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

[MP3Mike]

They won't have a shortage of 2170 forever.

I wouldn't be so sure of that. Y, Pickup, Semi, Roadster, stationary storage... Tesla was able to ramp the Model 3 faster than Panasonic ramped the 2170 production. I suspect that the Y will ramp much faster than the 3 did. The Pickup, Semi, and Roadster will burn through cells faster than you can imagine...

 

[Todd Burch]

Totally off-topic here, but my son was playing Roblox on his iPad and said “hey dad, your car and charger are in my game!”

Took a screenshot (click to view in a more biglier fashion):


More on-topic: I welcome reasonable bear arguments, but my New Year’s resolution is to never respond AT ALL to the care bears and occasional visitors* that come out of the woodwork from time to time. I’m over them. My shares are in for the long haul.

They’ve already been proven wrong. No sense in engaging stupidity. It only encourages more stupidity.

I hope everyone else does the same in 2019.

2019 resolution: increase TMC signal/noise ratio.



*FUDsters

 

[tivoboy]

OT
Interestingly, much of Apples gains last year had to do with #1's tax cuts and all that money APPL could bring back to US.
Now all of APPLs woes are also because of #1's tariffs.

We got till March to see how it plays out.

I bought APPL at 154 and sold at 220, but got back in like 2 weeks back @ 170-180 range

Frankly, apple and most other tech companies didn't really benefit from the tax cuts much at all. the repatriation, MAYBE and yes, but most techs in good form were BELOW the new federal max 21%. Someone like an apple might actually go UP 1-2% overall in actual tax impact. Repatriation at 15% is a good thing and being able to carry it forward a DECADE (the tax liability) is really nice too, but that really all went into the stock buy backs. Apple could have done a similar financial gymnastics with very low rates and borrowing AGAINST the foreign holdings..

Overall tax impact though on an annual REVENUE basis, I'll be surprised if its more than 0.5% overall.

 

[tivoboy]

Consumer Reports owner satisfaction.

Car Brands Ranked by Owner Satisfaction

I just want to say, I LOVE this avatar

 

[EVNow]

If you boughtvAAPL around 1980, you would have 56x more shares by doing _nothing_
If you bought MSFT back then, (he weeps in abject agony) you would have almost 300x more shares, again by doing _nothing_

Wrong.

You did something.

You got 38 years older.

 

[Beltsbear]

I wouldn't be so sure of that. Y, Pickup, Semi, Roadster, stationary storage... Tesla was able to ramp the Model 3 faster than Panasonic ramped the 2170 production. I suspect that the Y will ramp much faster than the 3 did. The Pickup, Semi, and Roadster will burn through cells faster than you can imagine...

Basically Tesla/Panasonic will build a new line each quarter and every cell will be spoken for. They may need to start adding more than one line per quarter if you count China.

 

[tinm]

From the video, Doug Fields might have been fired from Tesla bc he over engineered the body design, which adds more weight but yields the same amount of safety ratings under a crash test.

My understanding is that he quit, wanting to return to a saner pace/culture at Apple.

 

[skitown]

That's fine, if you wanted the Dec 2017 info, but Karen was asking about info from late 2018...

That's what I provided...

Again, just google it, and look for the ~late 2018~ articles... There are several....

Oh, I can google. What you provided looks to be a reliability report, not customer satisfaction. @KarenRei is specifically talking about Customer Satisfaction (obviously). Too - my link was also for 2018. See the chart. But I think you might know that.

KarenRei said: ↑
I disagree. CR's satisfaction survey serves as an annual reminder to the market that despite an entire year's worth of BS about Tesla customers supposedly being angry with the company about (insert favoured FUD topic here), by and large they remain exceedingly satisfied with their purchases and are very likely to be repeat customers.

AKA: "The FUD is just noise. Were you thinking about taking it seriously? Don't."

 

[winfield100]

Wrong.

You did something.

You got 38 years older.

And had well over $10 millions if I had just held the damn stock, or only sold 1/2

 

[tinm]

OT, apologize for the intrusion, don't know what else I can do.

