Did I not recently see EM with Jordan Peterson? Who put him in EM’s sphere of influence?
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
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petit_bateau
Active Member
I'll try and give you a serious answer, because quite a lot of money is at stake. So, to be honest I don't have any particular emotional feeling regarding this. The forecast I have generated is simply a fairly mechanical outcome of the particular model I have adopted. In these things the motto should be to "dispassionately follow the data", of course hedged with the caveat that one must acknowledge that opinions/emotions of others are in play.
An aspect of the model I use is to observe that there are different types of buyers/sellers out there. Some are momentum traders or emotion traders or playing all sorts of options games, and I cannot account for them. However amongst the more rational buyers/sellers some focus on PE ratios, some focus on PR ratios, some focus on PEG ratios; and some do it quarterly, and some do it annually; and some do it GAAP, and some do it non-GAAP / EBITDA; and some do it backwards-looking and some do it forwards-looking; and some use 1yr fwds and some 5yr fwds. That is to say one could come up with several different 'metrics' for valuation*, and if one were to focus on only one of those and to model a shareprice trajectory accordingly, then one would inadvertently create very sharp discontinuties in the other valuation metrics. So, back in the real world, what would happen is that the traders/investors who are focussed on those other metrics would swing wildly and abruptly and that would confound any single-metric-driven shareprice forecasting model. Therefore I try to blend the various metrics together to get a smoother progression in all the ratios over time, as that - in my opinion - has the best possibility of forecasting a more central shareprice trajectory.
Having done that, the question becomes what to do with it. My opinion is that there are very large error bars on that blended valuation forecast for TSLA, much larger than for most businesses (even for 'now', let alone forwards-looking) because of the disparity in the outcomes from the different metrics (let alone the different operational and financial scenarios). This means that the TSLA shareprice could - perfectly logically and rationally, with no malicious interference required, and full information access to all participants - move rapidly and abruptly over a very wide range, and sit at odd valuations in a sticky manner for very long periods, and then fluctuate rapidly with no apparent cause. So if that were to be the case - and I think it is the case - then one needs to position ones own portfolio of TSLA (and non-TSLA) so as to get the best possible outcome given the resources one has as an individual. For a solo smallbeer investor like me, that could logically and rationally lead to a different strategy than (say) a very rich person, or (say) a fund.
And - in my opinion - this accounts for a lot of what we observe in the TSLA shareprice. So no, I'm not being funny, quite the reverse as I see a range of participants in the market, all of whom have very different views on what might constitute 'funny'.
* Of course valuation is only the last stage of any model of this nature. The first stages are to actually model the operational and financial performance of the business. They are just as hard, if not harder. I should point out that The Accountant's models are more sophisticated than mine in this respect, if only because he includes BS and CF statements in his modelling, and because he takes a lot more effort than I do to account for below-the-line items such as tax and interest and stock options and whatnot - and I am highly impressed by all that. In contrast my models are rather more simplistic in that respect.
Cars car be upgraded. Tesla is legally obliged to make these cars work with “FSD”. If that means they have to upgrade the camera systems and computer, they will do it. They have already committed to upgrading cameras on some older cars. It seems like H3 with the current cameras will work, but if they won’t Tesla will upgrade the car.
It WILL absolutely work with his car. And assuming they purchased FSD, there won’t be any additional charges.
Teslas with AP 2.0 to need camera upgrades for FSD
Tesla entered into the car industry with their first EV, the original Tesla Roadster. It was more of a proof of concept as Tesla had bigger plans. Tesla's planwww.notateslaapp.com
PS: If you think this is untrue PLEASE LET ME KNOW WHY rather than just a cowardly downvote a DM is fine if you’d rather not discuss it in public. I’d vastly prefer to be corrected than pass on mis-information.
Thanks for the nice reply. I chalk my statement up to 2 reasons. 1 is technical the other is legal/business.
