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

[jeewee3000]

How do you get to producing 20 million cars per year if not through extensive
capital investment, that’s the best use of free cash flow. Until Tesla
nears that goal it seems unlikely share buy backs are a priority,
Especially and purely for the purpose of sustaining the stock price.

I agree. Elon hinted in the Q4 2021 call that multiple new locations could be announced by year end, so those will require cash. Add a possible recession and Tesla needs its cash buffer more than a high(er) SP.

In the coming years we need (besides current factories):
- robotaxi plant
- Optimus plant

And if Tesla were to enter the mining business, it will need cash for this as well.

So fully agree with @Drax7 : buyback is not necessary IMO. With the current cash buffer I don't lose sleep over Tesla's position in case the economy went to sugar for multiple years.

 

[Mengy]

What’s worse is that if you go back to webush’s earlier notes from the last 6 months, their base case PT of 1400 (with a bull case of 1800) is predicated on Tesla achieving a 2 million annual run rate by the end of 2022. Absolutely nothing has changed there.

Sure something has changed: market sentiment. If we are going into a recession then it's possible the market will stay down for at least a six month period, perhaps longer. Dan might believe this will happen and a lot of his reduction might be due to that more than anything changing with Tesla's performance.

It's why I still feel we will see more PE compression for TSLA this year rather than a new ATH. I think this market will take a bit of time to recover itself, and in the meantime my hunch is the market will stay down for a few months, possibly until sometime in 2023. My amateur model predicts if PE compression keeps going along the trend then we could possibly end this year around $1000 ~ $1200 even with Tesla breaking records in Q3 and Q4. Of course this would give us a huge springboard for 2023...

 

[ZachF]

News flash - that’s not how fund managers see things or how they think or what they want.

#1 They want to make money
#2 They don’t actually care how they make it
#3 They say whatever, do whatever is necessary to make money; including but not exclusive to lying, fabricating, regurgitating worn out talking points, making up bs, instilling base emotions like fear in others.
#4 Did I mention they are habitual liars?

Think of Wall Street et al like another version of a politician and you’ll have a better grasp of who these people are.

…and we get to what ESG is, a new Wall Street grift trying to capitalize off investors with good intentions, as ultimately the best way to increase scores is to pay them to learn how to game their system, or put people on your company’s board who will work for them instead of you.

 

[Krugerrand]

That's IF they're paid on performance, no?

Who’s not paid on performance?

Has a single human being ever existed that didn’t get paid for performance? Elon gets paid for performance. Students get paid for performance. The Pope gets paid for performance. Pezpunk got paid for his performance yesterday.

Performance and payment come in many forms.

 

[Gigapress]

For the care bears who are worried that no Republicans buy teslas anyways.

Survey puts Republicans at 30% vs 38% democrats.

Tesla owners are more Republican than you'd think

Elon Musk has trained his Twitter guns on top Democrats such as Bernie Sanders and Elizabeth Warren. Now he's going after Joe Biden.

www.cnn.com

Take this with a pile of salt because it’s a CNN article and aside from telling us which organization performed the survey, they provided no other information about how the results came about.

Surveys are notoriously unreliable. It’s wise to be skeptical of the results when we don’t know how sample selection was performed, how big the sample size was, what questions they asked, and how the questions were asked (phone call, email, door-to-door,…?)

 

[ZachF]

Texas (hard Republican) has the biggest wind generating plants in the US, and a growing number of PV installations, and it was mostly funded by Republicans in state (despite the lies of Republicans being against "green new deal", it actually the opposite).
Texas has 5x the wind generation than California (shocking, I know).

Thoughts on that, @ZachF ?

Texas will probably overtake California in population and economy sometime in the 2030s. They will probably produce many multiples of California’s output in solar and wind by then. They will probably be the top American producer of both batteries and EVs too.

 

[ninpb]

Get ready for the launch. Mother-in-law sent article on Tesla dropped from SP500 ESG.

 

[jerry33]

This is a fallacy promoted by people that . . . have never actually talked to these people.

They have zero beef with solar in particular, and love the self-reliant aspect of it.

What they do have a beef with is:
1) Made in China Solar (they WILL bring this up)
2) What happens when the sun goes down? They have to be better educated on this, the concept of batteries that last all night is not intuitive to them.
3) Cost - time to payback is important (and it's VERY long in the southeast USA, where power is super cheap at about 10c/kwh).

You get past those three things, you make a sale to them easy.

You might ask how I know these things? I've got a lot of family in this area, and the topic of conversation always comes up at family gatherings and they see my Tesla (which they don't have a problem with, btw - - they just want a more "traditional" looking truck to schlep around in).

Not to worry. Once the Cybertruck has shipped for a bit, it will be the conventional looking truck.

 

[mongo]

How do you get to producing 20 million cars per year if not through extensive
capital investment, that’s the best use of free cash flow. Until Tesla
nears that goal it seems unlikely share buy backs are a priority,
Especially and purely for the purpose of sustaining the stock price.

Per my post before this:

Vehicle production is limited by chips now
Vehicle production will then be limited by cells
Only when those two items are in abundance will vehicle production be limited by factories.

