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

[Singuy]

Average shipping index fell another 5%, shipping cost to North America West falling the most by 13% in one week.

 

[Gigapress]

I wouldn't be surprised if Elon planned the location at spacex. Indonesia is hungry for technological progress. There are other companies that can show their leader a battery factory, but there's only one place on earth they can see this sort of technology and nation building, and that's at SpaceX. It's got to stick in Joko's mind when it comes time to make a decision around who will make best use of Indonesia's natural resources.

I just emerged from the Indonesia rabbit hole…

Elon has been very clear that minimizing cost per ton to orbit is the sole objective for SpaceX right now.

Launching from Earth’s equatorial regions is optimal for reaching orbit or escape velocity because the rotation of the planet basically gives the rocket momentum for free at t=0.

https://solarsystem.nasa.gov/basics/chapter14-1/

It’s also very helpful to have a large body of water such as an ocean directly adjacent to the launch site, especially on the eastern side since the launch would need to align with Earth’s eastward rotation for minimum cost. Launching over water keeps the noise and danger away from populated land and makes an emergency launch abortion maneuver much easier to do safely.

These reasons are why Kennedy Space Center is on the southeast coast of Florida and why Starbase is on the southern tip of Texas.

Starbase is actually pretty far north, though. With a latitude of 26 degrees, it’s not even in the tropics. Indonesia straddles the Equator. Jakarta sits at -6 degrees—not bad! Indonesia has an abundance of other less developed potential coastal launch sites situated exactly on the Equator. Indonesia’s geographic advantage for mass production of rocket launches destined for Mars is unique globally. Neighboring countries like Malaysia or the Philippines might be good candidates, except they’re smaller and not right on the Equator.

At 26 degrees, Earth’s rotational velocity is 1500 km/hr. At the equator (0 degrees) it’s 1680 km/hr, which is over 11% faster. Earth’s escape velocity is 40,000 km/hr. The extra 180 km/hr bonus compared to Starbase would make a Starship save an appreciable amount of cost per ton. With rocketry and multi trillion dollar launch volume, every little bit counts.

After doing this math I searched for “why aren’t more rocket launches done from Indonesia”, and the first result was a BBC article from April 2021 saying that Lapan, the Indonesian aeronautics and space administration, had been actively courting SpaceX for building launch sites in the country including “a large scale international space port”. An earlier 2020 article said the Indonesian President has been working on this proposal for years.

You know what else Indonesia has?

• The world’s largest nickel reserves
  • Source
• Proximity to Australia, which is a close 2nd place for nickel reserves and #1 for lithium production
  • Source
  • Also, proximity to China, which is 3rd place for lithium production
• 11th largest copper production in the world
• Proximity to East Asian semiconductor fabrication facilities
  • Particularly in Taiwan, S Korea, China and Japan
• A burgeoning software and tech industry
• Massive mining deals with Tesla—deals which seem to have included undisclosed plans for ore refining and at least one battery Terafactory
  • As one official said “If they [Tesla] only want to buy raw materials, we are not interested”
  • Source

Indonesia seems poised to be the next major Tesla and SpaceX hub in the Asia-Pacific region in the coming years, edging out competitors like Australia, Korea, India and Japan.

 

[elasalle]

I just emerged from the Indonesia rabbit hole…

Elon has been very clear that minimizing cost per ton to orbit is the sole objective for SpaceX right now.

Launching from Earth’s equatorial regions is optimal for reaching orbit or escape velocity because the rotation of the planet basically gives the rocket momentum for free at t=0.

https://solarsystem.nasa.gov/basics/chapter14-1/

It’s also very helpful to have a large body of water such as an ocean directly adjacent to the launch site, especially on the eastern side since the launch would need to align with Earth’s eastward rotation for minimum cost. Launching over water keeps the noise and danger away from populated land and makes an emergency launch abortion maneuver much easier to do safely.

These reasons are why Kennedy Space Center is on the southeast coast of Florida and why Starbase is on the southern tip of Texas.

Starbase is actually pretty far north, though. With a latitude of 26 degrees, it’s not even in the tropics. Indonesia straddles the Equator. Jakarta sits at -6 degrees—not bad! Indonesia has an abundance of other less developed potential coastal launch sites situated exactly on the Equator. Indonesia’s geographic advantage for mass production of rocket launches destined for Mars is unique globally. Neighboring countries like Malaysia or the Philippines might be good candidates, except they’re smaller and not right on the Equator.

