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

[goinfraftw]

Climate change deniers often claim that global warming didn't cause hurricanes, that we had hurricanes before. No, hurricanes didn't use to go from a Cat.2 to Cat.5 in under 24 hrs. That's what a +1 C sea surface temperature (SST) buys you, and that's just one effect of warmer oceans.

This isn't going to stop, or slow down. The world is headed towards +3.6 C increase by the end of this century. May God help the people of planet Earth.

Regards,
Lodger

I found this to be really helpful to understand the connection between greenhouse emissions and Hurrican Dorian (scroll down a bit).

Climate Signals | Hurricane Dorian August 2019

 

[ReflexFunds]

I have to throw the BS flag here. While I am long Tesla, appreciate the urgency of the climate crisis, and own a 2019 Model 3, I have problems with this number that is approximately three orders of magnitude overstated.

A quick check of the web shows the high end of one estimate of subsidies to the U.S. oil and gas industry as $52 billion.

The trillions figure appears to come from an IMF study touted by Rolling Stone magazine which includes real subsidies (actual supply costs from provable, supportable figures) and estimated environmental costs (e.g., the allowing the fossil fuels industry to price their products only for actual costs and NOT including the "costs" to the environment, and health, etc., whose valuation is, in the words of the IMF report, " much more contentious than for supply costs".

The "subsidy" in the case of these environmental costs results from not charging fossil fuel prices which would include both real supply costs and estimated environmental costs. So, according to the IMF report, "undercharging for the true social costs of consumption" becomes a "subsidy" (but does not become a subsidy of tax dollars).

The IMF study does address tax dollars by including in the "subsidy" the opportunity cost of failing to apply VAT taxes to all levels of the fossil fuel consumption cycle. However, these are not direct subsidies of tax dollars, but, rather, the foregoing of additional tax revenues as a result of not levying new taxes.

Further, the quoted statement applies the IMF totals to "subsidies" to the oil and gas industry; the IMF study actually addresses global energy subsidies and associated fuel pricing.

"By fuel, coal remains the largest source of subsidies (44 percent), followed by petroleum (41 percent), natural gas (10 percent), and electricity output (4 percent)."​

I could go on and on, but it should be evident that it is not productive when discussing apples to introduce orange-based arguments.

I am NOT a short; I am NOT anti environmental; I AM in favor of truth in argument and the notion that Oil and Gas industry includes all global fossil fuels and that "trillions of tax dollars" include tax dollars conflated with contentious, soft estimates of opportunity costs is false and misleading hyperbole and does more damage than help to the cause it purports to advance.

Real global fossil fuel subsidies are somewhere between $5trn to $10trn annually on my estimates based on the latest research from annual air pollution deaths and social cost of carbon. I don't blame you for not understanding this because the fossil fuel industry has gone to extreme efforts to ensure the media don't tell people this.

Every-time a cost is separated from the company generating revenue this is a very real subsidy, this can be an indirect cost, health or environmental costs, it doesn't have to be a direct financial cost. There is nothing magic about direct financial costs. If you are not making a company pay for the costs of its product this is a subsidy. The vast majority of the time capitalism goes badly wrong is when the costs of a company's product are artificially separated from the company generating revenue and profit. This is often initially due to a simple ignorance of the overall health and environmental costs of the product, and then when science makes these costs become clear, intense lobbying and propaganda to prevent governments enforcing allocation of these costs as they do for normal products and industries.

People don't realise but most of the time indirect costs actually are allocated to companies or people through laws and regulations - it is only in certain cases like fossil fuels where industries have managed to keep these completely separated. This is the reason why theft is illegal - it is an attempt to allocate the indirect cost of the revenue generated from stealing. Claiming that indirect costs shouldn't count as a subsidy is equivalent to claiming theft is an amazing 100% margin business because the thief does not have any direct costs to acquire their revenue.

