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

[Fact Checking]

In practice, everyone in the software industry knows this, so with the exception of occasional lunacy like the Apple/Samsung case, they all sign "mutual disarmament" agreements agreeing to not sue each other over any purported software patents.

Yeah, and the software patent portfolio of the biggest players are basically weapons of mass destruction of mutually assured destruction, and everyone knows this and nobody with a real business will prefer to go nuclear as a first option. So they cross-license and occasionally extract licensing fees from smaller players.

Apple's patent case against Samsung was more of a personal mania of Steve Jobs who (incorrectly) felt wronged by Android, it wasn't a smart business move. Why Jobs, after Apple effectively used FreeBSD to bootstrap iOS and made great use of shared R&D thought it outrageous that high-tech companies copy design trends such as 'touchscreens' and related UI concepts is beyond me. Apple did so in the past and they'll do so in the future too.

The big players are mostly happy with the status quo, it's smaller startups that are at risk - but even them are mostly the targets of patent trolls, the big players generally don't use software patents offensively.

 

[MP3Mike]

Driving data collection and analysis of said data. Mobileye has 0, nada, none. Some of their partners may have some, but so far, it seems unlikely that any of them have much.

According to this article Mobileye had a fleet of ~2 million EyeQ4 equipped cars contributing to their HD-mapping effort last year.

They announced the EyeQ4 in what 2015? They entered volume production in 2017.. It took them 3 years to get them into 2 million cars, and they are still going down the HD-mapping route, which means they are nowhere and have to start over. (If they count on the HD mapping in their FSD implementation.)

Tesla started hiring people to make the FSD chip in 2016 and started volume production in 2018. So they moved way faster...

 

[neroden]

It's too bad that the real world doesn't work that way. Elon wants to maintain control so if Google started buying up huge amounts of stock it would actually be seen as hostile. Elon isn't going to allow dilution of his position.

He just did allow dilution of his position. I worked out how much he needed to buy to avoid dilution in the current issuance -- a lot more than he bought.

 

[Fact Checking]

However, as a prudent investor, I will be *watching their insurance rates* and seeing if they make sense to me -- if they're underpricing severely, then I know they're not taking proper care.

As @jhm pointed it out in this fantastic post, Tesla will be doing car insurance correctly if they do not chase the lowest rate offers on the market, i.e. if they just match a fair insurance rate and pocket the difference (if any), and offer "triple play" (car, financing, insurance) convenience and retain good customers long term.

I.e. they should not use any data advantage they have (360° video capture of the large majority of insurance events, fine-grained, GPS tagged customer behavioral history, etc.) to undercut competitors - they should use it to isolate loyal, low cost customer base they feel confident underwriting, and build a robust, high margin revenue stream.

Personally I'm really curious what effect Tesla's "data advantage" is going to have on underwriting costs: having legally extremely powerful video recording of insurance events will make both sides of underwriting less expensive:

• Events where Tesla owners are at fault: when faced with video evidence they might pay out of pocket instead of having an at-fault claim on their insurance record. (Also, people often genuinely misremember traffic accidents - and simply having it all on record will inject a lot more reason into the process.)
  
• Events where Tesla owners were not at fault: both litigation and collection of damages should be a lot cheaper with good video evidence, both against insured and against uninsured parties.

In particular spurious claims of injury (fraud, or borderline fraud) should be easier to defend against with video evidence of the actual collision on record.

There's also secondary revenue opportunities, like getting Tesla insured vehicles fixed in Tesla body shops. (Once they have free service capacity to spend on it ...)

 

[capster]

Can these OT FSD postings move to the Autonomous Vehicles forum?

I agree that some (okay, a lot) of the back and forth on FSD is a bit much, though I don’t agree that all FSD commentary is automatically off topic.

I’d urge people to follow this admonition regarding comments from RealClimate: "Please note that if your comment repeats a point you have already made, or is abusive, or is the nth comment you have posted in a very short amount of time, please reflect on the whether you are using your time online to maximum efficiency. Thanks.”

For my next post and just for fun, I’ll try to express some thoughts using compression via allusion to keep things brief with a side of humor to leaven the post.