At 26 degrees, Earth’s rotational velocity is 1500 km/hr. At the equator (0 degrees) it’s 1680 km/hr, which is over 11% faster. Earth’s escape velocity is 40,000 km/hr. The extra 180 km/hr bonus compared to Starbase would make a Starship save an appreciable amount of cost per ton. With rocketry and multi trillion dollar launch volume, every little bit counts.

After doing this math I searched for “why aren’t more rocket launches done from Indonesia”, and the first result was a BBC article from April 2021 saying that Lapan, the Indonesian aeronautics and space administration, had been actively courting SpaceX for building launch sites in the country including “a large scale international space port”. An earlier 2020 article said the Indonesian President has been working on this proposal for years.

You know what else Indonesia has?

• The world’s largest nickel reserves
  • Source
• Proximity to Australia, which is a close 2nd place for nickel reserves and #1 for lithium production
  • Source
  • Also, proximity to China, which is 3rd place for lithium production
• Massive mining deals with Tesla—deals which seem to have included undisclosed plans for ore refining and at least one battery Terafactory
  • As one official said “If they [Tesla] only want to buy raw materials, we are not interested”
  • Source
• A burgeoning software and tech industry

Indonesia seems poised to be the next major Tesla and SpaceX hub in the Asia-Pacific region in the coming years, edging out competitors like Australia, Korea, India and Japan.

Tesla sure …
But SpaceX has many national security implications?

 

[Gigapress]

Tesla sure …
But SpaceX has many national security implications?

Since 2016, SpaceX has been proposing international passenger orbital travel as their cash cow to fund Mars.

I would assume that they have been working on resolving any issues with ITAR (International Traffic in Arms Regulations) or American national security requirements.

If Starship is as easy to land, fuel and relaunch as SpaceX is aiming for, then probably any of the technology transfer would be pretty minimal anyway. They don’t necessarily need to export critical technical data or engineers beyond US borders. Plus, SpaceX is already showing detailed video tours of Starbase on YouTube so it’s not like it’s really that secretive anyway. Most SpaceX jobs don’t even require security clearance from the US govt (these employees merely need to be “US Persons”).

It’s probably also safe to say that prominent leaders in the Indonesian government, including the President himself, would not have spent years openly courting one of the biggest contractors for the US Armed Forces without first establishing that the idea wouldn’t be shot down because of legal or political challenges surrounding US national security. Politicians tend to avoid that kind of embarrassment.

 

[JimS]

If it can be shown with hard evidence that this Max Pain arbitrage opportunity actually exists, then I propose (literally) that we form a TMC hedge fund to exploit this in exactly the manner described above.

Can you run a model of that for 6 months with pretend money? If there’s a good ROI you can count me in for $1K!

Actually, I’m pretty sure @Papafox would never recommend using Max Pain as the reference price for any option. I think he consistently cautions us not to invest in any short term options precisely because of the Market Makers’ ability to use legitimate and illegitimate tools to maximize their profits at our expense.

 

[bkp_duke]

Average shipping index fell another 5%, shipping cost to North America West falling the most by 13% in one week.

Fantastic. That's a very early indicator of pricing (inflation). Love the direction this is headed.

 

[bkp_duke]

Tesla sure …
But SpaceX has many national security implications?

Spot on. Elon has said multiple times that SpaceX has to screen everyone that hire to a degree because of the US national security implications. Basically, if they don't do this . . . poof go the military and NASA launches.

Interestingly there is a lawsuit against this practice as "discriminatory":

Justice Department investigating Elon Musk's SpaceX following complaint of hiring discrimination

The DOJ is investigating Elon Musk's SpaceX over whether the company "engages in any pattern or practice of discrimination" in its hiring, court filings said.

www.cnbc.com

Ironic that the DOJ is investigating SpaceX for this . . . when it is the US Gov that put the screening process in place.

Typical gov efficiency there.

 

[ZeApelido]

I just emerged from the Indonesia rabbit hole…

Elon has been very clear that minimizing cost per ton to orbit is the sole objective for SpaceX right now.

Launching from Earth’s equatorial regions is optimal for reaching orbit or escape velocity because the rotation of the planet basically gives the rocket momentum for free at t=0.

https://solarsystem.nasa.gov/basics/chapter14-1/

It’s also very helpful to have a large body of water such as an ocean directly adjacent to the launch site, especially on the eastern side since the launch would need to align with Earth’s eastward rotation for minimum cost. Launching over water keeps the noise and danger away from populated land and makes an emergency launch abortion maneuver much easier to do safely.

These reasons are why Kennedy Space Center is on the southeast coast of Florida and why Starbase is on the southern tip of Texas.

