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

[Doggydogworld]

Yeah, sorry, that's bull-sugar:

• 'fuzzed' old miles are the same open loop non-reactive environment that you used to pooh-pooh Tesla's 'shadow mode' with. Make up your mind: open loop testing is either incredibly useful or it is not the real thing.

I said open-loop has proven pretty useless for driving policy training. not testing.

Fuzzed data isn't entirely open loop, either, as it can capture all likely reactions.

If you are still claiming that Tesla's data advantage is absolutely no advantage...

Nice straw man you've set up there. I claimed nothing of the sort, in fact I listed couple of advantages Tesla's ability to collect data gives them. The point I keep trying (and failing) to make is that "more data" is not a magical solution to every problem the other teams are grappling with. I gave unprotected left turns as an example where copious data hasn't done the trick.​

 

[Remus]

They’ve blocked out anything but the tslaq echo chamber. I suppose we are blocked from bearish news as well, but Tesla seems or track for 40-50% growth this year and better in 2020 and 2021 as Shanghai scales up, followed by GF4. The key is if they can maintain demand, which seems under control and improving margins, which will follow increasing production. Reducing production loss and increasing capacity by Panasonic on the cell side is probably the lowest hanging fruit right now, followed by supply chain / procurement opportunities and then production at Fremont. The opportunity for steady capacity improvements seems much clearer today the a year ago.

This thread does have bullish tendency but there's no way we block out bearish info, the customer service problems, communication problems and short term demand pull forward all been discussed. The biggest misstep here might be misinterpreted Q1 Europe and China delivery numbers.

No I don't think this is an echo chamber.

Well maybe an echo chamber of climate change believers, but I don't mind that.

 

[Remus]

I'm thinking more and more that lower priced EVs like the model 3 will hold their value much better than similar ICE cars.

AS cars get older fuel and maintenance costs take up more and more of the total cost of ownership pie... but 'fuel' and maintenance are so much lower on EVs that a used $15k EV is going to have the same TCOE of an ICE have that has a significantly lower price.

I'm thinking this effect will make ICEs depreciate much lower than ICe cars.

Yes, but this takes years to show. So the key is be patient.

 

[SGordB]

Slight nitpick: what they bought is the recently issued convertible bonds, not the common stock. I think the ARK fund is probably "full" of TSLA, since they limit their holding in any one stock to 10% (although there must be some "slop" in that or they'd have to trade almost continuously), and TSLA has been going up.

They've been buying the dip almost down to the very bottom a week or two ago: https://ark-invest.com/wp-content/trades/ARK_Trades.pdf. When Tesla was last in the mid- to high- $300s, they were selling the wave. Cathie Wood has been candid about their strategy of playing the volatility even with a super high conviction buy like Tesla. Still, I assume the buying and selling represents a small percentage of their exposure.

 

[JusRelax]

Below is his response to the above. I’m thinking on how to answer him. I’d like to say: “Because this is common sense to anyone who has remotely any knowledge of Tesla and doesn't exist for the sole purpose to trash Elon/Tesla at every turn.” But....



On Jun 12, 2019, at 6:14 PM, Mitchell, Russ <[email protected]> wrote:

If he misstated himself, why didn’t he tweet or otherwise clarify? He may well have intended to be misunderstood.

I'd ignore that last part... you're correct that it's pretty obvious that he didn't 'intend to be misunderstood'. What advantage does Musk gain from that?

Some possibilities:

1. He is a very busy man that works 80+ hr weeks. It's possible he hasn't read the article.
2. It's possible that he intended to respond, but the governance team that governs his tweets didn't allow him to respond and directed him specifically not to contact any journalists that have written any incorrect statements.
3. (unlikely) he intends to respond but hasn't done so yet
4. As you mentioned, he finds it futile

 

[AlexS]

Sorry to barge in after being away for a long time from TMC. Ihor (Ihor Dusaniwsky on Twitter) is on Twitter claiming that currently we have the highest short interest ever in TSLA (not in $$$ but in % of the float) and we know there's some delay to the numbers. So short sellers were shorting all the way down to $177? They probably saw the "free falling" stock price as evidence for their thesis that Tesla was heading for bancruptcy? Is it really possible to be that stupid? And if so, wouldn't this mean that (once again) TSLA is like a loaded spring waiting to rebound with a vengance?

highest short interest was in 2013 over 40%

 

[dc_h]

Somehow many otherwise intelligent people fail to understand the (r)evolution of marketing communication that has come to be dominant in many amrkets today.

