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

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FUD from NPR written by David Gura on June 4. 2022-

Can the SEC stand up to the richest man on the planet?
Media's agenda and modus operandi is very simple: egg the regulators, shame them, goad them so that they will come out and lash at Musk and cut him to size. They have tried everything : writing FUD, total lies, throwing shade that Musk's personal character, scaring people with exaggerated Tesla fire stories. Nothing seems to have an impact. Now they are all angry at the regulators and shouting them: DO SOMETHING, will ya. !!
 
Nice FSD drive:

My take is that the big improvements are mainly that they have improved their cost function in their control system. It now rewards having better visibility by creeping and angling the car and also penalizes being stuck in dangerous situations, ie better to have some ”uncomfortable” jerk than driving slowly through the dangerous intersection.

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In the next version 10.13 they will again improve the cost function to penalize having the car slightly outside of the median to reward angling the car so it fits in the median even if this means a more lateral jerk.



So first they will add this behavior. It will not be perfect in the first iteration, but it will be part of the score. Then they will take another iteration to gather data, tune it and improve its performance to get closer to perfection.

This is why I believe in Tesla. Instead of figuring out what to do they first figure out what they want to accomplish and then let an algorithm optimize how to do it. If they are not happy with what they algorithm suggests, they improve the cost function to better reflect the desired behavior. Same with their agile development, they have a cost score ie ”make as many safe cars at a profit as possible”. If some engineers comes up with some idea ”let’s do X instead of Y” they see if this improves their score or not. If it does they implement it, or if something seems off, they instead change their value function.

Like Karpathy shows they have an increasing number of ”unit tests” for different scenarios. Whenever they recompile their code they see if they get a higher score, ie if their new release passes more unit tests.
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When their customers are out driving and the system fails, they add the situation to their unit tests. Then they let their engineers and operation vacation try to add more data, improve the neural network, tune control paramaters etc freely, as long as they improve how many of their unit tests they pass and/or their cost function. That’s how they are making progress, by improving their cost function, by adding unit tests and by improving their score on these tests.
 
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Nice FSD drive:

My take is that the big improvements are mainly that they have improved their cost function in their control system. It now rewards having better visibility by creeping and angling the car and also penalizes being stuck in dangerous situations, ie better to have some ”uncomfortable” jerk than driving slowly through the dangerous intersection.

View attachment 812846

In the next version 10.13 they will again improve the cost function to penalize having the car slightly outside of the median to reward angling the car so it fits in the median even if this means a more lateral jerk.



So first they will add this behavior. It will not be perfect in the first iteration, but it will be part of the score. Then they will take another iteration to gather data, tune it and improve its performance to get closer to perfection.

This is why I believe in Tesla. Instead of figuring out what to do they first figure out what they want to accomplish and then let an algorithm optimize how to do it. If they are not happy with what they algorithm suggests, they improve the cost function to better reflect the desired behavior. Same with their agile development, they have a cost score ie ”make as many safe cars at a profit as possible”. If some engineers comes up with some idea ”let’s do X instead of Y” they see if this improves their score or not. If it does they implement it, or if something seems off, they instead change their value function.

Like Karpathy shows they have an increasing number of ”unit tests” for different scenarios. Whenever they recompile their code they see if they get a higher score, ie if their new release passes more unit tests.
View attachment 812845

When their customers are out driving and the system fails, they add the situation to their unit tests. Then they let their engineers and operation vacation try to add more data, improve the neural network, tune control paramaters etc freely, as long as they improve how many of their unit tests they pass and/or their cost function. That’s how they are making progress, by improving their cost function, by adding unit tests and by improving their score on these tests.
Well, it's a nice theory. But in the real world, every iteration means that some tests that used to fail now pass, and some tests that used to pass now fail. Not all unit tests have the same importance, so any score is really determined by how the relevant humans value the test cases. A simple metric of "no regressions allowed" would probably mean never releasing a new version.

So who determines which unit tests are "must pass" and which are fine to be part of the "one step back" cohort?

Me, I remember one similar situation at Apple where every change the team tried resulted in unacceptable regressions. It was... stressful.
 
