]

CT won't be any more niche than is the F-150.

Americans love big trucks. The number one vehicle sold in 2022 was the Ford F Series. The CT will do alright.