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

[JSML]

I disagree. Musk is an outstanding engineer, no doubt. But he's still one guy. His real skill is the ability to put a team together, to identify the right people and skills for that team, and to lead and inspire them to do things that are beyond any reasonable expectation. Nothing he's attempted is truly...unique. Other companies built electric cars-but none successfully built one that has people converting in droves from ICE. None achieved the engineering and product efficiency, none, including companies with a century of experience has touched Tesla's manufacturing efficiencies. None has done nearly as good a job managing supply chains throughout a global pandemic. NASA has spent billions since the shuttle was developed, dabbled with programs for 40 years, never built a reusable rocket (other than portions of the STS)-and has us hitching rides into orbit on Russian space craft. Until Elon and SpaceX, space travel required the resources and finances of a nation-state, not a small, private company. Musk didn't do those things by himself-he built and led the teams that did those things, and had the courage to risk his life's savings many times over on new ventures. There is a reason that Tesla and SpaceX are the dream companies for young engineers to work for-and that reason is Elon Musk.

I think the Twitter issue is way overstated. He may simply want to revise Twitter such that all points of view are allowed and respected, one where "group think" and conformity isn't demanded, where alternatives to prevailing thought may be presented and discussed. And lets face it, Twitter's interface and user tools are pretty terrible, it wouldn't take much to make them better. Reforming Twitter and putting together a much better, more capable and more efficient team to run it, really doesn't seem like it would take a lot of effort or a great deal of Elon's time. At least in comparison to developing the EV industry or revolutionizing manned space flight or creating a global internet service. I'd strongly suspect he already knows who he would want in leadership positions and where he wants to go. Lets face it, it's just software. He did more complicated things with PayPal when he was just a kid (well, at my age anyone under 45 is a kid) and when the technology was new and far less understood.

Elon’s stated goal is a trusted platform that is essential for democracies. Not tweaks.

Group think and conformity are not software problems and it’s doubtful software can make it better.

It could work but there are a no guarantees. There is a huge possibility that what happens on Facebook will happen on Twitter because it is the culture that wags the platform. My suspicion is that unbanning people and subjects will not make Twitter a more trusted platform.

 

[loquitur]

Social sciences do not have absolutes. With first principles, you can deduct that reusable rockets are feasible.

I can’t see how Elon can be sure he can accomplish what he wants with Twitter. Where is the first principles logic that this will work?

Towards understanding conflicting principles of unfettered vs. fettered speech on social media,
there's a special issue in the journal Science of 25 March 2022.

One article is colorfully called "On the Trail of B*llsh*t" (Science | AAAS). <--- No paywall for this one.

This runs down the views of network theorist Carl Bergstrom and others. The articles, including one about Twitter, cover approaches to handling lies, disinformation, and hate speech (especially as directed toward scientists).

 

[Doit]

I read that long thread. It basically says censorship is necessary on social networks because "All You [expletives censored by TMC]" won't stop posting "Dangerous Ideas." Rules can't be designed to avoid censorship, and the writer knows this because he used to run Reddit.

It reminds me of all the experts who said reusable rockets can't be done, because the experts couldn't do it. Well maybe so, sir, but you are not Elon Musk.

That thread has some good points, but otherwise, it's so full of a certain animal's solid waste, I could be banned as the smell of it would permeate this thread and make here unbearable through anything further I'd write about it other than this sentence.

 

[JSML]

Towards understanding conflicting principles of unfettered vs. fettered speech on social media,
there's a special issue in the journal Science of 25 March 2022.

One article is colorfully called "On the Trail of B*llsh*t" (Science | AAAS). <--- No paywall for this one.

This runs down the views of network theorist Carl Bergstrom and others. The articles, including one about Twitter, cover approaches to handling lies, disinformation, and hate speech (especially as directed toward scientists).

Great read. Thanks.

 

[kanweg]

"It's dead, Jim!"

It is pining for a Ford?

 

[UnknownSoldier]

I read that long thread. It basically says censorship is necessary on social networks because "All You [expletives censored by TMC]" won't stop posting "Dangerous Ideas." Rules can't be designed to avoid censorship, and the writer knows this because he used to run Reddit.

It reminds me of all the experts who said reusable rockets can't be done, because the experts couldn't do it. Well maybe so, sir, but you are not Elon Musk.

If that's literally what you got from that then I'm not sure how I can help you. But sure, I'll try a bit.

