Edit: I'm just ending this back and forth. I think we're both inclined to use the ignore button at this point.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Edit: I'm just ending this back and forth. I think we're both inclined to use the ignore button at this point.
Mo City
Active Member
I also believe your comparison with AMZN probably isn't the best but the concern about TSLA dropping a large percentage for an extended period of time is a valid point of discussion.
IMO, this is very unlikely barring complete economic collapse, China shutting them down because of tensions with the U.S. or Elon dying unexpectedly. Besides maybe SpaceX, Tesla is the most dynamic company in the world and seems to have a near "free run" in the auto and energy industries for several more years before competition bites hard. IMO, 10 million deliveries/year by 2030 is conservative. If the energy side grows to be roughly equal to the auto side (which means its rate of growth will absolutely explode beginning relatively soon), forget it. If FSD happens in a year or two, Tesla will pop to well over 1T by that alone.
There are other items but you get the idea. If there is a big drop in TSLA because "hype" dies down, it ain't gonna stay down 10 years. Tesla is just now hitting the sweet spot.
https://twitter.com/chinadaily/status/1298825064377286656?s=21
#Tesla China said it has started taking bookings for its made-in-China Model Y and the production of preordered cars will start from next year.#ModelY #TeslaChina bit.ly/3lofQTW
Hopefully lots of orders flooding in.
#Tesla China said it has started taking bookings for its made-in-China Model Y and the production of preordered cars will start from next year.#ModelY #TeslaChina bit.ly/3lofQTW
Hopefully lots of orders flooding in.
StealthP3D
Well-Known Member
I only made it part way through the video - it was too poorly put together to be watchable. Just like their short thesis.
I don't know. My point was a hardware maker can also have big profits from software. Tesla's growth potential from software (FSD, in-car apps, Autobidder) is similar to the software companies you mentioned with high multiples.
I think my main disagreements are with your ideas that...
1) Tesla won't earn its current valuation for 10 years.
2) The market looks ahead only 1-2 years.
The market values growth and room to grow. Both of those are huge for Tesla.
I suspect the AMZN history that you cite might help prevent TSLA from repeating it. The world is changing and investors are learning. Many here have said they missed out on Amazon and other high-growth companies, and are determined to not repeat the mistake with Tesla.
StealthP3D
Well-Known Member
StealthP3D
Well-Known Member
Yes! The Tesla Racing effort can mirror Tesla advertising, basically all privateers doing their own thing with a minimum amount of company support (like Superchargers).
I completely agree with @PeterJA and @StarFoxisDown! . You completely omitted the dot com bubble in this post, and I don't think anything can be learned about TSLA by looking at AMZN in 2000.
Furthermore, you say that Wall St. doesn't keep a long view on stock valuations. If by Wall St. you mean sell side analysts, then there's a fair amount of truth to that statement, but clearly sell side analysts are not the market, especially when it comes to TSLA. Ron Baron, Cathy Wood, and the TMC community are clear exceptions, and I suspect that many of TSLA's largest shareholders also have much longer term investment horizons. If not, then why have so many of them been invested in TSLA since late 2013? TSLA's largest shareholder (ex-Elon), Baillie Gifford, had 9.69% of its assets invested in TSLA at the end of Q2, and first invested in late 2013.
You also can't forget that even sell side analysts are starting to increase their TSLA Q3/Q4 price targets and forecasts, so they are also starting to realise that Tesla is further along than it may seem looking at Q1 and Q2:
I bet that buy side analysts at TSLA's biggest investors (Baillie, Capital World, etc.) have been aware of Q3's and Q4's strength for some time now, and are at least basing their decisions off of those numbers, if not numbers that include Giga Berlin and/or Giga Texas. If you run the numbers on what these factories combined would value Tesla at, it looks something like this:
- 600k Fremont (Includes S&X)
- 500k Shanghai (Conservative. Can likely do more than 500k)
- 750k Berlin (Could very well have higher than 750k eventual output)
- 1M Austin (Likely a very conservative output number long term)
- 2.85M Total @ 50k ASP @ 12% Operating Margin = $142.5B Revenue & $17.1B EBIT
- At a 50x EBIT multiple, that would be a $855B valuation.
- AAPL currently trades @ 32x EBIT, AMZN @ 102x EBIT, so 50x EBIT for TSLA is conservative if anything, considering its much higher growth rate and growth potential.
- A $855B valuation, would mean TSLA stock will be worth ~$4,600 at that point.
My Tesla Investment Thesis 2.0: Tesla's Monopoly Potential
Last but certainly not least, stock price is simply a factor of supply and demand, and currently demand for TSLA is high, and supply is severely contracting. Short interest is at all time lows, which means short covering has taken synthetic TSLA shares out of circulation. But most importantly, S&P 500 inclusion is on the cusp of taking 26M+ shares out of circulation, thereby decreasing the effective float by almost 20%. Meaning, the 20% of shareholders with the lowest conviction and lowest price targets will not matter anymore, and the 80% highest conviction TSLA shareholders will dictate the stock price very soon.
