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

[22522]

Thanksgiving week stock sale?

I looked, but nothing jumped out as far as timing goes. But a skilled person might be able to see something.

Also, my price estimate is based solely on a dog's ability to market the value of a toy by parading around the house with it, while not letting you have it. So the dog marketing price estimate for new years day is $1600.

There is no analysis besides considering how difficult it will be to get the toy away from the dog.

So market body language mapped to dog body language.

[And the availability of substitutes for both Tesla vehicles and TSLA shares.]

 

[Mengy]

That is some mad props the big Herb is giving to Tesla.

It is, but at least Diess seems to understand what VW is up against and he isn't afraid to talk about it nor confront it head on. When I hear Mary Barra speak I really don't believe she understands what GM needs to be doing to remain competitive. I feel Ford's CEO is somewhere in between, at least he isn't afraid to utter the "T" word in public.

 

[jbcarioca]

Just a quick anecdote. Currently I would say I do not know what I am doing. Years ago though I really did not know what Iwas doing. Had a margin account, and one day woke up, and all my shares in that account were gone. No warning. Sold by bank.

The US dollar had fluctuated, briefly steeply downward, making my holdings less valuable. So I exceeded my limits in Canadian dollars and…gonzo. I know we are a Worldwide forum and just something to consider, as I had not.


If I knew know what I knew in 2011…not about Tsla price but just about investing I would likely be 10x from where I am. But thanks to this board…when the next Tsla comes along I will be ready.

It is amazing and saddening to realize how many otherwise diligent investors do not understand the most fundamental risks of securities lending/borrowing/margin and all derivatives including all varieties of forwards and options. Over and over large institutional investors make similar errors. The risks are nearly all in the 'fine print' somewhere. Still over and over brilliant statisticians and mathematicians, including Nobel Prize winners, go broke making similar fundamental errors.

Over and over the risks are repeated and the 'stacked deck' against individual investors are reiterated. Still, some very intelligent and superficially cautious people repeat the same errors. That is inevitable since there are so many broadcasts, books, brokers and others who make it all seem lucrative and even prudent. The very concept of "hedge fund" is built upon this premise. The problem is basic; there is no such thing as a perfect hedge.

Some types of hedging including commodities, FX and interest rates are often with one side having a very logical business risk to hedge. Others act to limit risks by selling one or more portions of risk. For the most part as these instruments have become more popular they have become dominated by speculators. It has always been thus.

TSLA is far riskier than most securities for that sort of activity because so much of the transaction volume is by speculators. HODL minimizes that risk.

 

[hacer]

... At a certain point solar and batteries get so cheap that it'd be cheaper to just have a building with its own in situ power supply than to pay for grid connection.

There a few location where that might work out, but not very many.

Probably metro areas will each mainly have their own grid with far fewer long distance high voltage wires and associated transformers.

They will continue to have some interconnectivity with other systems for reliability if nothing else but also there aren't that many metro areas with enough nearby solar and wind resources to make that possible. Maybe 30% of metro areas where that could be done without actual long-distance lines.

Additionally I see no reason why applications requiring DC power couldn't just have essentially a direct connection from the Solar and battery DC output to the load with no pointless intermediate transformation DC --> AC --> DC. Thus, often inverters and rectifiers not necessary. In the future, the majority of electricity demand will be data center computers, AI training, building and industrial process heating, EV charging, LED lighting (including indoor farming that right now is mainly the 420 industry), and hydrogen and ammonia synthesis, all of which use DC. AC is great for motors, long distance transmission, voltage transformations, and fire safety, which is why it was the best choice originally.
...

Hopefully there will be new infrastructure for much more DC transmission in the U.S. but, like all new infrastructure, it has capital costs associated with it that will burden the system cost for a long time. There will still be transformation for long-distance DC transmission, but it will be DC-to-DC transformation. Otherwise the system will be terribly inefficient because it's not sensible to create solar arrays operating at over 100kV.

 

[jhm]

When you're investing in a stock of a company that can sustain 50% or better annual revenue growth, you don't need leverage to make it interesting.

 

[EVMeister]

This is essential viewing for us shareholders IMHO. Enjoy your weekend!

 

[jerry33]

When you're investing in a stock of a company that can sustain 50% or better annual revenue growth, you don't need leverage to make it interesting.

Especially if you also throw in a few hedge funds, market makers, and politicians--then it gets real interesting

 

[FS_FRA]

*very politely not mentioning “graybeards” & so forth

Have you met my Model S?

 

[Singuy]

This is essential viewing for us shareholders IMHO. Enjoy your weekend!

I know some might be turned off by his heavy accent but the part about horizonal integration is pretty importiont.

TLDR. According Ferrugu, Tesla is dragging all cell manufactures to 4680s and then give them a gigantic contract to buy them at a good price which horizontally integrate as well as vertically integrate on battery production. This allows Tesla to have the lowest cost on cells while the rest of the industry will have to bid up what is left or solve their own battery constraint problems. Usually vertical integration is a drag on margins because the economy of scale can only get so big, while the competitors leverage mass scale production vehicles (like major cell manufactures) that can produce way cheaper than a company relying on vertical integration. Tesla however is doing both which essentially locks down the margin gap comes 2025 vs other automakers.

