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

[Prunesquallor]

I was passing through the Dallas airport hub with my then 9 or so year old son. Who asked me in the men’s room “How big is the time difference from home?”

“About two centuries" I replied, not missing a beat.

Only then did I think to look around for any six guns.

Try to keep things in perspective.

It IS somewhat embarrassing we're that far ahead.

 

[Richard34212]

"Running on all..."
that is it

"Firing on all..."
that is it

Elon Won

 

[The Accountant]

I see some members are feeling a bit down due the stock price action...here is something to cheer you up

Freight Train Arriving ……. Demolishing the Bear Thesis
The naysayers may downplay S&P Inclusion (“it won’t have a lasting effect”) and poo-poo Battery Day (“remember Autonomy Day?”) but there is one coming event that they are sweating…..Q3 Results !!

Here are the headlines we will see in October:
- Tesla Delivers 145,000 Vehicles; 50% Increase over Prior Year
- Tesla Delivers Record Earnings of $490m GAAP Profits ($736m non-GAAP)
- Tesla Reports Record Sales $8.3 Billion
- Tesla Achieves GAAP Profit excluding Regulatory Credits
- Impressive Operating Leverage as Tesla Delivers Operating Profit Growth of 188%

See Q3 financial projections in these 2 posts"

Near-future quarterly financial projections

Near-future quarterly financial projections

 

[InDaClub]

If they change the metal, it’s going to affect A LOT of processes across the board. The window for custom machinery, never before seen in vehicle high volume production is closing quickly.

I was suggesting that instead of using 3-mm-thick 30X, which Elon has said can break a stamping press, press (3) 1-mm-thick layers separately, (1 stainless, 1 aluminum, 1 stainless) and clad them together. If you want bullet-proof doors, then a nano-bond technology could be used.

Tesla Cybertruck stainless steel

 

[Krugerrand]

Please note I am talking about the time to build the factory, not the time to build a white body.

Sure laser cutting and bending the sheet could take longer time than stamping, but the machines involved are much simpler and cheaper and easier to procure and install, they can have many of them in parallel.

That’s an incorrect assumption. Nobody has ever made a CYBRTRCK body panel. The odds of an off the shelf piece of machinery existing is pretty much nil. While bending machines and brake presses exist, they aren’t built in quantity and are mostly special order just like press lines so that different specifications can be built in according to the purpose of the machine. That takes time.

Secondarily, they’ll need multiple of the same machinery rather than one press line. CNC machines of the size likely required; not cheap. The costs of the bending and brake machinery is less, but times how many?

The material for CYBRTRCK isn’t cheaper than aluminum or steel already being used.

Oops, suddenly costs aren’t as cheap as you think.

Key aspect is reprogramming CNC cutter and bending breaks would be much faster and easier than iterating stamping dies, which would fast track the development process.

Die sets are not iterated once built, other than minor changes done through welding and grinding. Iterations can be made from one set to the next during a copy and paste. It does require design changes and revalidation before sending to casting. Takes a bit of extra time (a week? maybe 2 if they drag their feet) but falls easily within the time frame of installing a press line.

About steel rolls, I don’t think they would do that themselves, they have a year to find someone to to do it for them, most likely using existing equipment and adapt to SpaceX formulas. SpaceX might be the one, or they would be looking too.

Nobody in the whole world makes that SS at volumes required or has their business set up for volumes required. It’s a solvable problem but won’t be easy or cheap.

 

[Tes La Ferrari]

I like EM’s transparency, common to many software engineers. I base quite a bit of my investment decisions on his mood. More often than not, his tweets and actions reflect his feelings clear as day.

If he’s happily working at SpaceX end of quarter and posting happy tweets, that’s my cue to invest more or hedge less.

Would be interesting to see Elon’s tweet frequency overlayed / charted on a historic stock price chart.

 

[Jack6591]

This morning in Santa Clarita California...there are those claiming demand in California has dried up.

I’m not able to confirm that, based on the number of paper plate Model Ys at my local Supercharger.

 

[scaesare]

Great metaphors stand the test of time, long after whatever they referred to have been forgotten by history.

Today, we still say something has a "full head of steam" even though no one has seen a steam locomotive in a century.

