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

[Opus BC fan]

Hopefully, the last hour of trading today will offer some excitement.

 

[Maarten]

Almost cannot keep up with this thread, but some posts are so good/informative or funny, that I wish I had taken on the forum name 'and 72 others'.

 

[AudubonB]

In line with my goals to keep this thread more or less On Topic, more or less most of the time -

a Quick & Dirty crunch suggests that for TSLA to perform as well since its 2010 inception as AAPL has since its own in 1985 - all stock splits but no dividends accounted for - it needs to get to $8,700.

Lofty goal, indeed, but I don’t think it will need all of the additional 25-year head start that AAPL enjoys.

 

[mltv]

https://twitter.com/x/status/1456614520961454081

 

[PokerFJÆS]

My day at work as a hard-working TSLA investor.

Cheers to the Longs!

 

[AudubonB]

Right now TSLA has performed about as well as my SBUX - both up on the order of 30,000%. But I got into SBUX at its inception, and into TSLA not until 1Q 2013 (~ $7-10, post-split). So, in my portfolio, SBUX is still ahead.

It’s an easy lesson, all, and one you’ve heard several times from those no longer wet behind the ears*: If you can find a story with the right management with the right vision disrupting the right market, then HOFDL. You will be rewarded for years, for decades…and for generations.


*very politely not mentioning “graybeards” & so forth

 

[StealthP3D]

I am paying my margin gradually to get ready in case of a new dip like we had in the $570s where I added some extra. Slowly paying margin by selling puts weekly and staying me motivated to take calls at work and still find motivation to work 24hours straight.

I wonder what was your plan with your margin if there was a 30% pullback, do you add more on margin? Or you stay leveraged the same for the next decade?

I recommend investors avoid margin altogether. The idea is to invest to build wealth, not to invest and build wealth if you are lucky. The nature of markets is such that use of margin exposes the small investor to things they shouldn't be exposed to. It always seems like those things cannot and will not happen right up until they actually do. These events happen with regularity in every investors life, some more severe than others and all such events have one thing in common: they don't pre-announce their arrival.

TSLA is well valued right now and that is not the time to leverage further. That's not to say it couldn't go up a lot more and be very profitable, it's saying that no one knows what the stock price will do in the near-term. And that is true no matter how much an individual may be convinced otherwise. The least dangerous time to use margin is not when markets are riding high but when there is blood in the streets and people think the economic system might be collapsing. Even then, it's best to avoid the use of margin but it's a far cry better than doing it now. And by using margin in times like this it is a virtual certainty you won't be able to use it when things go south. That right there is proof that margin should not be used in times like this. The fact that it might work out does not negate this principle.

An aggressive investor who wants to build wealth should spend effort on cutting living expenses and discretionary purchases to the bone while looking for ways to supplement income to maximize investment capital. Not be taking shortcuts in good times to try to build wealth faster while risking their solvency.

Human nature under-estimates the chance of a catastrophic event happening. In other words, a negative impact that is rare is further discounted by humans as being all but impossible and so they believe it won't happen to them. On the other hand, the chances of a rare but beneficial event are commonly over-estimated. This explains why lotteries are able to sell lottery tickets even though the chances of winning the jackpot are extraordinarily low and why individual investors are so willing to risk their very solvency by going on margin while times are good. A good investor shouldn't need to actually experience a margin call to realize that they actually can happen to them. It's a fallacy that wisdom is only gained through hardship. Observation and simple rational logic should be all that is required. This is another area in which human nature misleads us. Specifically, humans are very slow to learn from the mistakes of others. As if it can't happen to us unless it actually does.

An event that is a calamity to an unprepared investor on margin can be a big nothing burger to an investor who is aggressively long but well-positioned to weather the storm. And, no, only using half of your available margin does not protect one from a calamity.

 

[jhm]

Attention paper-handed longs:

You are underestimating the significance of the Lithium Iron Phosphate 250-mile vehicle. Tesla hasn't spelled it out for you so I'll attempt to do that here.

Tesla can easily squeeze *at least* 4,000 cycles out of an LFP cell with *today's* technology. A 250-mile car at 4,000 cycles is 1 million miles. We already know the motor and vehicle structure will last that long.

Right now an SR Model 3 with the CATL LFP cells from Giga Shanghai probably costs less than $30k to produce. With full casting, new paint shop etc it could easily get down to $25k or less, which over a million mile life is $0.025/mile.