What Yishan Wong, CEO of Reddit from 2012-2014, is saying is that humans inherently behave badly when given a massive megaphone and no repercussions and what is being tightly regulated is humans behaving badly. That's why people on every "side" complains about "censorship" because it's not what their opinion is, it's how horrible and disgusting and nasty they are when expressing it. Which is completely true, social networks are cesspools because humans are cesspools. Furthermore, what he's saying is that "censorship" would cease to exist if humans gained the ability to be nice to each other on the Internet instead of the worst case scenarios of human behavior which is always what seems to happen on every social network that exists.

I personally don't want Elon wasting his valuable and pitifully short mortal lifespan on babysitting screeching greenhair woke blue checkmarks instead of doing important things like accelerating the world's transition to sustainable energy and making humanity a multi-planetary species. Elon is busy tackling existential threats to humanity here, I don't understand where trying to solve fundamental human behavioral issues on social networks fits in there.

 

[Artful Dodger]

I don't understand where trying to solve fundamental human behavioral issues on social networks fits in there.

It doesn't. It belongs here:

Elon & Twitter | TMC

 

[MABMAB]

Okay, bring on the dislikes! I've shared this kind of stuff before and nobody provided any constructive criticism. I think it makes the best argument for bears and analysts.


In the TED talk this week, Musk said the robot would be more valuable than the car business, thought first working prototype in 2023. I think modeling some future value for this (and the robotaxi network) is akin to investing in a pharmaceutical company with only a stage three drug trial or a lithium company that only has signed contracts giving them claim to lithium in the ground. No real product yet exists to sell, yet there is hope and chance of value creation.

What most impresses me is the 4680 battery now available in cars. I'll be further impressed as they scale production of that battery.

I do think TSLA might just accomplish all of their goals. But along with that might comes a chance of failure. One of the main things I think TSLA bulls fail to account for is the mathematics of probabilities. I think there is some fancy math rule, I might not describe it well but will try. Let's say one assigns a probability of FSD coming true by year 2025 as 50%. Robot of 25%, robotaxi 25%, Truck 50%. Well to come up with the chance of all of those things coming true by 2025, one has to multiply those probabilities (.25 x .5 x .5 x .25) to get a 1.56 % chance of all of that coming true. So modeling some future value based upon predictions gets to be very difficult and complicated. So if things model some future value of 4T based upon all of those things coming true, there is a very low probability of it happening. Even if you said that each of those had a 75% chance, the math says only 21% chance of all of it happening.

So lets say one can rationalize some future market cap of 4T in 2025. I then have to come up with a present value. I've seen others choose lower discount percent, but what I've always done is figure a 20% discount per year. So in 2024 they would be worth 3.2T. 2023 2.56 T, and this year just 2T. For a super high potential valuation, at some reasonable chance of failure, I am not sure this is worth investing into at this point.

This is why I have a tough time modeling for future products not yet available.

 

[jbcarioca]

Towards understanding conflicting principles of unfettered vs. fettered speech on social media,
there's a special issue in the journal Science of 25 March 2022.

One article is colorfully called "On the Trail of B*llsh*t" (Science | AAAS). <--- No paywall for this one.

This runs down the views of network theorist Carl Bergstrom and others. The articles, including one about Twitter, cover approaches to handling lies, disinformation, and hate speech (especially as directed toward scientists).

His book expanded these ideas and is very instructive. It’s also referenced in the recent Science article. BTW, Science and the AAAS are my most personally illuminating sources, although much of the content exceeds my meager abilities. Membership also helps fund the journal. The book is on Amazon, among other places: Amazon.com: Calling Bullshit: The Art of Skepticism in a Data-Driven World: 9780525509189: Bergstrom, Carl T., West, Jevin D.: Books

Many of us think about how to counter FUD. The book, and it’s references plus Begstrom’s Twitter is really good: @CT_Bergstom

Thanks @loquitur . It never occurred to me to link this although I am a long time AAAS fan and coincidently a Carl Bergstrom fan too.

 

[Buckminster]

Okay, bring on the dislikes! I've shared this kind of stuff before and nobody provided any constructive criticism. I think it makes the best argument for bears and analysts.


In the TED talk this week, Musk said the robot would be more valuable than the car business, thought first working prototype in 2023. I think modeling some future value for this (and the robotaxi network) is akin to investing in a pharmaceutical company with only a stage three drug trial or a lithium company that only has signed contracts giving them claim to lithium in the ground. No real product yet exists to sell, yet there is hope and chance of value creation.

What most impresses me is the 4680 battery now available in cars. I'll be further impressed as they scale production of that battery.