We still say "we're setting sail", or when "the wind is at our backs", "we are full sails" even though no one has sailed on a ship which uses the wind to generate motion for longer than a century. In fact, even today, the act of guiding and navigating a ship is still called sailing even though the ship is powered by a motor!

There's no reason to assume people will stop saying "firing on all cylinders", "step on the gas", or using terms like turbo, turbocharger, or supercharger anytime soon. In fact...the Tesla fast charging network is called the Supercharger network even though that's a borrowed term!

Supercharger - Wikipedia

Anyone who has used Microsoft Office today still knows what the save icon looks like. It's this:

What the hell is this? No one has seen a floppy disk in decades. Yet the icon used for Save will never change, even though what it actually is will be forgotten in living memory someday. Why change an icon which is, well, iconic?

The call icon in the current Model S UI is not only an analog phone, it's a Candlestick Phone at that!:

 

[Bet TSLA]

its just staggering that this gets disagrees. I worry that people buy stock and sell stock without having any idea how stocks work, or even what they are, or even very very very basic economic theory.
I own a company outright (video games!). It pays me dividends, which I live off. I could choose not to pay the dividend this year, and reinvest all that money to grow the company, but why? why bother? whats the point?

The POINT is clearly to increase future profitability so that I can earn MORE dividends later. (even if thats 10,20,30 years from now).
If you *really* think that your stocks have the same (or even greater) worth if they NEVER pay dividedns, I'll give you $0.01 for the perpetual dividend rights to your stocks. PM me to set it up.

For everyone bragging about how amazons stock has gone up...yay great. Thats so they can dominate the market even more and thus pay whacking phat dividends later. You REALLY think that in 2060 amzn will not have returned a penny in dividends to its stockholders?

I am (not really) surprised that there are people here who have so little understanding of money. So you think that when you get dividends that you are getting something of value back? You mean those pieces of paper that long ago lost any rights to be turned into gold? Paying dividends to shareholders is just turning one kind of fantasy into another. Economic "theory" of this sort is mostly BS.

Things have value because people believe they can get other things in exchange for them. "Money" has value for the same reason. So long as my shares can be sold they have whatever value I can sell them for. This does not require dividends, nor does it require any sort of belief about dividends. Dividends are just another way to move value around.

 

[StealthP3D]

We all know this. What we are arguing about is WHY tesla stock is worth anything. If people wont accept that the value of ANY stock is eventually determined by its future dividend returns, even if thats not going to start for a billion years, then they have no clue whatsoever what they are doing.

The discussion was about present value. Obviously, no one can say with certainty any company will pay dividends in the future (they could go bankrupt before that ever happens). The present value of a company is based upon the expectation that it might pay dividends in the future but nothing says they will or they must.

 

[Krugerrand]

Keep in mind that Tesla has about a 1 billion SG&A expense each quarter. Tesla should maintain a reserve to survive economic down turns. That 8.5 billion might not go as far as you think ether.

So how much is a reasonable amount to have do you think?

 

[Bet TSLA]

We all know this. What we are arguing about is WHY tesla stock is worth anything. If people wont accept that the value of ANY stock is eventually determined by its future dividend returns, even if thats not going to start for a billion years, then they have no clue whatsoever what they are doing.

Tesla will end up paying dividends. It might even be after musk has died on mars, but it will happen.
Why cant people accept that this is fundamentally and clearly true, even if we do NOT want tesla to prioritize dividends yet. Even apple and microsoft pay dividends.

The fact that people here are arguing against you is proof enough that you're wrong. These are people who believe in the value of Tesla stock despite not believing that it will ever pay dividends. Personally, if Tesla starts paying dividends, I'm out. I believe it will be lowering its value and signaling its intent to be of less value in the future.

So why don't you stop telling people that you know better than them what they believe? It's an obviously foolish thing to be doing.

 

[Krugerrand]

TESLA: Cars. Mars. Victory Cigars.

Pretty sure you also need a singing fat lady.

 

[Mo City]

I see some members are feeling a bit down due the stock price action...here is something to cheer you up

Freight Train Arriving ……. Demolishing the Bear Thesis
The naysayers may downplay S&P Inclusion (“it won’t have a lasting effect”) and poo-poo Battery Day (“remember Autonomy Day?”) but there is one coming event that they are sweating…..Q3 Results !!