First, 'advertising' as John Wanamaker so famously said "...is half wasted. The problem is that I don't know which half". Even the more carefully targeting produces exceedingly expensive 'cost per reach', with much higher 'cost per sale'.
Second, as various internet solutions have become more and more advanced the cost per reach has become very high regardless of the specific technique being used.
Third, in many geographical markets Tesla seems to be either the highest frequency automotive search or quite close. That suggests quite strongly that awareness is exceedingly high among probable interested customers and investors. Obviously that comment is an inference made with inadequate data to support it directly, but...
Fourth, the actual sales results pretty much everywhere Tesla is available suggest that the existing techniques are quite effective and are also scalable.

Finally poorly informed investors, many owners and lots of TMC enthusiasts all share the idea that broad scale advertising would provide direct benefits, as it would indeed. It would increase cost of sales and have minimal other results because there is zero chance they could spend enough money to yield any material benefits.

Sadly, perhaps, I did my PhD in that silly topic, marketing. Even back in the dark ages when I did it (1973) there was no better technique than carefully cultivated 'Word of Mouth' to achieve excellent results. Tesla reaches many new customers in critically important demographics because of (in)judicious Twitter use and nurtured other social media, all with close to zero marginal cost. As with all such efforts, the very activities themselves alienate some other valuable classes, but most of those tend not to be large consumers of the same media.

If you doubt anything I have said I suggest reflecting on a handful of political campaigns (e.g. Trump, Brexit, The Ukraine Presidential election of Volodymyr Zelensky. All of those were huge surprises because all of them reached potential voters that their opponents and pundits missed. Tesla may the the only major automobile or energy company to actually know what they're doing.

There are many things Tesla should be doing better, especially customer support. They should understand better how to handle delivery and customer support. As for marketing and/or advertising they're pretty close to optimal except for surmounting political and legal opposition from fossils. That, sadly, will not fade for a very long time.

I agree about advertising Tesla cars, but I think advertising the company and mission would pay off well. Cheap Facebook/google marketing is fine and cost effective, but marketing on PBS News Hour to get the mission statement out there and get a low energy baseline sense that Tesla is a long term part of the social fabric. Tesla thought Elon’s twitter and the negative news has Ironically made Tesla the EV brand.

 

[madodel]

Even then it's probably a better use of the excess trillions of profits to not be turned into dividends, but used for the interstellar colonization project. Even for a huge firm like Musk Industries it's a financial stretch to build a self-sustaining starship the size of a small moon.

Will that be modeled on the Death Star?

 

[skybluecgreen]

So I went back and here's what Elon said about Q2:

[timestamp 33:00]

"[Q2] sales have far exceeded production, and production has been pretty good, so we're actually doing doing well, and we have a decent shot at a record quarter on every level, [...] if not it's gonna be very close, [...] we've got a shot at a record quarter, and 90% of orders are coming from non reservation holders, so these are new customers."

[timestamp 69:40]

"we feel good about demand, that's you know I think not a major issue the profitability is always challenging if you're a fast growing company and I think that the scale at which Tesla is growing is like hard to appreciate but last year we we doubled our fleet like so we made as many cars last year as we had in our entire history and this year you know it's gonna be like pretty like similar at least sort of sixty to eighty percent growth of the total vehicle fleet made more than that so it so it's hard to be profitable with that level of growth we could slow down but then that would not be good for sustainability and the cause of electric vehicles and and solar and storage [...] so you know I think we can be cashflow positive despite having a very high growth rate."
​

Note that there's several levels of new information there that I haven't seen reported together yet:

• Q2 is still guided as non-GAAP profitable, which should reduce the chances of a surprise $250m+ profit triggering S&P 500 inclusion.
  
• Note the "sales have far exceeded production" wording. That's not the wording you'd use with poor demand and Tesla just limping along.
  
• Q1'19 S+X production was only 14k units, and it was an open question whether Tesla could still do 25k/quarter production after the layoffs, reduction in production and the change to Raven. If Elon included S+X in his remark then this would suggest that they can do 20k+ production and maybe 20k deliveries in Q1, which would be huge and would remove much of the cash and GAAP income drain that the S+X drop caused in Q1. I still think S+X production not quite at the Q2'2018 level of ~24k is still in the cards for Q2.
  
