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

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This is my favorite post ever, and my spouse's too. We visited Shenyang first in 1978, which created memories especially because we had been married only a few months when we were invited by a Chinese Government entity (long story, seriously OT). From nostalgia we went back in 2019 for tourism. This video not only was Teslaphilic, but brought back all those memories. We did not visit that particular noodle shop, though.
Thank you very much!

I’m taking this opportunity to thank you for everything you post and for all the education I got from your posts!

Please, never stop posting your knowledge and understanding!

Thank you! 🙏
 
I think the key reason why Tesla has been avoiding the upper midwest is the UAW. The rapid pace of innovation they are working with would quickly be stymied by the bureaucracy and work rules that come with a union.

When an engineer can't touch the machine he is designing/building, it is quite difficult to build the mental model necessary to rapidly iterate on it's design.

For instance, I currently work in a Teamster shop. If I see something wrong, it is not as simple as fixing the problem in the most direct way possible. It means working through the union bureaucracy to do so. This bureaucracy absolutely gums up the gears of innovation. Innovation is at the core of Tesla.
This is very true...This reminds me when I was interning in the electrical engineering department at a Union manufacturing plant (auto industry) years ago. One of the engineers was explaining/teaching me an electrical engineering concept (as it relates to one of the products being manufactured) and then decided to bring me to the "shop" to show me the concept in practice by using some electrical test equipment, etc. Couldn't have been 10 minutes later when one of the union shop guys came up with one of the union bosses and demanded that he immediately stop what he is doing. I guess the protocol is if any of the electrical engineers wanted anything done they needed to submit a work order and wait until one of the union guys gets around to it. Could take weeks.

I spent a few summers prior to this internship in the manufacturing plant on one of the assembly lines (great college summer job that paid a lot) so I was familiar with how unions work on the manufacturing floor. However, this experience in the electrical engineering department completely surprised me as I assumed the engineers, in the engineering department, wouldn't have been under such restrictions.

That experience cemented the idea that I would never want to be an engineer in a union shop. Things moved way too slowly. This would never fly at Tesla and would completely go against the culture at Tesla.
 
I think the key reason why Tesla has been avoiding the upper midwest is the UAW. The rapid pace of innovation they are working with would quickly be stymied by the bureaucracy and work rules that come with a union.

When an engineer can't touch the machine he is designing/building, it is quite difficult to build the mental model necessary to rapidly iterate on it's design.

For instance, I currently work in a Teamster shop. If I see something wrong, it is not as simple as fixing the problem in the most direct way possible. It means working through the union bureaucracy to do so. This bureaucracy absolutely gums up the gears of innovation. Innovation is at the core of Tesla.
Very true. I worked for GM from 1980-94 as an engineer (80-85 as a co-op student), most of that time in manufacturing engineering on the production floor. UAW rules were a joke. Machine goes down? Machine repair is called-they show and determines some guards must be removed to access the problem. OK, removing sheet metal guards is a tinsmiths job, sit until they show (or the MR disappears before they show). Guard removed, MR (and engineer) determine that the problem is a damaged limit switch-so an electrician gets called to bend a LS arm back into place. Putting everything back together is the reverse. Things that should take minutes to do take hours. All while the operators sit around-and when the machine is back up, it's within two hours of the end of shift so they won't run any parts anyway. It was a joke. Fortunately as a manufacturing engineer, I got along well with skilled trades and got away with more than I was supposed to-but still very frustrating.
 
GM all over CNBC this morning. Now Cramer's explaining how Ford is going to run an ICE operation right alongside the EV operation and be wildly successful because "they have plenty of money". Lol....wait til the investors look under the hood in 2024 and realize they've been shafted.

Do people even look at the numbers anymore?

“Plenty of money” 🤣

Tesla is already generating operating cash flow comparable with Ford and GM, and growing at 50%. Tesla has basically no debt too, which means basically no rollover cost, thus operating cash flow less debt rollover is better than Ford and GM. No debt also means a much larger potential future borrowing capacity for Tesla, and Tesla can raise billions with tiny dilutions of equity if it wants to.

Tesla also doesn’t need to waste money keeping ICE lines open that will become obsolete.

The reality is that Tesla’s real ability to fund future EV expansion dwarfs the other automakers. These dumb Wall Street types haven’t updated their rhetoric from 2017.
 