I do think TSLA might just accomplish all of their goals. But along with that might comes a chance of failure. One of the main things I think TSLA bulls fail to account for is the mathematics of probabilities. I think there is some fancy math rule, I might not describe it well but will try. Let's say one assigns a probability of FSD coming true by year 2025 as 50%. Robot of 25%, robotaxi 25%, Truck 50%. Well to come up with the chance of all of those things coming true by 2025, one has to multiply those probabilities (.25 x .5 x .5 x .25) to get a 1.56 % chance of all of that coming true. So modeling some future value based upon predictions gets to be very difficult and complicated. So if things model some future value of 4T based upon all of those things coming true, there is a very low probability of it happening. Even if you said that each of those had a 75% chance, the math says only 21% chance of all of it happening.

So lets say one can rationalize some future market cap of 4T in 2025. I then have to come up with a present value. I've seen others choose lower discount percent, but what I've always done is figure a 20% discount per year. So in 2024 they would be worth 3.2T. 2023 2.56 T, and this year just 2T. For a super high potential valuation, at some reasonable chance of failure, I am not sure this is worth investing into at this point.

This is why I have a tough time modeling for future products not yet available.

You want me to give you a disagree because TSLA will only double in the next 9 months? I like your style.

 

[MaChiMiB]

Let's say one assigns a probability of FSD coming true by year 2025 as 50%. Robot of 25%, robotaxi 25%, Truck 50%. Well to come up with the chance of all of those things coming true by 2025, one has to multiply those probabilities (.25 x .5 x .5 x .25) to get a 1.56 % chance of all of that coming true.

That's only true if the fourth event (truck) requires the third (robotaxi) to be 100% completed. The third requires the second, and the second the first.

You also have to be careful whats your basis for the probabilities.
You can say: 25% chance of robotaxi, if FSD is solved first. Then it's 50% (FSD) * 25% (robotaxi) = 12.5% that both of them to become true.
Or you say: 25% chance for robotaxi by 2025 and 50% for FSD by 2025, then it's 25% that both of them to become true.


There is some correlation between FSD, robotaxi and robot, but it's not 100%. The truck is very much independent from them.
If there were no correlation, the chances of all four becoming true would simply be the minimum of all probabilities -> 25%.

edit; Well it was too early for math :/ Thanks for the corrections below.

 

[ZsoZso]

That's an apples and oranges comparison.
One statement is on the reliable perversity of human nature, the other is denial of hard-headed (and excellent) engineering.

Exactly.
Elon's Asperger's helped him to become an excellent engineer. However, it inhabits him in the area of social interactions, human communication nuances.
His achievements with SpaceX and Tesla are all about engineering. Twitter is all about social interactions, human communication.
This endeavor is simply not a good fit for him personally.

 

[TN Mtn Man]

Elon seemed pretty clear there are no negotiations and his offer is take it or leave it.

And if they planned to take it why would they bother with the poison pill?






He can- but if he buys more than 15% then every shareholder except him gets to buy a ton of "new" shares at a significant discount. Meaning the ones he just bought magically become a much smaller % of the total shares.

It can make his buying up to 51% massively more expensive for him-- potentially impossible depending on the details I haven't seen (but will be in an 8K shortly).

That's without the board then going to another option-- issuing themselves preferred shares with outsized voting rights--- such that even if Elon went ahead and overspent to get 51% of common stock he'd still have only a minority of the total votes.


Essentially if the board wishes to stop him- they pretty much can.

They might open themselves up to shareholder lawsuits depending how they do it--- but when Elon said yesterday he might not be able to buy Twitter- he literally meant it might not be possible.

My expectation is that if the board wants to flood the market with new shares, it will dilute the value of existing shares and cost shareholders. Such an action should, at the very least, have to go through a vote of the shareholders before any such action can proceed. From what I've read, a lot of those shares are owned by investment companies, including companies managing IRAs and 401ks. Meaning every investor ends up with the option to vote (please, those more knowledgeable, correct me if I'm wrong). Now, what do you think these investors are more likely to approve? A payment for their shares at a price 40% over market rate (of an underperforming stock), or a board that wants to dilute their share value in order to maintain their power and ability to censor free speech, in particular conservative speech? Bigger issue, does the board have fiduciary responsibilities, requiring them to look out for the financial interests of the shareholders they represent?

 

[Favguy]

As mongo points out this is a myth, even though data sheets may show it. I have a lithium ion cell that's probably over 10 years old now that I've never charged or discharged that I check periodically, today it's sitting at 3.85V, same as it's been for years.