This blew Rob's mind.

​

 

[Tslynk67]

Okay then, predict $1,208.50 for the Dec 31, 2021 Closing SP, based on YTD δ.

Cheers!

P.S. @Unpilot came in at $1,069 for your table above.
P.P.S. @Chenkers , @Sofie Nice estimates.

The year ain't done yet and what's with Adam @buttershrimp Jonas getting two goes?

 

[Zhelko Dimic]

When you're investing in a stock of a company that can sustain 50% or better annual revenue growth, you don't need leverage to make it interesting.

Depends on how much adrenaline you're used to
I found this years 40% drop almost boring, compared to the "good old times" when I was running highly leveraged

 

[Tslynk67]

I know there has been a lot of sentimental posts around here lately with people crossing milestones and what not. My partner and I just wanted to say a special thanks to this community because it has been life changing. We would not be in the position we are today without your help and insight, so THANK YOU!

We first got interested in Tesla right around the Solar City deal when we lived in England and saw all kinds of Model S's running around the town we lived in. I told my partner, that seems like a good investment and they said "prove it". Well here we are 4 years later and I have most certainly proved it.

Big thanks to the O.G.'s @Lycanthrope (my Belgian beer buddy -- even you might be jealous of my cellar!) @FactChecking @KarenRei @FrankSG @Papafox who gave us the knowledge and ability to HODL and see through the FUD.

We're finally celebrating Monday's impressive run tonight While we have hit our financial goals, we are not selling anytime soon and continue to find new ways to leverage our position (see the other thread ).

Cheers to the Longs.

Somewhat abashed to be mentioned amongst such illustrious company, but damn that steak looks nice!

 

[dhanson865]

That appears to be a graph of uninstalled PV module cost. I have been watching such curves quite carefully in the energy sector in my day job for 30-years. They are impressive, hopeful even for us poor humans. However when you take into account:
- full BoM of an installed system (inverts, combiners, meters, etc);
- install costs;
- permitting osts (aka soft costs);
And then add in the biggy:
- intermittency costs (so either overbuild PV, or add wind, or add battery, or all, or other costly stuff);
Then I think you'll find that on a Levelised Cost Of Energy with Intermittency Provision Included that the curve is tending to level out. I would like that not to be the case, and in time I hopeful that Tesla (and others) will force trend resumption, but it is not quite as good news quite yet as one might like.

You seem to be thinking only of panels in a field feeding the grid.

Let me tell you how I respond as someone with a house that has a roof.

BoM costs continue to fall, install costs continue to fall (more efficient panels mean less racking and such, less time spent installing). Yes there is a floor to this and it will drop slower than panel costs. For practical purposes it won't drop much going forward once you get the surge pricing (excess profit) out of the picture.

What lower panel costs do in the long term is expand the system until it fills your roof space. As an example

Lets say I have 2000 sq ft of roof space to put panels on (ignoring ground mount options, and wall mounted panels).

Tesla .com solar told me a few years ago my best option in terms of years payback was a 4.x KW system, a couple of years ago it said my best payback per year was an 8.x KW system, more recently it says a 12.x KW system is the best payback. Maybe in a few years the balance point will be a 16.x KW system.

None of those systems fill my roof. As panel costs drop I can come closer and closer to filling my roof with a similar cost. That lowers my cost of electricity going forward.

Maybe distribution costs make it prohibitive for me to stay on the grid long term. At some point both the panels and batteries will be cheap enough I can just fill my roof and disconnect from the grid to avoid distribution costs.

After the point where BoM and Soft costs dominate (lower panel prices don't affect the decision much) you'll see customers asking how much can you fit on my roof and just doing the largest array they can get away with. We aren't there yet in my neck of the woods but it takes super cheap panels to have that happen.

 

[Paul_SF]

I know some might be turned off by his heavy accent but the part about horizonal integration is pretty importiont.

TLDR. According Ferrugu, Tesla is dragging all cell manufactures to 4680s and then give them a gigantic contract to buy them at a good price which horizontally integrate as well as vertically integrate on battery production. This allows Tesla to have the lowest cost on cells while the rest of the industry will have to bid up what is left or solve their own battery constraint problems. Usually vertical integration is a drag on margins because the economy of scale can only get so big, while the competitors leverage mass scale production vehicles (like major cell manufactures) that can produce way cheaper than a company relying on vertical integration. Tesla however is doing both which essentially locks down the margin gap comes 2025 vs other automakers.

This blew Rob's mind.

​

This blew my mind as well. Perfect explanation to what is happening.

 

[TheTalkingMule]

You seem to be thinking only of panels in a field feeding the grid.

Let me tell you how I respond as someone with a house that has a roof.

BoM costs continue to fall, install costs continue to fall (more efficient panels mean less racking and such, less time spent installing). Yes there is a floor to this and it will drop slower than panel costs. For practical purposes it won't drop much going forward once you get the surge pricing (excess profit) out of the picture.

