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

[Rarity]

It looks like all of the many heads of the Musk Inc. hydra are coming together in Indonesia next month.

Tesla teams to visit Indonesia next month -- Indonesia wants battery factory (Reuters)
SpaceX team to visit Indonesia next month -- Indonesia wants spaceport (Bloomberg)

Indonesia is a big country with a very large population and blessed with natural resources that Musk Inc. needs. The extra $5 billion sure doesn't hurt in taking advantage of these kinds of opportunities. This is also a good opportunity to gentrify Mordor.

 

[Singuy]

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..

You don't own any Tesla shares. Don't kid yourself. With your kind of sentiment there's 100% chance you are lying here. Tsla have x8-12 depending on where you bought the last 1.5 years. You would have sold a long time ago if you think there's a bubble. And you wouldn't have bought in any time during this run up because you think it's overvalued. So nice trolling.

If you bought just for S&P inclusion then okay, but this forum offers no value to swing traders, and your comments offer no value either. I suggest a better resource for you which is wallstreet bets on reddit.

 

[bkp_duke]

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..

On the surface, this is correct.

But when you do a proper deep dive, there are so many flaws in this reasoning.

1) We've been told that ICE-manuf "EVs are coming" for . . . . nearly a decade. Those EVs that have actually shown up have been woefully inferior to what Tesla makes by any reasonable yardstick (efficiency, range, power).

2) A core premise of your thesis above is that there are plenty of batteries to go around for everyone to produce EVs with no problems. This is patently false, and is why Tesla has such a large advantage over everyone else. They realize that battery supply is the limiting factor, and have taken a multi-pronged approach to solve that problem. A) they buy up every battery they can get their hands on (LG Chem, Panasonic, CATL). B) they buy up battery start-ups with good technology with the goal of producing their own batteries (Maxwell tech, etc.), now known as the Roadrunner prototype production line in Fremont.

3) Traditional ICE manufacturers have sold-off the bulk of their innovating power decades ago. They now rely entirely upon sub-contractors to build major components. This approach is woefully inadequate for competing with a vertically-integrated company like Tesla. Not only is Tesla 5-7 years ahead of the other manufacturers in software, battery chemistry and pack design, and manufacturing processes, but they are accelerating that lead. The other companies are not actually gaining any ground on Tesla.

TL,DR version: Tesla has a laser focus and execution on their goals. Everyone else still approaches EVs as a side business and are not giving it proper attention.

 

[UncaNed]

More from @FrankSG on Twitter.

https://twitter.com/FrankPeelen/status/1337619063711776771

Did Frank edit his post overnight from recommending that we close all our calls that expire in December to toning it down so it applies if you have 20% in those or am I mistaken?

 

[ggr]

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!

They addressed the problem of getting someone else's battery by requiring that you return the same way and swap back. Also it wasn't "soon closed"... I knew the guy who ran the facility, it was open for a good few years even though it had very little traffic. I hope he still works for Tesla, I lost track after it closed.

 

[M|S|M MYP]

All i gotta say till Monday is this: @FrankSG is spitting out knowledge right now on twitter!

 

[Lessmog]

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..

Hahahah- hh . Sorry, lost my breath there for a bit.

Are you really not aware of this exact argument having been thoroughly whipped to death over the last decade? "Beware, the mighty competition is coming -- Real Soon Now, for real!"

This is the whole point of Elon's latest meme gimmick, the Teslaquilla exorbitantly priced drink named after the huge horde of Tesla-Killers that somehow always are about to show up and eat Tesla's lunch.

In reality, the opposite is more likely to happen. Which car maker has $20B+ cash, and which have $200B in debt? Pro tip: Do not hold your breath while finding out. Oh sure, some competitor EVs are not total crap. But none is offering a competitive effort either.

 

[Krugerrand]

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?

Yes. HODL hard.

 

[JRP3]

If you click/touch his user name you can see he is in Central New York (Syracuse/Rochester). Not far from Giga NY (Buffalo).

Yes, somewhat ironic.

 

[JRP3]

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..