Is it possible that TSLA will see a temporary pull back? Sure, it always is. There are many things that could cause this to happen, and it did happen during the COVID crisis in March. However, comparing AMZN in 2000 and TSLA in 2020 is completely pointless, and TSLA's all time high still being around $2,000 in 10 years is so incredibly unlikely imo that I am betting against that happening with my entire net worth by being long TSLA.
Artful Dodger
"Neko no me"
https://twitter.com/elonmusk/status/1298827537645285376/photo/1 Another cryptic msg?
E'sP ... Good
Bank (Money) ... Poly (A lot)
View attachment 581203
That's an old studio mixer console. More likely Elon's about to drop another tune from Emoji Records. LP
Cheers!
Bet TSLA
Active Member
Rob Maurer's latest is out:
.
He interview's David Trainer about his recent analysis: Tesla: The Most Dangerous Stock for Fiduciaries - New Constructs.
It's sad. Trainer knows pretty much nothing about Tesla. He's brought a noodle to a knife fight.
About an hour:
Timestamps: 0:00 Introduction 1:58 Why do you think Tesla is overvalued? 4:04 Tesla's market cap per vehicle sold 9:17 Influence of regulatory credits on Tesla's business 11:46 Tesla's market share, growth, and competitive outlook 17:26 Modeling Tesla's valuation 25:42 Counterpoints to the valuation models 37:05 Risk vs. reward when investing in TSLA 40:46 Tesla insurance bull case 42:16 Scaling up and Tesla's competitive position 48:44 Are other automakers finally catching up? 55:09 Wrapping up
He interview's David Trainer about his recent analysis: Tesla: The Most Dangerous Stock for Fiduciaries - New Constructs.
It's sad. Trainer knows pretty much nothing about Tesla. He's brought a noodle to a knife fight.
About an hour:
Timestamps: 0:00 Introduction 1:58 Why do you think Tesla is overvalued? 4:04 Tesla's market cap per vehicle sold 9:17 Influence of regulatory credits on Tesla's business 11:46 Tesla's market share, growth, and competitive outlook 17:26 Modeling Tesla's valuation 25:42 Counterpoints to the valuation models 37:05 Risk vs. reward when investing in TSLA 40:46 Tesla insurance bull case 42:16 Scaling up and Tesla's competitive position 48:44 Are other automakers finally catching up? 55:09 Wrapping up
CyberDutchie
Active Member
Looks like it. Here is a Level II screen capture from around 10:00 am when 2100 broke. I’ve never seen only orders in multiples of 100 shares on that screen. And the screen was fast moving!
Artful Dodger
"Neko no me"
Tradegate.TL0 (Berlin) 4 min ago: 1.824,80 Euro is $2,158.22 USD
smorgasbord
Active Member
Well, my comparison with Amazon has the dot-com bust analogy. I'm not saying TSLA will decline just because the hype will die down.
1) I'm not saying Tesla will need 10 years to earn its current valuation. I am saying that valuation won't be realized within a year or two.
2) My point is that the market always reverts to the 1-2 year timeframe.
Hindsight is 20-20 and while people say they didn't want to miss out on the next Amazon, the people who held AMZN through the bust or bought shortly thereafter weren't happy for a long time. Those who bought AMZN for $10 in 2001 only saw a 28% CAGR for the next 10 years despite the company executing extremely well and even starting up a whole new line of business besides its eCommerce dominance.
In another possible comparison, the dig against Amazon was when it would be profitable, then when the profits would be big. The market then didn't truly understand that Amazon was reinvesting its profits back into growing the business for the long term. Musk talked about this in the last earnings call, and it being 20 years later i think more people recognize a company takes the money it earns and uses it to expand. So maybe in this regard Tesla will be different. But, I think doing that depends on TSLA not having too big a hiccup.
1) I did not omit the dot-com bust. It's a key part of my argument. I respect my audience enough to not have to spell everything out.
2) I already acknowledged Cathie Wood. You do recall me taking about Henry Blodget being one who recognized Amazon's potential early, right? Did I really need to spell that equivalence out explicitly? I thoguht we were smarter than that.
3) I see the sell side analysts mostly playing catch-up to the stock's performance. Heck, in the interview with Gordon Johnson, the interviewer said he himself was a sell-side analyst and then gave him a hard time because of where the stock is today, not because of what the company is doing. So, that mentality is still prevelant. And, Q3/Q4 getting Tesla to 500k deliveries for 2020 is great, but not in and of itself worth $2500.
4) Your 50X EBIT calculation relies on an EBIT that is not 2020 and not 2021. When will Berlin produce 750K vehicles in a year? When will Austin produce 1 million in a year? I agree that building these factories is great and necessary for Tesla to be on its 50% CAGR path, but if you're going to compare an EBIT multiple for other companies, you need to use the same year. You're not saying AAPL today is 32x 2023's EBIT.
