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

[printf42]

OT

So I'm guessing my explanation (2) is correct -- their accounting system is closing the quarterly books faster. That's a good thing.

We are witnessing TeslaQs insanely fast pace of innovation, even their innovative accounting is faster now.
/s

 

[DragonWatch]

Finally, back and heading north and now have WiFi ~ cool.

As you might know, or maybe wish you didn’t ~ this road trip is fossil fueled.

We only saw seven Tesla’s today, but then it was mostly back roads; beautiful I might add, but back roads none the less. saw a beautiful waterfall this afternoon. Since we are used to Supercharging, we applied the same principle here and schedule topping off at Costco. Own some shares there too, so kind of spreading the wealth as they say. Since we are heading north, I doubt that we will see any loaded trucks, and counting the empties only skews the count Okay, it would be cool to pass a loaded truck of 3s heading north to wild country There would be red meat for bears if I actually saw a truck full of Tesla’s heading south in Oregon or Washington Just sayin’

Driving the Tacoma on this road trip only pushes me closer to nuts ~ yes, some believe I passed that tipping point years ago. But, . . . The engine noise is outrageous, bar none. Cruise control sucks, bottom line. GPS, humm. I have used GPS since 1983, no this is not back to future, and no I am not impressed with Toyota’s version. The screen on our Tacoma is maybe, maybe 3”x6”; wife says that is being generous. Please, please give me a Tesla Model T ~ I’ll buy it already. I must have smacked the steering wheel five times today after turning on the turn signal indicating a lane change ~ no, the darned car just stayed in the lane and was not slowing down as the slower car remained in my way. I had to maneuver my car into the faster lane:-(

This truck (Tacoma) and I will part company once the Tesla Model T is available.

Remember when the ugly step child of the family, a couple of years back, was to run the newly designated all electric division at company where I bought my current truck? Yeah, kinda like falling asleep at the wheel waiting for him to introduce the all electric lineup ~ not me I am okay, I am okay ~ do not try this sleeping trick in school with a sharpie pencil:-(

Meanwhile, my wife laughs at me and says, “turn off the truck, and then remove the key.” Damned fossil fuel trucks

Yes, I know Elon may not be able to name his truck the Model T ~ you get over it, a boy is allowed to dream

 

[EVNow]

Personally, I have no idea what it will do. Could sell off or go up. At earnings, we could be at 200 or 280. Haven't a clue. But my guess is that if it runs up into earnings, it will sell off afterwards, and vice a versa.

Depends on beat or miss and any guidance changes. If it beats consensus and no negative guidance it will go up otherwise down.

I don't see much of a pattern in earlier quarters.

 

[mblakele]

There's some discussion of the global auto industry in this article. Nothing earthshaking, I think, but maybe worth a glance. I hadn't considered Morocco for the next GF.

The Economist
Supply chains for different industries are fragmenting in different ways
Clothes, cars and computers are all being affected

[...] Hau Thai-Tang, Ford’s top supply-chain executive. He sees a trend towards greater regionalisation coming with three hub-and-spoke networks: Mexico as the low-cost spoke for America; eastern Europe and Morocco for western Europe; and South-East Asia and China for Asia.

One reason for regionalisation is that the American market is diverging from global trends, argues Kristin Dziczek of America’s Centre for Automotive Research, an industry-research outfit. The Trump administration has rejected carbon regulation and rolled back Obama-era rules promoting more fuel-efficient vehicles. Americans are increasingly favouring pickup trucks and sports-utility vehicles, gas guzzlers eschewed by much of the rest of the world. [...]

[...]Mexico’s four dozen free-trade agreements with other countries which allow it to export to almost half the world’s market for new cars tariff-free. Carmakers have rejigged supply lines to take advantage. Mexico’s car exports to Germany have nearly 40% German components by value, while those crossing its northern border have over 70% American content.

[...]

A longer-term force that could turn automotive supply chains upside down is electrification. The Edison Electric Institute, a think-tank, estimates that the share of electric vehicles (EVs) in new car sales in America will rise from 2% in 2018 to over 20% in 2030. That could reduce trade in parts dramatically, since EVs have many fewer moving parts than conventional cars. Ford calculates that a shift to electric would reduce the value added by branded car manufacturers from 30% to 10%.

[...]​

 

[mrmage]

My guess is - its not about robotaxi next year - but its about feature complete by end of this year. They have to first get to FC before improving the quality.

That's the point I'm making. Without doing some critical thinking about all the needed features, you can't figure out how complex a particular feature is and thus how long it might take.

With Musk, we have no idea whether they have done this homework and then concluded it will take 6 weeks for summon or 9 months FC - or it is just a wild guess by Musk.

I thought discussions of the F*D and R******I are banned, so I'll discuss this in a more general perspective, and why I think most people are looking at this problem the wrong way. Or make me change my mind.

Engineering problems are deterministic because they either apply known or similar approaches to the problem, or we develop new approaches that can verify. The problem with N 9s of reliability in real world problems is that we can't really say that an approach that reaches .99 of the cases is sufficient to ever handle five nines (.99999) of cases.