A question for @Fact Checking -- I am trying to reach you. I assume you get many private messages so maybe you ignore them. This is a legit inquiry. Would very much appreciate a reply to my message from this past Tuesday. Thanks.

And now back to our regularly scheduled program....

 

[hacer]

As per a prior request of me made either by you or by someone not you......

...

I inquired of several of my contacts. Not one of them!!!!! either has a FactSet subscription or knows of anyone who does. Huh.

It's just like people here have said - the consensus was formed after the results were announced (at least it certainly could have):

Updated intraday, FactSet’s consensus estimates are aggregated from a wide base of contributors and cover over 19,000 active companies across 90+ countries. Data Frequency: Quarterly; Update Frequency: Intraday.

FactSet Estimates - Consensus | Open:FactSet | Marketplace — FactSet Research Systems

So what we really want is a plot of the consensus estimate since it changes during the day. I'll bet that had some steep ass rise over the weekend!

 

[Thekiwi]

Frankly, apple and most other tech companies didn't really benefit from the tax cuts much at all. the repatriation, MAYBE and yes, but most techs in good form were BELOW the new federal max 21%. Someone like an apple might actually go UP 1-2% overall in actual tax impact. Repatriation at 15% is a good thing and being able to carry it forward a DECADE (the tax liability) is really nice too, but that really all went into the stock buy backs. Apple could have done a similar financial gymnastics with very low rates and borrowing AGAINST the foreign holdings..

Overall tax impact though on an annual REVENUE basis, I'll be surprised if its more than 0.5% overall.

you have your Apple facts entirely backwards.

Apple benefitted greatly from the tax changes. So much so that even with its big guidance cut yesterday - Apple is still going to report quarterly net income of ~$20 Billion, approximately equaling the record profits it had in the year ago quarter. Apple’s tax rate dropped from 25.77% in the December 2017 quarter to 16.5% in the just finished December 2018 quarter.

Apple was doing financial gymnastics - borrowing more than $100 Billion domestically against its international cash so it could up the level of its massive buyback program - BUT in a somewhat surprising show of corporate responsibility it had always made a tax liability allowance for eventual repatriation of most of its offshore cash hoard in its earnings, which is why it had comparatively little negative effect on its results when the 15% repatriation rate was enacted.

 

[dc_h]

Then there is this fun figure (from Yahoo Finance):

Average analyst revenue projection for 2019 -- $29.37B.

So the average analyst is predicting essentially no growth or low single digit growth from Q4 -- after 5 years of 60% y/y growth.

Don't disabuse them, let's keep the street view as low as possible for now. After Q1 earnings, they should start to update targets. A lot figured once US subsidy drops, sales will cease in USA. Assuming Tesla is driving margins higher, those minor price cuts in the US should allow them to continue to increase sales from ~5000 per week, to at least ~7000 a week by mid year and maintain at least low 20's gross margins on the 3.

Potential 2019 TSLA bonus points not on Wall Street radar.
Updated S/X battery and electronics would improve assembly processes, performance and margins. There will be a significant number of S/X owners "needing" to upgrade to track mode. A complete update to the body & batteries could reduce costs based on Model 3 learnings by 10% and greatly increase performance. Switch to steel and margins could go crazy. I know keeping the 18650 line running is helpful, but they need to keep their lead from the competition.
Shanghai Model 3 assembly in Q3 will reduce assembly costs and tariffs and reduce capacity constraint issues in Fremont. Any Shanghai assembly, or production in 2019 puts them on track for over 500,000 rate exiting 2019 and increase margins.
Tesla Energy hits 1 billion in quarterly revenue and is valued on Wall Street above zero. Solar is picking up and battery sales should ramping once the new Panasonic lines are all running. With the big California batteries coming online, they could have 1 billion battery sales per quarter by end of year, plus TE solar.
FSD, the subject of debate even among bulls. Based on employee beta, it appears Tesla has chip-sets to drive FSD 3.0. Even a limited FSD, will be a greatly enhanced version of ramp to ramp AP and in Tesla dense areas like California, will begin to utilize the neural network and effectively have communal awareness, sharing situational awareness and jumping well ahead of all FSD competitors. If Tesla can deploy FSD in California and Arizona, where laws are in place, it should be worth $100 a share. If it wipes out Uber locally, it would be worth more.
Tesla Semi: Not likely in any Wall Street valuations and even a couple hundred produced in 2019 should have a positive impact on valuations. I think Tesla will want at least the first 50-100 trucks in use internally. If Lathrop is the semi plant, they could be building in limited volume by q3.
Revenue for 2019 should be over 35 billion and margins, even with price reductions, to offset tax incentives, will increase through the year. Baring a 2007 style recession, Tesla should make over 1.5 billion and probably closer to 2 billion.

