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

[humbaba]

Hindsight is 20/20. It's so easy to bag on ourselves for not going nuts at 180, but at the same time you never want to add too much risk to yourself. I purchased 1 call for $305 for 10/23 for like 30 bucks. I wound up making $1500 on it. Part of me is annoyed I didn't throw a few hundred grand at that call but realistically my odds of losing it all were much higher. IMO don't focus on lost profits from 180 up to 317, focus on profits from $317 up to 2/3/4k.

Oh, at the time I wanted to buy more. I did all I could, other than mortgage the house So I didn't make out like a bandit, but at least I'm still married. And, realistically, it would have given me ulcers until the pop having my home in hock and not knowing when to bail (for me the pop would have been a clear sign, whether I bailed early or late it would have been > $300).

The truth is, I'm not cut out for that kind of stress. So I accumulate and compulsively follow the stock.

 

[dww12]

A succesful launch of solar roof V3, with billions in revenue, is the death sentence for that lawsuit. It can be used as evidence that acquiring Solar City was a sound business decision, not a bail out.

Was the solar roof in the works at the time at SC though, or just a dream? What IP did SC have at the time?

 

[Fact Checking]

I'm a little puzzled by Land and Buildings, which grew 324m the past 6 months (2632 to 2956). Does this include the GF3 building? It was not in service on 9/30, but most of the first building was "ready for its intended use". I'm not aware of much else in the way of land/building action happening in the period. Thoughts?

Could it be the new Lathrop warehouse:

Tesla's rumored Lathrop distribution center seems poised to start operations soon
​

At almost 1 million square feet it's pretty large. This might be part of the Model Y plans where they freed up warehouse space at Fremont.

 

[Tslynk67]

Massive capping at $313 today. I'm also of the opinion that the after last week's options blood-bath, the MM's want their pound of flesh back.

 

[EVNow]

What do we need for "Feature Complete"?

• The roll-out of "advanced summon" and "navigate on auto pilot" in some international markets.
• "Recognition of stop signs and traffic lights",
• "Automatic driving on city streets"

Elon: while it's going to be tight, it still does appear that we will be at least in limited -- in early access release of a feature-complete Full Self-Driving feature this year. So, it's not for sure, but it appears to be on track for at least an early access release of a fully functional Full Self-Driving by the end of this year.

Yes - I've been trying to track this from a few months closely for this reason. Whenever Tesla hits FSD feature complete (FC) milestone,
- they can recognize a bunch of deferred revenue
- it might hit the market that Tesla is similar to Waymo in terms of capability, but is worldwide instead of couple of cities

Of the two big items remaining, we don't know whether they will roll out traffic lights/signs separately or just City NOA all at once. I was hoping V10 would have traffic lights/signs - but it didn't.

Of the $500M remaining, I'd say
- $100M for HW3 upgrade (COGS) per vehicle
- $150M for traffic lights/signs
- $250M for City NOA

Out of this may be 75% is in the US. So, depending on what gets released in Q4/Q1, where it gets released, how much of HW3 upgrade has been done in Q4/Q1, we can get some sense of how much revenue recognition we should expect. Given seasonally low Q1 and developing timeline for FSD FC, it would make sense for Tesla to complete HW3 upgrades in Q1, release FSD FC - recognize $400M in deferred revenue. This could also make sure TSLA gets added to S&P 500 after Q1.

We should watch FSD FC closely - if it is released close to end of Q1, it would be a good sign.

 

[GOVA]

Could it be the new Lathrop warehouse:

Tesla's rumored Lathrop distribution center seems poised to start operations soon
​

At almost 1 million square feet it's pretty large. This might be part of the Model Y plans where they feed up warehouse space at Fremont.

Mini "Giga" factory held under wraps to do 'surprising' model Y production? What if this is not a distro center???

 

[Fact Checking]

That's the worst chart of the bunch. Warranty claims, mostly from prior year sales, can't be usefully compared to current year sales for a high growth carmaker.

Well, if we assume that Tesla's products follow the typical bathtub curve:

Where the increasing "wear out failure rate" starts rising when most vehicles are out of warranty already, then the chart by Stephenson likely overestimates Tesla's warranty claims, as "infant" defects are more likely to occur in the first 1-2 years of the car's lifetime.

Secondly, the Model 3 ramp-up also probably artificially increased the defect rate, as it's a first generation product that now increasingly dominates Tesla's sales.

