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

[j6Lpi429@3j]

Just chippoing in from the world of super narrow streets and tiny parking places (UK) to add weight to the argument that small car doesn't have to mean cheap car.
I used to own (now wife drives0 a lexus CT200h. its TINY in comparison to most US made cars, and definitely small compared to my model S, but when I got it, my wife preferred her peugeot because 'she didnt like big cars like the lexus').

Small cars are a PLUS point for many UK owners. size is equated with inconvenience, not convenience for many. And some people will pay for the convenience of a small car. If you are trying to cope with on-street parking in kensington (one of the wealthiest parts of one of the wealthiest cities in Europe), then having a short, narrow car is a huge bonus, even when money is no object.

If it was possible to pay $5,000 to Tesla right now for them to come and shrink the width of my model S, and reduce the length a bit too, I'd press the buy button without hesitation.

Don't forget we all have our own experience and biases. To brits, most american cars seem stupidly big. To Americans, most British cars seem laughably small. Tesla needs to ensure it doesn't get caught in the californian mindset of big wide roads and everybody having huge parking spaces. Plenty of room in the marketplace for small BEVs and big cybertrucks.

 

[dl003]

Wouldn’t a cheaper, smaller car be an obvious way to “accelerate the mission” by simply allowing more people to buy a car? Musk himself repeatedly has said they simply need to make cars more affordable to enable more people to buy them. Making smaller models is an obvious way to lower entry prices while maintaining margins.

I'm gonna go out on a limb here and say a smaller car will be made when Tesla has the production capacity. Its vision statement contains the word "to accelerate", not just "push" or "drive", but "accelerate". At Tesla, the speed of innovation is also the biggest moat. Seems speed and acceleration is a common theme there. So while Elon wants to put EVs in everyone's hand, he also wants to do it in the most expedite manner possible. So, I'm asking myself what causes the most friction against that and I think it's production. Higher production efficiency = less costs and more opportunities for innovation which further drives down costs. To expand capacity, you need brain and money, the latter depends on how profitable your current operation is. Right now they must have determined that, given the current production constraint, a smaller cheaper car would require sacrificing profitability (remember they're already reducing profit as much as they can on existing line up) to the point that it would actually slow down the speed of expansion.

 

[Yoona]

Question: which is the wise path when buying Tesla.
A) purchasing shares weekly on payday
B) waiting for a “pullback” to 1200$

A downside: missing out on lower cost shares and increasing cost basis significantly over time
B downside: it’ll never pull back to 1200$ and I’ll be timing the market for more shares forever

It depends. Do you want to control the purchase price, or control the purchase timing?

Waiting for dip = you control the purchase price, but there is no guarantee that price will arrive.

Buy whenever money is available = you control the purchase timing and the share(s) are in your hand.

If I log in to my trading account, I want to see shares, not cash.

 

[CyberDutchie]

Okay so this is me. ~300 shares currently. But I need to make a fairly regular income out of this without trying to time the market as well. What’s the best way? Take out small amounts monthly? Take out larger amounts after jumps? I want to be very conservative with withdrawals as I’m jeopardizing a fortune in the future with them.

see if your broker can give you a line of credit with your shares as collateral. This is what Elon does. Interest rates are very low right now and you can add the interest to the amount you owe.

 

[JohnnyEnglish]

Reflecting on the comments made at the Q2 ER (and prior to that) regarding the Semi, it would be complex from a logistics perspective to create the battery pack/drivetrain in GF Nevada and then ship that to GF Texas for adding the body etc.It would also seem to preclude getting Semi into production early 2021 (at the Q2 ER Semi was mentioned as one of the products that would be built at GF Texas).

At the same time I was surprised by reports of the extension of GA4 at Fremont (currently being used for model Y). My understanding was that Model Y would be moved to GA5 at Fremont when that is operational.

I was wondering if the initial production of Semi might be in GA4 at Fremont once Y has moved to GA5. This might also fit well with using the batteries from the pilot production line at Kato Rd. Semi production could then be moved to GF Texas once the factory has been built, including the battery production facility.

Initial Semi production at Fremont would make the target timeline feasible, provide an experienced production workforce to work out the kinks in the production processes and ensure easier access by the engineering teams during that ramping activity.

Is there any additional information out there that you are aware of that would support or disprove this approach?

 

[gabeincal]

see if your broker can give you a line of credit with your shares as collateral. This is what Elon does. Interest rates are very low right now and you can add the interest to the amount you owe.

Essentially margin..?

 

[Joesantelli]

Pretty low volum still

 

[StealthP3D]

Sure, it can be fun and lucrative to sell some and buy back later for less -- if you can time it right -- but not the whole pot.