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Ha....silly cat ...think more like a Dune type attack....maybe
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How do I get in that market?
You need to instantly become ~250 years old if you want to be a young man then:cool::
 
Do people even look at the numbers anymore?

“Plenty of money” 🤣

Tesla is already generating operating cash flow comparable with Ford and GM, and growing at 50%. Tesla has basically no debt too, which means basically no rollover cost, thus operating cash flow less debt rollover is better than Ford and GM. No debt also means a much larger potential future borrowing capacity for Tesla, and Tesla can raise billions with tiny dilutions of equity if it wants to.

Tesla also doesn’t need to waste money keeping ICE lines open that will become obsolete.

The reality is that Tesla’s real ability to fund future EV expansion dwarfs the other automakers. These dumb Wall Street types haven’t updated their rhetoric from 2017.
I have to wonder, especially when the "experts" keep pumping GM in spite of it's declining EPS. All while TSLA EPS is up 217% YoY.
 
In US terms since the Buttonwood tree market makers have manipulated. technically the system(s) were not "set up to trust them". They were developed to improve liquidity and standardize tools of the trade. It is only by inference and political positioning that any reference to individual shareholders exists at all.
That may not be a popular view, but it is true. Worldwide financial systems were all developed to benefit financial institutions and institutional investors. I understand the previous sentence is absolute. A little more than 40 years ago I led a project for a very large financial institution to assess the structure and character of more than 170 individual financial markets, from the smallest at the time, the Seychelles to the physically largest, China (at that time they did not have a national system, and much intra-China trade ran on, believe it or not, bankcard debit settlement systems. That changed very, very quickly, but 1978 was the real beginning of their economic development).
That paragraph simply explains that the roelfo market makers and financial transactions is no monolithic at all. Almost none of it has much to do with individual consumers. There is a lesson that is unequivocal:

By design, participation in most securities or other financial markets does not have individual consumer benefits except from the typical Consumer Protection feature that are always designed to appear to have consumer benefits that are actually quite toothless.

The absolute classic example is in the present day. TSLA, represents more than half the total derivatives market. Why should that be? It si quite simple and transparent. TSLA is inordinately popular among active consumers who are self-directed. That means that those investors (US, if you please) are probably the most profitable single class of individuals. The result is that the TSLA individual investors devour large quantities of highly 'sophisticated' ...

note: I am using the 15c definition for the word:

sophistication (n.)​

early 15c., "use of sophistry; fallacious argument intended to mislead; adulteration; an adulterated or adulterating substance,"

...tools. Those tools are quite explicitly designed to generate r4venue from volatility, the more extreme the better.
Most fo us know that, but persist in trying to game a system designed to strip them of their money. In short, playing with derivatives as an individual consumer is roughly equivalent to using a 'system' to play slot machines. It cannot be successful long term and will not be.

Of course @StealthP3D is largely correct except for the purpose. Quite a few people here are using FINRA data:
Given the interplay between DTC...

...FINRA and the reporting entities much short selling and consequent Fails to Deliver may never be reported at all.

This all sounds to be deeply conspiratorial. I don't really think that is true. factually very few people understand how this system works. Those who do are likely to be very, very 'nerdish' and some have very well developed analytic skills. Those few devise the various operational tools that end out being called 'bots', 'algorithms' or something else. Those are the automated tools that end out manipulating markets, quite often in ways that avoid regulatory reporting.
To my knowledge virtually no ostensible corporate leaders have any idea at all how this works. They only know they make tons of money until something goes wrong, whereupon they are perfectly equipped to deny responsibility, take their Nobel Prizes and/or $billions and retire into the sunset. In short, the system probably is mostly not corrupt but it is wide open for corrupt actions that are plausibly deniable.

This repeats regular warnings, that will invariably be ignored by people who are convinced they can beat the system. They're better off going to casino slots where they might at least get 'free' drinks when they lose enough.

Implying that playing options is like playing slots is silly. If you said poker, I would not disagree. Even though the house always collects their share, disciplined and skilled poker players will, over time, consistently beat fellow players who are less skilled.

Although the total options market is less than a zero sum game relative to the underlying stock because the MM always takes their cut (aka premiums), this is not unlike auctions where the house always takes a cut.

