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

[avoigt]

The annoying thing is that by the time TSLA investors learn this lesson Tesla might start a new era of under-promising and over-delivering.

Not advice though.

Looking at the behavior and guidance change we have seen from Elon & Tesla we may have already entered the era of under-promising and over-delivering while most don't realize it yet.

With now GF3 near production start and more markets delivered to the ability of the organization to shape its own future and with it output and financial success is increasing and will further increase from here.

Given that Elon is following the execution of his mission without compromises they may not care though about e.g. profits but expansion and units delivered only as this is what essentially helps to move to sustainable transportation and force ICE to move BEV. This endeavor has been extremely successful and is under-appreciated in the media and public opinion though.

Rhetoric question: where would we be without Elon?

The guidance that Q3/Q4 will be good and Q1/Q2 bad and after that very good should create enough opportunity for shorts and naysayers to spread FUD to keep the SP down unless Hedge Fonds and large investors change their minds which always can happen but so far did not. At that point the losses of short will overweight their gains and outlook which spurs further SP increase.

I am surprised that all the good news we have seen in 2019 so far did not turn the tide and my prediction that the dip below $300 will be short was wrong. Be it the successful manipulation that @Papafox explains to all of us in his daily threat or other factors but the SP established in low areas that I call cheap or a bargain.

The recent uptrend is promising and the series of up days impressive but what really counts is how the ER will be received and a win on all level would be needed to turn the opinions and I rather count with some good and some mixed numbers. Even if all is positive I am not convinced if we see a bounce as the manipulation will IMO continue.

Looking forward with weak Q1/Q2 but strong expected delivery numbers in 2020 there is a chance to enter a more stable profit phase 2H 2020 and usually WallStreet would anticipate that about 6 months ahead.

Unfortunately there is no usually with Tesla and while I am very pleased to see how the company does execute the reality gap we see in the SP may continue for a while. Clearly hoping to be wrong and to see a EOY run though.

 

[Fact Checking]

Looking at the behavior and guidance change we have seen from Elon & Tesla we may have already entered the era of under-promising and over-delivering while most don't realize it yet.

Unfortunately there is no usually with Tesla and while I am very pleased to see how the company does execute the reality gap we see in the SP may continue for a while. Clearly hoping to be wrong and to see a EOY run though.

Yeah, agreed - if Q3 results are a loss - which looks likely at this point - then I'd expect the negative sentiment to resume.

 

[Fred42]

This channel has 4.69 MILLION subscribers and posted this video today, which already has 125k views:

now 1.3 million views (JerryRigEverything's Model X video)

 

[Prunesquallor]

Hmm...

 

[Hock1]

The annoying thing is that by the time TSLA investors learn this lesson Tesla might start a new era of under-promising and over-delivering.

Not advice though.

With a record number of TSLA investors "learning their" lesson and de-risking themselves at ER time, seems like there is a real good chance that the stock is going to soar. Not a prediction, just sayin'.

 

[Drax7]

now 1.3 million views (JerryRigEverything's Model X video)

It would be nice if Elon would design a wheel chair solution that requires little effort to load and unload into
The car. It’s heart breaking watching her load it back.

 

[Johnny Ma]

Self-Driving Requires Unprecedented Collaboration

Lyft teams up with legacy auto in self-driving regulation efforts (because they're all getting beaten by Tesla). Expect lobbying efforts to try to slow Tesla down. This company has a LOT of enemies.

Deleting Lyft app on my phone.

 

[TheTalkingMule]

It would be nice if Elon would design a wheel chair solution that requires little effort to load and unload into
The car. It’s heart breaking watching her load it back.

Well FSD will certainly solve all these issues.

 

[replicant]

Self-Driving Requires Unprecedented Collaboration

Lyft teams up with legacy auto in self-driving regulation efforts (because they're all getting beaten by Tesla). Expect lobbying efforts to try to slow Tesla down. This company has a LOT of enemies.

Deleting Lyft app on my phone.

Interestingly, its COO left last July. Before that, he was Tesla's VP of global sales and service. I wonder why he left and what he's doing now.