For fossil fuels there are many different types of subsidy:

• A direct financial subsidy paid in cash by the government
• An indirect subsidy from exempting (or reducing) fossil fuels from VAT tax (often in contrast to renewables). This does have a direct short term impact on a government's budget.
• A military subsidiary ($100bn in the US for defending fossil fuel supplies overseas). This again does have a direct short term impact on a government's budget.
• A public health subsidy (I estimate around $100k per ICE car in its lifetime) from the people hospitalised or killed by air pollution. 1 to 4 million people die each year from fossil fuel air pollution (latest studies put average European life expectancy fossil fuel air pollution impact at 3 years, mostly from coal and ICE cars). Part of this is direct cost for the government health service, and part of it is also a financial cost to the government from lost tax revenue from people that don't have to be dead, but it is mostly the population's cost of their lost life or impaired health.
• An environmental cost subsidy from not charging fossil fuel companies/ICE companies for using up the planet's remaining carbon budget and potentially eventually forcing 1 to 2 billion people out of their homes from global warming. This is already a direct financial cost to governments from flooding and hurricane damage etc, but it will eventually be a huge huge direct financial cost to the government (as well as individuals) as the damage gets greater and greater.

 

[Doggydogworld]

@ggies07 @KSilver2000
Please explain why you disagree.
Ford and GM spend ~$14.3 billion on advertising and dividends that is _not_ reinvested in R&D instead
Flat to declining sales last 10 years.
Essentially zero _net_ income
A few 100’s of $Billions in obligations
(Plus a lot of stranded assets, both intellectual and physical)

1. He starts by saying he hasn't seen these numbers anywhere, as if he will reveal new info. He reveals zero new info.
2. Only a simpleton compares cash vs. debt/liabilities without first subtracting out the non-recourse finance subsidiaries.
3. Tesla is growing, F/GM aren't. Stop the presses!
4. It's inaccurate to say F/GM ad spend reduces funds available to invest. Going to zero ads would probably reduce their profits. Tesla, being much smaller and targeting a different audience, is in a different situation.
5. Full-cycle payout ratio is much more relevant than a single year snapshot.
6. Lots of companies reduce dividends. Sometimes the stock falls, sometimes it rises. It depends on the reason.
7. If Wall Street doesn't care about the long term why was TSLA $300 five years ago? Why are Uber, Beyond Meat, etc. all sky high?
8. I stopped listening, sparing you all from points 9-18.

 

[Buckminster]

Watched/scanned the Sean Mitchell video of etron. He lost the respect of many of his followers on several subjects. The most glaring was FSD - no mention that I saw.

 

[goinfraftw]

Couple of links:

Simulation of Cat 5 wind damage: Brian Kahn on Twitter

Buildup of Dorian into Cat 5: Stu Ostro on Twitter

I did make a Climate Change Update Investor Thread regarding events like this here (so it's out of the main Investor thread), not sure if it still applies:

Climate Change Update Investor Thread

 

[Doggydogworld]

There is some discord in the ranks of the shorts on twitter and hilarity ensues

Andreas Hopf on Twitter

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You'll search far and wide to find someone with more Musk-hate than Andreas Hopf, but he doesn't short Tesla. He regularly goes long for short term trades. He's also able to count, unlike most in the Q cult.

He's a great example of someone who can keep their emotions out of their trading/investing strategy.

 

[loky]

Sure! Tweet away. I don't do Twitter. Or Facebook.

Thanks. I will send you a message with the tweet.

 

[UncaNed]

Why not install a tesla home charger instead and replace the ICE clunker with a modern electric car? The value of the ICE is going to drop dramatically over the next years as people recognize the difference.

Let's use every Carbon Monoxide fatality to blast social media that the fatality could not happen with a Tesla.

If inappropriately posted during a time of mourning, so much the better making your post more memorable because who knows who's life you might save while helping market Tesla and other EV's.

Better that paid advertising a few of us keep barking about!

 

[wipster]

You'll search far and wide to find someone with more Musk-hate than Andreas Hopf, but he doesn't short Tesla. He regularly goes long for short term trades. He's also able to count, unlike most in the Q cult.

He's a great example of someone who can keep their emotions out of their trading/investing strategy.

No I won't, I have far better things to do this weekend... you know it's a dog eat dog world out there and somebody has to help those poor weiner dogs...

 

[EVNow]

You'll search far and wide to find someone with more Musk-hate than Andreas Hopf, but he doesn't short Tesla. He regularly goes long for short term trades.