2020 will be the really exciting year with the pickup and model Y and a ramping semi and the tslaq shorts going bankrupt and becoming tslaqq.

 

[dc_h]

When "everyone" can make an affordable 600 mile range BEV what will happen to BES prices? What is happening to solar prices?

Are there bigger barrier to entry into cool solar roofs than autos?

People pay premiums for cool cars with cool interiors.

BES and Solar power not as much.

After watching Sandy Munro today, it seems apparent no one is going to be building a 600 mile car anytime soon. This guy is a premier automotive engineer and had to research what the Halbach method was and after tearing down a motor, could not reverse engineer the motor. Maybe competitors will copy the tech, but it is not something they are just going to copy. They will need top notch engineers with physics and material sciences backgrounds. No one in the USA has that experience, I doubt even VW has much depth here, maybe BMW, but they keep getting cold feet. Bosch and some of the German suppliers may have some of this expertise, but not likely under one roof. So Hyundai or some Chinese company, but the moat is not patents or existing investments, it is an engineering army that has been built up to produce the best electric cars on the planet with a relentless focus on continuous improvement.

 

[printf42]

Chinese news network reported that China Ministry of Commerce confirmed a high profile US team will visit china on Jan-7th and 8th to continue the tariff talk.
中美将于1月7日-8日举行经贸问题副部级磋商
It's currently the top news listed on their website.

This is not really news, since we already saw it reported several days ago:
Bloomberg - Are you a robot?

But the way it's reported in Chinese media shows the gov want people to be assured that they are making good progress, which means either they really did make great progress or they are willing to make a deal happen.

Could be positive sign for Macro.

 

[dc_h]

It's just like people here have said - the consensus was formed after the results were announced (at least it certainly could have):

FactSet Estimates - Consensus | Open:FactSet | Marketplace — FactSet Research Systems

So what we really want is a plot of the consensus estimate since it changes during the day. I'll bet that had some steep ass rise over the weekend!

Not sure how expensive the service is, but interesting tracking data. Certainly sounds like it could add to the Bloomberg and Troy tracker, but if Gene Munster and the rest of Wall Street depended on this one source that is not smart. One thing I take away is that Elon must not like some of the gamesmanship of Investor Relations, where most companies would have an available contact or team to communicate with key bankers and provide clarity on prior guidance. As a small investor this is nice, since we are better informed then Wall Street, but the dark side of this is that when Tesla meets or beats our tracking, it could be seen as a huge beat or defeat. On the first, if I knew what the numbers were, I would have bought calls and would have been crushed. So, does giving some industry guidance to insiders actually protect smaller investors? It's an interesting question. Long term holders like Fidelity might actually benefit more from less guidance than small holders who might vacillate based on volatility and outright confusion about how the stock reacts in the short term.

Personally, I would think the stock should rebound through earnings. Q1 will be the toughest transition, maximizing shipments to Europe and China until the start of March, selling almost nothing in the US in January and February and then, hopefully 20 to 25,000 Model 3's in March in the US and Canada. It takes 20 days for a ship to go from SF to China, so March 5th is probably the absolute latest a shipment can go out, get through customs and get delivered. They'd have to have one of those Norway style delivery events and deliver 1000 cars a day.
On the bright side, it sounds like production is now where Factset thought it was and 72,000 Model 3's produced in Q1 seems very possible. Combined with 25,000 SX, some increase in TE and steady services, revenue for Q1 should be over 8 billion. Assuming steady profit in Q4 from Q3 (~300 million) and closer to 500 million in Q1, paying off bonds is becomes a very obvious non-issue, even to most doubters.

