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

Jack6591

Active Member
May 11, 2013
2,041
16,978
California
Interesting excerpt from this book:

yQAe8YD6EcBKC0AfPpuOwe_UAjffNWNQqOZrmXyPN4FeYbwHkQlDHeATRfvGV0hxO2U4NpF8EZzW3swagVVfP9M0NrtqvWkyBFY7f9QAFolYnncvoi5E-D68UEm_UFqJ=s0-d-e1-ft



One example within the book deals with separating noise and signal (meaning) within investing. Let’s say you have a dentist that can invest with a 15% average annual return with 10% annual volatility. For reference, the S&P 500 index has a ~10% average annual return and ~14% average annual volatility. The dentist has good thing going, with the portfolio doubling in value every 5 years on average.

An unexpected factor in his success is the frequency upon which he looks at his portfolio balance. Here’s a chart from the book showing the probability of a positive change in value based on how often the portfolio is checked.

iejaUc_aFwn6arGPwtYGYftWBHj4anZ6MzQ4wwSQeDU1xl1pPbxdFFrpzJkAVMdGRNSXMAEjeHSIQoApHnuhWV0mAOXNeVB6s4LlwtBJDcxDXvYsWrmX8HSxgCm0v7aJsw=s0-d-e1-ft


If he were to check his portfolio every minute, he would only see a positive return 50.17% of the time. That is basically indiscernible from a coin flip. The problem is loss aversion.

Being emotional, he feels a pang with every loss, as it shows in red on his screen. He feels some pleasure when the performance is positive, but not in equivalent amount as the pain experienced when the performance is negative.

At the end of every day the dentist will be emotionally drained. A minute-by-minute examination of his performance means that each day (assuming eight hours per day) he will have 241 pleasurable minutes against 239 unpleasurable ones. These amount to 60,688 and 60,271, respectively, per year. Now realize that if the unpleasurable minute is worse in reverse pleasure than the pleasurable minute is in pleasure terms, then the dentist incurs a large deficit when examining his performance at a high frequency.

Again, this doesn’t go away even if you know about the phenomenon:

Regardless of what people claim, a negative pang is not offset by a positive one (some psychologists estimate the negative effect for an average loss to be up to 2.5 the magnitude of a positive one); it will lead to an emotional deficit.

Now, if he were to check that same portfolio only when his monthly statement arrives, he would see a positive return 67% of the time (2 out of 3). Finally, if he has the patience to check only once a year, she would see a positive return 93% of the time. The time scale matters.

Thought i'd share this with TMC...... :D:D:D:D:D:D

I’m burning way to many emotional calories, but in my defense I make sound long term decisions.

All that aside, I wouldn’t trade anything for this experience. What a hoot — it’s a helluva a lot of fun.
 

oldTAVguy

Member
May 30, 2019
514
3,800
Texas
Walking around GF3 in the air\Tesla gigafactory 3 in shanghai


One thing i just noticed is that most of the new buildings do not have the vast number of truck doors as the Model 3 plant. I wonder if this is due to the ramp or because they will be bring in lots of raw material and less bulky off-site parts.

Edit: I have never seen as many cars on the test track at one time, as there are in this video.
 
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TheTalkingMule

Distributed Energy Enthusiast
Oct 20, 2012
8,032
35,223
Philadelphia, PA
So this board is basically an emotional support group with some business intelligence sprinkled in.
Sounds about right.
You try getting through 2013-16 without a guy in his mom's basement to hold your hand and tell you everything's gonna be ok!
 

Krugerrand

Enough of the 🐩, back to 🐈‍⬛
Jul 13, 2012
11,864
71,223
Tesla friendly place
I have found that big up days are a big drain on my energy. Not at all fun, to be honest. This is a bit of a head-scratcher. More money is more fun, right?

Perhaps on big up days, I check the price very often. Even on big up days, the quote is a down-tick only slightly less than an up-tick.