 

[ZsoZso]

And it’s only been noted at least 100x what Ark’s policy is

I know that's their policy, but it is kind of a self-defeating policy.
What it guarantees, is that their portfolio performance is limited by the worst performing stock they own.
Since every better performing one periodically hits the 10% mark and gets trimmed until the entire portfolio is performing exactly as bad as the worst stock.

In other words: even if their projection about TSLA is correct and it will grow ~20x in the next 5 years, they will never benefit from the 20x growth, because their TSLA portion will be sold down to 10% every time TSLA outperforms their average stock performance.

Example: suppose TSLA doubles next week in response to a stellar unexpected ER, as a consequence ARK has to trim their TSLA holding to half. That means their growth can never reach 20x only 10x IFF there is no more trimming(i.e. TSLA becomes their worst from there on), in case of TSLA continued out-performance of their worst, more trimming will occur and their growth from TSLA is even lower.

IMHO: the correct version of the policy would be to never buy more of a stock if its over 10%, but no forced selling due to over-performance. So if they invest only 10% in a stock to start with, but that stock outperforms everything else so much that it becomes 90% of their portfolio, its still fine, they just don't buy more of it and only sell when it reaches their projected price target.

 

[Dan Detweiler]

It would be nice if Elon would design a wheel chair solution that requires little effort to load and unload into
The car. It’s heart breaking watching her load it back.

You know some sort of lift will be coming on down the road. I am sure there are 3rd party options now, just at very expensive prices. After all, there are currently retrofit options on the market. Right now Tesla has bigger fish to fry, but I would not be at all surprised to see wheelchair assist models available.

Dan

 

[Hock1]

I know that's their policy, but it is kind of a self-defeating policy.
What it guarantees, is that their portfolio performance is limited by the worst performing stock they own.
Since every better performing one periodically hits the 10% mark and gets trimmed until the entire portfolio is performing exactly as bad as the worst stock.

In other words: even if their projection about TSLA is correct and it will grow ~20x in the next 5 years, they will never benefit from the 20x growth, because their TSLA portion will be sold down to 10% every time TSLA outperforms their average stock performance.

Example: suppose TSLA doubles next week in response to a stellar unexpected ER, as a consequence ARK has to trim their TSLA holding to half. That means their growth can never reach 20x only 10x IFF there is no more trimming(i.e. TSLA becomes their worst from there on), in case of TSLA continued out-performance of their worst, more trimming will occur and their growth from TSLA is even lower.

IMHO: the correct version of the policy would be to never buy more of a stock if its over 10%, but no forced selling due to over-performance. So if they invest only 10% in a stock to start with, but that stock outperforms everything else so much that it becomes 90% of their portfolio, its still fine, they just don't buy more of it and only sell when it reaches their projected price target.

I don't know about your "correct version", but you are absolutely right about the current policy limiting the upside of a 20-bagger in the portfolio. I have been thinking exactly what you have outlined here. Thanks.

 

[UncaNed]

It would be nice if Elon would design a wheel chair solution that requires little effort to load and unload into
The car. It’s heart breaking watching her load it back.

I disagree. All wheelchair users are different and have different limitations and needs. If Elon just offered a way to remove the second row seat or seats so one of the many handicap/wheelchair adaptive places across the world can have more room, it would make it easier across the board to customize Teslas for wheelchair users, weather that be a simple grab bar or two, a rope-and-pulley chair lifting and loading system, or an elaborate, powered chair-loading system. Or a custom, pivoting chair for the wheelchair user themselves.

(Again, please don't anyone forward the video of the impractical, over-engineered German chair loading monstrosity I keep seeing)

 

[Fact Checking]

IMHO: the correct version of the policy would be to never buy more of a stock if its over 10%, but no forced selling due to over-performance. So if they invest only 10% in a stock to start with, but that stock outperforms everything else so much that it becomes 90% of their portfolio, its still fine, they just don't buy more of it and only sell when it reaches their projected price target.

JFYI, that is actually ARK's real portfolio policy. They don't have any mandatory sales above 10%.