First, the assertion that simply because a contract exists that Tesla plans to honor it- the primary assertion fails based on Teslas history of attempting to break contracts. It's not a one off, it is common by example I point you to the Tesla Solar Roof price increases with signed contracts. The FSD contract is terribly written and has no end date. Legally this would mean it is generally not held as enforceable and I'm not going down that rabbit hole but someone will one day. Daniels car will represent such a small percent of Teslas fleet that by the time of actual working L5 systems that it will be far cheaper for Tesla to give him a new Y or 3 or whatever than replace that hardware and debug and ensure it works on older vehicles. This does bring up a good question and that is...how many older 2016 or 2017 Teslas are in the FSD Beta? If none I'd hold by my statement. If there are any than I admit I am perhaps wrong and Tesla is being quixotic.
Tesla clearly recognized the risk by 2019. That's why they changed the language. Essentially that represents 1 fork in the fleet. Though Teslas are engineering for backward and forward compatibility on the hardware will it be enough? The hardware changes required to achieve l4/5 are at this point uncertain and unplanned. What is certain is that current cars can't achieve it. What modifications will be required to achieve it are uncertain. How much compute? is vision alone going to work in all weather? How many cameras?
The further in time we go, the more the FSD L4/5 contract fleet is simply an exception. In 5 years when Tesla has a run rate of 10 million (or more) are they going to devote a development team to fixing a few thousand cars and then a safety team to debug and test the software on the cars? And then the risk that they screwed up camera angle slightly and that a child is hit on a bike because the modified Tesla camera angle is not interpreted correctly? If I am Tesla's legal team I'd be engineering a legal construct out of the quandary with all haste. Such a legal construct could keep customers happy and remove older cars from the fleet, always a useful thing. wait...Tesla already has done this. Oh it happened in 2019 when Robyn became the chair. Oh imagine that. No Tesla is never going to honor his FSD and they have been busy at work since 2019 to make sure it wont matter.
The initial owners of Tesla all wanted Tesla to succeed. It is what built the cult following- investors and consumers, a company with a mission and a good car to boot. Nearly all of those investors/owners that did buy FSD didn't need the money prior to 2019 and certainly don't need it now if they stayed invested. This greatly mutes pressure to deliver. Then, and I am being a cynic, the fact that the cars are going to be over 12-15 years old means that they will likely have changed hands and in many cases to Tesla, in that ownership transfer Tesla has killed FSD. If this pushes out 5-6 more years (likely best case) than the number of vehicles with that problematic license is going to be very small indeed. Even if someone were to buy FSD on the old car they won't get that original contract so no commitment to have L4/5 service. So the pool of people that have a claim to FSD l4/5 capability has been shrinking year by year by year since 2019 as Tesla owners trade in older Tesla S and 3 and X for new Teslas.
Tesla wouldn't have forked the contract language and then removed the old contract license from any repurchased car if the contract language was not viewed as a business risk. It's a business risk just as Supercharging was a business risk. With supercharging the risk is just a tiny financial drain. With FSD it represents a different sort of risk and it is much easier to address that level of risk with business terms.
So technically they don't have a solution yet but when they do they'll be years out. Business wise the number of exceptions this will represent is tiny and it is far cheaper to resolve in a settlement, even giving someone a new car with FSD L4/5 and cash and taking back the old car. Just business.
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Have a 2017 S75D HW 2.5 and had the beta since 10.8
. Got EAP for the features, FSD when it was on sale for 2k. 7k sunk? Sure. Like others said zoom out: what’s 7k when the rest of the car cost could have gotten double the features now? Hindsight always 2020. Related, does anyone know if there’s any news on the large pile of data NTHSA requested by October 2021 on AP/FSD?l vehicles? Conveniently was due on Q3 earnings, but we all know what happened then.
TheTalkingMule
Distributed Energy Enthusiast
I'm having a tough time understanding the theme of your last 97 posts on the subject. Are you upset that FSD isn't complete yet? Perhaps you could post your feelings in more detail?
Happy Friday to all! Another few weeks like this and 2024 calls will look like free money!
