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

[humbaba]

FSD is so exciting. I think it is bigger than any other application of AI to date. Clearly they are making rapid progress with features just as Elon promised. Fixing the trailing 9s is just a matter of data and time. Even if you don't have TSLA stock it is exciting. Our cities are going to be changed. This will affect everyone. When you combine it with the custom chip and battery advances, I can't help but geek out over the direction this is going.

I suspect AJ's impact is limited by how many times he has already cried wolf. I think it would be hilarious if Elon let him ask a question at the next earnings and then gave a 'no more bonehead questions' answer to him. Personally I loved it when Elon was trolling more on Twitter - more entertaining...

As for battery day, I don't expect anything other than them laying out their plan, and some dry battery electrode related stuff. It might even seem underwhelming, but over a period of 5 years, a path to huge battery capacity will be the backbone of the company. It is important but predictable.

MIC is important and predictable too imo. They executed well, and 2020 is going to be ramp up and good margins.

FSD on the other hand is so much more important, and so much more unpredictable, and completely unaccounted for in a 420 share price. This latest release is a very big deal. It shows Elon's timelines for FSD are somewhat accurate. The more I start thinking about FSD the more bullish I get. I know some of the regular well known posters here are skeptical about FSD timelines - even thinking it will take 10 years. @KarenRei I think was skeptical... someone who is pretty technical. I wonder what the consensus is now on FSD? I think it is a huge mistake to not believe Elon on his FSD estimates now that he is taking a more conservative line on his estimates. And of course there is a lot of upside to the SP even without robotaxis, just from things like NOA. The thing about robotaxis though, is that they will not get priced into the SP until after they are invented. The concept is too foreign and analysts (and investors) are too technically limited and reactionary, for the most part.

If we are FSD feature complete in 6 months from now, and we allow a year for training, and another 6 months for regulatory approval in progressive US states like California, then my best guess is robotaxis rapidly scaling out across the US by the start of 2022. China following closely behind and EU a year after that.

Also, from a usability POV, voice commands is pretty sweet.

I think it is important to separate things when talking about FSD.

FSD as sold by Tesla right now

• Navigate on Autopilot: automatic driving from highway on-ramp to off-ramp including interchanges and overtaking slower cars.
• Auto Lane Change: automatic lane changes while driving on the highway.
• Autopark: both parallel and perpendicular spaces.
• Summon: your parked car will come find you anywhere in a parking lot. Really.

Coming later this year:

• Recognize and respond to traffic lights and stop signs.
• Automatic driving on city streets.

People can (and do) quibble over the state of these features. For example, autopark into perpendicular spaces was always iffy for me and hasn't work at all for >9 months. But there really doesn't seem to be any reason it couldn't be made to work. The top part is all here right now, though labeled as "beta" and somewhat uneven in execution, it is always improving.

The "coming soon" features -- the sneak preview is proof of the first and a guide for how close the second is. But make no mistake, this is still not autonomous.

The currently enabled features require active driver supervision and do not make the vehicle autonomous. The activation and use of these features are dependent on achieving reliability far in excess of human drivers as demonstrated by billions of miles of experience, as well as regulatory approval, which may take longer in some jurisdictions. As these self-driving features evolve, your car will be continuously upgraded through over-the-air software updates.

At autonomy day, Musk said he expects to be "feature complete" by end of year (2019). He explicitly said not safe enough and, for that, projected end of 2020. He additionally gave a caveat that regulatory approval would be some point in the future.

But this is still not robotaxi capable. And while it might seem like a small leap, even if they get approval for unsupervised the currently demonstrated features are nowhere near robust enough for a fully autonomous service, like a robotaxi. That is, it could end up achieving sufficient safety, but be unable to reach a destination.

Importantly, note that nowhere in that text does Tesla advertise this FSD as being robotaxi.

Also note that while Tesla autopilot/FSD is not geofenced it is also limited as to where it can be done. They talk about "city driving" and "highways" -- is the midwestern town I live in count as a city? We have "roads" that are... challenging. And this isn't even talking rural. There's a new highway segment here that is on the map and been around at least a year I guess and navigation still doesn't acknowledge its existence and tries to do impossible things to get back on the roads it knows. Is that solvable? Of course it is. But roads are always being built and bypassed -- this isn't just a problem for LIDAR and hi-def map based solutions, its just worse for them.

Now lets talk about sensors and weather. Recent trip I was on autopilot cut in and out somewhat counterintuitive to the weather being experienced. It would be fine in heavy rain, then fail when it let up. The reason is simple and obvious if you review camera footage. What happens is that when the rain let up droplets obscured the cameras and it makes a kaleidoscope look like a clean view of the surroundings. The car can't see anything and there's mechanism to clear the sensors. Front facing cameras just aren't enough: you have to see beside and behind in order to drive.