Starbase is actually pretty far north, though. With a latitude of 26 degrees, it’s not even in the tropics. Indonesia straddles the Equator. Jakarta sits at -6 degrees—not bad! Indonesia has an abundance of other less developed potential coastal launch sites situated exactly on the Equator. Indonesia’s geographic advantage for mass production of rocket launches destined for Mars is unique globally. Neighboring countries like Malaysia or the Philippines might be good candidates, except they’re smaller and not right on the Equator.

At 26 degrees, Earth’s rotational velocity is 1500 km/hr. At the equator (0 degrees) it’s 1680 km/hr, which is over 11% faster. Earth’s escape velocity is 40,000 km/hr. The extra 180 km/hr bonus compared to Starbase would make a Starship save an appreciable amount of cost per ton. With rocketry and multi trillion dollar launch volume, every little bit counts.

After doing this math I searched for “why aren’t more rocket launches done from Indonesia”, and the first result was a BBC article from April 2021 saying that Lapan, the Indonesian aeronautics and space administration, had been actively courting SpaceX for building launch sites in the country including “a large scale international space port”. An earlier 2020 article said the Indonesian President has been working on this proposal for years.

You know what else Indonesia has?

• The world’s largest nickel reserves
  • Source
• Proximity to Australia, which is a close 2nd place for nickel reserves and #1 for lithium production
  • Source
  • Also, proximity to China, which is 3rd place for lithium production
• 11th largest copper production in the world
• Proximity to East Asian semiconductor fabrication facilities
  • Particularly in Taiwan, S Korea, China and Japan
• A burgeoning software and tech industry
• Massive mining deals with Tesla—deals which seem to have included undisclosed plans for ore refining and at least one battery Terafactory
  • As one official said “If they [Tesla] only want to buy raw materials, we are not interested”
  • Source

Indonesia seems poised to be the next major Tesla and SpaceX hub in the Asia-Pacific region in the coming years, edging out competitors like Australia, Korea, India and Japan.

Someone just read this and is starting “Musk to overthrow Indonesian government” and “Musk to buy Indonesia on TSLA margin loan” articles as we speak.

Thanks gigapress.

 

[dhanson865]

Spot on. Elon has said multiple times that SpaceX has to screen everyone that hire to a degree because of the US national security implications. Basically, if they don't do this . . . poof go the military and NASA launches.

That's for manufacturing and design not operation.

You can build in the US and fly to Indonesia unladen, load up with fuel and cargo in Indonesia and re launch for Mars and still come out ahead on launch costs to Mars due to the fuel savings. Send what cargo you can by slow boat. Send the Starship over later when the cargo is there and ready to be picked up.

US military flys hardware all over the world. The only thing they are worried about is a ship being taken hostage. So long as the port is friendly it doesn't matter if it's Navy, Air Force, or SpaceX.

Relations between Indonesia and the U.S. are generally positive and have advanced since the election of President Susilo Bambang Yudhoyono in 2004. Cooperative relations are maintained today, although no formal security treaties bind the two countries.

The US government will likely step in and make some sort of arrangement but even if they don't I wouldn't expect them to clip SpaceX wings just because they want to operate out of multiple launch sites.

I'm sure Elon or Gwen will explain how it would be in the best interest of the US to allow it.

 

[Gigapress]

What complicates the situation is that Max Pain data is a cumulative total, but each market maker has their own individual Open Interest graph (which we cannot see, we can only see the aggregate of those), and its their own outstanding contracts that drive their behavior, i.e. provides manipulation incentive. The ideal target price maybe different for different market makers, resulting in a tug-of-war between their efforts.

As for creating a hedge fund to take advantage of the arbitrage opportunity via additional option trading, that effort can lead to a self-defeating situation, whereas the opening of new option positions will alter the target point if there is sufficient volume in those transactions. Basically, by trying to exploit the effort of market makers to move the stock price, your own option contracts force a change in equilibrium such that the market makers will necessarily work against your hedge fund, i.e. they also need to annihilate your options along with the rest of the market.

As long as you are a small fry, your best chance to exploit this is to "join" the market makers rather than fight them, i.e. write contracts at the same points where they have the largest peaks in open interest and trust that their manipulation efforts will benefit you too.

If the market making game theory dynamics are too complicated to model and much of the necessary data is kept private by the players, then I don’t understand the point of even following Max Pain as retail investors.

Also, the fact that this proposed Max Pain exploitation strategy is less profitable the more it’s scaled is exactly in line with the efficient market hypothesis. In an ideal rational market, easy arbitrage opportunities always are competed away to nonexistence. This is true for any asset, not just stocks.