Cool. Well then maybe I'm wrong. I'm still going to bet that if you hold onto that car then Tesla offers you a great replacement deal whenever they crack FSD L4/5. Zoom out indeed. You'll win either way. Helped Tesla when they needed the cash and the mission is what matters. If you don't get FSD (l4/5) before you trade it in so what. Maybe be worth $100k more if you'd put it Tesla stock but so what, you obviously put some into TSLA. Good on you.Have a 2017 S75D HW 2.5 and had the beta since 10.8
Related, does anyone know if there’s any news on the large pile of data NTHSA requested by October 2021 on AP/FSD?l vehicles? Conveniently was due on Q3 earnings, but we all know what happened then.
Probably because it would take up to 120,000 miles of driving to break even the battery cells lithium extraction in energy production compared to the CO2 emissions of a regular ICE sedan. You could make 5 times more efficient EVs with the number of battery cells locked in a Hummer EV.
That’s exactly the opinion of Gary Black he shared on Dave Lee on investing podcast the day after earnings calls when the SP dropped 10%. Funds managers only evaluate TSLA according to the EV business. They don’t have any excel spread sheets about Tesla bot, FSD, and now they had to postpone the Cybertruck profits and delete the 25k car profits from their spreadsheets.
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To the extent that analysts and PMs influence SP, this is a glaring market inefficiency for disruptive growth companies. It may be a reasonable approach for valuation of more established, lower growth companies (“show me the money, prove it”), but ultimately this enables the opportunities that we are here to learn about and exploit.
This post is prima facie evidence that the nearly ten year history for @adiggs carries with it an unusually clear understanding of our world.
I nominate this post for Moderators' Choice: Posts of Particular Merit
To add perspective I suggest anybody seeking to disqualify Elon Musk might check biographies of Henry Ford, Thomas Edison, Albert Einstein or many other outsized contributors to human advances. It might help to check W A Mozart, as well. With an tiny amount of insight we see that great accomplishments are almost (I say almost only because I am not positive it is actually 'all') never made by well-balanced socially adept people. That does not apply to only men. Marie Curie, Ada Lovelace and Rosalind Franklin come to mind. Without these flawed women we'd have waited longer to have understanding of things such as radioactivity, programming and DNA.
From ancient times great accomplishments-lishmenst have come from flawed people.
Now we have Elon Musk who stands in clear harmony with the great accomplishments of human history. Were he not serious flawed would he have had the ability to develop 'impossible' things?
Good post.
5 year forward-looking evaluations depend on predictions of growth, which depends on execution, competition and total addressable market. There is also the possibility of black-swan events. Pessimistic expectations of these can give low valuations, less than the current share price, which optimistic expectations can give valuations many times the current price.
It seems the market is pretty pessimistic on Tesla's five year performance. If we take Tesla's guidance - 50% growth long term, considerably over 50% growth short-medium term, 20 million vehicles/year by 2030, energy as big as auto, 3TWh cell production and using as much again from external suppliers by 2030, S curves - then it is clear that TSLA should be much higher, whatever metric is used. The current pessimism seems to be caused by low production forecasts for the current factories, worries about no new factories announced and lack of work on a $25,000 model, the constant drip, drip of FUD against Elon and Tesla do not help either.
Because of the large potential market for Robotaxi and Optimus they are extremely hard to value if they are given a non-zero probability of success. Currently FSD, Robotaxi, AI and Optimus are all given zero valuations, if one of them is given a small probability of success then TSLA would be many times what it is now.
The switch from pessimism to optimism could happen overnight, maybe tomorrow, maybe in a couple years time. Then it could quite easily switch back to pessimism. There need be no event to cause these switches, it could be just a general slow improvement in outlook, or it may be one of many potential catalysts internal or external to Tesla.