In short, there's a big jump from a supervised driver assistance FSD -- which is what Tesla is currently advertising -- and something capable of driving from point A to point B without intervention and without getting stranded. Tesla says the current hardware is enough and, given some caveats, I believe them. But it won't be enough for robotaxi service in all places.

 

[Chunky Jr.]

Amazon invests huge money into Rivian
Amazon gives Rivian an imaginary order for a nonexistent product
Rivian valuation is now artificially inflated and everyone wins

This was a common game during the dot com boom. A VC would fund Company A. They would also fund companies B,C,D that buy products from Company A. Company A looks like it is on a tear, goes public, and the VCs cash in and make a ton of money. At this point, they no longer care about any of these companies even if they lose all their money in B,C,D because they made so much with A.

 

[lklundin]

So, during run ups I tend to buy OTM calls with the intention of flipping them for a few extra free shares. Not any substantial amount of $ - say $200-$1000 in calls. Just kinda “meh if I lose it I’m not too worried and I don’t think it will ever be in the money so I’m not worried about that aspect.

This run up...I’m unsure what to do...because the $1,000 in options is now $30,000 in options and I’m coming ITM.

They’re all Jan 17s, so I can capture the P&D report If I choose.

I never partake in options to this quantity of dollars, and I’m legit unsure what to do. Any advices?

I believe I have managed to deduct a couple of "rules" on what to do with (call) options (that are in the money, ITM):
1) The premium paid for the options is a sunk cost, so the decision regarding how to act is not influenced by the premium paid (since that cost cannot be regained).
2) Until expiry the ITM call options can be bought at the strike price and then either (A) held or (B) sold at their current price
- rolling the options is a special case of (B). So the actual choice is whether to hold or sell.
3) If one believes that the price (of the underlying) within a relevant time frame will go below the strike price(*), then one should not hold but rather sell the underlying, since (per this belief)) the shares can be bought cheaper later.

I have some Jan. 17 320$ calls that do _not_ fall in category 3) - so I am thinking to exercise my right to buy them at the strike price and then hold them. The price effectively paid for these shares is then the strike price plus the (per share) premium paid.

(*) Because of 1) it is the strike price and not the break-even price (strike price plus per-share premium) that defines this threshold.

PS. Again, if I have misunderstood something, then please let me know.

 

[Chunky Jr.]

When I was a kid, my friend and I used to build what we called impenetrable walls out of sand on the beach. We designed them to hold off the tide as long as possible, but eventually the tide eventually won and wiped our creation out. This reminds me of TSLA. The shorts are attempting to build their impenetrable wall, but TSLA is the tide.

 

[ammulder]

I think it is important to separate things when talking about FSD.
...
In short, there's a big jump from a supervised driver assistance FSD -- which is what Tesla is currently advertising -- and something capable of driving from point A to point B without intervention and without getting stranded. Tesla says the current hardware is enough and, given some caveats, I believe them. But it won't be enough for robotaxi service in all places.

I totally agree with this distinction. On a drive I commonly take, there are two rural intersections with weird road angles and bushes or structures in the way -- where at a stop sign, the car is angled toward the cross road and I have to lean way forward to see cross traffic coming at ~50mph from the direction I'm angled away from. I'm not sure, but it's not at all clear that the cameras will have an adequate field of view to see traffic before it's too late (the front camera would have to have an EXTREMELY wide view and solid recognition way out at the limits of that view).

So while I would be thrilled to have the car drive me 99% of the way (I can't understate how excited I would be to see reliable autopilot on "city streets"), I'm not at all convinced a "robotaxi" using the current cameras/sensors could make it literally 100% of the way. And I am having a hard time imagining a no-steering-wheel future.

It's a difference between making my drive a lot more pleasant, and sending the car to take my kids somewhere, or sending the car to pick up my kids from somewhere.

 

[wipster]

well, just briefly. Its "puff, puff, pass" right?

I'm of course referring to the SP...

 

[jerry33]

Do Auto companies make Batteries, Energy Products, Chips, AI N/N's ?

Most barely even make autos anymore with all the outsourcing that happens.

 

[StealthP3D]

Follow-up question to @StealthP3D:

Why would you retire so early?

I was a commercial fisherman. At the time there was no Internet access on boats (especially in Alaska). Since I had millions in one stock and it was over 90% of my net worth it would make little sense to get on a boat for 3-4 months on which my earnings for the entire period would amount to less than the average daily volatility of my brokerage account. At the time, it was not uncommon for my account to shoot up or down by $30-$100,000 each day. Fortunately, mostly up! I needed Internet access to decide when to sell. I loved fishing but there came a time when it would have been financially irresponsible to get on a boat.