 

[StealthP3D]

With a record number of TSLA investors "learning their" lesson and de-risking themselves at ER time, seems like there is a real good chance that the stock is going to soar. Not a prediction, just sayin'.

Whenever I hear a new investor say "they have learned their lesson" and they are speaking of a single experience (or even a handful of experiences) I feel this:



Statements like this make me wonder if they appreciate the complexities and nuances of the markets. It makes me wonder if they understand the concept of "statistically significant" and how their experience is just one of many possibilities in the intricate fabric of market reactions. It makes me wonder if they understand the theory of the Butterfly Effect and how everything is simultaneously connected, yet disconnected.

In short, it's absurdism to think a few experiences can be reduced to a simple rule. Investing is more art than science - and especially when considering high growth, unprofitable companies. It kills me to see people trying to value such companies using the same techniques applicable to large lumbering and established companies with small growth rates. Determining the value of a company like Tesla is not a linear exercise with numbers and growth rates - at any point in time, it's worth whatever people think it's worth. Its valuation is much more a social science or art than an accounting game. Because people have biases and prejudices, they have emotions and peculiarities. This is what is valuing Tesla. All the numbers of each quarterly report need to play through these filters. The $TSLAQ crowd knows this which is why they spend so much energy trying to discredit TSLA and take the luster off their image.

Unless you are simply playing the volatility of Tesla like a casino, it is wise to step back from these quarterly and even annual fluctuations. A "long-term view" does not mean a week, a month or even a year or two. Look at the broad trends. Think like Elon, in terms of 5 years at a time. Don't compare Q3 2019 and its global distribution with Q3 2018 when pent up demand and domestic deliveries of high margin variants were in full swing (without recognizing the two periods are NOT directly comparable). This is a technique better suited to a company like Proctor and Gamble. Look at the bigger picture, the trends surrounding the cost of goods sold, the volume of production, the consumer response to Tesla's products over time. Look at the direction the company is taking with internal initiatives to affect this bigger picture.

A really important factor in my analysis is whether or not I think Tesla will be able to obtain enough batteries to feed assumed growth rates. Also, cost of batteries going forward. And I think other investors and sincere analysts are starting to see this as the most important thing. News and forward guidance on batteries will likely drive the share price reaction to Q3 which is why I'm looking forward to the conference call more than the exact results of last quarter. Because the share price will be more driven by how investors THINK the future will unfold than by last quarters' results. Those aligned with $TSLAQ will attempt to focus the narrative on the past while the future is staring them in the face. They are not going away but I definitely think they are a dying breed.

 

[ZsoZso]

JFYI, that is actually ARK's real portfolio policy. They don't have any mandatory sales above 10%.

In that case, the original explanation of the sell-off from Karen (which triggered my post in the first place) is in error:

It would be a violation of Ark's policy to not sell off some TSLA shares after a meaningful runup. The company always stays around 10%, and they try to prevent any stock from meaningfully exceeding 10%.

People trying to read tea leaves into this are just projecting their own feelings.

 

[KarenRei]

So, not going to discuss it in this thread, but if you want to know why Boris is probably out looking for a good ditch right now, and why Monday will be "interesting" in the UK...

Brexit: 'I will not negotiate a delay with the EU,' Boris Johnson tells MPs after vote defeat – live news

 

[JRP3]

The pace of construction in Tesla’s electric car factory has been so notable that the term “Tesla Speed” has reportedly been coined to describe the project. “Tesla Speed” is a step above “China Speed,” which is already a term that suggests a project is being completed in a very quick manner.

China's 'Tesla Speed' construction for Gigafactory 3 christened with bold signage

 

[KSilver2000]

Self-Driving Requires Unprecedented Collaboration

Lyft teams up with legacy auto in self-driving regulation efforts (because they're all getting beaten by Tesla). Expect lobbying efforts to try to slow Tesla down. This company has a LOT of enemies.

Deleting Lyft app on my phone.

The articles says that Uber is also part of the group.
So, no more Uber for you as well, hopefully.

 

[Right_Said_Fred]

27 posts were moved to Battery pack/module replacement (out of main). Try to refrain from having highly technical discussions in the investor thread.