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

[Spacep0d]

Never doubt GM investments. They are really good at spotting and investing in companies with great technologies and high growth potential like Lordstown Motors or Nikola Motors.

Don't forget the genius of the EV-1 rollout and subsequent mandatory recovery and destruction of nearly all of these electric vehicles. GM just keep hitting it out of the park.....playing tennis.

 

[Buckminster]

Somebody already posted this video, but something about Mayur’s focus on ROIC and comparison of Tesla’s 23% to Apple’s 40% bothered me and I believe I figured it out.

ROIC on EXISTING (already deployed) capital (like Apple) is not that pertinent.

E.g. Assume another company (Apple Prime) has 2.5X more capital deployed than Apple but only has a 20% ROI vs Apple’s 40%, but is identical in every other way. Apple Prime should be more highly valued, because the cash flow would be greater.

Apple OBVIOUSLY cannot get a 40% ROI on NEW capital deployment, because if they could, they would immediately halt buybacks, dividends, deplete their bank account and borrow as much as possible to invest that new capital at a 40% rate of return

So ROEC (Return on existing capital) is just not important. Nobody cares about how much capital you had to deploy to get your present cash flows. Only the size of the cash flows and your present debt/cash balance matters.

So while Tesla has 23% ROEC, that’s not important. What IS important is their RONC (Return on New Capital).

Supposedly GF Shanghai Phase 1 only cost $1B. At 250k units per year and $10k gross profits / unit, that’s a staggering 250% gross profit return on that capital. I would imagine net cash flows from that factory would be a huge portion of that as OpEx shouldn’t be that high for that factory alone and/or China operations. Note: I believe GF Berlin and Austin are not that cheap, so I wouldn’t expect that RONC.

So RONC is one of the largest determinants on growth rate. And it is growth rate that is important! I believe Mayur mentioned legacy auto gets 10% RONC, but since new capital costs them 10%, they have no motivation to expand.

So ROEC is an historical measurement that is only important in so far as it helps predict RONC, which is EXTREMELY important as well as the total addressable market which helps decide how long a very high RONC can continue. In Tesla’s case, the addressable market for transport and energy is GIGANTIC, so they have a huge runway, which becomes infinite if they solve TeslaBot.

Infinite runway - has a ring to it!

I consider Tesla Bot a solved problem. They just need to execute on NN training. Just a matter of time.

 

[StealthP3D]

Tesla's Full Self-Driving Beta 'button' set to arrive tonight: Here's what to expect

Tesla is set to release its newest version of the Full Self-Driving Beta later tonight via a software update. Among the improvements is set to be the long-awaited arrival of the “Beta Button,” which will allow owners to potentially join the Beta program, giving them full access to the most...

www.teslarati.com

Wouldn't the drivers who are driving at or near the performance limits of the car be the ones Tesla would want to migrate to the more gentle FSD ASAP?

The relevant metric deciding who will migrate to FSD first should be how much attention a driver pays, not whether they are performance driving or driving like grandma. Because the whole point of FSD beta is for the car to drive itself. And Elon knows what I'm saying is true so I suspect there is more to the way that he is representing this than meets they eye.

 

[Drezil]

Never doubt GM investments. They are really good at spotting and investing in companies with great technologies and high growth potential like Lordstown Motors or Nikola Motors.

Hey! You can't argue that Nikolas Gravity-Engine did not work.. It did! And i'm sure they planned on using hydrogen to get the truck back up the hill!

Have you guys also VWs investments on the radar as well? They own 50% of quantumscape & are in bed with Argo-AI for FSD. Compared to GM these are well-researched companies! I changed my mind about QS after the last "limiting factor"-video some days ago - seems like they really have a breakthrough.. that can be commercialized by 2025 or so.

 

[replicant]

Already exists: R/WallStreetBets re: AMC + GameStop


Short term that's known as "Buy High, Sell Low". Most people try to avoid that.

Cheers!

Oh no. we don't want subpoenas, do we?

he's him.

 

[AimStellar]

Link: Korea Economic Daily

 

[H Mak]

I wonder whether @Curt Renz might give us a musical end to the week

 

[BrownOuttaSpec]

Looks like its going to be a fun close in the last 10 minutes. I can see my house from here (773)!

 

[Prunesquallor]

Closing bell is too soon…

 

[wipster]

I think I can, I think I can...

 

[Drezil]

nearly no imbalance at closing cross today.

started with nearly no imbalance, then slight buy-side-imbalance.. but mostly flat.
SP reflects that being flat around 773

Normally we had 100k imbalances on the closes & SP moved a bit .. today nearly nothing - even with options expiring. Strange.

 

[StealthP3D]

GM Makes Self-Driving Bet In China To Catch Up With Nio, Xpeng

General Motors will invest in Chinese self-driving startup Momenta, as key new Nio, Xpeng EVs loom. GM stock rose.

www.investors.com

Looks like GM is full in geo-based solution. First with Cruise geofence solution now investing in local solution for self-driving in China instead on importing Cruise solution. More variety only mean added complexity to a solution. What will they do? having Cruise on vehicles for US and Momenta on vehicles for China? What about Europe? Or dumping Cruise?

GM's version of first-principles thinking applied to autonomy:

1: Cars must stay on the road
2. Roads have well-defined geographical boundaries
3. The solution must be geographically based

 

[Cattledog]

That was fun...nice volume after the 10 minute warning.

 

[NooB_cat]

HAHA love it, smashed that wall this week - payback time MMs!!

 

[ZachF]

$774.39

 

[wipster]

I knew we could, I knew we could!

(Don't know what it was, but I knew we could do it... great way to start the weekend!)

 

[inconel]

Hey! You can't argue that Nikolas Gravity-Engine did not work.. It did! And i'm sure they planned on using hydrogen to get the truck back up the hill!

Have you guys also VWs investments on the radar as well? They own 50% of quantumscape & are in bed with Argo-AI for FSD. Compared to GM these are well-researched companies! I changed my mind about QS after the last "limiting factor"-video some days ago - seems like they really have a breakthrough.. that can be commercialized by 2025 or so.

I think other AI systems will quickly have FSD capabilities once Tesla releases their FSD. They could directly copy the "weights" in Tesla neural nets, or use Tesla FSD in a supervised training. Generate lots of simulations and train their own systems to behave like Tesla's by hacking to input the simulation videos into Tesla camera feeds.

 

[elasalle]

closed 2 320/570 Jun 22 verticals after 1 year (so hope long term gains).
Added some Jan 24 900 calls into strength around closing... CC's hopefully in a few days to get some monies back
has been in range for 1 year now ... expecting a break dance soon

lotto plays for 10/8 780 and 10/15 800 getting hot ....

 

[Singuy]

Looking to be a normal dip and not a correction after all.

SPY successfully bounced off 441, close above the 50 ema 2 times in a row and Vix closed below 18.20. All signs point to bears lost and correction avoided. After last Friday's close I commented that this week was going to be scary. Indeed it was a drama filled week but the prediction that Tsla will beat macro also came true. Great close for Tsla as it finally broke out of that pesky resistant. Next week should see calmer waters I am guessing.

 

[ZachF]

View attachment 713708

Link: Korea Economic Daily

I'm guessing $17b Austin facility is related to this news somehow