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

[dc_h]

Look at the overall size of Texas economy. It’s diverse and less reliant on oil and gas than 20 years ago. It’s a pragmatic state. They won’t go sustainable because it’s the right thing to do, but because it’s the profitable way to go.

and they already are. Texas is #1 in wind generation and 4 in solar. A lot of that solar is due to Austin, which is moving to full renewable.

 

[dc_h]

Haven’t seen this posted yet, should be good for Monday’s open. Basically, Tesla can’t produce and deliver cars fast enough. Shorts will have their version of this being tesla can’t make cars fast enough, but we know this is about demand continuing to outstrip supply. Based on the updates to model 3 and increased MIC Model 3, margins are at a point Tesla would have cut prices at, in the past. I haven’t seen any updates from the accountant lately, but I expect margin expansion of 2-3 points. The stock may be high here, but with Q4 deliveries and profits coming after S&P and a likely debt rating upgrade in Q1, the stock could go much higher next year.
‘I do see downside pressure post inclusion as market makers sell hedged calls coming due on the 18th. That and front running will lessen, but definitely not eliminate the S&P rise next week.

Elon Musk Emailed Tesla Staff to Increase Production in Q4 for ‘High-Class Problem of Demand’

 

[dc_h]

Strategies for next week?

does anyone have strategies, besides HODL(which is a good one). Is after market sell order 20% over closing, or something like that an option?

 

[Stretch2727]

Interesting article on Tesla dissolving PR department

Elon Musk appears immune to criticism as Tesla ignores the media

The media critical of a company for not using the media. This is news?

 

[2daMoon]

Strategies for next week?

does anyone have strategies, besides HODL(which is a good one). Is after market sell order 20% over closing, or something like that an option?

There's always HODLAST

Hold On for Dear Life And Sip Teslaquila​

 

[ZeApelido]

Not sure if this has been posted yet. Elon email to employees:

Elon Musk Emailed Tesla Staff to Increase Production in Q4 for ‘High-Class Problem of Demand’

I've never been called "high-class" anything

 

[lascavarian]

CNN discussing Tesla and Texas right now.

on Smerconish.

 

[FastCompany]

For me, figuring it out is easy. Here is the decision tree:

Do you need cash now?
--No. Then HODL Tesla shares.
--Yes. Then borrow cash and HODL Tesla shares.

I suspect that folks tempted to sell shares now are forgetting two facts:

1) This company is historic. There has never been anything like it, with a combination of...

• genius, workaholic, polymath CEO
• global braintrust of top-1% engineering talent
• corporate mission and other incentives attracting more top talent
• corporate culture driving rapid relentless innovation and improvements
• multiple, huge, accelerating technology leads
• vertical integration and talent/tech sharing with rocket geniuses
• gargantuan addressable markets (global transportation and energy)
• vast untapped or barely tapped market segments (robotaxis, trucking, solar roofs, virtual power-plants)
• vast untapped or barely tapped market regions (China, India, South America, Middle East, Africa)
• doubling product line in the next few years (Cybertruck, Semi, Roadster2, "world cars")
• doubling (or more) production capacity in the next few years (Giga Shanghai, Berlin, Austin)
• unlimited future opportunities for the engineering braintrust (home HVAC, air and underground transport, on Earth and Mars)
• fanatical, evangelical, exponentially growing customer base
• unprecedented social tailwinds (accelerating climate change, growing government incentives)

Bears scoff at the current stock price and the idea that it will 10x again. "That would be a $6 trillion market cap! When has that ever happened?!" Well, several times in history, adjusted for inflation. But Tesla is making history.

2) This stock has turned a corner. HODLers endured 5 years of price stagnation and some gut-wrenching drops. Some folks might be traumatized and think the stock is still risky. But TSLA's future will not be like the past, because...

• major index inclusions are incoming (S&P 500 and 100)
• bond rating upgrades are incoming (if the raters want to be taken seriously)
• at least 15% of available shares are disappearing permanently into index funds
• up to 22% of available shares are disappearing likely permanently into benchmarked funds
• FUD will have no or little effect on those shareholders
• clueless or dishonest analysts will have no or little effect on those shareholders
• Tesla's "fortress balance sheet" now has $20 billion in cash
• all bear theses (unprofitability, inexperience, no demand, competition) have been discredited except excessive valuation
• this last bear thesis will be discredited by the imminent FSD rollout, blowout Q4 earnings, and new products and production capacity coming next year
• Tesla is now sandbagging their guidance to consistently beat expectations

FUD and abusive analysts will continue, but clearly they are losing effect. Volatility may continue, but so will the upward trend. The global market is waking up to TSLA. Usually when picking a stock, you must choose between safety and huge potential. TSLA offers both, in my studied opinion.