This "problem" was brought about by a refusal to take profits simply because one of my stocks had doubled or tripled. And yet this is common financial "wisdom". Never sell or profit take simply because a stock has done well! Sell when the stock's growth has completely played out. By that time you will probably be so far ahead of the game that even if you miss the top by 50% it won't even matter - you will be so far ahead of where you would have been had you "protected" your early profits with profit-taking.

 

[Tim S]

I believe I have managed to deduct a couple of "rules" on what to do with (call) options (that are in the money, ITM):
1) The premium paid for the options is a sunk cost, so the decision regarding how to act is not influenced by the premium paid (since that cost cannot be regained).
2) Until expiry the ITM call options can be bought at the strike price and then either (A) held or (B) sold at their current price
- rolling the options is a special case of (B). So the actual choice is whether to hold or sell.
3) If one believes that the price (of the underlying) within a relevant time frame will go below the strike price(*), then one should not hold but rather sell the underlying, since (per this belief)) the shares can be bought cheaper later.

I have some Jan. 17 320$ calls that do _not_ fall in category 3) - so I am thinking to exercise my right to buy them at the strike price and then hold them. The price effectively paid for these shares is then the strike price plus the (per share) premium paid.

(*) Because of 1) it is the strike price and not the break-even price (strike price plus per-share premium) that defines this threshold.

PS. Again, if I have misunderstood something, then please let me know.

Slightly OT:
I am in this same situation with one Jan 17 $285 call. If I exercise it, I believe I will not have a taxable gain until after I sell the shares. So if I exercise and then hold the shares for a year, I will have long term capital gains. Is that correct (US tax laws)?

Edit: GREEN!

 

[Tslynk67]

All I want for Xmas is >= $420 close today, OK? Nothing fancy, no crazy spending.

 

[AZRI11]

Mark "O.J. Simpson" Spiegal is still looking for the real (Tesla) killer

The "all new electric 202? Ford Bronco " if your into hypermiling, this is your "Tesla Killer"

 

[lklundin]

Mark "O.J. Simpson" Spiegal is still looking for the real (Tesla) killer

On Twitter the various invocations of this persons name now has a 'Q' appended to it...

 

[ZeApelido]

I invested all spare cash at a relatively young age without diversifying and lived like a college student when I could have afforded to live a middle-class life. I bought only used motorcycles ($300-$1200 each) exclusively for the first 5 years as a motorist. My first 4 cars cost $800- $1500 each. Instead of buying things or hiring people I did it myself. I rebuilt the engines of two of my motorcycles and one car (all reliable, practical cycles and cars that excelled at their purpose) and, before buying my first house lived in low-rent places, mostly with roommates. I didn't own a TV until later in life. I dropped out of college because I didn't want the debt and I didn't think it was a good investment considering I didn't aspire to work for someone else. But I kept living on a college student's budget.

Early retirement was made possible from long-term investing all spare cash in high growth, non-dividend paying (at the time) companies like SBUX, MU, MSFT, QCOM, etc. It's the compound growth from being in the right stock with concentrated positions and not selling a single share until it's time. I did not day trade or do much buying and selling. I really didn't care about money but I knew I wanted enough that I wouldn't have to think about it. Profit-taking early and portfolio balancing is for weak people who are too attached to their money and afraid to lose some in the name of making more (or those who are retired and don't have time to earn any losses back).

Dude you are a badass.

Also nostradamus, what is the next big thing?

 

[AZRI11]

You’ll learn about it when you’re older.

I know. This significance of the "69" Is due to the miracle Mets, and first man on the moon.

 

[Nocturnal]

Dude you are a badass.

Also nostradamus, what is the next big thing?

Have you heard about this upstart auto company from California?

 

[lklundin]

324 $400 Jan 2022 $tsla

Holy crap, do I read this right that you just bought 324 contracts, each contract with the right to buy 100 TSLA for 400$ until expiry in Jan. 2022?

If so, exercising all contracts would require just below 13M $ - three of orders of magnitude above my typical order amount...

 

[StealthP3D]

That’s a nicely coordinated short attack on a day with very light trading: Jonas + MMD. Why would an analyst publish a note on Tesla on Christmas Eve?!?

Just because your friends and associates might be TSLA shorts doesn't mean they don't get Christmas presents!

Especially if you're on their "off-the-books" payroll!

 

[wipster]

I know. This significance of the "69" Is due to the miracle Mets, and first man on the moon.

I personally like 77...

 

[lklundin]

I still don't get the .69 part. I would rather have one at 420.00 Did Elon say he was taking Tesla private at 420.69? I'm sure it's in this thread somewhere, but I have to skip about ten pages at a time to keep up.

No, the 69 refers to something else that's private.

 

[Todd Burch]

Shorts are urinating into an atmospheric pressure gradient.

Way too much upcoming good news.