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

[UkNorthampton]

Whenever there is a FUD hit piece that comes out about Tesla and China relations, I pretty much chalk it up to "They" being scared poop-less by China and Tesla's relationship and trying very pathetic attempts to make it seem like the Tesla/China relationship is souring (including the staged supposed "consumer" complaints that China cracked down on in a very public way")

Say what you want about China, this is not a post to say anything negative or positive on China. But China won't be bought off by any lobbying groups/parties or industry titans. China sees the benefit of supporting Tesla. It's a mutual relationship. One that can't be influenced by outside forces like we see in the US/Europe and that clearly very much worries "them".

Their worst nightmare is Shanghai ramping to 1 million annual production and given the latest data....Shanghai is well on it's way to that number

Tesla / Elon have done a good job of making Tesla more resilient to a number of bad things happening, whether corruption, conspiracies, natural disasters or bad luck/Black Swans. This should be an important point to investors. Tesla is resilient.

 

[Singuy]

 

[StealthP3D]

Bumping the point from earlier-- last I knew they're not using the same alloy anymore. 301 for truck, 304L for starship. If anyone has newer info I'd love to hear it though.

SpaceX doesn't use 304L for Starship, according to Elon in one of his interviews (I don't recall which one) they use a customized alloy they special order to spec. And Tesla hasn't revealed the alloy they will use for Cybertruck. With much higher volumes than Starship, you can bet the primary alloy used is going to be a custom alloy optimized for Cybertruck production. There will probably be more than one SS alloy used so they can stamp some parts used as stiffeners in key areas like around the door jambs but I bet the primary SS alloy is custom.

 

[StealthP3D]

A number of people here are on record as being critical of Cathie Wood for selling TSLA before 2021 earnings release. But the stock has been getting significantly cheaper. I'm betting she starts buying TSLA in earnest, probably as soon as Monday morning.

Strap in and enjoy the ride. There won't be enough shares to go around at the current price.

 

[JustSaying]

MODERATOR:
There is an unseemly and irritating amount of mission creep ===>NO!<=== occurring in this thread. It must end. That means -

* NO discussion of the appropriateness of investing in, or the foreseeable future for "NFLX", "FAANG" "PLTN" "BTC"....or any other such NON-Tesla company. Acceptable exceptions, with restraint, can be other EV manufacturers and, with even more restraint, other automotive firms; and BTC to and only to the extent that Tesla's balance sheet is so exposed.

* NO attempting to use "But TSLA is affected by how ____X___ fares in the market." Violators trying that may find themselves with especially raw knuckles.

WOT,
As a Catholic School kid in the early 60's from Gueens NY the thought of "Violators trying that may find themselves with especially raw knuckles" brought back some scary memories...
(And I also suddenly recalled Ivory Soap tastes terrible?)

 

[Knightshade]

SpaceX doesn't use 304L for Starship, according to Elon in one of his interviews (I don't recall which one)

You might wanna check.

because he's given different answers over time to that question.

Here below for example he says SpaceX is going to 304L for starship, in parts at least, and for a while at least.

https://twitter.com/x/status/1238952612562489344

He's also said 4 months later that due to alloy tweeks traditional names might not fit exactly for the steel in the future...

https://twitter.com/x/status/1285613263976312836

That said- the question was really about if CT and Starship will use the same steel... and that seems pretty unlikely. The conditions and stresses the two will be put under are quite different... so I'd expect a custom, but different, alloy for each as the primary steel used... (and yes, using more than 1 type for certain specific parts wouldn't be surprising either as Elon alludes to about starship in the first tweet for example).

 

[Sudre]

TSLAQ: We knew it!! They are transporting those to secret parking lots we have not discovered yet!

Absolutely true. We here call those private owners driveways.

 

[StealthP3D]

You might wanna check.

because he's given different answers over time to that question.

Here below for example he says SpaceX is going to 304L for starship, in parts at least, and for a while at least.

https://twitter.com/x/status/1238952612562489344

He's also said 4 months later that due to alloy tweeks traditional names might not fit exactly for the steel in the future...

https://twitter.com/x/status/1285613263976312836

That said- the question was really about if CT and Starship will use the same steel... and that seems pretty unlikely. The conditions and stresses the two will be put under are quite different... so I'd expect a custom, but different, alloy for each as the primary steel used... (and yes, using more than 1 type for certain specific parts wouldn't be surprising either as Elon alludes to about starship in the first tweet for example).

I think he's already using the common alloy numbers as approximations for customized alloys. The fact remains, we don't know what the Cybertruck will be made of except it will be in the 30x family series.

 

[mrmage]

I noticed that TSLA is only 12% higher than it was a year ago. Crazy considering the progress the company has made. For me, the difference is that 850 seemed kind of high back then, and 950 seems rather low today.

On another topic, exercising my Jan21 options has led me further into margin than I'd normally like. In the past I would limit the usage of margin to a percentage, but this was imprecise because the rate of change in portfolio value vs SP depends on the composition of stocks, options, spreads, etc.

Recently, I've been using the TOS analyzer (on TD) to ensure trades and rollovers do not increase margin risk. Other services have margin calculators, but the TOS analyzer is the only method I know of on TD. This is especially helpful with portfolio margin, as opposed to the common Reg T margin which is easy to calculate manually, but recognizes much less of account value.

My approach is to choose a SP / % that I feel TSLA will stay above, then see if the portfolio will meet margin requirements at that SP. Let's say I'm considering converting shares to LEAPs. I'll make simulated trades (sell shares and buy LEAPs), then adjust quantities so the margin requirements will still be met if TSLA goes down to that SP.

