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

[adiggs]

Efficient Market theorists say that is unlikely-to-impossible, but I'm willing to believe it in selected corners of the market with the fresh perspective of ARK Invest.

The short term traders would agree.

Something I've noticed in my own life, having followed Tesla way too much for 8+ years, is that I have an information advantage over almost everybody else. The financial advisor / helper Fidelity linked me up with, my wife, my chiropractor, everybody I work with - they've all got opinions on Tesla. And all of them are so superficial and uninformed, it's finally got me to just shut up around most people. The ones that are particularly strong about it, I ask them if they'd like to learn about another perspective on why I think TSLA is the safest thing to invest in rather than the riskiest. None of them have taken me up on it (my wife is willing to suspend disbelief, and doesn't have the energy to go through it all, so she trusts me and our overall approach ). EDIT to add - she has at least driven 2 different Teslas (our Roadster, and Model X). So she's crystal clear on the whole 'the product matters' angle - she lovers HER Roadster).

That information advantage, as best I can tell, extends to the professionals that follow the company and the auto industry, and the financial press (much less the regular press). To the extend that they reports events and facts, they are very helpful to me. To the extent that they opine on the latest way that Tesla will go bankrupt, or they figure out how to include a throwaway Tesla reference to garner clicks, they've proven themselves useless.

Particularly amusing to me are the way that 5-8 year old warnings about the company keep getting recycled, and keep sounding the same.


I don't believe that somebody that studies a company deeply can study ANY company deeply and get a meaningful information advantage. I do believe that the more disruptive / innovative a company is (different from the rest of their 'industry'), the more possible that there's something there (as there is with Tesla). Of course it's also possible that it's marketing spiel with no substance as well. Or there's substance there, but not execution. Or there is substance, execution, and bad timing or luck. There are many ways in which the information advantage can apply to something that doesn't pan out.

 

[Mo City]

ARKG has about 36 companies in Biotech/Life Sciences/Healthcare Technology but the top six holdings make up 50% of the fund. As you said, it's hard to pick the absolute winners, particularly if you are not fully educated in the field. ARK Invest has an expert in these fields but they still don't know who will be the big winners and which ones will fizzle out. So they hold them in proportion to the amount of conviction they have in each one (and totally exclude those companies who they have no confidence in).

Last 3 years:

S&P 500: 18.36% return

Biotech Sector: 18.2% return
Healthcare tech: 16.2% return
Life Sciences: 74.2% return!

ARKG: 63.53% return!

Apparently, Ark Invest is able to do company research and come up with conclusions that are useful for predicting future performance.

Indeed. I'm aware of their track record (even before your excellent post about them earlier today). My preference is to have some grasp on industries instead of purely trusting the judgement of an aggressive ETF. If I were to make an exception, ARKG is tempting, especially post COVID-19.

 

[traxila]

Yes, words matter.

So does reading comprehension.

 

[Intl Professor]

Comparing conventional auto analysts to the relatively few correctly assessing Tesla is like a functionally illiterate compared to a speed reader with perfect comprehension. The former knows the individual words of a prescription but cannot understand how to follow them.

 

[Sanny]

I have invested in ARKK and ARKF for some time but it appears I should research ARKG.....Thanks all for the ARK discussion as it awoken me to another possible investment.

Are you also a Bitcoin investor or want to become one? Cause this is where Cathie Wood lost me - to me her analysis of bitcoin and blockchain was just all buzzwords. I even started to reconsider my TSLA thesis and asked myself - these guys are betting on TSLA and on Bitcoin at the same time, do I want to be in the same group?

 

[Singer3000]

The fact is that she was proven wrong by the pandemic.

So easy to just say that if not this then something else.

Attack her when her V shape predictions fail. That would make sense at least.

BTW, very hard to say what will happen as the money printer is officially turned onto infinite, and with interest rates hovering at zero and the Fed buying all excess, why can’t the government simply borrow a quintillion or two? That will certainly solve the problem .

She may very well be correct. I am not smart enough to say either way. I think we are in for a long slog, but this is an unprecedented time for sure.

V shape is not quite yet impossible. It would be nice if it happened but it’s a little fanciful. I haven’t heard much beyond the money printing argument. And it’s not obvious to me why printing gets services industries through an indeterminate period of social distancing and how it gets the record numbers of newly unemployed into new jobs.