Solar PV, wind and batteries are still setting new records every year for cheapest energy in history. If you look at RethinkX's projections (Tony Seba's team) let's say the price of electricity is going to fall 10x from today's typical price of about $0.15/kWh to perhaps $0.015/kWh by 2030. Model 3 even driven inefficiently gets at least 3 miles/kWh. Energy cost: $0.005/mile.

Then, Teslas will continue to get better at avoiding accidents with software upgrades. So insurance cost eventually also comes down 10x because the risk comes down 10x. Let's say that comes down from today's average vehicle insurance price of around $0.10/mile to $0.01/mi.

Reupholstering the interior and repainting the exterior 3 times over vehicle life is maybe $10k total, or $0.01/mile.

Tires, cleaning, wipers + fluid and other maintenance is perhaps $0.02/mile at most, same as it is today.

Road tax will need to be added, let's estimate $0.01/mile.

Total cost of Model 3 SR with LFP pack: $0.08/mi.

Let that sink in.

Currently driving costs at least $0.60/mi for an equivalent experience. This is a 7.5x cost reduction!! This is literally getting close to competing with the shoe replacement cost of walking!!

Not all of this will show up in margins but the value proposition is incredible. And no one else has most of what needs to be in place for this to work at this level, plus the packs very well might last longer than 1million miles. Additionally, this assumes no end of life scrap value of the battery and the rest of the car. So $0.05/mile is a plausible outcome by 2030.

Why oh why would you sell off a big chunk of your stake at anything close to today's share price??

I like this analysis! I would add one dimension here. Used vehicles are often exported from affluent countries to less affluent. This trade allows refurbishment to seek out lower cost labor. I believe that the million mile drivetrain is the most economical and ecological way to increase motorization rates in developing countries.

The prospect of reducing vehicle transport by a factor of 10 or so means that the automive fleet can grow many times larger in places that presently have the lowest motorization rates. Put another way, the global fleet presently at about 2 billion motor vehicles can grow much larger with highly durable EVs.

(This happens to be one way that Musk uses his wealth to solve the world hunger problem.)

 

[H Mak]

Right now TSLA has performed about as well as my SBUX - both up on the order of 30,000%. But I got into SBUX at its inception, and into TSLA not until 1Q 2013 (~ $7-10, post-split). So, in my portfolio, SBUX is still ahead.

It’s an easy lesson, all, and one you’ve heard several times from those no longer wet behind the ears*: If you can find a story with the right management with the right vision disrupting the right market, then HOFDL. You will be rewarded for years, for decades…and for generations.


*very politely not mentioning “graybeards” & so forth

Too right. I missed Apple and Google and Amazon for the simple reason that when I looked into them I thought the price was too high compared to their earnings at the time. I resolved when the next "one" came along I would go all in, and along came Tesla.

 

[mltv]

https://twitter.com/x/status/1456365915503833094

Make sense. Car last longer and Tesla can refresh itself thru OTA updates. Feel new longer should and should have more reason for longer term loan.

 

[dhanson865]

From the solar PV world, applies to TSLA solar and indirectly speaks to the viability of recycling batteries as well.

New tech recovers pure silicon from end-of-life solar cells

The technique is reported to be able to deliver recycled silicon with a purity of up to 99.9984%.

pv-magazine-usa.com

and from a comment

When you are trying to strip cells down to pure silicon, corrosion is kind of the point. The replacement chemicals (10 M NaOH, 6 M HNO3 and 90% H3PO4) are no less corrosive. The advantage is that they are all far less toxic than HF

 

[Prunesquallor]

I recommend investors avoid margin altogether. The idea is to invest to build wealth, not to invest and build wealth if you are lucky. The nature of markets is such that use of margin exposes the small investor to things they shouldn't be exposed to. It always seems like those things cannot and will not happen right up until they actually do. These events happen with regularity in every investors life, some more severe than others and all such events have one thing in common: they don't pre-announce their arrival.

TSLA is well valued right now and that is not the time to leverage further. That's not to say it couldn't go up a lot more and be very profitable, it's saying that no one knows what the stock price will do in the near-term. And that is true no matter how much an individual may be convinced otherwise. The least dangerous time to use margin is not when markets are riding high but when there is blood in the streets and people think the economic system might be collapsing. Even then, it's best to avoid the use of margin but it's a far cry better than doing it now. And by using margin in times like this it is a virtual certainty you won't be able to use it when things go south. That right there is proof that margin should not be used in times like this. The fact that it might work out does not negate this principle.