On a big down day, I can just tune it all out and not check the ticker. So big down days are, perversely, more enjoyable for me.

Somebody’s always got to be different.
 

Steve m

Member
Sep 30, 2018
674
4,799
Earth
Sorry, now I’m lost more than ever. Not your fault, so can you clarify please?

I thought you’re original point was an argument for more cash on hand. I asked how much you felt they needed. You said 4 billionish. I said but they’ve already got 8.6 billion. Now you’re talking about 8.6 minus a ‘reserve’. I’ve no idea what that means.

All I was asking was how much in total you felt they should have on hand, since you felt what they currently have (8.6) isn’t enough. Do you mean they should have 4 billionish more making a grand total of 13 billionish? That’s the amount you’d be comfortable with them having on hand?
I did not make an argument for more cash.

I did try to state that Tesla has a lot of known projects going on that require a lot of cash.

I tried to male the point that Tesla should maintain a reserve to survive a down turn. That reserve should cover anticipated SG&A plus debt obligations and thinking about it payments due to survive the down turn.

I also think competition is coming and Tesla needs to figure out if they should be adding even more capacity.

These are all very strategic questions and so far Elon and Zach are doing a very good job making them.
 

Jack6591

Active Member
May 11, 2013
2,041
16,978
California
So this board is basically an emotional support group with some business intelligence sprinkled in.
Sounds about right.

The emotional discourse on this board swings wildly with the share price.

I’ve always been a fan of Jim Sinegal.

"I think the biggest single thing that causes difficulty in the business world is the short-term view. ... "Wall Street is in the business of making money between now and next Tuesday. We're in the business of building an organization, an institution that we hope will be here 50 years from now.

The only business intellect I’m capable of applying to TSLA is long term. So, my long-term business intellect says only one thing to me. Steady.
 

Krugerrand

Enough of the 🐩, back to 🐈‍⬛
Jul 13, 2012
11,864
71,223
Tesla friendly place
I did not make an argument for more cash.

I did try to state that Tesla has a lot of known projects going on that require a lot of cash.

I tried to male the point that Tesla should maintain a reserve to survive a down turn. That reserve should cover anticipated SG&A plus debt obligations and thinking about it payments due to survive the down turn.

I also think competition is coming and Tesla needs to figure out if they should be adding even more capacity.

These are all very strategic questions and so far Elon and Zach are doing a very good job making them.

Okay. Well. I think they decided how much they need by doing the raise earlier this year and then cutting costs during the pandemic to continue to add to their cash.

Since they stated they want to make minimal profit etc, etc... in full context of everything else they are doing, when they stop building their bank we’ll know when they believe they have that necessary level of on hand reserve. No?
 

Cherry Wine

Active Member
Supporting Member
Oct 4, 2018
2,796
22,463
California

Watching these factory construction videos -- especially once they get past the foundation work -- will never get old.

EDIT: Also, for those interested in such things, a close above $1478 would set a bullish technical signal -- so I find it interesting that the high for the day is right around that mark. Obviously, a close below the mid-BB ($~1410) would be a bearish signal and I would expect (though no guarantees, of course) that TSLA would break down lower if it closes below that point.

So those are the two levels I'm watching today.
 
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Watching these factory construction videos -- especially once they get past the foundation work -- will never get old.

EDIT: Also, for those interested in such things, a close above $1478 would set a bullish technical signal -- .

For my information, how are you establishing this level at $1478?
 

vikings123

Active Member
Supporting Member
May 27, 2019
1,245
9,094
MN
Watching these factory construction videos -- especially once they get past the foundation work -- will never get old.

EDIT: Also, for those interested in such things, a close above $1478 would set a bullish technical signal -- so I find it interesting that the high for the day is right around that mark. Obviously, a close below the mid-BB ($~1410) would be a bearish signal and I would expect (though no guarantees, of course) that TSLA would break down lower if it closes below that point.

So those are the two levels I'm watching today.