What lower panel costs do in the long term is expand the system until it fills your roof space. As an example

Lets say I have 2000 sq ft of roof space to put panels on (ignoring ground mount options, and wall mounted panels).

Tesla .com solar told me a few years ago my best option in terms of years payback was a 4.x KW system, a couple of years ago it said my best payback per year was an 8.x KW system, more recently it says a 12.x KW system is the best payback. Maybe in a few years the balance point will be a 16.x KW system.

None of those systems fill my roof. As panel costs drop I can come closer and closer to filling my roof with a similar cost. That lowers my cost of electricity going forward.

Maybe distribution costs make it prohibitive for me to stay on the grid long term. At some point both the panels and batteries will be cheap enough I can just fill my roof and disconnect from the grid to avoid distribution costs.

After the point where BoM and Soft costs dominate (lower panel prices don't affect the decision much) you'll see customers asking how much can you fit on my roof and just doing the largest array they can get away with. We aren't there yet in my neck of the woods but it takes super cheap panels to have that happen.

Panels don't cost anything, why would it cost much more to install more panels? The only reason a 16kw system costs about twice as much as an 8kw system is because that's how we price it in the US. Meanwhile the actual incremental cost to take an 8kW to 16kW is just a tiny bit of hardware and install labor cost. Maybe 15% more cost relative to the original pricetag to install an 8kW array.

In the US it's ALL SALES COST. And a bit of other inefficient soft costs, but mostly sales cost. The idea that can't be removed is just silly. Everyone already wants solar. But for some reason in the US we charge you $5k to go from wanting solar to installing solar. I know it's been around forever, but there's zero chance this high sales cost lasts 2-3 more years. From that alone we'll see average array prices go down 20-40%.

 

[dhanson865]

I just got an email from Vinyasun (the Tesla authorized distributor that installed my 3 Powerwalls). They informed me that FPL and the other Florida electric utilities quietly convinced the Florida PUC to allow them to raise the base meter rate from $9 to $25. They are not going to go quietly into the night I suspect.

I've been watching my minimum bill rise once or twice a year most years. Bums me out as I reduce my load to see my electric bill stay the same.

Minimum Bill changes​	​
$6.09​	2009?​
$8.00​	7-2010​
$10.00​	6-2011​
$11.00​	11-2011​
$12.00​	11-2012​
$13.00​	11-2013​
$14.00​	8-2014​
$15.00​	8-2015​
$16.00​	8-2016​
$17.50​	11-2017​
$19.00​	11-2018​
$20.50​	2019? or 2020?​

 

[dhanson865]

Panels don't cost anything, why would it cost much more to install more panels? The only reason a 16kw system costs about twice as much as an 8kw system is because that's how we price it in the US. Meanwhile the actual incremental cost to take an 8kW to 16kW is just a tiny bit of hardware and install labor cost. Maybe 15% more cost relative to the original pricetag to install an 8kW array.

In the US it's ALL SALES COST. And a bit of other inefficient soft costs, but mostly sales cost. The idea that can't be removed is just silly. Everyone already wants solar. But for some reason in the US we charge you $5k to go from wanting solar to installing solar. I know it's been around forever, but there's zero chance this high sales cost lasts 2-3 more years. From that alone we'll see average array prices go down 20-40%.

Design your Solar + Powerwall system | Tesla

Design and order solar to take control of your home's energy production and immediately save on your utility bill.

www.tesla.com

Quotes me

4.25KW for $8,542 (total system cost 8,542 with no powerwall)
8.5 KW for $17,083 (total system cost matches again no powerwall)
12.75KW for $25,625 (total system cost matches again no powerwall)
17 KW for $34,167 (total system cost matches again no powerwall)

I guess you are saying Tesla has sales cost in those numbers? If they didn't, the scaled up system with 4x the panels wouldn't be exactly 4x the cost.

The 12.x KW system is about the size I'd ask for if the prices were more compressed but if it were say

$8,000 for 4.x KW
$9,000 for 8.x KW
$10,000 for 12.x KW
$11,000 for 17 KW

I'd just buy the biggest one they would put on my roof and run my heat and air more.

Not be so energy conscious like I am now keeping it in the 60s F in the winter and 70s F in the summer. I'd bring my winter and summer numbers closer together (assuming the winter heat didn't outstrip even the largest array).

 

[OrthoSurg]

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.

Totally agree but when covid started, I had invested all my money in January in S&P500 ETFs according to the recommendations of the great John Bogle book on investing. When TSLA collapsed, I had no free money and I saw this as an opportunity of a life time. I could not let the wave pass and miss if because my surf board was left on the shore.

really interesting point of view or Tom Nash about the advantage of Tesla during high inflation.

 

[Jack6591]

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

Back in the early 90s, a friend did everything he could to convince to invest Starbucks. I asked him. “Why would I invest in a coffee shop?”

Can I get a graybeard mulligan?

 

[Tyler34]

The year ain't done yet and what's with Adam @buttershrimp Jonas getting two goes?

There should also be some dates for when the prediction was made. Some of made those predictions 10 months ago