Tesla is currently expanding at all 4 locations simultaneously and still has positive FCF, they are not cash limited. They will be even less cash limited when these 3+ full factory equivilents ramp up, doubling production and more than doubling net profit.
Factory build out is limited by trained teams and equipment suppliers (gigapresses for example), not capital. Starting 4 more factories today now likely isn't helpful. A linear increase of 2 new factories a year + existing expansion gets to 20 factories in 2030, if each does 1 million cars on average, that's 20 million. Mining and the rest of the chain needs to scale with production capacity.

 

[ZachF]

Ideally, I’d like the farm/ranch to have enough battery (mega pack?) and solar to pay for itself and the property taxes.

Also, Tesla-bot farm hands that could help manage the property would make this dream even more awesome.

 

[Spacep0d]

Can we attribute this to the multiple compression?

Relevant. I follow this guy for basic prepping tips (don't worry, the only cult I'm in is Tesla) and because I find hard core preppers fascinating. He pushes hard for the solar/EV self sufficiency angle in the event of disasters or strife. He LOVES the Cybertruck.

I used this argument against a right-leaning, Tesla FUD-spreading friend who has prepper tendencies.

For some reason he didn't understand that solar and EVs make one more independent, not less. He had the nerve to call EVs a 'fad' or "toys for the rich", and totally ignored my enthusiasm for buying TSLA at $400 pre-split. The thing us, I'm not rich at all. He's far wealthier than me.

His foundational reasoning was wrong and he was believing narrative over first principles. It didn't help that at the time TSLA had peaked at 1200 so he was probably embarrassed but couldn't admit he was wrong about the company in any way.

 

[elasalle]

Get ready for the launch. Mother-in-law sent article on Tesla dropped from SP500 ESG.

Could be, I think 1st thing that came to mind for many folks was TSLA dropped from S&P, and FUDsters likely took advantage of it.

 

[AKAlex]

This is a fallacy promoted by people that . . . have never actually talked to these people.

They have zero beef with solar in particular, and love the self-reliant aspect of it.

What they do have a beef with is:
1) Made in China Solar (they WILL bring this up)
2) What happens when the sun goes down? They have to be better educated on this, the concept of batteries that last all night is not intuitive to them.
3) Cost - time to payback is important (and it's VERY long in the southeast USA, where power is super cheap at about 10c/kwh).

You get past those three things, you make a sale to them easy.

You might ask how I know these things? I've got a lot of family in this area, and the topic of conversation always comes up at family gatherings and they see my Tesla (which they don't have a problem with, btw - - they just want a more "traditional" looking truck to schlep around in).

My parents are pretty conservative... They're also putting up a 15kW solar array this summer. The prospect of never buying gas again and being totally energy self reliant is a rural conservatives dream. My favorite line in regard to solar & EVs is "It's just like having your own oil well and refinery in your backyard".

 

[ZachF]

I used this argument against a right-leaning, Tesla FUD-spreading friend who has prepper tendencies.

For some reason he didn't understand that solar and EVs make one more independent, not less. He had the nerve to call EVs a 'fad' or "toys for the rich", and totally ignored my enthusiasm for buying TSLA at $400 pre-split. The thing us, I'm not rich at all. He's far wealthier than me.

His foundational reasoning was wrong and he was believing narrative over first principles. It didn't help that at the time TSLA had peaked at 1200 so he was probably embarrassed but couldn't admit he was wrong about the company in any way.

Not many people do it yet, but eventually, more and more of his neighbors will do it and the logic of it will be obvious.

 

[The Accountant]

I am going to start tracking estimated delivery times for the Northeast US region.
I will be tracking base configurations (no upgrades on wheels, paint, etc).
What I noticed when completing May is that if you want the Long Range base version of S3XY, you are not likely getting it this year (see yellow boxes).
I'm curious to see what impact, if any, Austin will have on the Model Y delivery times.

 

[ZachF]

It seems like the “growth” stocks are starting to show a bit more support after having been beaten down recently.

It also seems like the market finally caught on to Wal Marts laughable valuation too. Costco got rekt too. Perhaps from here most of the declines will occur in these low/no-growth stocks which seem the most overvalued currently IMHO.

 

[ZeApelido]

https://twitter.com/x/status/1527316140602494976

 

[henchman24]

It seems like the “growth” stocks are starting to show a bit more support after having been beaten down recently.

It also seems like the market finally caught on to Wal Marts laughable valuation too. Costco got rekt too. Perhaps from here most of the declines will occur in these low/no-growth stocks which seem the most overvalued currently IMHO.

A leading indicator of a rally is when money starts entering the growth side. Both Nasdaq and Russell 2000 are having solid days (so far) while the SP500 is lagging. So yeah, growth is getting some support.

 

[verystandard]

Could be, I think 1st thing that came to mind for many folks was TSLA dropped from S&P, and FUDsters likely took advantage of it.

FUDsters like to mislabelled it as "S&P 500 dropped TSLA" instead of "S&P 500 ESG Index dropped Tesla"

Also, if i remember seeing the blog from Margaret Dorn @ S&P ESG Indices, "It joins Berkshire Hathaway, Johnson & Johnson and Meta, which have once again met the index methodology’s chopping block" I don't see the end of the world with these other stocks

 

[Paul_SF]

I wanted to say this yesterday, but based on the people Elon is hanging out with and his statements, Elon is going Forward and we all need to go forward.

Forward is the way! Out with the fossils (fuels and politicians)!