Like, I could have sold a few hundred in Jan-Feb at 900+ and bought double that number in Spring. Didn't. Oh well. In June I did sell 200 at the (then) ATH of 1000, paid off my car loan part of the mortgage, stuffed away enough for taxes next year and reinvested the rest in a tax-exempt account (simplified). Sure, had I waited a few weeks it would have been 50% more, as we now know. Heck, in two months more it could have been 100%!

I guess it depends on how much your "fun" is worth in dollar terms. Most "investors" make less money, not more, over time when trying to trade growth companies. They would make more by doing nothing.

Jack Rickard is a smart guy who understands Tesla well and has played the market for decades. Lot's of experience. In his most recent video (highly recommended by the way) he discloses that he would be dollars ahead if he didn't trade in/out of his positions. The difference is not small. But he claims it's "fun". It makes me wonder if he would choose to trade for "fun" if he knew how much it was going to cost him over a 10 or 20 year period! Because justifying it after the fact by calling it "fun" is just another way to say you're not going to cry over spilled milk.

I like having "fun" as much as the next guy but I'm not about to pay hundreds of thousands of dollars (more likely millions of dollars) for that "fun". Sure, there is a chance you could come out ahead in the end, but that's an extremely rare person. I admit, I'm a gambler because investing is gambling. But I want the odds to be on my side as much as possible. In other words, I want to be as profitable as possible over time. And that is why I'm a buy/hold investor, not a trader.

 

[Tslynk67]

Pretty low volum still

Indeed, but heading in the right direction for the moment

 

[elasalle]

Pretty low volum still

Low vol means MM's can manipulate it easily to Max-Pain. MM's don't play using sentiment, so they go to work using the same strategy in either direction

 

[dl003]

Pretty low volum still

Imagine having to fight 10 other guys for tickets to a roller-coaster. Once inside, you realize the ride doesn't start for another 3 days. Oh, and while you're standing in line, a tropical storm lands and the ground splits underneath the park. Can't complain about the lack of new riders.

 

[bhtooefr]

Ferrari market cap is $30+ billion. That's huge for a company selling few cars, at least compared to other ICE makers.

1. When do they plan to switch to BEV?
2. How fast and successful can they be in this transition? How much resources have they invested already?
   
3. Would Tesla be an option to customers cross-shopping Ferraris? If not, why and how deep is the moat?
   
4. What could distinguish Ferrari cars from Tesla, besides branding and exclusivity (e.g quality, features, range, customization...)?
5. [edit] Should Tesla consider launching sub-brands at some point, to better compete in the luxury space (vs robotaxis, trucks, family cars...)? If so, how can Ferrari keep up if their tech isn't as good as Tesla?

It seems that we expect Tesla to take market shares for all manufacturers and that the industry (and the stock market is finally realizing that, but so far, Ferrari seems unmoved, as if they weren't making ICE vehicles.

Take all of this with a caveat that I wouldn't touch Ferrari stock with a ten foot pole:

...Ferrari is a weird case, because at times, they've made more revenue from selling branded apparel than cars.

In some ways, they behave as a giant sports team instead of an automaker. This is because... that's actually what they are. They're a Formula 1 team that happens to sell cars to help fund the race team.

There's absolutely threats to Ferrari from Tesla - people want to be seen in both Ferraris and Teslas, which does make their automotive divisions competitors to an extent (especially as the Roadster directly competes against Ferrari's road cars) - but Ferrari does have some unique selling points. Interestingly, given that Ferrari has no qualms about selling road-illegal cars, one of those unique selling points is actually the internal combustion engine, and I could see that being the case even after ICEs are banned for the road. There's a lot of money in retro, and in 50 years, Ferrari being able to say "we've continuously made internal combustion engine cars since 1947" will come off as more authentic to car collectors than some upstart making a retro track car with an ICE. I think they do have to make the BEV transition, but out of all automakers, they're the one that never has to complete it, and in fact completing it may hurt their brand. (Additionally... Ferrari's customers aren't usually buying Ferraris as only cars, so Tesla and Ferrari could in fact coexist.)

The biggest threat to Ferrari, honestly, is Formula 1 itself failing - that's what their brand is fundamentally built on. Right now, electric motorsports are fairly niche (yes, Formula E exists, and produces very close racing, but it's still seen as a joke, with a race format full of gimmicks, by a lot of motorsports fans), and aren't anywhere close to displacing F1... but there's always the possibility that F1 somehow just loses its shine without another motorsport usurping it.