Well, it's a nice theory. But in the real world, every iteration means that some tests that used to fail now pass, and some tests that used to pass now fail. Not all unit tests have the same importance, so any score is really determined by how the relevant humans value the test cases. A simple metric of "no regressions allowed" would probably mean never releasing a new version.

So who determines which unit tests are "must pass" and which are fine to be part of the "one step back" cohort?

Me, I remember one similar situation at Apple where every change the team tried resulted in unacceptable regressions. It was... stressful.
In a truly automated machine learning system, regressions are mostly not manually handled by the team except under obviously serious circumstances and edge cases where the machine learning is simply not going to be able to experience it often enough to learn to do it right. Every FSD beta so far has had large advancements combined with regressions and that will continue and that should continue. It's how real world learning works, and if the FSD beta testing driver is paying attention properly and ready to take over if needed, then it is working as intended.

Chuck Cook's Left Turn of Doom was never serious enough that the team needed to manually intervene and we can see that improvements have generally been adjacent to his specific problem. I sincerely doubt Elon or the FSD team ever thought his specific left turn was so important it needed manual intervention or special training, but Elon has noticed that as of late it has improved to the point where he can comment and say that yes, we're seeing major improvements in the upcoming version.
 
Tesla should have a share buyback program so they could take advantage of false negative media reports, especially Kolodny events. Tesla has no responsibility to comment on media speculation, so it wouldn't be a violation to say nothing and buy back shares.
It’s fun to imagine the firestorm of media shock and dismay if Tesla started day trading its own stock!
Why not?..
The media is so obviously in the service of the short sellers on the other side of the game
 
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I get your point, but I’m going to venture a bit further out on the limb. The pattern I think I’ve been seeing, is that positive news can drive an upswing, but MMs can fight it if the volume is low. Negative news gets amplified, and then any macro trends have a pile-on effect. That nice limb might get sawed off by Monday morning.

On a somewhat related note, I got an email from my sister referring me to a NYT OpEd entitled, “When Elon Musk Dreams, His Employees Have Nightmares.” I had seen the headline as I have a digital subscription to it, but didn’t waste my time reading it, nor did I when she cited it. My sister was sort of poking me. She and her husband are Porsche fans. I sent her back the following note:

‘Thanks. Yes I saw this article. He was pilloried in the press after he first said all workers needed to work 40 hrs in the office, and then said he was reducing staff by 10%. He later clarified that to be just office workers, and that they are increasing factory and service workers. It caused the stock to drop a good bit.

Here’s the thing, he is pushing the envelope. For those who want to work at a place where there is constant innovation, challenge, and empowerment to achieve - Tesla is it. And more do than don’t want to be there. It isn’t-a great place for softer skills most likely. And it’s probably not a place you’d spend a career at.

As an investor, I’ve learned to filter the things he says and does through a net that drops out impacts to core business. I’ll admit it is sometimes difficult. But so far when I do this, what I see is a company that is growing dramatically, by constantly innovating and adapting to near-term, medium-term, and long-term constraints, as it maniacally focuses on achieving its objectives. They are not for faint of heart. I periodically check in with people whose financial knowledge and wisdom I respect just to make sure I’ve not got rose colored glasses on. And I read an investors’ forum daily. Staying the course.’

Of course the investors’ forum I referred to is TMC/this thread.

Hopefully one day in the not too distant future she will be wistful that she didn’t buy-in when she had the chance..

Re " ..Hopefully one day in the not too distant future she will be wistful that she didn’t buy-in when she had the chance.. "

Nah - people I've tried to convince way back in '19 don't remember our multiple back and forth emails, and I don't have the heart / time to send them these copies. The rare one or two who eventually dipped in started trading it, dunno how they fared. Only thing you can do, which I did for a friend's child b/c they don't really understand investments - helped them open an IRA and put in one share worth. That was a couple months ago. Ouch! - but I'm not worried

For kicks, in your case, send them this video ;D

 
Well, it's a nice theory. But in the real world, every iteration means that some tests that used to fail now pass, and some tests that used to pass now fail. Not all unit tests have the same importance, so any score is really determined by how the relevant humans value the test cases. A simple metric of "no regressions allowed" would probably mean never releasing a new version.