I’m still left wondering why professional institutional investors aren’t pursuing this strategy. Even a market maker could try to exploit the max pain manipulation of other market makers.

 

[UnknownSoldier]

Spot on. Elon has said multiple times that SpaceX has to screen everyone that hire to a degree because of the US national security implications. Basically, if they don't do this . . . poof go the military and NASA launches.

Interestingly there is a lawsuit against this practice as "discriminatory":

Justice Department investigating Elon Musk's SpaceX following complaint of hiring discrimination

The DOJ is investigating Elon Musk's SpaceX over whether the company "engages in any pattern or practice of discrimination" in its hiring, court filings said.

www.cnbc.com

Ironic that the DOJ is investigating SpaceX for this . . . when it is the US Gov that put the screening process in place.

Typical gov efficiency there.

The government creating problems for itself to solve is pretty standard classic government bureaucracy.

 

[Rotte]

It's not a myth, I called six different service stations who all said they do not work on nor inspect Tesla's. I only found the garage I did because I talked to members of the Lehigh Valley Tesla Club and they recommended the place to me.

I have to wonder if these anti-Tesla garages will change their tune over the next couple of years as Tesla vehicles become super prolific and abundant?

I live in western Pennsylvania. I picked up my new Model 3 in April 2018. The Tesla service Center gave me a list of garages that would do the inspection on my Tesla when I first picked up the car. All of the local Firestone tire stores in our area will inspect my car.

 

[Gigapress]

Spot on. Elon has said multiple times that SpaceX has to screen everyone that hire to a degree because of the US national security implications. Basically, if they don't do this . . . poof go the military and NASA launches.

Interestingly there is a lawsuit against this practice as "discriminatory":

Justice Department investigating Elon Musk's SpaceX following complaint of hiring discrimination

The DOJ is investigating Elon Musk's SpaceX over whether the company "engages in any pattern or practice of discrimination" in its hiring, court filings said.

www.cnbc.com

Ironic that the DOJ is investigating SpaceX for this . . . when it is the US Gov that put the screening process in place.

Typical gov efficiency there.

The CNBS article linked says that the DOJ investigation is in response to a formal complaint filed by somebody who claims it was discriminatory.

The inefficiency appears to really be that the DOJ Immigrant and Employee Rights Section probably has some process requirement or internal politics preventing them from dismissing such a frivolous claim without further investigation.

 

[Queeg500]

If Tesla did a vehicle inspection for Space X, this thread would take a screenshot.

 

[Discoducky]

Anyone hear of Austin built 4680 Model Y test drives? I thought this was happening soon'ish...

 

[Papafox]

Can you run a model of that for 6 months with pretend money? If there’s a good ROI you can count me in for $1K!

Actually, I’m pretty sure @Papafox would never recommend using Max Pain as the reference price for any option. I think he consistently cautions us not to invest in any short term options precisely because of the Market Makers’ ability to use legitimate and illegitimate tools to maximize their profits at our expense.

I speak frequently about not buying short term options at popular strike prices because the market makers are likely going to put in a serious effort to keep those popular strike price options from moving into the money. OTOH, perhaps @ZsoZso is the closest to being on target with the suggestion for sellers of options to target popular strike prices that are at or outside max pain and then to let the market makers work on your behalf. So, because of premiums charged for options, sellers of options are going to be more profitable than buyers. Also, the market makers will reset their Friday closing target if there's a big move earlier in the week. To adjust for this reset you would need to be willing to sometimes bite the bullet and take some losses as you readjust your target as the week progresses. There's definitely a dynamic component sometimes. Personally, I don't buy or sell short-term options primarily because I don't want to spend my day following the stock price.

Nonetheless, if I was going to sell some call options that expire Friday, they would probably be 900-strike or 950-strike because those price points would consider the current max pain and the 950s would consider some upward movement of max pain as the week progresses. OTOH, with a potential big move upward this coming week, selling puts might make more sense. Keep in mind that sometimes you lose even with a good plan. One needs a deep enough capital reservoir so that you can eat some losses and still do well over a long time span.

 

[Captkerosene]

Tesla sure …
But SpaceX has many national security implications?

I would add that Indonesia has lots of natural gas too.

Regarding security: we're talking about a space plane ... they can take off or land anywhere. Don't have to be flown from where they're built.

SpaceX didn't seem to care when the application to expand the footprint at StarBase was denied. They wouldn't reveal their plans for a backup location/plan.

Also, in the Everyday Astronaut interview Elon looked to be hiding some news about locations and facilities.

Who wants the FAA, EPA and DNC looking over your shoulder trying to shut you down?