As far as sub-brands... here's why to do sub-brands:

• As a mainstream manufacturer, you're trying to move upmarket. This actually does work best with a new brand, especially in the US and China (less true in Europe and Japan), as consumers in those nations are especially sensitive to being seen in a "poor" brand. Tesla may run into this if they try to move into the top tier (Rolls-Royce, Bentley), but I'm also not sure they actually would move up there.
• As a premium/luxury manufacturer, you're trying to move downmarket. I think this is overemphasized - it's easier to move downmarket and manage to not sully the upmarket products' reputation, than it is to move upmarket - but it's absolutely a consideration that some automakers make. (Mercedes was incredibly terrified of the Sprinter bringing down the perception of their US-market cars, and launched it under the Dodge and Freightliner brands... and then after selling Chrysler, and realizing that Sprinter buyers were buying Mercedes badges and grilles and retrofitting them, and that Freightliner wasn't set up very well for a lot of Sprinter buyers, started just selling them as Mercedes in the US, and nothing bad happened.)
• When entering a new geographic market, or dealing with a geographic market where the brand has a negative reputation. This one actually could be relevant to Tesla - especially carrying the reputation of an American automaker into Europe, specifically - but it's not guaranteed that having market-specific brands gets around this (see GM's ownership of Opel/Vauxhall, which AFAIK was a money loser for decades), and it's also not required (see Ford of Europe).
• Mergers, and wanting to keep the other brand around to keep those customers.

 

[CyberDutchie]

Essentially margin..?

There are differences. You cannot use the proceeds from an asset-backed line of credit to buy stock or options. That’s why interest is much lower (in the low two percent range).

 

[Unpilot]

Bought some more....about the third time I have bought some more ....after saying Don't buy more...you have enough!
But I like round numbers....so I bought some more

 

[lafrisbee]

You realize you could have made the video in the time it took you to type that out, eh?

You have NO idea how clueless I am when it comes to the technology of this era. Wait, maybe you have a slight idea of how clueless I am... I have yet to figure out the "quote" feature on this forum..and really can't. I've tried a few times, and then just hit "reply" button when I give up.

 

[M|S|M MYP]

Oh $1500. I’m sorry I talked bad about you, let’s never fight again. Btw, can I have your friend $1600’s number?

Sorry....I dumped her....currently looking for a new friend named $1700 or $1800..possibly $1900. I will let you know when she's found

 

[replicant]

The biggest threat to Ferrari, honestly, is Formula 1 itself failing - that's what their brand is fundamentally built on. Right now, electric motorsports are fairly niche (yes, Formula E exists, and produces very close racing, but it's still seen as a joke, with a race format full of gimmicks, by a lot of motorsports fans), and aren't anywhere close to displacing F1... but there's always the possibility that F1 somehow just loses its shine without another motorsport usurping it.

I don't follow F1 but I'm hearing (e.g on the anti-EV /r/cars, cf Renault Reports Record $8 Billion Loss) that F1 is a zombie because of the all troubles ICE makers are starting to face, with Covid19 but mostly from the transition to EV. It would be ironical that Ferrari benefits from its success in F1 but the demise of the ICE industry makes F1 a dead end, putting nails in Ferrari's coffin. In other words, winning makes them fail.

 

[mrbloons]

At this point GM should stop being critical of Tesla and focus on the task at hand. In the past, Mary Barra made comments with the thoughts releasing the Bolt before the Model 3 and having "dealers" was a huge competitive advantage. Turned out to be completely wrong.

Their current focus for product is on the high end market (Cadillac and Hummer) is probably a good idea, but then why focus on charging for people in apartments and condos with EVGo. Not having seamless charging on road trips for someone buying a high end car is going to be a huge impediment to sales.

Honestly more confident than ever that this is going to be a huge train wreck for the OEM's in 3-4 years, especially in North America.

Spot on. GM knows that talk is cheap. They like to talk up their 400 mile range, million mile battery, 20+ models, but what do they have on the market today? They act like Tesla has had a head start but the reality is they have had decades to get this right and have faltered time and again. Executives that would rather wine and dine and use marketing ploys and sales tactics to move mediocre product than work hard to change the world for the better. Hard pass to any GM product, thank you.

 

[Snerruc]

I am generally of the opinion that somebody who doesn't remember the ticker symbol of a great company whose stock they own is possibly a brilliant buy and hold investor who really ought to just hold forever. Or an idiot who should just get out as quickly as possible.

You might want to consider which applies to you and act accordingly.

Well, I don’t know the ticker symbols for stocks I own, and l retired 33 years ago. I’m definitely not brilliant like most of you, but stocks aren’t rocket science.

 

[StealthP3D]

Wouldn’t a cheaper, smaller car be an obvious way to “accelerate the mission” by simply allowing more people to buy a car? Musk himself repeatedly has said they simply need to make cars more affordable to enable more people to buy them. Making smaller models is an obvious way to lower entry prices while maintaining margins.

Yes, but not before the larger cars are sales limited. A smaller/cheaper car isn't going to allow more people to buy Tesla's if they are already selling everyone they can make. It would just shift the Average Selling Price down market and reduce the amount of capital they had to expand production by reducing profit margins.