Case in point is speech recognition. I developed a smart desktop phone that embedded a speech recognition in the early 80s. Without additional training, it could recognize numbers with .9 accuracy. But the algorithm it used would never get to .999 accuracy across all accents no matter how much work was put into it. The approach was wrong. So were all other approaches until machine learning came along.

So feature complete for F*D means something with all the features with .99999 reliability in a location (e.g. Denver). If it works in one location with .99999, we can say with reasonable probability that getting it approach to work in many other cities will work with more training. Machine learning does a great job at adding extra reliability to variations.

But feature complete which only performs all functions to .99 reliability does not mean the architecture can achieve .99999. Those extra 3 nines are not bugs. They're brand new problems.

The neural network stack may not be able to handle those extra cases, which means more programming and R&D, not just training. Because we don't actually know what new use cases will arise within the extra 3 nines, we are all really in the dark until we get to five nines at a particular location.

 

[StealthP3D]

Or another theory: Since Tesla redesigns things a lot, they could easily just have a new board rev that now requires an extra relay versus the old board. I mean, its a $1 - $5 part probably. As I said before, this is meaningless data unless you have a whole bunch more information.

I don't like that theory. Tesla normally redesigns things to be simpler, not more complex. The extra relays are likely for extra production, especially considering that Tesla has plans to increase production! The simplest answers are typically the best answers.

I smell a short burn in the making.

 

[StealthP3D]

Personally, I have no idea what it will do. Could sell off or go up. At earnings, we could be at 200 or 280. Haven't a clue. But my guess is that if it runs up into earnings, it will sell off afterwards, and vice a versa.

I disagree because I definitely don't think it will sell off after earnings, at least not in any dramatic fashion. I think the cost-cutting implemented many moons ago will be paying big dividends in Q2, ASP's will be above expectations due to the way Model 3 hit new markets and earnings will be impressive enough to at least hold the same price range. And we are clearly in a period where investors are starting to realize the story is not a negative one, but that things are much more positive than they have been reported to be. The news basically forgot to cover how impressive production and deliveries were in Q2. As investors come to terms with these things, the share price is gradually rising. Big money players have been doing their damndest to walk the price back down but they have continually been forced to keep letting it find new, higher, levels. This costs money. I suspect the powers to be behind this "walking down" are starting to wonder if it's stoppable at all (if Tesla keeps performing like a well-oiled machine) and whether it's worth it. And shorts who have been holding on to their positions should start to wonder why. So, not only will it not sell off going into earnings, it won't sell off on earnings release either. I really do sense there is at least another impending break-out to the upside, maybe two.

But, certainly, it's all semi-educated guessing, trying to prognosticate the direction of the overall markets and individual stocks is not easy, it's more a matter of trying to get it right 60% of the time.

 

[dc_h]

Feature semi-complete?

Chad Mortensen on Twitter

 

[kengchang]

Feature semi-complete?

Chad Mortensen on Twitter

There's a driver, hard to see but he's there.

 

[ggr]

Mod: 12 posts nuked. When we tell you to take the discussion elsewhere we mean it. --ggr.

 

[schonelucht]

Where the hell are you getting 15,000? You're just wrong.

From official investor relation communications by Tesla. Produced minus delivered. So no, I am not wrong.

 

[EVMeister]

There's a driver, hard to see but he's there.

But they're sitting to the left in the cab, not the centre where the steering wheel is? An observer/safety driver?

 

[Papafox]

Here's Friday's expiring options. If the theory that the manipulations of TSLA right now are being done by the sellers of the call options (hedge funds that didn't delta-hedge), then the effort will be to keep TSLA from closing above 240. If that's not possible, it's even more important to the manipulators to see TSLA close below 242.50.

I think we're seeing more oddball strikes in popular use recently (242.50 calls, 222.50 puts) because the buyers of the options realize that the stock is indeed being manipulated and they're hoping to spread out the option strike prices somewhat.

When do the manipulations lessen? That timing, I suspect, will be when institutional investors and more cautious investors start buying again. The volumes will be going up, the buying by longs will result in buying by shorts to cover and as the stock price rises the market makers (most, at least) will be buying shares to delta-hedge their options sold. Media coverage will become less negative (except for WSJ, BusinessInsider, NYT, and L.A. Times). Let's hope that Q2 ER provides the catalyst to get the whole train in motion (phrase chosen for benefit of @neroden ).

 

[Carl Raymond]

I smell a short burn in the making.

So many extremes.

Short interest extremely high.
Stock price extremely low.
Quarter deliveries, record high.
China expansion, at record pace.
Efficiency, at all time best.

Shorts have two choices, get out now, or get out at a much higher price. Deja vu all over again.

 

[mariaaa]

So many extremes.

Short interest extremely high.
Stock price extremely low.
Quarter deliveries, record high.
China expansion, at record pace.
Efficiency, at all time best.

Shorts have two choices, get out now, or get out at a much higher price. Deja vu all over again.