Here are the headlines we will see in October”
- Tesla Delivers 145,000 Vehicles; 50% Increase over Prior Year
- Tesla Delivers Record Earnings of $490m GAAP Profits ($736m non-GAAP)
- Tesla Reports Record Sales $8.3 Billion
- Tesla Achieves GAAP Profit excluding Regulatory Credits
- Impressive Operating Leverage as Tesla Delivers Operating Profit Growth of 188%

See Q3 financial projections in these 2 posts"

Near-future quarterly financial projections

Near-future quarterly financial projections

Thank you. This is great stuff!

Get's even better when you project Q4 and 2021. Allegedly MIC Model Y will begin production Oct/Nov and hit stride during Q1 while Giga Berlin fires up Q1 and starts rocking early Q3.

 

[Krugerrand]

I think this is great news. Rivian has some awesome trucks. I hope they work out the legal issue with Tesla and Rivian can get rolling. This is bad news for other OEMs because their bread and butter is trucks. It is OK news for Cybertruck because I think Cybertruck is in a different type of buyers segment. I think it being so different almost puts it in it's own segment.... almost like a Jeep (real jeeps) more than a pickup truck. Ford needs to keep it's investment unlike Mercedes who should have stayed partnered with Tesla.

Before yesterday I would have agreed. Now I want Tesla to bury Rivian. If they’ll knowing steal from Tesla, they don’t deserve to succeed. But that’s just me and my moral and ethics coding.

 

[StealthP3D]

Weekend OT. Here's Elon's tweet frequency.
View attachment 569172

Source
[OC] Elon Musk daily number of tweets : dataisbeautiful

Practice makes perfect!

And lets be glad each of those data-points is not a paid ad!

 

[Krugerrand]

I was suggesting that instead of using 3-mm-thick 30X, which Elon has said can break a stamping press, press (3) 1-mm-thick layers separately, (1 stainless, 1 aluminum, 1 stainless) and clad them together. If you want bullet-proof doors, then a nano-bond technology could be used.

Tesla Cybertruck stainless steel

Yes, I understood that and still changing the material to that changes a lot of other processes. Material is not interchangeable without affecting other stuff - like for instance bending, shaping, spring back, welding, crash tests...

 

[Curt Renz]

Marques Brownlee - Friday:

 

[Curt Renz]

Terafactory Texas - yesterday:

 

[jbcarioca]

its just staggering that this gets disagrees. I worry that people buy stock and sell stock without having any idea how stocks work, or even what they are, or even very very very basic economic theory.
...

The POINT is clearly to increase future profitability so that I can earn MORE dividends later. (even if thats 10,20,30 years from now).
If you *really* think that your stocks have the same (or even greater) worth if they NEVER pay dividedns, I'll give you $0.01 for the perpetual dividend rights to your stocks. PM me to set it up.

For everyone bragging about how amazons stock has gone up...yay great. Thats so they can dominate the market even more and thus pay whacking phat dividends later. You REALLY think that in 2060 amzn will not have returned a penny in dividends to its stockholders?

It is sad how many of us really do not understand the basic of value investing. Dividends can be one component, but dividends reflect the notion that the company has limited growth potential so choose to distribute directly to shareholders. Dividends are one of the last tax efficient ways to generate income.

Dividends are only one way of returning value to shareholders. To the extent that anyone thinks people stupid who hope TSLA never pays dividends, the people really do not understand the nature fo public companies, nor the increased value that derives from a high growth rate of profitability and cash generation.

Perhaps it would be beneficial to read some more about the ways to derive profit.

FWIW, for those of us who have sold our own companies rather than paying ourselves dividends it might be helpful to find out whether they would have been better off to take dividends. For my own sake I much prefer paying takes on capital gains than paying taxes on ordinary income. Anyway, the latter, in my case anyway, was a couple standard deviations higher than would have been taking dividends.

One who does not understand the fundamentals should not invest in companies like Tesla, just as they would not have done in the first decade of AAPL, AMZN and so many others. 'Total return' matters, not the specific source of that return.