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Regarding the availability of water for expanding the population near GF1, here's Truckee Meadows Regional Plan info to consider. The Truckee Meadows encompasses Reno, Sparks, and immediately adjacent areas. It does not include Storey County, where the GF1 is located, but we can assume a large percentage of GF1 workers will commute from the Truckee Meadows. The plan suggests that there will be 107,000 new residents to the Truckee Meadows over the next 20 years. If water can be found to support this increased population over a 20 year period, then a smaller increase can be found within the next few years to increase the population as needed for Tesla's Gigafactory 1.

As a general rule, local governments want growth because it expands their revenues and allows local contractors and businesses to make more money. Sometimes, when the water is not available, a local government will find roundabout ways to grow nonetheless. For example, I live in Hawaii on the island of Oahu (where Honolulu is located). The majority of water used by residents is obtained from wells. Initially, some growth was possible by displacing agriculture land with houses and buying the water rights. The problem is that if you take the water table down too far with increased water usage, salt water from the ocean will eventually intrude and then you have an ecological disaster. Rule #1 for bureaucrats is to never fail to recognize the gift contained in any problem. In our case, the water and sewer systems on the island had deteriorated to the point where there are major and regular failures. Consequently, the price of water plus sewer were increased many times over and continue to rise as extensive repairs are made. The result? Water usage dropped significantly. How did the local government respond? It authorized a plethora of new home developments on the island, taking advantage of the local water consumption drop by residents. What happens when water and sewer fees return to normal? Disaster, of course, so they will NEVER return to normal again. Residents haven't figured this out yet and by the time they do it'll be too late. Governments seeking growth have a way of making it possible.

The best hope for lower water and sewer fees for residents of my island would be low-cost desalination of sea water made possible by cheap solar and wind energy, both of which are plentiful. You wouldn't need much in the way of batteries because you could decrease or halt the desalination when it is night time and the wind is still.
 
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On the topic of GF1 workforce water use, two options not being discussed (because they sound much worse than they actually are and fail the popular vote) are water recycling and usage reduction.

Membranes can filter water using far less energy than desalination. The filtered product is potable, by any test.

My partner and I lived in a tiny-house for November using 5 litres per person per day. Average Australian uses 130 litres per day. Average Arab uses 11 litres. It’s challenging, but not impossible and yes, we washed every day. Obviously it requires a switch from flushing to composting toilets. Surprisingly, the latter are less odorous, thanks to the tiny continuously running extractor fan.

Fear of running out of water is largely a fear of inconvenience.
 
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Why are you just referencing the automotive part of the transport sector? Master Plan Part Deux already includes ALL forms of terrestrial transport.

I stand corrected. If you include those, it might be possible just off of transportation.

Warren Buffett said if you get right on a stock, sell slowly. I would make selling decisions based on the underlying business, not based on how much I have gained or lost. I wouldn't sell just because it hits $4200. I would take a close look at that time.

You're right. The post wasn't 100% serious. Of course if material things change with Tesla as a company or in my life, it's possible I would sell shares at $4200 or even earlier.
 
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I think that Tesla is very likely intentionally delaying the MIC 3 delivery to Q1, to offset the Q1 slump and inevitable FUD people will try to pull then. They’ll constantly whine and complain over Q1 19, and try to extrapolate into this Q1, but then the margins of MIC M3 hit like a popped pimple, and suddenly we’re in the S&P 500 list, and they’re scrambling and Overlord Musk is laughing at his cleverness.

Agreed. As well they delay depreciation until the factory is at a higher run rate in Q1. The cars will be inventory on the balance sheet, no COGS, depreciation, etc. Should help make Q1 profitable as it appears Q4 profitability is done deal.

Also, have seen stocking cars done with other OEM's just to insure the quality. Look at VW with the ID3. Early cars are more likely to have issues due to the learning curve. If they find something they need to fix they can do it before delivery. I think the risk here of quality concerns is pretty low assuming they are using the same suppliers for components. If they sourced new components in China right out of the gate then the risk is higher. Anytime you set up new tooling and production the risk for an issue increases in my experience.
 
Not sure if you guys have seen this yet, but the latest update from China suggest once more they are producing cars like there is no tomorrow, yet deliveries will only start in January.
mic-model-3-gf3.jpg


Tesla China even tweeted today that deliveries will start soon:
Tesla China on Twitter
View attachment 492801

So this suggests a couple of things to me:
  • I am more and more subscribing to the idea, that this is being done on purpose, in preparation for Tesla's pre-announced, terrible, horrible, no good, very bad Q1. Elon has said for about 2 quarters now, that Q1 will suck - he did not elaborate, but I would think the end of US subsidies, post-high Dutch deliveries/tax change and maybe Model Y production start will eat into deliveries and margins. To balance this, they may want to realize a few extra thousand Chinese sales, that could lessen the blow or even counter the negatives. (both on the books and psychologically as well).
  • However this also means, that they feel comfortable making the 360k target even without any MIC sales.
Any thoughts?