5) You're right that FSD will open up a whole new tier for Tesla. But the regulatory approval you agree is needed is years out - more time than Tesla actually making it all work. I believe Elon when he says Tesla will get there, and I like what I've seen so far, but I also believe that FSD will happen in Elon years, as he himself has previously acknowledged on past promises achieved, just not on schedule.
6) I'm on-board with S&P 500 being a near-term stock price catalyst. Although this is such a widely held view that I have to believe that a not insignificant part of TSLA's rise is due to front-running that inclusion. So much so that I'm starting to wonder if there won't be lots of willing sellers who bought in simply to sell to the Index funds that need to wait and then need to buy quickly. But, that's a separate discussion.
7) "comparing AMZN in 2000 and TSLA in 2020 is completely pointless, and TSLA's all time high still being around $2,000 in 10 years is so incredibly unlikely imo that I am betting against that happening with my entire net worth by being long TSLA."
It's not pointless. Like I said, history may not repeat, but it does rhyme. I'm not saying TSLA's ATH will be around $2K in 10 years. First, I expect TSLA to continue making new highs until S&P 500 inclusion is complete, and that could easily be $3,000. That said, I'm not expecting much from battery day, but that's dependent on whether Elon treats Battery Day as a technology demonstration (like he did Autonomy Day), or as a technology-drives-future-business demonstration, which is what the analysts are looking for.
Whatever the trigger, whether a macro-event or an execution blip (and TSLA has seen both so far, but before this kind of huge late 20th century Amazon-like run-up), it's possible that Mr. Market will do its normal panic thing and take profits, with stop-loss orders (which we've read that some people here have) triggering and domino-ing, and so TSLA's price could crash. And, like Amazon, Tesla the business would still continue to execute well overall, with the stock price needing something like FSD approval or Tesla Energy growth to be the equivalent of Amazon's AWS, which was needed for the company to re-take it's ATH out - and even that took more years.
And I freely admit it may not happen. I've expressed this as a concern since the beginning, not a certainty.
That so many people have reacted so strongly makes me feel like I've hit a hidden nerve that some may not want to admit. And remember that I'm not only an original Roadster owner, I've been HODLing TSLA longer continuously than most people here: since mid 2011. So, I'm not one to freak out and sell it all on a whim, and I've survived Rawlinson leaving and Model S battery impact fires and Model X delays and Model 3 delays and funding secured and 2019Q1 delivery drop-off and executive departures and everything else.
jhm
Well-Known Member
Runarbt
Active Member
And this:
The Big Bang started very, very smōl
https://twitter.com/elonmusk/status/1298858283852234752
Combined with previous tweet about baby not ready for spoon.
Small Pig(and SPoon) - S&P
Started very very small - stock split
S&P announced shortly after split is done? AaanD - we will get a BIG BANG .-D
I will apply my shrinking and now tiny call money let from constant weeklies optionsplay at monday. ;-)
Someone on reddit claims battery day picture is about tabless
The Battery Day teaser is not silicon nanowires. It is a zoomed in view of the conductive elements in the tabless electrode patent. : teslamotors
Significantly reduced interal resistance because there are more pathways for the electrons to flow. This will lead to:
-Faster charging. Like 5x-20x faster! Holy *sugar*!
-Faster discharging. More horsepower out of smaller batteries!
-Less heat generated. Less cooling requirements!
The decreased resistance will also allow for much larger cells. This means much fewer cells. This will result in:
-Decreased cost to manufacture and assemble packs!
-Higher pack density!
-Simpler pack with faster assembly with fewer parts and fewer chances for defects.
The increased contact between the cap and current collector will also greatly increase the cooling capabilities.
With Elon saying it is not Amperius it is likely not silicon nanowires. So maybe Tabless it is?
Old video:
Would be good for Roadster, Plaid, Megacharger etc... The acceleration and charging speeds blows Elon’s mind. Maybe the reason why Supercharger v3 rollout is so slow, they are waiting for v4?
The Battery Day teaser is not silicon nanowires. It is a zoomed in view of the conductive elements in the tabless electrode patent. : teslamotors
Significantly reduced interal resistance because there are more pathways for the electrons to flow. This will lead to:
-Faster charging. Like 5x-20x faster! Holy *sugar*!
-Faster discharging. More horsepower out of smaller batteries!
-Less heat generated. Less cooling requirements!
The decreased resistance will also allow for much larger cells. This means much fewer cells. This will result in:
-Decreased cost to manufacture and assemble packs!
-Higher pack density!
-Simpler pack with faster assembly with fewer parts and fewer chances for defects.
The increased contact between the cap and current collector will also greatly increase the cooling capabilities.
With Elon saying it is not Amperius it is likely not silicon nanowires. So maybe Tabless it is?
Old video:
Would be good for Roadster, Plaid, Megacharger etc... The acceleration and charging speeds blows Elon’s mind. Maybe the reason why Supercharger v3 rollout is so slow, they are waiting for v4?
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