So who determines which unit tests are "must pass" and which are fine to be part of the "one step back" cohort?

Me, I remember one similar situation at Apple where every change the team tried resulted in unacceptable regressions. It was... stressful.
13:30 here:

It will regress in behavior when the value function is changed, but should not regress when the value function is left unchanged…
 
WuWa has discovered a new warehouse near Giga Shanghai, and seems to have some insider info (hope these are not just his guesses and that´s lost in translation..):

This is a Tesla warehouse 2 km away from the Shanghai factory, "the supplier parts are stored here, and then distributed according to the needs of the production line, through this Shanghai lockout, Tesla will increase their inventory to prepare for emergency needs."

If true, typical Tesla: rapidly learn from problems (parts shortage from lockdown).

EDIT: Seems to be shared whith another company (another logo on the same building), so likely they just rented it.
 
And the fossil fuel industry's media onslaught against EV's continues . . .


Perhaps it's time for Tesla to bring back their PR department?

Tesla has about 80% of the US EV market, and yet the WSJ borrows/rents a single Model 3 from Turo (likely an SR?), while demonstrating the absurdity of other brands' efforts, and the overall profoundly negative tone "does the job" to support legacy ICE brands "other goal" of retaining the status quo, at least here in the US.

This other WSJ article was NOT behind a paywall on the Apple News feed as well: an absolute nightmare of a KIA EV road trip, with nary a single mention of the Supercharging network . . . . Interesting eh?


(Perhaps someone needs to reach out to her and loan her a Model 3 LR?)

In the interim, all TSLA investors can expect more FUD like this as those that profit greatly from the status quo appear to be getting serious about trying to stop EV's, and it also speaks volumes as to legacy ICE brands' seriousness (or lack there of) in actually making the transition to an EV future, and the absolute brilliance of Elon's Supercharger network.
 
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🤔Hmmm. Wondering if expanding FSD Autosteer on City Streets to 100k cars will release a portion of the Deferred FSD Revenue to Q2 Earnings?
Per the Q1 10Q, Tesla expects to earn about $1.6B in the next 12 months from revenue that had been deferred. I wonder how much of this $1.6B will show up in Q2? if any?


View attachment 812796

The accounting on this is a bit of a wild card. Tesla will have to use some judgment as to whether they can recognize revenue with the expanded release of FSD Beta 10.12.2.

In April 2020, Tesla recognized $48m in revenue when Traffic and Stop Sign Control was released. Note that this feature is still considered Beta (see yellow highlight below) and yet Tesla was able to recognize $48m when released.

Today, when Tesla sells FSD, they only recognize about 60% as revenue and defer 40% until FSD is fully delivered. I believe that Auto Steer on City Streets is the final component to FSD and when released would allow Tesla to recognize the final 40% to revenue.

With Auto Steer on City Streets released to 100k vehicles, we could see about $240m released to revenue generating an additional $0.20 to Q2 EPS.
My number is a VERY ROUGH ESTIMATE and is computed as follows:

(# Vehicles X FSD Avg Price X Remaining Unrecognized FSD Revenue %)
. 100,000 X $6,000 X 40% = $240m

I may be low on the avg price of FSD at $6,000 but FSD had a high take rate when pricing was $4k to $6k. Pricing today is $12k.
Perhaps some of the Tesla Forecasters on Twitter & Youtube will cover this topic with better data than I have.
Again, I want to stress that the accounting on this is not certain. Tesla may decide Revenue Recognition is not warranted.

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Yesterday I was supercharging at the Eemnes SuC in The Netherlands.
Looking to my right I saw a Model X that had been altered to incorporate an installation for a wheelchair.
I approached the people in the Model X and asked if I was allowed to take a picture.
Very friendly people; I saw that the steering wheel had been altered too.
We had a short chat with each other about the upcoming stock split and about hodling.
He offered to send me a link to a short movie of the installation in action; I added it here.
There are days that the versatility of Tesla keeps amazing me.

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