People are competing against each other, not just against the house. Every dollar someone gains above the rise in SP comes at the expense of someone else, after paying the MM. Although this means the options market as a whole cannot come out ahead, individuals can come out ahead if they can better invest than their fellow participants.

Between the disinformation on Tesla, impulsiveness of most WSBs, and lack of research by the average investor, making money in options is not implausible. Although participants will come out behind in aggregate, that is not the case for individuals.

There is a reason why options have outperformed stocks for many well informed investors on this forum, and it’s not due to utter blind luck.
 
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So, both of you mention emergency needs. I see that being the only attractive use case....and one that does not need a 1M mile battery for. Only using your car battery like a powerwall and daily V2G duty cycling justify the 1M mile aspect, which doesn't make sense to me because I want my car mostly charged when I get in it at random times during the day or night.

I also mentioned grid optimization, but it’s harder to quantify the savings at this time. However, the 1M mile battery can be charged to 100% vs 80% typical for today’s batteries. That extra 20% is like getting 2 free powerwalls, so you don’t lose anything even if you use it for grid.

Not to mention that working remote has become very common, so more people than ever keep their EV plugged in during the weekdays. Grid optimization and emergency use are in more need than ever. It’s the ideal scenario for the 1M battery.
 
I don't think Tesla is going to build another gigafactory in the USA in the next 10 years, and possibly ever. GigaTexas is massive. If you haven't been watching Joe T's YouTube videos, I strongly recommend checking out at least a few of them. Tesla also owns a large amount of additional land around GigaTexas that can be used for further expansion. Barring a significant change, my expectation is that USA growth will be at that facility for the next decade.

I think the next two gigafactories will be international, and I think India is a strong contender.
 
This might explain some fishy trading behavior pre earnings:
Federal prosecutors in Boston allege that the Klyushin group stole computer passwords from the filing agents’ employees and then roamed the firms’ networks from 2017 through 2020 to steal copies of more than 500 unannounced earnings drafts.

 
Very true. I worked for GM from 1980-94 as an engineer (80-85 as a co-op student), most of that time in manufacturing engineering on the production floor. UAW rules were a joke. Machine goes down? Machine repair is called-they show and determines some guards must be removed to access the problem. OK, removing sheet metal guards is a tinsmiths job, sit until they show (or the MR disappears before they show). Guard removed, MR (and engineer) determine that the problem is a damaged limit switch-so an electrician gets called to bend a LS arm back into place. Putting everything back together is the reverse. Things that should take minutes to do take hours. All while the operators sit around-and when the machine is back up, it's within two hours of the end of shift so they won't run any parts anyway. It was a joke. Fortunately as a manufacturing engineer, I got along well with skilled trades and got away with more than I was supposed to-but still very frustrating.

This is very accurate and my experience as well. It was ridiculous and everyone knew it, but those are the rules so what else can be done? :p
 
I don't think Tesla is going to build another gigafactory in the USA in the next 10 years, and possibly ever. GigaTexas is massive. If you haven't been watching Joe T's YouTube videos, I strongly recommend checking out at least a few of them. Tesla also owns a large amount of additional land around GigaTexas that can be used for further expansion. Barring a significant change, my expectation is that USA growth will be at that facility for the next decade.

I think the next two gigafactories will be international, and I think India is a strong contender.

North America is 20m cars per year. 20%+ market share means 4m+ of capacity needed. Austin will probably eventually be 2-2.5m.
 
This might explain some fishy trading behavior pre earnings:


Ha, joke's on them since there seems to be zero correlation between Tesla's actual financial performance and short term movements in the TSLA share price.
 
Every time the SP goes down a bunch, the conspiracy theories start flying here. Can we agree on one thing: anyone threatened by Tesla (Big Oil, Legacy Auto, etc) is not going to attack Tesla via its SP. That would be very expensive, and for absolutely no benefit. Tesla is self-funding its operations now and into the future, it's not going to the markets to raise money. It doesn't do that many acquisitions-for-stock. Tesla's success or failure at this point has nothing to do with whether the SP at the end of the year is 2000 or 500!

The mainstream media may have ownership and advertising conflicts that could distort its coverage, but the far simpler explanation for its negative coverage is that it thrives on eyeballs, and stories about recalls and crashes and fires attract eyeballs.