But he is into FUD. Why would he not short (unless his broker won't allow) ?

Andreas Hopf on Twitter

 

[defc0n]

You'll search far and wide to find someone with more Musk-hate than Andreas Hopf, but he doesn't short Tesla. He regularly goes long for short term trades. He's also able to count, unlike most in the Q cult.

He's a great example of someone who can keep their emotions out of their trading/investing strategy.

Indeed, he has the worst case of “smarter than Elon Musk syndrome” I’ve ever seen.

 

[dc_h]

This is where the shorts

Elon in 2016: 4 gigafactories by the end of the year.
Q.E.D.

Those who could see, already do.

have been effective. Cutting off Tesla’s access to capital has dramatically slowed down growth opportunities. I think this may work out for the best by forcing Tesla to manage capital better now. It’s a lesson that will pay off many times as Tesla scales up. Once Shanghai is online and generating cash flow, we will see rapid work on GF4 and expansion of Fremont. If Tesla can build Shanghai with internal cash flow while under 10,000 cars a week, they should be able to start GF4 in 2020 and GF5 early 2021.
Will shorts work away when Tesla is selling 20,000 cars a week and generating over 1 billion in free cash flow per quarter? I’d guess they go away when the last coal plant closes and half of new car sales are EV’s.

 

[winfield100]

1. He starts by saying he hasn't seen these numbers anywhere, as if he will reveal new info. He reveals zero new info.
2. Only a simpleton compares cash vs. debt/liabilities without first subtracting out the non-recourse finance subsidiaries.
3. Tesla is growing, F/GM aren't. Stop the presses!
4. It's inaccurate to say F/GM ad spend reduces funds available to invest. Going to zero ads would probably reduce their profits. Tesla, being much smaller and targeting a different audience, is in a different situation.
5. Full-cycle payout ratio is much more relevant than a single year snapshot.
6. Lots of companies reduce dividends. Sometimes the stock falls, sometimes it rises. It depends on the reason.
7. If Wall Street doesn't care about the long term why was TSLA $300 five years ago? Why are Uber, Beyond Meat, etc. all sky high?
8. I stopped listening, sparing you all from points 9-18.

@Doggydogworld
Thank you for your kind and gracious answer, that’s so special, bless your heart, however, I didn’t know we were allowed multiple identities here or you were vaguely telepathic (read my mind)
I _specifically_ and _explicitely_ asked @KSilver2000, whom also has fingertips to type with.
Is he a nom nom day plumeria?

Thank you kindly for your response though the tone of it is blue as Spanish skies

 

[Carl Raymond]

@Doggydogworld
I didn’t know we were allowed multiple identities here or you were vaguely telepathic (read my mind)
I _specifically_ and _explicitely_ asked @KSilver2000, whom also has fingertips to type with.
Is he a nom nom day plumeria?

Thank you kindly for your response though the tone of it is blue as Spanish skies

It was interesting, the gusto with which Doggydogworld sprang to defend the viability of ICE-land.

Some ideas are more dangerous than others. From the perspective of any car company, the idea that they may not be around in five years is like cancer. Buyers need reassurance that parts will be available. Resale will plummet if the brand is history, belonging to a bankrupt company.

It’s amazing that a nascent Tesla survived the incessant TSLAQ onslaught, with a critical mass of true believers. We are now witnessing the turning of the table. Less and less the Q FUD lands on Tesla; with 5 billion in the bank and a GF ramping, it washes right off. More and more the Q factor will give ICE buyers reason to pause and seriously consider if they are about to make a blunder.

The ICE makers need to make the most of the level ground. It won’t last long.

 

[SPadival]

He's a great example of someone who can keep their emotions out of their trading/investing strategy.

Oh yeah? These are the seeking alpaca article titles of his .. and unlike a "journalist"'s favourite excuse, he gets to select his headlines on SA.