Well you know - there is always hope left. I also do not understand how these shorts are thinking, probably its not even their own money that they will be loosing.

However, I guess they see the potential danger but they hope that there is some kind of negative event and/or news that will prevent tesla from climbing higher.

 

[sundaymorning]

Mercedes on life support?

Daimler Cuts Outlook Again, Blaming Airbags, Diesel Costs

-Daimler AG issued its fourth profit warning in just over a year, this time blaming higher costs to deal with a recall for faulty airbags and increasing funds set aside to address allegations of emissions-tampering in diesel cars.

-The shares fell as much as 4.5% in early German trading. The carmaker now forecasts full-year earnings excluding some items to be “significantly” below last year’s figure, according to a statement Friday. In June, the carmaker cut that metric to “level” with last year.

-The world’s biggest luxury auto manufacturer boosted provisions for a recall of vehicles fitted with faulty Takata airbags to 1 billion euros ($1.1 billion) and increased expenses to address legal and governmental proceedings on diesel vehicles by 1.6 billion euros. As a result, second-quarter result has swung to a loss of 1.6 billion euros, excluding interest and taxes.

 

[Sancho]

View attachment 428773

Here's Friday's expiring options. If the theory that the manipulations of TSLA right now are being done by the sellers of the call options (hedge funds that didn't delta-hedge), then the effort will be to keep TSLA from closing above 240. If that's not possible, it's even more important to the manipulators to see TSLA close below 242.50.

I think we're seeing more oddball strikes in popular use recently (242.50 calls, 222.50 puts) because the buyers of the options realize that the stock is indeed being manipulated and they're hoping to spread out the option strike prices somewhat.

When do the manipulations lessen? That timing, I suspect, will be when institutional investors and more cautious investors start buying again. The volumes will be going up, the buying by longs will result in buying by shorts to cover and as the stock price rises the market makers (most, at least) will be buying shares to delta-hedge their options sold. Media coverage will become less negative (except for WSJ, BusinessInsider, NYT, and L.A. Times). Let's hope that Q2 ER provides the catalyst to get the whole train in motion (phrase chosen for benefit of @neroden ).

Totally agree with you, but I think the very short term calls are just the tip of the iceberg. I suspect that even bigger money is being made by hedge funds selling calls for further out expirations.

While sellers of these calls don’t need the SP to close at a particular price Friday, it’s critically important for them to continuously maintain what I would call “SP price control.” Their big fear is an uncontrolled runup. Not necessarily a full-blown short squeeze. But for example, it was critically important to them yesterday to knock down the price below 240. If the SP kept going to, say 243, it might have zoomed to 250, which would signal to everyone that the call sellers have lost control of the SP. When that signal is sent, the SP is vulnerable to a quick rise to 300 and beyond. The smart hedge funds will take their losses quickly and live to play the game all over again when the SP settles. They will let the SP run. The less smart “pilers on” to the call selling game will lose their shirts, but they are not driving things st all, they will just be roadkill.

When do the call writers lose control of the SP? With the SP still 150 points below ATH, and improving fundamentals, just about any positive news of any kind could be the catalyst.

But let’s not get overconfident. The SP now is also 60 points above recent lows, and negative news can have the opposite effect. And regardless of the news, the call writers are going to continue to fight hard not to lose SP price control.

 

[CorneliusXX]

... and pigs get slaughtered.

This place is a menagerie!

 

[CorneliusXX]

You’ve seen what we’ve had to put up with from Wall Street, media, SA, SEC and assorted scum buckets. And now the dog people want to take our cat glory!? Is it really too much to ask that people simply post per Jeopardy rules?

Answer: What is catnip overload?

There's only one way to resolve this impasse. Next earnings call we ask Elon if he's a dog person or a cat person.

 

[Fact Checking]

Mercedes on life support?

Daimler Cuts Outlook Again, Blaming Airbags, Diesel Costs

-Daimler AG issued its fourth profit warning in just over a year, this time blaming higher costs to deal with a recall for faulty airbags and increasing funds set aside to address allegations of emissions-tampering in diesel cars.

-The shares fell as much as 4.5% in early German trading. The carmaker now forecasts full-year earnings excluding some items to be “significantly” below last year’s figure, according to a statement Friday. In June, the carmaker cut that metric to “level” with last year.

-The world’s biggest luxury auto manufacturer boosted provisions for a recall of vehicles fitted with faulty Takata airbags to 1 billion euros ($1.1 billion) and increased expenses to address legal and governmental proceedings on diesel vehicles by 1.6 billion euros. As a result, second-quarter result has swung to a loss of 1.6 billion euros, excluding interest and taxes.

Daimler AG on "life support" is premature I think - they still have ~95% of the profit stream from their obsolete gascar businesses, so they might be fine in later quarters.

The current profit warning is not yet a sign of losing to EVs financially, but paying the price of poison-gassing citizens for profits. Because to Mercedes that's a "legal expense".

The groundbreaking ceremony of the 10th Gigafactory cannot come soon enough.