Might work. It isn't the Chinese Imperial Exams, you've got Google. That might help.

 

[capster]

If you are betting on the known to be decisive Team Don’t Rule out Rules (DRoR) in the fantasy leagues of the Tournament of Cybernetic Frankenstein Drivers being hosted (hypothetically for the mo’) at Tesla, you might want to play along with this book (ignoring the parts about clutches, etc).

BookBub shows it on special: How to Drive by Ben Collins - BookBub

I just picked it up because I’m guessing my fantasy team, Team Hey Nice Conditioning Baby (HNCB), isn’t a pure play. Why not embed rules if you know how to train them in or adjoin them you if can adaptively parameterize them? Hey, it’s a no holds barred Tournament — survival of the fittest and all.

In HNCB’s defense, it’s likely the late, dark horse anyway. Also, Meta-Team All Your Nodes are Belong to Us (AYNBU) is just going to be poaching, distilling, and integrating all the other teams’ best work anyway. Bunch of frickin’ monster makers over at AYNBU, let me tell you!!

Of course, Team Infernal Inference Engine (IIE) may have the lead going out of the gate, what with all their current glory. Showboaters, sheez.

Should be some exciting developments! You never know, it’s possible Meta-Team R. Fast Arbitrator (R.FA) will be as good (well close enough to ship along with some teams) as AYNBU.

Going to be an exciting Tournament for sure! What kind of mutant cybernetic driver will emerge superhuman??

We can surmise that Tesla is gonna dim the lights in the Intertubes when those matches hit the clouds! (Not to worry folks, shouldn’t be more than a total of 30 match days with chances of traffic delays)

Go out there and step right up and place your bets!! Watch your step around those fantasy shares, please.

Not any advice here either.

Tl:dr; Can Elon reach FSD before or within epsilon delta of his forecast (sorry, had to do it fans of “order of magnitude”)? He has a sporting chance.

 

[scaesare]

I also don't quite get why would you want to beat up an expensive vehicle around rocks and branches.

Also, that X, which burned on the lake... the driver thought that maybe he hit his car bottom on the rocks. That's a sensitive piece of equipment on the bottom(battery) that you probably don't want to hit or puncture and risk burning the vehicle.

Supposedly, Teslas have some titanium plate there, but X burned regardless. Didn't see a definitive proof though of what caused it.

Packs have full aluminum armor underbelly. The titanium portion is only a small region near front of vehicle that protects against damage to the small un-armored front face of the pack.

 

[neroden]

If amazon can get the photography on white background patent....

United States Patent: 8676045

This goes to show that most US Patents are invalid. This is a case of unintended consequences. Congress moved most patent cases to a special patent courts, the "Federal Circuit". It was corruptly stacked with corrupt patent lawyers whose goal was to make maximum money by approving as many invalid patents as possible. This has caused a lot of problems.

 

[Cohiba]

This thread is useless for following intraday stock moves.

 

[neroden]

what is the current production status of batteries? all this other stuff is interesting, but distant.

i kinda lost touch with where they are at gf1 ...how far theyve come with redoing the battery lines. we had 2 done by end of 2018 and the 3rd in q1 2019?
is this correct? does anyone have latest status of this...and given the panasonic news over the last month or so

NOBODY KNOWS

Tesla has been getting better at suppressing leaks

 

[EVNow]

Almost nil

Cool. So, if by end of 2021 Tesla has a robotaxi service in a city, you owe me a million dollars. If they don't I owe you almost nothing.

 

[FreqFlyer]

This thread is useless for following intraday stock moves.

Summation, this day sucked.............................If want you more details..........

NASDAQ: TSLA - Google Search

 

[Fact Checking]

Supposedly, Teslas have some titanium plate there, but X burned regardless. Didn't see a definitive proof though of what caused it.

The (relatively small) titanium plate is there to protect against high-speed but low mass road debris hitting the battery pack in the wrong place at the wrong time - like the lose pieces of foam hit Space Shuttle Columbia.

Driving into an ice lake and hitting the car against the rocks on the shore is hitting the titanium and aluminum plates not with small road debris, but they are hitting an immovable object with a 2+ tons car. They are absolutely not designed to withstand that.