• Tesla Pivots To Oblivion
• Tesla Endgame
• Tesla Approaches Terminal Decline
• The Big Tesla Swindle

Why is he misleading his #dumdum readers on SA with emotional articles? The last three are from 2017/18 and to add a cherry on top, all three are SA "Editor's pic" LOLOL #TheInternetNeverForgets

 

[KSilver2000]

@Doggydogworld
Thank you for your kind and gracious answer, that’s so special, bless your heart, however, I didn’t know we were allowed multiple identities here or you were vaguely telepathic (read my mind)
I _specifically_ and _explicitely_ asked @KSilver2000, whom also has fingertips to type with.
Is he a nom nom day plumeria?

Thank you kindly for your response though the tone of it is blue as Spanish skies

Some reasons why I disagreed with the video are mentioned by @Doggydogworld. I’m not disagreeing with you, specifically, just some arguments that the guy makes in the video. He’s clearly biased against ICE and it showed in how he presented his arguments. Not that I like ICE, but just prefer people to argue objectively.

BTW, do you have a need to know exactly why people disagree with any of your ideas in life? Seems like a tiring way to live.

 

[winfield100]

Some reasons why I disagreed with the video are mentioned by @Doggydogworld. I’m not disagreeing with you, specifically, just some arguments that the guy makes in the video. He’s clearly biased against ICE and it showed in how he presented his arguments. Not that I like ICE, but just prefer people to argue objectively.

BTW, do you have a need to know exactly why people disagree with any of your ideas in life? Seems like a tiring way to live.

@KSilver2000

Thank you for your gracious response
Perhaps the gentleman had some bad arguments, but i pointed out the, to me, salient points.
serious obligations in the literally 100's of Billion$
$14.3 Billion that could be better spent elsewhere in ad's and dividends
Have you really ever watched the useless vehicle ads? a waste of money
the point about dividends and causing a run on "going to other income producing vehicles"
the balance between income and outgo and how income is declining.
He didn't mention stranded assets, physical and intellectual
I also have a serious bias against ICE, and no fear of it showing either,
kinda like "if you go to Zha-ha-dum, you _will_ die" statements of fact.

Do you travel and see the car parks full of "pretty faces" saying "buy me no buy me!",
those are portents of unsustainable, "not long before the end"
As another point, your disagree wasnt with me, it was apparently with the article, so I asked ?why? looking for a rational explanation
As for tiring way to live, well, i guess so, traveling to various parts of the world, (i love Kaua'i) swimming in my 87 degree pool, , listening to various tunes', may the goddess cast her munificient smile upon you

 

[dc_h]

But they have guided for 80k/year run rate for S/X or 1600 per week.

Elon kinda through his hands in the air and said maybe demand is not there but that is there capacity with the current line using 1 shift.

Anecdotally I’ve seen a lot of new S and X in Chicagoland. Especially X’s. We won’t catch up to California any time soon, but much more common then a year ago.

 

[StealthP3D]

I also have a serious bias against ICE, and no fear of it showing either

That raises the various serious question of why you would be biased against a technology like ICE that has contributed to millions of early deaths, pollutes our land and costs people billions of dollars a year in lost tax revenue, caused millions of missed workdays, sickness, death and who knows what else?

I mean, I can understand the dead people and stuff, but who doesn't like missed work days?

 

[TheMrX]

It's difficult to know what the impact of this will be, but I think there is a risk this could be a real headache for Tesla. The bulk of Tesla's cathode powder comes from Sumitomo who has much of their Nickel supply in Indonesia.

The Nickel Sulphate market is only small at around 80kt Nickel content vs the 2,000kt Nickel market. But only a minority of Nickel mines have a grade that can be economically used as supply for sulphate conversion. Generally I think Nickel sulphate sells for around 20% premium to its Nickel content.
Currently I think this would put Tesla's Nickel sulphate raw materials costs at $1k per SR+ car. Compared to around $500 Lithium Hydroxide and around $60 Cobalt. The Cathode powder likely has around 30% price premium over its raw materials costs, so total Cathode powder cost for a SR+ battery is likely now around $2k.

However it is likely that Sumitomo and Panasonic both absorb part of any short term moves in raw material prices.
The biggest issue is just where Sumitomo will get new high grade Nickel supply at short notice if it is no longer able to access its supplies in Indonesia.

Project Dumont of RNC Mineral is shovel ready. (And its between where I live and where I work

Project Summary | RNC