An aggressive investor who wants to build wealth should spend effort on cutting living expenses and discretionary purchases to the bone while looking for ways to supplement income to maximize investment capital. Not be taking shortcuts in good times to try to build wealth faster while risking their solvency.

Human nature under-estimates the chance of a catastrophic event happening. In other words, a negative impact that is rare is further discounted by humans as being all but impossible and so they believe it won't happen to them. On the other hand, the chances of a rare but beneficial event are commonly over-estimated. This explains why lotteries are able to sell lottery tickets even though the chances of winning the jackpot are extraordinarily low and why individual investors are so willing to risk their very solvency by going on margin while times are good. A good investor shouldn't need to actually experience a margin call to realize that they actually can happen to them. It's a fallacy that wisdom is only gained through hardship. Observation and simple rational logic should be all that is required. This is another area in which human nature misleads us. Specifically, humans are very slow to learn from the mistakes of others. As if it can't happen to us unless it actually does.

An event that is a calamity to an unprepared investor on margin can be a big nothing burger to an investor who is aggressively long but well-positioned to weather the storm. And, no, only using half of your available margin does not protect one from a calamity.

I agree with this. I’ll admit, I was pretty darn lucky in my margin use. I bought TSLA exclusively on margin during the 2020 run-up. The higher the SP, the more margin I had to play with - lots of leverage. The initial Covid crash got pretty close to a margin call, but when the V happened, I kept on going. By December, I figured my luck was close to running out, so I sold enough shares to pay off the margin completely.

Pure luck. I won’t be doing that again.

 

[MABMAB]

Leo KoGuan rally time?

 

[MABMAB]

It is fascinating to ponder to who is trading the $1250 calls, price all over past 10 minutes. An avoid for me!

 

[dhanson865]

IRS announces 401(k) limit increases to $20,500 | Internal Revenue Service

IR-2021-216, November 4, 2021 — The Internal Revenue Service announced today that the amount individuals can contribute to their 401(k) plans in 2022 has increased to $20,500, up from $19,500 for 2021 and 2020.

www.irs.gov

 

[hacer]

This is simply not true.

There's no regulatory limits on this in the US and AP is still limited to 90 mph (roughly 145 kmh)-- and on vision-only cars the limit is even lower (again not due to regulation at all).

This is a limit of the system- not regulation.

The original discussion was about Tesla's in GERMANY, which in not the US. In the EU Tesla's autopilot is strictly limited by regulation. Sorry for the grotesque article author but the story is factual. It's likely that, in the EU, Tesla is limited by both their (current) system and regulations. The thing is that the system limitation could easily be removed in the future with a software update but the EU regulations aren't going to disappear for a long, long time if ever.

 

[mrmage]

I recommend investors avoid margin altogether. The idea is to invest to build wealth, not to invest and build wealth if you are lucky. The nature of markets is such that use of margin exposes the small investor to things they shouldn't be exposed to. It always seems like those things cannot and will not happen right up until they actually do. These events happen with regularity in every investors life, some more severe than others and all such events have one thing in common: they don't pre-announce their arrival.

TSLA is well valued right now and that is not the time to leverage further. That's not to say it couldn't go up a lot more and be very profitable, it's saying that no one knows what the stock price will do in the near-term. And that is true no matter how much an individual may be convinced otherwise. The least dangerous time to use margin is not when markets are riding high but when there is blood in the streets and people think the economic system might be collapsing. Even then, it's best to avoid the use of margin but it's a far cry better than doing it now. And by using margin in times like this it is a virtual certainty you won't be able to use it when things go south. That right there is proof that margin should not be used in times like this. The fact that it might work out does not negate this principle.

An aggressive investor who wants to build wealth should spend effort on cutting living expenses and discretionary purchases to the bone while looking for ways to supplement income to maximize investment capital. Not be taking shortcuts in good times to try to build wealth faster while risking their solvency.