 

[Bet TSLA]

If the market making game theory dynamics are too complicated to model and much of the necessary data is kept private by the players, then I don’t understand the point of even following Max Pain as retail investors.

Exactly! It's seductive nonsense for the credulous. Not even its proponents will put real money on it. If you like to believe the market (or even just TSLA) is rife with manipulation, then it provides some rationale for why and how it might be going on in the short term. But there's nothing indicating it's any better than consulting monkeys with a dartboard. And just like those monkeys, sometimes it's uncannily accurate.

 

[SmokyPeat]

That's for manufacturing and design not operation.

You can build in the US and fly to Indonesia unladen, load up with fuel and cargo in Indonesia and re launch for Mars and still come out ahead on launch costs to Mars due to the fuel savings. Send what cargo you can by slow boat. Send the Starship over later when the cargo is there and ready to be picked up.

US military flys hardware all over the world. The only thing they are worried about is a ship being taken hostage. So long as the port is friendly it doesn't matter if it's Navy, Air Force, or SpaceX.



The US government will likely step in and make some sort of arrangement but even if they don't I wouldn't expect them to clip SpaceX wings just because they want to operate out of multiple launch sites.

I'm sure Elon or Gwen will explain how it would be in the best interest of the US to allow it.

Setting aside the security issues, I'm not sure that it would be cheaper to launch from Indonesia once all of the costs are factored in. Maybe a launch site in the US virgin islands @ ~10* lat would be more cost effective, though. It certainly wouldn't raise the same security concerns as a launch site located somewhere like Indonesia.

 

[ZachF]

I just emerged from the Indonesia rabbit hole…

Elon has been very clear that minimizing cost per ton to orbit is the sole objective for SpaceX right now.

Launching from Earth’s equatorial regions is optimal for reaching orbit or escape velocity because the rotation of the planet basically gives the rocket momentum for free at t=0.

https://solarsystem.nasa.gov/basics/chapter14-1/

It’s also very helpful to have a large body of water such as an ocean directly adjacent to the launch site, especially on the eastern side since the launch would need to align with Earth’s eastward rotation for minimum cost. Launching over water keeps the noise and danger away from populated land and makes an emergency launch abortion maneuver much easier to do safely.

These reasons are why Kennedy Space Center is on the southeast coast of Florida and why Starbase is on the southern tip of Texas.

Starbase is actually pretty far north, though. With a latitude of 26 degrees, it’s not even in the tropics. Indonesia straddles the Equator. Jakarta sits at -6 degrees—not bad! Indonesia has an abundance of other less developed potential coastal launch sites situated exactly on the Equator. Indonesia’s geographic advantage for mass production of rocket launches destined for Mars is unique globally. Neighboring countries like Malaysia or the Philippines might be good candidates, except they’re smaller and not right on the Equator.

At 26 degrees, Earth’s rotational velocity is 1500 km/hr. At the equator (0 degrees) it’s 1680 km/hr, which is over 11% faster. Earth’s escape velocity is 40,000 km/hr. The extra 180 km/hr bonus compared to Starbase would make a Starship save an appreciable amount of cost per ton. With rocketry and multi trillion dollar launch volume, every little bit counts.

After doing this math I searched for “why aren’t more rocket launches done from Indonesia”, and the first result was a BBC article from April 2021 saying that Lapan, the Indonesian aeronautics and space administration, had been actively courting SpaceX for building launch sites in the country including “a large scale international space port”. An earlier 2020 article said the Indonesian President has been working on this proposal for years.

You know what else Indonesia has?

• The world’s largest nickel reserves
  • Source
• Proximity to Australia, which is a close 2nd place for nickel reserves and #1 for lithium production
  • Source
  • Also, proximity to China, which is 3rd place for lithium production
• 11th largest copper production in the world
• Proximity to East Asian semiconductor fabrication facilities
  • Particularly in Taiwan, S Korea, China and Japan
• A burgeoning software and tech industry
• Massive mining deals with Tesla—deals which seem to have included undisclosed plans for ore refining and at least one battery Terafactory
  • As one official said “If they [Tesla] only want to buy raw materials, we are not interested”
  • Source

Indonesia seems poised to be the next major Tesla and SpaceX hub in the Asia-Pacific region in the coming years, edging out competitors like Australia, Korea, India and Japan.

You probably won’t get anything in Indonesia wrt SpaceX other than Starlink for a long time because of ITAR.

Also, unless you are going to Geostationary orbit (which is headed to a 0deg inclination) the boost from equatorial launches isn’t that large.

Tesla is different though, would not be surprised to see a Giga Jakarta someday.