I understand the mid-BB now which is the 20 DMA. I liked how we bounced off that number in premarket. What is the significance of 1478? Thanks.

Talking about technicals it seems like both NASDAQ and QQQ could close below levels that would be bearish for macros so we will see what happens?
 

SOULPEDL

Active Member
Jul 25, 2016
3,977
16,665
Arizona
Everything I learned here and from Monroe about outsourcing by big auto and how they now lack the skills internally, together with all the comparisons to Tesla on Vertical Integration, and now I'm reading about Intel planning the same... shameful, but not surprising.
Intel Corp’s plan to outsource manufacturing is the end of an era in US tech
I'm saddened, as I was among many engineers over the past decade who were let go mainly from a cost perspective. My last Achievement Award Plaque was handed to me on my exit walk. Ya that really happened, 15 ft from the exit door as my boss said "Better late than never."
(In hindsight, it was the best thing that happened to my career.)

23 yrs with Intel, and they just threw away my experience - didn't even ask. In HR circles the "Knowledge Management" group of elites did their best to quantify the potential losses to this new thinning process by lump sum "Separation Package", but the shareholders wouldn't listen. Human Capital has always been hard to put to dollar figures, so they made the choice to ignore it for short-term gain. (And all the KM expert systems that were proposed, in order to capture this knowledge first? Ya, not funded.) Now to watch them fumble Production and Process, I guess I'm not surprised. But at this point, what choice do they have if they just can't do it anymore themselves.

Contrasting Tesla strategy, everytime I hear Elon speak lately it's to recruit talent. I've never seen this type of focus, ever. His priorities seem to be Battery Costs, FSD, Manufacturing, and Humans - up there in the top 5 anyway and probably #1 priority in Giga Berlin with all the EU hiring rules.
 

smorgasbord

Active Member
Jun 3, 2011
3,235
5,516
SF Bay Area
Marques Brownlee - Friday:

Well, first I don't know why all these reviewers keep bashing the key card. Consumer Reports also complained. They both grudgingly acknowledge that most people will use their phone, yet they don't focus on that. Brownlee apparently doesn't realize that after you've unlocked the car from the outside, you don't need to do anything else with the key card or phone to drive it - as long as you do it within 30 seconds. So his complaint that you need to put the key card on the center console isn't really appropriate for every day use. Then, his complaint that the key card flies off as you drive doesn't make sense at all as there's no reason to leave the key card there - once the car has read it, you can remove it and put it back in your purse or wallet. As an early Model 3 owner my biggest complaint here is that the phone and car don't always connect to each other as I walk up and so I'm standing there tugging on the handle and the door doesn't open. Half the time I reach into my pocket to get my phone it does connect, other times I have to wake my phone up (iPhone X, btw). I guess I don't have to actually open the app, but there's nothing more annoying than a convenience feature that isn't convenient.

So, the car he's driving was lent to him by Tesla for the review (as he says and it has Tesla OEM plates). Yet it still has obvious fit and finish issues like a very loose sun visor, large panel gaps, and a loose trim piece:
Screen Shot 2020-07-27 at 10.06.11 AM.png
Screen Shot 2020-07-27 at 10.04.36 AM.png
Screen Shot 2020-07-27 at 10.03.16 AM.png


I appreciate what Brownlee says about the relative importance of such things, it is more than disappointing. When I talk with my fellow Tesla owners and Teslanaires about ordering a Model Y, we literally talk about waiting until Tesla gets its manufacturing act together. My early Model 3 (VIN under 2K) had a really bad panel alignment, very annoying wind noise at 50 mph, and a rear defroster where some of the lines didn't defrost. The Tesla Service Center was great and fixed all three, but 2 of those should never have passed QA. Anyway, we want to trade up to a Model Y and as a big Tesla fan as I am, am literally waiting. I can't be alone in this - and wonder if this is somehow hurting Tesla demand right now, hence the recent price cut ($2k, btw since FSD went up $1k at the same time).
 

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