 

[AZRI11]

After watching Sandy Munro today, it seems apparent no one is going to be building a 600 mile car anytime soon. This guy is a premier automotive engineer and had to research what the Halbach method was and after tearing down a motor, could not reverse engineer the motor. Maybe competitors will copy the tech, but it is not something they are just going to copy. They will need top notch engineers with physics and material sciences backgrounds. No one in the USA has that experience, I doubt even VW has much depth here, maybe BMW, but they keep getting cold feet. Bosch and some of the German suppliers may have some of this expertise, but not likely under one roof. So Hyundai or some Chinese company, but the moat is not patents or existing investments, it is an engineering army that has been built up to produce the best electric cars on the planet with a relentless focus on continuous improvement.

Tesla has Navy Seals. Everyone else has

 

[printf42]

LIVE Sandy Munro -playing right now, very informative

I am watching this right now, absolutely bullish points about Model 3 all over the place.

• He said he is interested in who is going to sell the most cars and make the most money, then dismissed i-Pace just after looking and does not even have any interest to take it apart.
• The body in white was heavier than 320, which according to him was the heaviest in class. One bit he was not pleased is the battery is not being used as a structure member, so has not contributed to the body strength as it could. But I suspect Tesla has their own reasoning, it's not just because of sloppy engineering, for example, they might already planed for the different pack design of SR, so the lighter pack won't compromise overall safety.
• He talked about the motor and especially the magnet in it. Tesla glued 4 strips of magnets into one piece, to take advantage of a known physical effect that no one else had went through the trouble to make it work, result is 40% better performance.
• least amount of piping, least amount of wiring harness, etc...

These are the reason why Model 3 is superior than competitions, but at the same time can have most juicy margin.
Anyone who want to understand why Model 3 changes everything should take a look.

So sad the video only have 6.6k views so far.

 

[Fact Checking]

Not sure how expensive the service is, but interesting tracking data. Certainly sounds like it could add to the Bloomberg and Troy tracker, but if Gene Munster and the rest of Wall Street depended on this one source that is not smart.

Note that what happened is that analysts and the business media pretended to care about the "FactSet consensus analyst expectations", which is a hopelessly gamed and compromised metric influenced by dominantly bearish Tesla analysts: these analysts input unrealistically high expectations such as 79k Model 3 deliveries in Q4, to engineer the "miss" their firms profit from.

Note that the same analysts had $190 and similar price targets, completely incompatible with the "delivery expectations" numbers they entered.

I.e. FactSet is used as an excuse to create a false media narrative and is also used as a platform for coordinated response to data releases.

I.e. it's plain old-fashioned fraud.

This scam will continue until well known financial metrics of Tesla improve to a level that will bring in value investors who ignore Wall Street analysts. The Q4 ER could be such a moment. The Q3 numbers probably already define a price floor - which got so low only due to a really bad macroeconomic environment.

As to Gene Munster: my speculative guess is he missed the Q3 boat and intends to enter a large TSLA position. He needed the "miss" price dip and assisted the CNBC shortz to make that happen. After the Q4 earnings report he'll be very, very bullish.

Also note that these shenanigans have little effect on Tesla's operations, which keeps generating cash and which keeps falsifying the ever adjusting bear thesis. Tesla doesn't need Wall Street anymore.

 

[Fact Checking]

My understanding is that he quit, wanting to return to a saner pace/culture at Apple.

That's the impression I got too - and it's supported by the timing: Doug Fields quit right after the Model 3 line reached 5,000/week performance.

I.e. he waited until the manufacturing project he started was brought to completion and quit voluntarily. Elon tends to fire people without waiting too much, like he fired the exec responsible for the non-working Model 3 battery pack assembly lines in 2017.

Doug Fields might also have gotten an irresistible offer from Apple - Tesla executives are highly sought.