Great post Peter, thank-you.

Will begin my TSLA refunded retirement in a few short weeks, and this post and other like it give me confidence to maintain my strategy to HODL long term, and borrow for short term. A traditional 4% draw-down strategy would be a huge salary increase, although it surely did NOT look that way a year ago.

 

[joh01652]

Interesting article on Tesla dissolving PR department

Elon Musk appears immune to criticism as Tesla ignores the media

This is a great article, thanks for sharing. I've always enjoyed reading about the corrupt social history of public relations, advertising and journalism.

Tesla is disrupting the traditional advertising/public relations/marketing/journalism sphere so much that apparently even the Public Relations Society of America has taken notice--that's big news, if true.

PR/advertising firms around the world must be very angry at Tesla for not throwing millions of dollars of spin money their way. They don't like it that Tesla can take control of the narrative as well as they can while spending a fraction of the money.

 

[Prunesquallor]

Great post Peter, thank-you.

Will begin my TSLA refunded retirement in a few short weeks, and this post and other like it give me confidence to maintain my strategy to HODL long term, and borrow for short term. A traditional 4% draw-down strategy would be a huge salary increase, although it surely did NOT look that way a year ago.

Could you elaborate more on your strategy? May be in a similar position next year.

 

[Krugerrand]

Agreed, it's not a "we need to work our butts off to hit our target" type of email...

BAF, as they say

It is a different variety of email. Instead of we need to do everything in our power to deliver vehicles before the end of the year (to hit our goals/reach a new quarterly record), it’s a we aren’t making vehicles fast enough to satisfy (increased) customer demand.

With the exception of the people who made me buy demand shares, we’ve always known there’s more customers than Tesla can make vehicles. But it’s been awhile since the demand queue has gotten a bit too long for Tesla to be comfortable.

Remember back in the day when we talked about how long people would be willing to wait? That if demand was too high, people had to wait too long — It appears we just got the heads up of a demand spike. My guess is Model Y is going to outsell Model 3 faster than we may have expected.

 

[Knightshade]

Right, I forgot about Dojo. Add that to the diversified basket of startups that is Tesla.

Worth keeping in mind- most startups fail.

That's not at all to say Tesla isn't going to continue to be wildly succesful at much of what they do- they will do- and they'll have many additional, successful, lines of business and plans.

But I've seen a couple folks here who seem to think -all- of em will work out perfectly, seemingly adding some theoretical high value to EVERY possible startup within the company which seems.... overly optimistic.

Anybody remember battery swap stations? Tesla thought it was a great idea once....not so much today.

The one major upside here compared to most companies- Tesla is also usually much-faster-than-usual at realizing an idea isn't going to pan out, and moving on to something else.

So not every new line of business/startup-inside-tesla is gonna be a home run, but they're also not gonna waste nearly as much time/$/thought on the ones that aren't as most other folks will... (see for example Toyota still setting piles of cash on fire trying to make FCV cars happen)

If you aren't able to rollover into another account, look into a 401K loan.

Before I crossed the 59.5 threshold I could "borrow" up to 50% of my 401K. There were some insignificant service fees, but all interest and principle paid went back into my 401K and could be automatically deducted on each payday.

Do the math and see if putting the loan money into an Individual account owning TSLA would earn you more than those service fees (practically a no-brainer), and, verify that the repayment deduction won't adversely affect your lifestyle. If all is good, you can have whatever is comfortable, up to half of your 401K, earning money in Tesla in a few days.

Worth noting while you do pay yourself back- you are doing so with taxed money, which will then be taxed again when withdrawn in the future- so the fees can be pretty significant in that sense.

I mean, still probably more than just leaving it in an index fund, potentially much more, but it's NOT a trivial amount and should probably be figured into the math.

Plus you're required to repay the loan in full if you leave the job, which could be awkward if it's during a pullback or something.

 

[Stretch2727]

Strategies for next week?

does anyone have strategies, besides HODL(which is a good one). Is after market sell order 20% over closing, or something like that an option?