I've been adding potatoes for 10 years now. Guess it's going to be a big mess when that giant hot potato bubble bursts.

 

[lafrisbee]

It is Saturday.
Saturday is the day the real important stuff is delivered by snail mail.
<---getting up in a little bit to see if the Short Shorts are on the porch.

 

[StealthP3D]

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.

Did you time travel to the future?

Because that was a popular thing to say in 2017. We're still waiting.

 

[ClownMouth]

Trying my hand at another one...

 

[mekberg]

Yes. HODL hard.

Doing nothing is the hardest thing of all. Turns out I’m quite good at it.

 

[gabeincal]

The competition is coming. Here is the ID.4, in german but you can use google auto translate. Start at 9:30.

Edit: Just going to leave 3 words here.

Rear
Drum
Brakes

Also, driving dynamics at 31:25 or so. In comparison with a Model Y. No language necessary

 

[Johan]

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..

 

[FrankSG]

Did Frank edit his post overnight from recommending that we close all our calls that expire in December to toning it down so it applies if you have 20% in those or am I mistaken?

This is not what I said at all. I simply adviced people to make sure that no potential outcomes are unacceptable to them.

If losing 20% of your portfolio on an S&P inclusion play is an unacceptable outcome to you, you should not have 20% of your portfolio in short-term expiration options.

 

[TravelFree]

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.

Excellent! But here's my dilemma:
The strategy above doesn't address age of the investor. As many mature investors claim your age can and should influence your portfolio balance. Disclosure- I'm in my mid 70's. Have achieved enough to live my lifestyle until age 125 with no market crashes and flat to 5% growth. My portfolio is diversified with Tesla this year being at 50%. but 30% of all assets.

What's the point in high risk if I don't NEED the money? IMO, that is what young people should do because they have the years to make it back when they lose.

So with Tesla, I believe the future is not guaranteed as many here do. I see at least two ways Tesla will fail.
1. The economy collapses due to natural disaster or political errors causing huge ( much greater than the pandemic) loss of employment that harms sales of Tesla cars. If Tesla has a couple quarters of terrible sales due to a deep depression, then the long devotees will HODL until the company is bankrupt.
2. Elon Musk leaves the company because he has new interests, or dies. And, his replacement is like a Steve Balmer was at Microsoft when Bill Gates left. A failure! Tesla needs to do what Steve Jobs did, train a bright replacement who will be a better leader than he was. I don't see Elon doing this yet.
3. Is there another? Maybe Chinese Communist government taking control of GF3 operation and kicking Tesla out or just confiscating the profits. Europe too?

So therefore, I will take my profits off the table as Tesla grows. Keep it below 50% of my portfolio of 25 stocks with those sales. The cash gained will be in my tax exempt account or at least in my tax deferred account. Here I will invest in Gold. Gold metal and hide it physically and off the books. But physical assets to enjoy life, including travel. Love your environment and toys, not your numbers on your balance sheet.

As I said, young people here probably won't understand this mindset until they get older and wiser. But even the young, really smart people need to avoid falling in love with Tesla and the stock because you'll grow much more over the long haul if you never have a high risk go bad.

 

[TheTalkingMule]

Did Frank edit his post overnight from recommending that we close all our calls that expire in December to toning it down so it applies if you have 20% in those or am I mistaken?

That looks like an 18 part tweet to say that Tesla is volatile and leverage via options is more risky than holding shares.

 

[FrankSG]

That looks like an 18 part tweet to say that Tesla is volatile and leverage via options is more risky than holding shares.

Also not what I said at all, although it is obviously true that options carry more risk than shares.

Basically, I just shared some advice. If you're worried that Tesla is becoming overvalued, don't be, it's still great for the long term. And if you need to time the market during the next 2 weeks, be it to sell some shares or to sell options, then:

1. Eliminate unacceptable outcomes.
2. Have a plan. It's ok to adjust it, but don't get swept away by emotions.
3. Be careful to read too much into short-term price movements.

https://twitter.com/FrankPeelen/status/1337619063711776771