A Nike Tick shape recovery is certainly a bigger possibility and one we could in my opinion be more usefully spending our time thinking about, rather than getting ourselves frenzied thinking about 2020 deliveries.

 

[Artful Dodger]

CNBC - late yesterday afternoon: Options traders bet Tesla could throttle above $600

"[URL='https://mpmaterials.com/about/']MP Materials is trying to rebuild the Rare Earths supply chain in the US": Mountain Pass mine[/URL] in San Bernardino County, Californina

This could benefit both Tesla EVs and solar production:

 

[Prunesquallor]

I did a little research into Genomics because of Ark but couldn't wrap my head around it enough to pull the trigger on investing in ARKG. Surely at some point that segment will ignite but it could be a very long time from now. Plus, picking winners vs losers seems nearly impossible.

Still sniffing ARKF and so far it looks solid.

Lots of cashless transaction tech in ARKK. The CV situation could up the game there, too.

 

[Drax7]

Kathy keeps pushing Robotaxis, at present that is so far fetched in my view,
on so many level , both technological and regulatory, and even time wise,
that she loses some credibility in my opinion.

 

[Words of HABIT]

He also said that all ventilators, weather tesla bought them or built them, will be donated. I don't think he will make an exeption for Africa, of all places.

Yes, Tesla is donating, while others are profiting from COVID-19.
US federal government plans to buy $2 billion worth of ventilators to distribute to states
Just yesterday, US Dept. of Heath and Human Services planning to spend $2B on ventilators including $1.14B from GM and Phillips for 73,000 ventilators. That's $15,616 per ventilator. As I have stated before, every ventilator will save a life, many lives as they can be reused for years, so I am all for saving lives. Note this is only for US which has only 5% of the World's population, so yes, there is a need for ventilators, and Tesla should continue with their efforts to design, test, seek regulatory approval, and begin manufacturing of ventilators. To show my support, I will purchase $1 of TSLA for every ventilator Tesla manufactures. IMHO, Tesla should be able to design from first principles to get the unit cost per ventilator down to a small fraction of the $15,616 price by GM and Phillips. The Goodwill generated by such a move is priceless. Many thanks to Elon and Tesla for their generous contributions to date for PPE and ventilators.

 

[Mkorpal]

Kathy keeps pushing Robotaxis, at present that is so far fetched in my view,
on so many level , both technological and regulatory, and even time wise,
that she loses some credibility in my opinion.

I see no reason it's beyond anything technically feasible. The real battle will be regulatory.

 

[LJS22]

I see no reason it's beyond anything technically feasible. The real battle will be regulatory.

I’m not even sure regulatory issues will be bad. Considering each state can implement their own runs of autonomous vehicles I expect there will be a few takers early on. If you can show promising data that supports a wide range implementation of robotaxis in larger populated areas then the approval process will be sped up. I think Arizona and Florida are on board.

I agree it still seems out of our time, but to dismiss it completely right now would be a mistake.

 

[jerry33]

Kathy keeps pushing Robotaxis, at present that is so far fetched in my view,
on so many level , both technological and regulatory, and even time wise,
that she loses some credibility in my opinion.

No doubt the U.S. will be the last to get robotaxi just like they are the last to replace mirrors with cameras, but other countries will not be so backwards. Landing a rocket on a barge was also far fetched until it was accomplished.

 

[gillfoto]

Yeah all it would take is a little rain and it would just be "a muddy field"

The development is on hold, Sand has been found in soil therefore requiring structure to have different foundation. Requires local government approval to proceed with alternative foundation.

 

[Mkorpal]

I’m not even sure regulatory issues will be bad. Considering each state can implement their own runs of autonomous vehicles I expect there will be a few takers early on. If you can show promising data that supports a wide range implementation of robotaxis in larger populated areas then the approval process will be sped up. I think Arizona and Florida are on board.

I agree it still seems out of our time, but to dismiss it completely right now would be a mistake.

I think Tesla will struggle to deal with misconceptions of what autonomous driving is. It's not intended to be perfect, and never will. But most are just going to assume that and freak out every time a car gets dinged up.

I actually kind of wonder if Tesla released robotaxies today, with what they currently have, if they would manage to preform as well as the fleet of lyft and Uber drivers.

 

[Words of HABIT]

For the record you said the exact opposite to Cathie, she expects there might not be a second bottom because a majority expect a second bottom.