I have basically structured some sell and buy limit orders to hold a fixed dollar amount in TSLA. I will buy back when it drops and sell when the dollar amount is 4-5% above/below my target. This is somewhat what ARK is doing with Tesla. It has worked quite well to give me some cash to diversify. It's in a 401K so I don't need to worry about taxes.

I am retiring soon and have made huge gains in Tesla. I am way past my "number" for retirement thanks to TSLA. Want to continue to hold a large position in Tesla but want to peel off some of the gains using a structured approach but always hold TSLA.

 

[StealthP3D]

Tesla is disrupting the traditional advertising/public relations/marketing/journalism sphere so much that apparently even the Public Relations Society of America has taken notice--that's big news, if true.

PR/advertising firms around the world must be very angry at Tesla for not throwing millions of dollars of spin money their way. They don't like it that Tesla can take control of the narrative as well as they can while spending a fraction of the money.

Are you suggesting the Public Relations Society of America has a PR problem they need to deal with?

 

[2daMoon]

Worth noting while you do pay yourself back- you are doing so with taxed money, which will then be taxed again when withdrawn in the future- so the fees can be pretty significant in that sense.

I mean, still probably more than just leaving it in an index fund, potentially much more, but it's NOT a trivial amount and should probably be figured into the math.

Plus you're required to repay the loan in full if you leave the job, which could be awkward if it's during a pullback or something.

Excellent points to keep in mind. To be clear, you are only taxed on the earnings, but that will likely be the lion's share when it comes time to withdraw.

On the flip-side, I read years ago how a goal for any investor should be to pay a LOT of taxes, simply because it will be the natural result of being successful. Anyone focusing too much on reducing taxes may miss opportunities.

As for paying it back, that is sort of built in. At least that is how I looked at it. That was the other half they won't lend you. I'd just liquidate to make it square if I ever had to. But, this is a key factor that must be considered based upon how long someone have been with the employer and how long one expects to remain there. I've been at the same company for going on 24 years and that consistency certainly played into my choice.

 

[ggr]

This is a great article, thanks for sharing. I've always enjoyed reading about the corrupt social history of public relations, advertising and journalism.

Tesla is disrupting the traditional advertising/public relations/marketing/journalism sphere so much that apparently even the Public Relations Society of America has taken notice--that's big news, if true.

PR/advertising firms around the world must be very angry at Tesla for not throwing millions of dollars of spin money their way. They don't like it that Tesla can take control of the narrative as well as they can while spending a fraction of the money.

There was a recent NPR program/podcast that I caught part of, about whether advertising actually works or not. I think it was Freakonomics. They mentioned the famous saying "I'm sure that 50% of our advertising budget is wasted; I just don't know which half." 50% of zero is...

 

[PKOttawa]

For me, figuring it out is easy. Here is the decision tree:

Do you need cash now?
--No. Then HODL Tesla shares.
--Yes. Then borrow cash and HODL Tesla shares.

I suspect that folks tempted to sell shares now are forgetting two facts:

1) This company is historic. There has never been anything like it, with a combination of...

• genius, workaholic, polymath CEO
• global braintrust of top-1% engineering talent
• corporate mission and other incentives attracting more top talent
• corporate culture driving rapid relentless innovation and improvements
• multiple, huge, accelerating technology leads
• vertical integration and talent/tech sharing with rocket geniuses
• gargantuan addressable markets (global transportation and energy)
• vast untapped or barely tapped market segments (robotaxis, trucking, solar roofs, virtual power-plants)
• vast untapped or barely tapped market regions (China, India, South America, Middle East, Africa)
• doubling product line in the next few years (Cybertruck, Semi, Roadster2, "world cars")
• doubling (or more) production capacity in the next few years (Giga Shanghai, Berlin, Austin)
• unlimited future opportunities for the engineering braintrust (home HVAC, air and underground transport, on Earth and Mars)
• fanatical, evangelical, exponentially growing customer base
• unprecedented social tailwinds (accelerating climate change, growing government incentives)

Bears scoff at the current stock price and the idea that it will 10x again. "That would be a $6 trillion market cap! When has that ever happened?!" Well, several times in history, adjusted for inflation. But Tesla is making history.

2) This stock has turned a corner. HODLers endured 5 years of price stagnation and some gut-wrenching drops. Some folks might be traumatized and think the stock is still risky. But TSLA's future will not be like the past, because...