Some of the results were expected, but still insightful. For example, exercising DITM calls had minimal impact to margin requirements, even though I had to borrow quite a bit to exercise. Otoh, buying OTM naked calls or spreads required selling more shares (in dollar value) than the new options to maintain the same level of margin requirements.

This makes sense because the delta for a DITM call is nearly the same as stock. If SP goes down $300, the value of 100 x Feb strike 500 calls goes down the same (dollar-wise, not %). Borrowing money to exercise does not change the potential for loss much because there is little change in leverage as long as SP is well above the strike.

Of course volatility may change the calculations, but this is better than winging it. I can better manage my portfolio's margin requirements to match my appetite for risk. Furthermore, if macro conditions change, I can adjust positions to manage that risk well in advance.

Although this doesn't prevent losses due to poor trades, it helps manage one of the riskiest elements of using leverage.

 

[FireMedic]

I just thought I’d share this here; I rarely get to see people in their first Tesla experience anymore and it reminds me of the joy and amazement I had on my first PM3 experience.

Btw this gentleman has nearly 3 mil subs, also I think he’s hilarious.

 

[MikeAtkinson]

Dave Lee has shared his projections over the next couple of years:

https://twitter.com/x/status/1485120411507605504

He is assuming a constant 60k per quarter increase in vehicle production. I prefer modeling it as an S curve, so an exponential increase for the next couple of years, then gradually leveling off as production reaches 10 million per year.

This makes a significant difference, for Q4 2023 Dave Lee has 720k production, my estimate is between 920k (15% per Q increase) and 1239k (19%).

 

[Blue horseshoe]

Dave Lee has shared his projections over the next couple of years:

https://twitter.com/x/status/1485120411507605504

He is assuming a constant 60k per quarter increase in vehicle production. I prefer modeling it as an S curve, so an exponential increase for the next couple of years, then gradually leveling off as production reaches 10 million per year.

This makes a significant difference, for Q4 2023 Dave Lee has 720k production, my estimate is between 920k (15% per Q increase) and 1239k (19%).

Like Dave says, the further out you project the more inaccurate you are. At 14% quarterly production growth I estimate 870k produced in q4 '23 and $164B in 2023 rev vs Dave's estimate of $136B. Using price to sales of 18 to 30 we could see end of 2023 share price of $2900-$4900.

I believe the above estimates to be low. Berlin and Austin will increase the production growth rate. Total revenue will be higher with improvements in Tesla energy, introduction of semi and cybertruck. Margins should improve as well. Finally fsd could see better revenue recognition and further improve margins. All of this should result in higher revenue, better margins, and an improved price to sales ratio.

I'm fairly confident we end 2022 around $2000 in share price (+/- $100).

I'm less certain, but guess we end 2023 around $3000 (+/- $100).

 

[jbcarioca]

Long investors have the choice of not using leverage, as for anyone with a retirement account. Short selling requires leverage, it's part of the contract.

Correct. That is why short selling is not investment but is speculation.
There is nothing inherently wrong with speculation, but it is important to know it for what it is.
Speculators normally prefer to be called investors. Not surprising.

 

[TSLA Pilot]

Great info, but I'm having trouble finding this on their actual website. Link please? Thx!

 

[jbcarioca]

Yeah, I think that’s just their business model. That and screwing with options traders.

That is it! Since at least the Phoenician shippers hedged their risks by selling shares of their cargo risks, if not before, speculators have done well in quite times and been destroyed in bad weather, history ancient and modern is littered with such cases.

For thousands of years the intermediaries normally are the winners.

When the Glass-Steagall Act was eliminated, the SEC was emasculated, and Corporations became free to support politics as the choose etc…
systemic risk rises as Corporation lose any significant constraints.

 

[Mengy]

I'm fairly confident we end 2022 around $2000 in share price (+/- $100).

I'm less certain, but guess we end 2023 around $3000 (+/- $100).

That sounds crazy high to me. I'm not saying you are WRONG, I don't have a crystal ball of course, but WOW that sounds high!

I'm leaning towards a more conservative share price increase over time. I think PE Ratios will contract over the next few years thereby lowering valuations in the market a bit compared to what we've been used to these past few years. Time will tell, and I'd love for your numbers to be correct!

 

[jw934]

Great info, but I'm having trouble finding this on their actual website. Link please? Thx!

See Page 29. PDF: Briefing - Feasibility Study Renewables Decarbonisation, by Transport & Environment

Comments in the tweet about this chart clarified that the "100% renewable electricity" at the top of the chart starts post generation, intermediate electricity storage and grid transmission, which each have their own efficiency numbers not covered by the chart.

https://twitter.com/x/status/1352656345288290306

 

[Singuy]

From Bloomberg

 

[Buckminster]

Aloha - 2 days since last tweet- I reckon Elon is cooking something up.

The Oracle has spoken.

 

[SOULPEDL]

This is a good counterpoint to folks who predict doom and gloom based on history from recent centuries or decades or even a few years. As Ray Kurzweil observed, technology is changing the world in a nonlinear way. The rate of change is increasing.

The world has never seen an economy based on abundant decentralized energy and machines replacing nearly all of human labor. But it is coming soon, if civilization survives the transition.

If doom and gloom arrives, it will be a new kind.

Ray wrote "The Singularity is Near" in 2005.
He should do a followup... "The Singularity is Here."