I agree with this. I'm much more bullish on Q1'20 than Q4'19. They've been stockpiling MiC M3s, and it's looking like Giga 3 could produce 2-3k MiC M3 per week throughout Q1.

If I'm not mistaken they also upgraded the South Australia battery in Q4'19, the revenue and profits of which might be counted in Q1 again, just like they did with the original battery in Q1'18.

There's also the increasing order backlog over the past few quarters, potential for FCA payments, potential deferred revenue if feature complete is released. I think Q1'20 might be Tesla's best quarter yet.
 
I had an urge to reserve one last night. I’m scared to talk about that with my better half, though...

I decided I’d rather have cybertruck over Model Y if it can comfortably seat 6
I made sure to get the approval first. :D Still have a Y reservation for her. The plan is to use the CT for touring the country and camping in it. Hopefully by the time we get it we can put it on the Tesla Network while not in use. Also can't think of a better vehicle to be in for a Buffalo snowstorm.
 
You're right. The post wasn't 100% serious. Of course if material things change with Tesla as a company or in my life, it's possible I would sell shares at $4200 or even earlier.

I was supporting what you said. Selling after a 10 fold gain may turn out to be a costly mistake. For the right stocks, the biggest gains happen in the later years. I still remember the fund manager who brag about how smart he was by selling all his AAPL in 2013 at $60, now it's at $284, plus dividend. On the long term chart you can see how wrong he was.
 
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Are people seriously back to the whole "GF1 cannot expand because of water" thing?

1) Truckee water rights are traded on the open market; you just buy them (in perpetuity). Even the most expensive they've ever gotten is eminently affordable to Tesla. They're much cheaper now...
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You do have some valid points but...it is not dimple nor easy to work through such seemingly easy solutions. Fir every simple solution there are seemingly negative implications. Thus skepticism is in order.

Desalination clearly is the least offensive solution, and rapidly decreasing in cost while increasing in scalability. Thanks to Israeli technology desalination has been a lifesaver in quite a few arid areas.

This is no panacea for Northern Nevada. Karen is neglecting the consequence of reduced consistency of snow pack and the real economics of long distance water transportation. Certainly pipelines can be built just as oil and gas ones are.

It may be possible to import mass quantities of water. Is that preferable to locating additional plants in less difficult areas; ones that coincidently might have existing large supplies of qualified engineers and manufacturing employees?
Such areas might even be close to large demand. GF-3 and GF-4 certainly are happening where all those advantages exist.

Sparks made perfect sense to feed Fremont, especially with exceedingly advantageous terms. Further expansion there is not so obvious.

I regard water as a primary problem there precisely because there are no easy solutions nor any solutions that would not be fraught politically and economically
while being time consuming to execute.

I am perhaps more sensitive about water issues because my family were citrus farmers in Southern California from 1904. Then water was a big deal. Further family dealings with Nevada issues since Hoover plus my own years working with LA DWP convince me no California/Nevada/Arizona water situation is simple to solve.
 
Should at least wait for the P&D report, at least that's what I am doing with the Jan Calls

The difference between the decay of the option premium and the potential for the price to keep going up past the option strike price is the essence of pricing risk. It's quite an art.

Most of the suggestions I made on here are for a generic portfolio. Everyone has different circumstances based on age, portfolio size, health, job income, marital status etc.

So knowing this. The sure thing going forward is the rapid decay of option premium. The unsure thing is whether or not the stock price can keep climbing and if the P&D report now beats the whisper number of a stock priced above $420. What's also sure is the current profit you have on those options. So taking the sure thing, price in the unsure thing is the best outcome of selling the call option to prevent time decay and selling put option with the cash generated to take advantage of the elevated theta and gamma from recent runup.

Now if I were a 20 yr old just graduating university with his first paycheck while still living at home, I'd bet that on keeping the call option preferably in a 401k or some tax free instrument. If I am a 60 something about to retire workaholic, I'd sell them and have the peace of mind so I can focus on work. Now if I am am investor like me where things are very well balanced and correlation of assets properly balanced, while having both options and stock. I'd have done what I did. Sold 2/3 of the call options and let the last 1/3 run and write covered call on that final 1/3 to lock in quick profit while keeping the long term stocks.

There's this unhealthy obsession and insistence from members of this forum on their strategy being right. But just like the shorts, if you keep yolo ing your entire asset eventually you'll meet a black swan event. Look at Mark Spiegel, he didn't even yolo his entire portfolio to short, but somewhere along the line over the past decade his AUM became significant less to the point of irrelevance compared to a random member on this forum.
 
We do have conflicting points for Q1 even for MIC since the beginning of depreciation is a negative but seemingly far faster and larger production seems to be underway than has been imagined possible.

The end of US rebates and Netherlands most aggressive ones appears problematical, but those are countered by very aggressive PIK rules coming in January fir the UK (Huge March when new number plates arrive) plus higher German incentives.

The combination of China, UK and Germany far outweighs everything other than NA. The primary question certainly is quantifying the impact of new PIK and city zero emission rules on EU sales plus China. People are working hard on all those estimates right now.