• Record at every level would I think normally also imply record revenue. If this verifies then record production, deliveries and revenue in Q2 would falsify all the TSLAQ talking points rather forcefully.
• 90% of demand is now organic, not pent-up demand from reservation holders. This was expected by everyone who looked at the huge reservation queue - but again this is huge if we can see it actually verified in practice as well.

I suspect this wording and JB's presence and good mood is what is behind much of the after-market bump yesterday, and the strong pre-market performance of TSLA today (so far).

It sounds like the focus on profits is switching to a focus on growth at the expense of profits. Not saying this is the wrong thing to do at this time but I am afraid it will be a headwind for the share price. I hope the Q2 report will demonstrate a clear path toward future profitability.

 

[kbM3]

Like probably many others I read the old post on Musk vs. Short sellers again. What stood out for me: the attacks against Fairfax stopped when the company filed a lawsuit against some of the manipulators. It scared off many others.

I wonder what would happen if Tesla filed one against the most obvious ones (to scare many other shorters and manipulators away). It shouldn’t be too hard to gather evidence against the sloppy ones.

Many say Elon and Tesla should focus on growth or profits to make the FUD go away. I think that’s an illusion. It will not go away. A lawsuit could turn out to be much more effective. Elon exposing Montana Skeptic shows he is not afraid to go head on with shorts.

Yesterday’s shareholder meeting showed how management and shareholders suffer under the constant stream of FUD and how the company is at a loss about how to counter it. One simple lawsuit could be all that is needed to fight back.

EXACTLY!

The root of the problem is the existence of the smear campaign itself. Legal action would be the absolute best possible response. If not possible, then at least shining a light on the perpetrators may help.

It seems like Tesla should put together a task force to identify all of the ones involved and examine any and every means to go after them as much as possible. Clean Technica’s @ZachShahan has been doing stellar work bringing light to the unfairness of the articles and publishing great articles detailing the smear campaign itself.

 

[juanmedina]

Option_Sniper on Twitter

 

[Fact Checking]

I said open-loop has proven pretty useless for driving policy training. not testing.

We are really talking past each other. Where did I claim that Tesla only had a training advantage? Their incredibly large fleet (compared to Waymo et al) improves the speed of training, testing and ultimately the speed of development.

Software development 101.

 

[SGordB]

Here is my response to his response:

I can’t read people’s minds either. So don’t feel bad about that. But honestly, I don’t think this required the ability to read minds.

What I’d like to know is, what is the goal of journalism? Is it to understand a situation and report on it so people know what’s going on? Or is it to find a sentence out of a long speech which doesn’t fit the rest of the paragraph, and to exploit that?


On Jun 12, 2019, at 4:36 PM, Mitchell, Russ <[email protected]> wrote:

i can’t read people’s mind and pretend to know what they meant to say. he said he’d have a million robotaxis

Russ Mitchell
Los Angeles Times
Automotive Technology
510-599-4500

From: <>
Sent: Wednesday, June 12, 2019 12:34 PM
To: Mitchell, Russ
Subject: Re: Robotaxi Elon softens claims.

EXTERNAL SOURCE



Thank you for your response! Greatly appreciated.


Here's the quote (quoted from the Youtube auto-generated transcript)
Here's what Elon said about a million vehicles on the Autonomy Investor Day, verbatim:

"we still have the data gathering ability and then by a year from now we'll have over a million cars with full self-driving computer hardware"

"by the middle of next year we'll have over a million Tesla cars on the road with full self-driving Hardware feature complete at a reliably level that we would consider that no one needs to pay attention meaning you could go to sleep in your from our standpoint if you fast for a year should look maybe a year maybe a year in three months but next year for sure we will have over a million Robo taxis on the road"

Which is true and has not changed: in 2020 there will be over a million AP HW 2 and later vehicles on the road.

He misspoke the "million robo taxis on the road", it was clear from the context right before it that he meant 1 million FSD-capable cars on the road.

In both contexts Elon correctly qualified it with "cars with full self-driving computer hardware", or with "cars with full self-driving hardware feature". He misspoke about the million robo taxis on the road but it was clear from the context right before it what he meant by that million.


Now seeing as how one part of the statement conflicts with the other, it probably would have been good to either try to determine which is the correct statement from Elon before running with it or maybe show more of the quote and let people determine for themselves on what the situation truly is. What do you think?

You hit the nail right on the head:

"What I’d like to know is, what is the goal of journalism? Is it to understand a situation and report on it so people know what’s going on? Or is it to find a sentence out of a long speech which doesn’t fit the rest of the paragraph, and to exploit that?"