• major index inclusions are incoming (S&P 500 and 100)
• bond rating upgrades are incoming (if the raters want to be taken seriously)
• at least 15% of available shares are disappearing permanently into index funds
• up to 22% of available shares are disappearing likely permanently into benchmarked funds
• FUD will have no or little effect on those shareholders
• clueless or dishonest analysts will have no or little effect on those shareholders
• Tesla's "fortress balance sheet" now has $20 billion in cash
• all bear theses (unprofitability, inexperience, no demand, competition) have been discredited except excessive valuation
• this last bear thesis will be discredited by the imminent FSD rollout, blowout Q4 earnings, and new products and production capacity coming next year
• Tesla is now sandbagging their guidance to consistently beat expectations

FUD and abusive analysts will continue, but clearly they are losing effect. Volatility may continue, but so will the upward trend. The global market is waking up to TSLA. Usually when picking a stock, you must choose between safety and huge potential. TSLA offers both, in my studied opinion.

Yikes... I applaud your enthusiasm - but I hope you or anyone else doesn’t risk a large portion of their financial security on what is clearly a bubble.

The fact is that EVs are very simple.. basically a battery platform with motors. Within 1-1.5 years every car manufacturer will have EVs with similar ranges, performance and capabilities and only differentiated by marketing and aesthetics..

Tesla has first movers advantage and will have a good year due to the growth of the EV market.. but soon other manufactures will release their products and market share will be redistributed as it is now for ICE cars. Once the market realizes Tesla has nothing special.. the valuation will tumble to more justified levels. Full disclosure.. I own a Tesla and Tesla shares.. but will be following things closely to make sure I’m not holding the hot potato when the bubble bursts..

 

[Johan]

This is a great article, thanks for sharing. I've always enjoyed reading about the corrupt social history of public relations, advertising and journalism.

Tesla is disrupting the traditional advertising/public relations/marketing/journalism sphere so much that apparently even the Public Relations Society of America has taken notice--that's big news, if true.

PR/advertising firms around the world must be very angry at Tesla for not throwing millions of dollars of spin money their way. They don't like it that Tesla can take control of the narrative as well as they can while spending a fraction of the money.

Just because "everyone is doing it" (PR) it doesn't mean it's a good idea. Tesla always demonstrates first principles thinking and this is just one example of it.

Thought experiment: Imagine Tesla having a regular PR department and a reporter asking the PR rep for example: "There have been several reports from new Model Y owners of failures in the steering within a few months of taking delivery, can you comment on this".

Now, we all know that a typical PR rep. would answer: "At Tesla customer satisfaction and safety is our priority and we are taking all complaints from new and returning customers very seriously and look in to every case individually".

Elon might answer: "Yes, in the cars produced in the first three months of the year it turns out we made a mistake and used a shim only 1 mm thick in the front steering joint assembly, where it turns out the shim should have been 2,5 mm thick. All cars produced after November 15th do not have this issue and we are contacting all customers with the defect and repairing their cars proactively. Safety was never compromised, but customers would notice some shudder when turning the wheel at low speed".

Now, which answer makes you confident buying a Tesla?

 

[Singuy]

There was a recent NPR program/podcast that I caught part of, about whether advertising actually works or not. I think it was Freakonomics. They mentioned the famous saying "I'm sure that 50% of our advertising budget is wasted; I just don't know which half." 50% of zero is...

Freakenomics actually had two podcast back to back discussing advertising. Many studies came out saying they don't really work but no one dares to pull out because they are afraid of any drop in sales. This "we have to grow sales every quarter" locks companies into wasting billions in advertisement because they need to show they have done everything possible to grow sales.

 

[Lessmog]

Anybody remember battery swap stations? Tesla thought it was a great idea once....not so much today.

Helpful comment overall, but this quoted part is not entirely correct, as I see it.

To the best of my recollection (not saying much there ) Tesla's motivation for doing the battery swap was that it was worth 2 extra credits from CARB or whatever -- a full 7 instead of 5 for a large, long-range electric car. Details prob. wrong here. Anyway, why not make a token attempt, if only to be able to claim those extra clean air credits? That meant a considerable amount of money at a time of needing cash.

And the swap actually did work, as shown on a live web event. Cost was somewhat less than a full tank and time also less -- they filled up an Audi at the same time. But people were reluctant to give out their own precious battery for some unknown pedigree, and the cost was after all not negligible.

The facility was soon closed. It had served its purpose however and allowed Tesla to claim a little extra credits, worth a few thousands each, for every car sold that qualified. Very valuable money at the time!