I am quite confident that Q1 will be GAAP positive for cash flow and earnings while margins will improve for Model 3 at least.

In the meantime we wait fir battery day to transform the outlook too.

And we can as always ignore TE for a few more months before it begins to contribute material benefits.
 
The short squeeze in 2013 that took us from $30 to $180 took about 4-5 months (if I recalled correctly). During that time we also had around 25-28 million shares shorted; which is quite similar to the current situation.... With every $2-3 gains, new shorts pilled in, which then caused the squeeze to extend itself even longer. During 2013 we saw something like a 6 banger, if the squeeze today, which started at $250s turned out to be the same 6 banger, then that would mean a SP of $1,500 within a 4-5 month period from October 2019.

My question is does Tesla future outlook have enough tailwind to push us that far by mid year 2020? Will Model Y and S&P catalyst give us enough to get the stock that high? I would not count on it, but if shorts keep piling in and spend money they don’t have (shorting on margins excessively like 2013) then every $5-10 move would mean many will be forced to cover.

If the SP kept rising to above $1k per share it doesn’t necessarily mean TSLA and Tesla deserves that valuation, it just means shorters are making a big mistake by buying on margins all at once. Shorts will tell themselves “there’s no way Tesla is worth such and such price” so then they short 1,000 shares, 5,000 shares or 100,000 shares like the guy who lost $2 million (true story)... this is a common mistake that shorters make, they don’t short 100 shares like the average buyer, they’re shorting big in hopes of hitting a grand slam (it’s a gamblers bad bet and this is in a way just like gambling); this in turn makes them expose to every little Tesla movement, every positive news, every leaked email.

If I recalled correctly in 2013, Elon also had new announcements every 2-3 days of some revolutionary idea for 1-2 weeks (like leasing, etc.), although he’s not currently pumping the stock like 2013, Tesla as a company is accomplishing feats that are much more noticeable, measurable and impressive than 2013. On the horizon, we have feature ready FSD release, Q4 record deliveries, cash flow positive, 2020 deliveries outlook of 500,000 or more cars, battery investor day, Model Y, Shanghai/Berlin, Chinese loans...(all within the next 6 months). Knowing that all these goodies are lined up, anyone of us honestly selling now or within the next 30 days? If so, please let us know your reasons. I think a good starting point for us bulls or for me at least, is to hold till delivery numbers, then wait and see. After that, wait till earnings CC then wait and see, then battery day (wait and see)... if this “wait and see” pattern continues and we hold, then current shorters will be crushed.

I have a rather different view of 2013. In lieu of posting it here for at least the 10th time, a couple of key words will turn up 9 past attempts to explain on TMC why I'm extremely confident 2013 was not a short squeeze.

for anybody interested put these terms

18%
short squeeze

in the search box, and do a search of the investor forum filtered for yours truly's TMC username

Search Results | Tesla Motors Club
 
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Wasn't the lastest info on current short interest due to be published today? Or am I mistaken?
Market Watch quotes it at 27.5M @ 13 Dec 2019 with 20.55% of float -- this is the most recent number and was released yesterday. The float figure depends on how you size the public float which apparently varies. Of course, that was right before the recent pop so if there were short covering it would not be reflected in it.
 
WOW, to be quoted by Popafox.

Will inventory of China made model 3's be counted as inventory or work in progress ?

EDIT: Inventory model 3's look very low. Also no SR+'s. I think we will have some people who ordered, that wont get their cars.

Inventory on the Balance Sheet is made up of:
- Raw Materials
- Service Parts
- Work in Progress
- Finished Goods.

MiC vehicles produced but not delivered or in transit will be classified as Finished Goods Inventory. Vehicles sitting on the production line on Dec 31 are classified as Work in Progress Inventory. So if the MiC vehicles have not yet been delivered by year-end, they will be on the balance sheet as inventory.
 
I was supporting what you said. Selling after a 10 fold gain may turn out to be a costly mistake. For the right stocks, the biggest gains happen in the later years. I still remember the fund manager who brag about how smart he was by selling all his AAPL in 2013 at $60, now it's at $284, plus dividend. On the long term chart you can see how wrong he was.
I remember back in mid-spring 2013 our broker (who is NOT allowed to trade shares for us) told me "Congratulations. That TSLA has run all the way up to $60. It's overbought and I think you should take those profits and put them elsewhere".

My reaction was to buy more.
 

OT: I love the novel and the movie but those black rubber "stillsuits" damn-near killed the actors while filming in the desert. It turns out that sweating has a function known as cooling. If your sweat can't evaporate, you cook, especially if you're wearing a solar collector colored black. Who knew? (besides every mechanical engineer) Maybe the forthcoming new version of DUNE will at least color the desert garments white, like those worn by real desert-dwelling people.

Relation to Tesla? The best engineers understand the whole project, not just their own specialty and narrow goals. Elon knows this and requires his various teams to work together, encouraging every engineer to think like a chief engineer.
 
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