Who is left to be manipulating the markets: traders! Retail and institutional, big and small. Short and long. Do they conspire? Not in the sense of getting together in a back room, but traders certainly have a herd mentality, and many are looking at the exact same price movements and TA to make their own moves. Short traders will take any opportunity to drive the SP down, and they live for the days when there is enough fear in the market (or fear about Tesla) that their momentary push down of the SP causes a calvacade of selling. On days when that isn't working, they will do everything they can to cap moves higher. Meanwhile. long traders are doing the opposite, making trades to set floors and looking for opportunities to trigger a steep march.

TSLA, with an enormous global investor interest both for common equity and options, and a high growth stock with a high PE, is the wet dream of traders.

Do most of these traders care about Tesla, the company? Not one iota! For all they care, Tesla could be in the toilet paper business! Most short traders aren't trying to hurt the company, just the SP!

How about TMC posters? I'd divide us into three camps. A minority of us are primarily traders. (Good luck to you, but you really should be doing something more useful to society than trading.) The largest group of us are the folks who mostly invest long term, but we can't resist the occasional short term trade. I fall in this category, and I'd really appreciate professional therapy to stop myself from doing any short term trading, because it seldom ends well, and is bad for my digestive system. And then there are the folks here who just invest for the long term. God bless their resistance to temptation. None of these trader shenanigans makes the slightest difference to them. But even for this blessed group, it's hard not to feel bad when the paper value of your account goes into the toilet, and you may even get angry and start looking for villains to blame.

And so, another 16,000 pages of this thread will continue to demonize "them", when in fact, the problem is us. Stop trading, Stop worrying. Be more like Elon: do something productive, and invest in the future of innovation.

Desperation breeds strange bedfellows. Fear and greed affect human behavior in the real world. It's not always rational but that is not particularly significant in this context.

There are a number of principles at play here that can lead to a desire to keep TSLA down.

TSLA share price is a powerful symbol. It can signal "success" and success can breed more success (people defecting from ICE to EV). The people who want to harm TSLA think it is a delicate phenomenon that can be slowed (or even snuffed out) by taking the halo away. Never mind that it's a wrong-headed notion. They view the desire to get into an EV as somewhat faddish and want the popularity of the movement to stall sooner than they think it will if they don't expose the fad for what it is. They never believed the EV movement had real "legs", at least not in the near-term timeframe.

Anything that that can potentially slow down the transition to EV's means billions in lost oil sales delayed to a later date. That means more profit now for big oil who has always found it important to focus on earning of the next quarter and the rest of the year. A smallish drop in demand has an outsized drop in oil price. And a moderate drop in oil price has an outsized effect on profits. It's a cascading series of impacts they believe needs to slowed down at the source. Money matters.

Anything that can slow down the transition to EV's gives multi-billion dollar dealership franchises as well as smaller mom-n-pop dealerships more time to prepare for an all-EV world. It potentially gives legacy auto manufacturing time to "catch up" to the leader. High prices for F and GM are good at giving this illusion legitimacy as much as a lower share price for TSLA helps stem the bleeding. Never mind that these are wrong-headed analyses, perceptions matter.

TSLA share price is not behaving as market makers expected, it is supposed to come back to 'reality'. As it continues to climb, it increasingly threatens billions of dollars of long-term options that are not fully hedged for prices on the high side. They can see strong TSLA earning do not bode well for their own "max pain" (which is the opposite of what we think of as "max pain"). TSLA share price action has not fit the predictive models based upon hundreds of previous high-flyers. This matters to their performance as market-makers in options markets and keeping TSLA share price in check can potentially help prevent TSLA from becoming an even more popular bull phenomenon. Anyone who thinks this doesn't matter needs to get their head examined.

TSLA success makes many people very unhappy. You can bet your sweet bottom this affects people's behavior across the board. I've long known that the share price of any given company is largely a reflection of public perceptions of that company. All stocks are ultimately valued by humans who make decisions based upon the entire body of perceptions around that company. Damage those perceptions, damage the share price. And damage the share price, damage the perception of that company. The two are inseparable.

Let's leave the naivety where it belongs, in the circular file with all the other unsupported conventional thinking based on nothing more than the misguided belief that the world is fair and just and not impacted by greed or bad actors.