There are major difficulties in modelling the future 5 or more years hence, the exact shape of S curves are difficult to predict, macros and black swan events are effectively random and by their nature unpredictable, future Tesla announcements are unpredictable (a year go we did not know about Optimus, 2 years ago 4680 battery technology was unknown, 5 years ago robotaxi was not known). Because of this unpredictability some form or monte-carlo simulation is probably best, but there are real difficulties in assigning probabilities to the different possible events and how they affect Tesla's financies. As it is so hard few bother, instead they make guesses, often based on FUD.
I only have a mental model, but my judgement is that bears could make a case for TSLA below $600, with bulls above $3000 (based on auto and energy) and hyper-bulls way above $10,000 (if they assume even a small probability of Robotaxi or Optimus being significant in Tesla's future). Tesla's guidance implies a valuation of $1600-$2000, assuming a discount for Tesla being too optimistic.
I'm not a patent lawyer either but I do hold some open source patents so I've worked with patent lawyers on these issues.
Being in the public domain doesn't make any difference. This is immaterial when the patent office considers the question of "newness".
In other words, just because Tesla allows anyone to use its patents does not keep someone from patenting a similar idea or an idea that builds upon one of Tesla's patents. The same patent laws apply to everyone when they seek their own patent.
Open sourcing doesn't protect you at the patent office. But it might help you in a potential lawsuit. The way these open source patent guarantees are written, it basically says "You can use our patents and we won't sue you for patent infringement as long as you don't sue us." So if a company tries to sue Tesla for patent infringement, Tesla will look through their portfolio and find an open source patent that the adversary is using. Then Tesla will file a countersuit.
The whole reason Tesla and other companies sometimes open source their patents is to head off future litigation. Open source patents, in theory, discourage patent infringement cases.
I'd nominate adding Alan Turing to your list. Not only did he have a clear vision of computers and machine language before either even existed, but because of his historical context he was arguably responsible for altering the outcome of WWII.
Another might be Steve Jobs.
Like you I'm fascinated that there seems to be a correlation between "mild" personality/neurodevelopmental disorders and transcendent intellect.
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Stock price looks brown this morning (if you are red/green color blind that is)
A Key Risk for Tesla Stock: Look What Happened to Albemarle
Things are looking good in the lithium industry. Stock in lithium miner Albemarle tanked after earnings anyway. The reason is operating leverage and fixed cost absorption. Tesla investors should take note.
www.barrons.com
"Tesla Stock Just Received a Warning From Albemarle Earnings"
So Tesla is in this headline because their batteries, like all other EV batteries, use lithium. Is that the only reason?
Not a lawyer:
Public domain is not quite the same same as open source. Either way, you can't patent someone else's idea.
Ford's patent app was submitted after the Tweet about dog mode, thus the base concept of dog mode cannot be patented. However, a method of implementing dog mode could still be patented (use of key fob for instance). However, defense of the patent could still fail at the novelty/ non-obviousness criteria (of course dog mode adjusts cabin temperature).
Having submitted a patent application, Ford could then warn Tesla after dog mode was released that they may be infringing on a pending patent, but there is no legal standing until the patent is granted. Once granted though, they could theoretically seek damages back to the point at which they gave notice.
I agree with your post, but I'd put Elon in a tie with Greta.
Solving the climate crisis requires both technological and political solutions. IMO, Greta's task is harder, but like Elon, she has had a lot of success.
It's also interesting that they both have Asperger's and both were Time Person of the Year. Maybe we need to gather all the people with Asperger's and put them in charge of everything.
bkp_duke
Well-Known Member
A Key Risk for Tesla Stock: Look What Happened to Albemarle
Things are looking good in the lithium industry. Stock in lithium miner Albemarle tanked after earnings anyway. The reason is operating leverage and fixed cost absorption. Tesla investors should take note.
"Tesla Stock Just Received a Warning From Albemarle Earnings"
So Tesla is in this headline because their batteries, like all other EV batteries, use lithium. Is that the only reason?
MSM are such dishonest turds. They put Tesla in the title to get a 100-1000X on clicks for that article, nothing else.
I drink coffee while driving my Tesla, I guess we should next see that association from the MSM. . .
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