In terms of the vaccine you are right, but we need to get better at living with the virus in the interim, that means identifying what activities can be done with reasonable safety and what additional safety protocols are needed.

My view is government can't afford to shut economies down for 6 months, they also can't risk a free for all with no social distancing restrictions... somewhere in between is a progressive continuum, that needs to be very conservative and evidence based, but slowly opens some additional parts of the economy when it is safe to do so.

I don't know if anyone is trading off rosy estimates, most of the buy-and-hold crew like me, haven't sold anything, and are not overly focused on the next 6 months, those timing the market need to use their own judgement, but should listen to both sides of the argument.

Agree, the return to normal will be a return to a new normal and the transition will be gradual. New models show if US lift restrictions completely May 4th, they could go back to current levels of affected/deaths by July. What is more likely to happen is a phased in approach. Industry first to keep the economy alive, then schools in September. Large spectator events like sporting, music concerts, theatres will be the last restrictions and I don't seeing those being lifted until January 2021. A new normal where the customary hand shakes are no longer, physical distancing still encouraged, limited gatherings, gloves and face coverings common when in public places, washing hands frequently, high risk members of our society (elderly, those with respirator problems, marginal health) taking additional precautions, sanitizing surfaces on a regular basis, enhanced methods of testing for the virus, enforced home solations for those tested positive, tracking of individuals affected to ensure compliance, and everyone working together for awareness and betterment of the whole to control the virus, until a vaccine is available for all.

The US May 4th start up is critical for the economy, and if it gets pushed out further Tesla will take a hit, however timing the start up is outside of our control (left up to the governing bodies and health agencies to decide which we put our trust in). Trying to time this startup is risky, because you want to be in TSLA when the green light is given. If May 4th great. If a little later, that's great to, when it happens. My prediction is Tesla will last a long longer than COVID-19.

 

[Words of HABIT]

The development is on hold, Sand has been found in soil therefore requiring structure to have different foundation. Requires local government approval to proceed with alternative foundation.

I can't believe that Tesla's hired enviromnental engineers would not have completed a hundred+ bore holes for soil samples on this site before they even purchased the land. Taking soil samples (2" to 3" in diameter to 10' depth or more) is standard practice and a regulatory requirement for all development projects to determine if there are an environmental conditions of the soil (i.e. Radon or Lead contamination) and also the structure of the soil and to determine the type of foundations to be used (slab on grade, piles (like GigaChina) or other). @Gillfoto, can you share where you are getting this information? Ontario and Quebec provicial governments, Canada, shut down Commercial construction projects (Residential and essential services Construction still open) to help prevent spread of COVID-19. Has Germany changed their positon from March 25th?
German construction continues through crisis

 

[Thumper]

Correct me if I'm wrong, but rare earths are for magnets and none are found in Tesla Cells. Yes?

 

[Chunky Jr.]

I like Cathy Woods' optimism about Tesla, but I think she is way too optimistic about when robotaxis will be a source of revenue. Maybe a Tesla branded ride sharing app with human drivers at first and some FSD, but full FSD with no drivers that can work anywhere is at least a couple years away. Even if the technology works great, getting regulatory approval and people feeling comfortable getting rides in it will take a while. Robotaxis seem inevitable, but not within the next year or two.

 

[CanadaEV]

I see no reason it's beyond anything technically feasible. The real battle will be regulatory.

This is a common view. I can see why too. Regulators have a reputation for being over-cautious and even unreasonably restrictive.

However in the FSD arena, over-cautious regulators may suffer if they focus only on the negative safety consequences of FSD failures. Their policies will be subject to comparison to policies in other jurisdictions where regulators progress more quickly. Statistical data will guide opinion. Even today, pre-FSD, Tesla is accumulating data that demonstrates Autopilot safety as being far above average.

Tesla Vehicle Safety Report

This information is seldom recognized in the media - the same page shows the incidence of Tesla vehicle fires to be almost 10X fewer than the average reported by the National Fire Protection Association (NFPA) and U.S. Department of Transportation. So far, the advertising-supported media are pretending otherwise.

Tesla and especially Musk are often blamed for overpromising on FSD. It is seldom acknowledged they are rightly progressing only at the pace that will not jeopardize the credibility of their goal. When Tesla's FSD becomes operable at near-level 5 functionality, regulators will find it very hard to deny approvals. It will be a statistical showdown, and FSD opponents will lose.