This is very true, back in the day I built an EV and installed a first generation AESC lithium pack (JRP3 might actually remember my Favorit EV conversion from the DIY electric car site we both frequented!) The finished car actually sat unused for a period of over 7 years with the battery kept at 50% SOC and over that time, the cell voltage didn't even drop by more than 100MV. To boot, a capacity check showed no noticeable capacity loss over this period of storage either! (UK stored, temperature range of about 0C to 20C, but average of around 15C)

 

[mongo]

That's only true if the fourth event (truck) requires the third (robotaxi) to be 100% completed. The third requires the second, and the second the first.

You also have to be careful whats your basis for the probabilities.
You can say: 25% chance of robotaxi, if FSD is solved first. Then it's 50% (FSD) * 25% (robotaxi) = 12.5% that both of them to become true.
Or you say: 25% chance for robotaxi by 2025 and 50% for FSD by 2025, then it's 25% that both of them to become true.


There is some correlation between FSD, robotaxi and robot, but it's not 100%. The truck is very much independent from them.
If there were no correlation, the chances of all four becoming true would simply be the minimum of all probabilities -> 25%.

It's probably too early to be mathing, but independent odds do multiply, and dependant add. So, in that, @MABMAB is correct.
Odds of rolling 2 sixes is 1/6 * 1/6, each due to each roll being independent. Odds of both die being 5 or 6: (1/6 * 1/6) + (1/6 * 1/6) since it must not be 5 in order to be six.

Odds of a truck with FSD: .5*.5=25%
Odds of a truck and no FSD: .5*(1-.5)=25%
Odds of no truck, but we get FSD: (1-.5)*.5=25%
Odds of at least one of truck and FSD happening=25%+25%+25%=75%
More simply: 1-((1-.5)*(1-.5))=75% i.e. 100% minus odds of both failing.

If we ignore the FSD/taxi linkage, the odds of none of those things happening is (1-.25)*(1-.5)*(1-.5)*(1-.25)=0.14 meaning the odds of at least one highly profitable product being produced is is 1-.14 or 86%.

 

[inconel]

...
If there were no correlation, the chances of all four becoming true would simply be the minimum of all probabilities -> 25%.

If the events are uncorrelated the probability of having all events is the product of the events probabilities as the OP said.

Flipping a coin twice, the probability of getting head-head is .25, not the minimum of each event which would be .5

 

[SmokyPeat]

My expectation is that if the board wants to flood the market with new shares, it will dilute the value of existing shares and cost shareholders. Such an action should, at the very least, have to go through a vote of the shareholders before any such action can proceed. From what I've read, a lot of those shares are owned by investment companies, including companies managing IRAs and 401ks. Meaning every investor ends up with the option to vote (please, those more knowledgeable, correct me if I'm wrong). Now, what do you think these investors are more likely to approve? A payment for their shares at a price 40% over market rate (of an underperforming stock), or a board that wants to dilute their share value in order to maintain their power and ability to censor free speech, in particular conservative speech? Bigger issue, does the board have fiduciary responsibilities, requiring them to look out for the financial interests of the shareholders they represent?

I think most of us here are very grateful that Elon's plan to take Tesla private at $420/share never materialized. There must be many Twitter shareholders who feel similarly. My feelings won't be hurt in the slightest if this Twitter obsession of Elon's is simply a passing fad.

 

[MD70]

What percentage of parts come from Mexico? Will the recent disruption have an affect on production at Freemont and Austin ?

 

[PeterJA]

I can’t see how Elon can be sure he can accomplish what he wants with Twitter....

... I don't understand where trying to solve fundamental human behavioral issues on social networks fits in there.

"I don't see how to do it, therefore Elon can't/shouldn't do it" is an argument that has not aged well in the last 20 years.

But those of us who have learned to give Elon's genius the benefit of the doubt do understand that many folks will not believe "it" (FSD, Mars colony, better Twitter, etc.) until they see it. Such skepticism is fine with me. It makes a market.

His achievements with SpaceX and Tesla are all about [non-social] engineering....

It's important for Tesla investors to understand that this is incorrect. SpaceX and Tesla have achieved unprecedented feats because of the corporate culture that Elon built at those corporations. Such culture-building is social engineering, also known as leadership.

Elon explained many of the principles of his social engineering in this interview:

 

[Prunesquallor]

What percentage of parts come from Mexico? Will the recent disruption have an affect on production at Freemont and Austin ?

If this is the disruption you’re referring too, it appears to be over.

https://www.washingtonpost.com/business/2022/04/15/texas-truck-greg-abbott-mexico/

Texas Gov. Greg Abbott (R) said Friday that there were no longer any secondary inspections of trucks crossing into his state from Mexico, announcing the end of a policy that had created multi-mile backlogs and that critics alleged had cost them millions of dollars in losses because key trade routes had ground to a halt.