 

[neroden]

GM Cruise raises $1.15B at a $19B valuation from Softbank and Honda – TechCrunch

GM Cruise has raised another $1.15 billion in new equity from a group of investors that includes T. Rowe Price Associates, Honda, Softbank Vision Fund and its parent company GM as the self-driving vehicle company pushes to launch a commercial autonomous ride-hailing service this year.

This investment increases Cruise’s post-money valuation to $19 billion, inclusive of SoftBank’s previously announced investment commitment. Cruise has secured capital commitments totaling $7.25 billion in the past year, according to the company.

It seems like private equity is overvalued period relative to public companies. Look at Lyft.

 

[Fact Checking]

Summation, this day sucked.............................If want you more details..........

NASDAQ: TSLA - Google Search

Today's TSLA drop was mostly China trade wars macro effect I believe: TSLA was always over-sensitive to China news, similarly to Micron Technology (NASDAQ: MU) which is the high-tech bellwether of China trade news:

Micron Technology, Inc. (MU) Stock Price, Quote, History & News​

 

[neroden]

Post-1Q-ocalypse it seems like we're back to the mid-morning dip pattern. These jerks are just printing money. We need some kind of regulatory body to change the way investing is done in the US.

Just pretend it's 1895, you'll understand how to invest these days

 

[neroden]

OT

Right, when is the USA going to fix its problem with just issuing patents left and right and then leaving it to the courts to sort things out?

Congress has to get involved. The Federal Circuit has to be abolished, for starters, and it has to be made crystal clear that math is unpatentable. Unfortunately Silicon Valley *still* doesn't have enough clout in Congress.

 

[neroden]

Wait.

So you are claiming there are millions of cars online and connected that are funneling on-road data back to Mobileye?

He is claiming this, but it's not correct; there are 15 million cars with Mobileye chips (mostly only used for forward collision prevention, as far as I can tell) but they nearly all send zero data back.

 

[neroden]

Here's one of the many Florida news link, this is a big deal IMO. Florida Approves Allowing Rideshare Firms to Deploy Autonomous Vehicles
Senate approved 100%, just needs Gov's approval. I also noticed the articles (several) make no mention of Tesla - seems all Uber/Lyft related. Figures.

I lived in Fla for a few years, plenty of dangerous roads there with nice divided highways mixed with stop lights all along. The 19 on the west coast was (is?) known for accidents because of this and it goes through every major city like this. What a crazy state for this, maybe it's for the seniors.

Why Fla?

Because they're crazy

 

[neroden]

Well, GMAC tried to do that and did succeed in becoming a giant mortgage originator, among other things. Back when they began more tan 100 years ago they wanted financing in order to sell cars they otherwise might not sell. That worked astoundingly well. Tesla, with insurance, is probably copying that Sloan-era GM policy. That they have better data, if they can deploy it properly, is unquestionable. @neroden is prone to hubris regarding actuarial science IMHO, but he's correct that Tesla often is unable to execute on their promises based on their superior data.

I am reminded of Long Term Capital Management again. To wit: Superior data and superior analytics do not guarantee excellent results.

For Tesla there is never a question about superior data nor superior intellect. Their question is always about successful execution.

After all making consistent profits in auto insurance is never a sure thing. Actuarial decisions based on anything other than collision loss severity and insured driving record is fraught. The always reliable postal code classification, included in the Tesla generic application, is a wonderful surrogate for those two factors. Auto insurance actuaries are truly adept in engineering multi-collinearity into their algorithms and very, very few people seem to notice, fewer know what that means and even fewer care. Basically that means that auto insurance rates are generally built on reliable layers of prejudice.

So the question is whether Tesla can actually do better. Maybe, but I'll be surprised if they succeed in any consequential way. OTOH, they may well be able to make a bit of money, and betting against Elon as a disruptor is by no means a sure thing.

If the goal is just to target zip codes where Teslas are getting uncompetitive insurance quotes and offer quotes comparable to quotes on other cars, I think they can do that. I suspect we'll be able to tell whether that is the case quickly. If we start seeing super-low rates, *then* I would worry.