I've been involved in journalism (writer, editor, reporter, opinion writer) for over 30 years. The mission of the reportorial wing of journalism is exactly as you state: "to understand a situation and report on it so people know what’s going on." Alas, the mission of opinion writing is to influence people, and far too many opinion writers -- automotive and other specialty columnists included -- have no compunction about twisting the facts to sell their story. And editors let them get away with it, as do most readers, as long as they can deliver a story people want to read, in style. Musk's tendency to lapse into grandiose rhetoric may have given writers like this guy an opportunity to willfully misunderstand his larger message -- that (he believes) a million Teslas will have the capacity to be robotaxis next year -- but they have an ethical responsibility to get the story right and not misrepresent it with a cherry-picked quote that leads readers astray.

 

[AlexS]

We ride along in Tesla Mobile Service's customized Model S - Video

Tesla mobile service

 

[jerry33]

it still amazes me that people just will not accept how advertising works, or even be so convinced it doesn't work at all (normally on *them* because they are *smart*). Please read 'the advertised mind'. Do people REALLY think that hundreds of billions of dollars get spent every year globally without anybody ever looking into it whether or not it works?

It's not that advertising doesn't work, everyone knows that advertising works, it's that if you can sell all you can make without advertising, why spend the money. Will it increase sales? No. Right now the only possible benefit from advertising is paying off the media thugs--and unless you spend a whopping amount, it won't change their stories to positive.

 

[KSilver2000]

ARK has been buying, not selling, Tesla securities for some time now.

Umm what?

Did I say they sold shares? Are you responding to the right person?

And I’m sure the majority here all know ARK is the biggest player consistently buying.

 

[Dig deeper]

highest short interest was in 2013 over 40%

I wonder what the days to cover situation looked like at that point in time. Nasdaq doesn't have historical data going back that far. Daily volume preceding that short squeeze was a lot lower on average than it is today.

I really want a short squeeze to happen, but the stars just dont seem to be aligned in our favor.

 

[TradingInvest]

I was thinking about FUD and mainstream media. Here are the ones whose inclusion on the list of those publishing persistent, misleading anti-Tesla pieces bothers me the most:

• New York Times
• Los Angeles Times
• Consumer Reports

These are very highly-trusted and revered publications, IMHO deservedly so.

If just one of these publications changed their tune, I think it it would make a huge difference.

Assuming Tesla is wildly successful in the next few years, they will presumably be forced to change with the times. In the meantime, is there any hope of moving them even slightly?

These are very highly-trusted and revered publications, and deservedly so?? What did you drink? To me it's obvious these guys have an agenda going against Tesla. I think media is one of the most corrupted field today. They can't survive in the internet age if they are not corrupted.

 

[AlexS]

I wonder what the days to cover situation looked like at that point in time. Nasdaq doesn't have historical data going back that far. Daily volume preceding that short squeeze was a lot lower on average than it is today.

I really want a short squeeze to happen, but the stars just dont seem to be aligned in our favor.

if I remember correctly it was 11- 12 days, more than 10, definitely more than 7. don't remember exactly

 

[capster]

The point I keep trying (and failing) to make is that "more data" is not a magical solution to every problem the other teams are grappling with.​

Even if we say that Tesla scale data sets are necessary but not sufficient, who says that Tesla is solely using inference a la multi-multi-layer backprop?

Biological brains are a bag of tricks. You can find mis-matched based learning for categorical memory, match based learning in motor control, and opponent processing based reinforcement learning for timed behavioral selection. Some of the tricks involve learned mappings from one coordinate system to another, e.g. retinal coordinates to spatial to motor codes in movement. Some of the tricks transform input, e.g. visual inputs are spit into form and boundary channels that reconverge for further processing. And so on.

You can pick and choose from this bag of tricks. Oftimes you can leverage some of these insights in data preprocessing and input representations. Sometimes you might need to do more. You can even use a hammer: You can add 'rules,' algorithmic pre-, inter-, or postprocessing.

Just because Tesla isn't publicizing every trick they use doesn't mean they aren't using them. Don't be blinded by your own strawperson.

In point of fact, our evolution is the existence proof that a sufficiently large data set plus search/inference can find the solution to every problem in navigating in the real world and more.

Tl:dr; Silicon Valley understands nothing so well as search. Recast this problem in your mind as a search, i.e. evolutionary, problem. Recognize that the compute power to perform this search is available today (given a sufficiently large and comprehensive data set ). And, perhaps, you will come to a different answer.