All the other carmakers benefit from steady state production of mostly mature, Nth generation product lines, and a fleet well into the "flat" part of the defect rate probability curve.

I.e. chances are that it's an entirely fair chart that might even turn out to be conservative, as the quickly dropping Tesla defect rate is suggesting.

 

[TradingInvest]

Model 3 becomes the first electric car approved for New York City taxis. Each driver can save a few thousand dollars per year on gasoline. It will reduce street air pollution too. Beijing announced they will switch 20,000 taxis to EV before the end of next year.
Model 3 is the best choice for taxi companies. A lot of people will have a chance to ride the EV.

 

[StealthP3D]

Massive capping at $313 today. I'm also of the opinion that the after last week's options blood-bath, the MM's want their pound of flesh back.

Market Makers *always* want as much flesh as they can get. Last week has no bearing on it.

 

[kengchang]

Mini "Giga" factory held under wraps to do 'surprising' model Y production? What if this is not a distro center???

Model Y is going to be built in Fremont, why the second guessing?

 

[woodisgood]

Does being added to the S&P500 give the stock some protection from MM/short-selling, given the greater amount of funds that will buy? Or other advantages? I've never followed a stock during its inclusion into said index.

 

[TheTalkingMule]

Buffett's kicking the tires on an plan to buy a bankrupt PG&E and we're over here with a $56B valuation like.....helllllllooooo???

What are these huge institutional investors waiting for?

 

[StealthP3D]

Model Y is going to be built in Fremont, why the second guessing?

Yeah, and it's going to be released in Q3 2020. No second-guessing!

 

[KarenRei]

Buffett's kicking the tires on an plan to buy a bankrupt PG&E and we're over here with a $56B valuation like.....helllllllooooo???

What are these huge institutional investors waiting for?

Buffett doesn't invest in growth companies; he usually targets stable mature companies.

Also, your article says that they don't have interest in PG&E.

 

[StealthP3D]

Buffett's kicking the tires on an plan to buy a bankrupt PG&E and we're over here with a $56B valuation like.....helllllllooooo???

What are these huge institutional investors waiting for?

Well, if he treats TSLA like other highly successful tech companies, he'll start buying at about $2000/share.

 

[KarenRei]

Well, if he treats TSLA like other highly successful tech companies, he'll start buying at about $2000/share.

Exactly. Buffett is who you'll be sharing your shares to five years from now.

 

[Tslynk67]

BTW, Lord Treelon was knocked off the leaderboard by the CEO of Shopify who's pledged 1000001 trees... Did 100 myself, mouse-nuts, I know, but if just 10k of Treelon's 29m followers did the same, would be a lot of trees.

 

[woodisgood]

Ok, now I'm excited. And I want it.

Model Y Prototype Spotted (2019-10-25) : teslamotors

EDIT: Not sure if there's a perspective issue with the dash cam, but this looks a lot larger than I had previously thought, not just a 3 with a hatch. This makes me feel better about the differentiation.

 

[Don TLR]

Nobody is really. Playing that game is luck. IMO, the only real edge you can have is if you have particular knowledge and/or believe in investing into long term societal trends.

I see the talk of long tem calls but will just do the safe for me accumulating, but sometimes feel I'm missing out on cheaper share pricing..

 

[Fact Checking]

Buffett doesn't invest in growth companies; he usually targets stable mature companies.

Well, Buffett is primarily targeting monopolies and other rent seeking industries - or companies that can trivially be turned into rent seekers.

Fast growing companies are often in danger of not turning into a monopolist, plus buying in the growth phase means he'd pretty much always have to pay a growth premium, with the risk of buying a bubble.

Buffett prefers to always buy guaranteed, multi decade cash flows at discounted prices. Any growth premium is pretty much a deal breaker.

Note that even when Buffett invested in AAPL in early 2016, Apple was showing signs of revenue reduction and the share price corrected, with little growth premium left.

I'd have expected Buffett to invest into Tesla in Q1 or Q2 - I'm sure Berkshire Hathaway considered it seriously, and he was a fool for not doing it. I'd guess he didn't do it due to cultural bias - Elon is likely too much of a nerd for Buffett who is a businessman. Also because Tesla has perhaps the most complex integrated business plan in existence of all major firms, and Buffett prefers simple monopolies.

His loss.