Human nature under-estimates the chance of a catastrophic event happening. In other words, a negative impact that is rare is further discounted by humans as being all but impossible and so they believe it won't happen to them. On the other hand, the chances of a rare but beneficial event are commonly over-estimated. This explains why lotteries are able to sell lottery tickets even though the chances of winning the jackpot are extraordinarily low and why individual investors are so willing to risk their very solvency by going on margin while times are good. A good investor shouldn't need to actually experience a margin call to realize that they actually can happen to them. It's a fallacy that wisdom is only gained through hardship. Observation and simple rational logic should be all that is required. This is another area in which human nature misleads us. Specifically, humans are very slow to learn from the mistakes of others. As if it can't happen to us unless it actually does.

An event that is a calamity to an unprepared investor on margin can be a big nothing burger to an investor who is aggressively long but well-positioned to weather the storm. And, no, only using half of your available margin does not protect one from a calamity.

I strongly disagree. Although generalizations about not using margin may apply to large swaths of the general population, investors here have varying levels of sophistication and assets.

Virtually every well run business uses loans. Most homeowners have used mortgages. Margin is just another kind of loan with terms that are not intrinsically better or worse than any other. Whether it is used well or not depends on understanding the terms, and to ensure the risk is appropriate for oneself.

Everyone risks their life everyday, so financial risks should be taken in that context. And, no, avoiding margin does not protect one from a calamity.

 

[hacer]

This is true but consider that the lifetime value of the vehicle is reflected in the used resale value. So even if you don't want it anymore, if the powertrain and everything is still essentially good as new then the depreciation costs plus operating costs over your ownership time will have added up to approximately the $0.08/mile estimate.

Also, only the depreciation cost really depended that much on vehicle lifetime. The energy, insurance, tires/maintenance, and refurbishment costs would scale down in proportion of the vehicle were scrapped after 500k miles. So at worst the estimate rises to maybe $0.10/mi instead of $0.08
...

Except that the original "estimate" is based on a whole lot of speculation.

Tesla can easily squeeze *at least* 4,000 cycles out of an LFP cell with *today's* technology. A 250-mile car at 4,000 cycles is 1 million miles. We already know the motor and vehicle structure will last that long.

The 250 mile range is only true at the beginning of life, so the 1 million mile estimate is overstated. It could go 1 million miles but near the end of life it's range would greatly lower the value and utility of the vehicle. Also 4,000 cycles is NOT "*at least*", it is an average of cells tested in laboratory condition. The results in real-world temperature conditions including aging will likely be worse.

Right now an SR Model 3 with the CATL LFP cells from Giga Shanghai probably costs less than $30k to produce. With full casting, new paint shop etc it could easily get down to $25k or less, which over a million mile life is $0.025/mile.

Maybe, maybe not. Actual vehicle prices have been rising.

Solar PV, wind and batteries are still setting new records every year for cheapest energy in history. If you look at RethinkX's projections (Tony Seba's team) let's say the price of electricity is going to fall 10x from today's typical price of about $0.15/kWh to perhaps $0.015/kWh by 2030. Model 3 even driven inefficiently gets at least 3 miles/kWh. Energy cost: $0.005/mile.

I think that most people would agree that a 10x reduction in energy cost is an aggressive estimate.

Then, Teslas will continue to get better at avoiding accidents with software upgrades. So insurance cost eventually also comes down 10x because the risk comes down 10x. Let's say that comes down from today's average vehicle insurance price of around $0.10/mile to $0.01/mi.

Another very aggressively low estimate.

This doesn't invalidate your whole point, it's just that the actual cost reduction may be more like a factor of 2 to 4 rather than 7.5

 

[Knightshade]

The original discussion was about Tesla's in GERMANY, which in not the US.

And yet still doesn't change anything. Even a little.

The system is speed limited to roughly the same speed in both places

So it's absolutely not regulation that limits the speed in Germany.

It limits other things that are less limited in the US.

But speed? It's actually slightly higher in Germany than the US.

So no- this specific limit has nothing, at all, to do with "regulations"


Indeed, your own link discusses what things are regulated in the EU- and AP top speed is not among them.

 

[StealthP3D]

Come on - this is not the best non Tesla dash - it's last gen MB - current MBux in entry level A-class is this:

View attachment 729505

I'm not saying this is better, it's subjective - but please compare actual cars. I'm all-in Tesla, won't sell for long time - but I totally understand colleagues who are choosing other brands in the EV space for premium-feeling.

I don't get it. Are you saying you like the Mercedes dash in the photo above? Yes, I get that aesthetics are subjective so let me re-phrase: are you saying you find the aesthetics in the above photo acceptable?

It looks like a bad dream to me!