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

[SOULPEDL]

Elon confirms that the wait list is just too long for the Model 3 LR

https://twitter.com/x/status/1558307261486956544

Is this a Peter pays Paul approach? Steal production from Model 3 short-term to increase Model Y output in 2H? The 3 and Y have a lot in common.

 

[Singuy]

Where’s the multi thousand upvotes in Reddit and retweets for the retraction? bet it will be crickets. Sigh….

It wasn't a retraction but doubling down with this trollish tweet.

 

[Christine69420]

Is this a Peter pays Paul approach? Steal production from Model 3 short-term to increase Model Y output in 2H? The 3 and Y have a lot in common.

Should not think so. The M3 lines are probably working full time to get the backlog down to a manageable time period.

 

[cab]

I know what you mean and if I was still striving to reach my "number" I would probably be even more than the 50-plus percent (in one company) than I already am. And I would be a bit "on the edge of my seat" the entire time being so concentrated in one investment, no matter how sure of a thing it seemed. As it is, I don't have a care. Which is a luxury in itself. No having a care is a luxury made possible by having a lot more than I know I need.

For that reason, I have some investment/retirement advice for those looking to retire and trying to come to terms with what their 'number' is. Take it or leave it, it doesn't matter to me:

Make the 'number' at least two to three times what you think it should be. Obviously, the exact multiplier here will vary depending upon how you calculated your "number" to begin with, and your age and health at the time, but you get the idea. Remember, the first million is the hardest so be very generous when calculating the number. Like at least 2-3X what you think you will actually need, maybe 5x. It's a lot easier to make more money when you haven't mentally 'cashed out' than it is to conserve a dwindling pile. There are a bunch of very good reasons to be greedy like this, I'm only going to mention two or three of the big ones.

1) The luxury of not having a care. This doesn't mean you can be reckless with your money on a grand and continuing scale, but it does mean you can stop thinking about money, stop trying to get a better deal, you can take that vacation when it's most convenient for you, maybe that means tomorrow, rather than planning it for when the rates are the lowest or the weather might not be optimum. It means you can stop waiting hoping the thing you want/need will go on sale, you can just buy it when you need it. Basically, when you have more than you need, you can do whatever you want, whenever you want, without worrying how it might impact your budget. That's very liberating which is worth a lot right there.

2) I don't know what the future holds, and neither do you. It could be there is hyperinflation. Or the future could be an amazing place with amazing options, but only if you have the very large amounts of money that it may cost to be an early adopter of things that could significantly improve your life. Domestic robots, life extension technologies, amazing genetic cures for diseases that cripple quality of life, etc. etc. etc. I could go on and on about why we don't know, the point is, nobody can know how much they might need or want in the future and it's a lot easier if you continue compounding your gains than if you cash out early and start living big early. I'm not saying to delay your dreams so much as I'm saying it might be good to scale them back to require a much smaller part of your net worth so the bulk of it can continue to compound rather than spending it down early on lavish things.

The future is both more certain and yet more uncertain than most people think. That sounds like a contradiction, but the certainty is a function of the aggregate future of everyone (which, with AWG, etc., still has plenty of uncertainty to it) and the uncertainty is a function of each individuals happenstance (human nature is to under-estimate the chances of negative things happening). All the planning in the world cannot prevent bad things from happening. I'm not saying to expect bad things to happen, I'm saying it's easier and better to have contingencies in case they do happen than to squander those away on living large and close to your budget, before you really have the means. It's always helpful to not be constrained by money. Truth: money does not surprise you with how long it lasts (unless it's actively working for you). Conversely, many people have discovered that money vanishes amazingly quickly with little to show for it. This is even true for the majority of big Lotto winners, even those who won more than $50-$100 million. Yes, they were foolish but it still illustrates how quickly things can go wrong.

3) There is no rule that says you have to spend it all, it doesn't matter if you have more than you need. It's only a problem when you have less than you need. Go beyond money and enjoy living so far within your actual means that you can enjoy each moment even more. If your money continues compounding (and it will), there will come a point at which living far within your means is actually living quite large. This is the side you want to err on.

Some people feel they must spend it now to become "the person" they want others to see. Please stop right there. That never made anyone happy and it just might make long-standing family and friends jealous. Conversely, if they are already far beyond your economic "status" and you want to bring yourself "up to their level", stop right there! If they treat you or think of you any differently based upon your perceived economic status, they are not worth knowing, let alone, trying to impress. You only have one life to live, live it on your terms. Do what you do because that's what you believe you should be doing, not because that's what you think others believe you should be doing.

In the current world, even $10 million is not necessarily excessive if one wants to retire before the traditional retirement age of 62-65. Sure, don't live like a college student simply because you 'only' have $2 million or $5 million, or whatever it is, but don't "cash out" and "do big things" because there is a high chance those "big things" won't turn out how you thought. It's much better to continue making money by the proven method of the magic of compounding. It doesn't even have to be in TSLA although I haven't seen any companies that look to me like they have a more favorable risk/reward ratio at this point. At my age, that doesn't stop me from diversifying 50% of my assets into other companies. Elon Musk kept betting it all and winning. He never intended to bet it all but that's just how it played out because the money never goes as far as you think, unless it's actively working for you. I suppose if you are as exceptional as he is, you could emulate his investment style, but I don't recommend it. If you want to bet on yourself, and you do not have a proven track record, limit the amount you invest and get others to make up the difference. Elon did this too but it almost ended up a disaster anyway.

The message is: money ain't what it used to be so don't be getting all swell'd up in da head thinking yer rich and can cash out and get off the crazy train simply because Tesla doubled yet again. Sure, take some profits and upgrade your day-to-day life a little, but always keep the spending on the conservative side so your assets can continue to compound, and you can reach that point where money truly doesn't matter. I think many will be surprised how quickly that will happen when you patiently hold the course. Of course, your health and age are major determinates of how to think about all of this and how and when to diversify. Finally, never take your eyes off the actual current performance and future prospects of the companies you are invested in.

Very good and well thought out post, Stealth. To pull the "health and age" thread a bit more I would point out is that many believe "time>money" (at least once you have a reasonable sum of the latter). Over on another forum I am on, folks call it "OMY"ing. This occurs when they have enough money to retire, but then work "One More Year" (aka OMY) to be sure...and then that turns into two more years...and then three more years, etc. While some are glad they did stockpile a bit more, many look back in regret because the one thing that money can't buy is more years...especially more HEALTHY years. More healthy years to "do stuff", more years to spend with family and loved ones, etc. It's always a balancing act....if only my crystal ball were working better I'd know my own "balance" point!

 

[SOULPEDL]

I know what you mean and if I was still striving to reach my "number" I would probably be even more than the 50-plus percent (in one company) than I already am. And I would be a bit "on the edge of my seat" the entire time being so concentrated in one investment, no matter how sure of a thing it seemed. As it is, I don't have a care. Which is a luxury in itself. No having a care is a luxury made possible by having a lot more than I know I need.

For that reason, I have some investment/retirement advice for those looking to retire and trying to come to terms with what their 'number' is. Take it or leave it, it doesn't matter to me:

Make the 'number' at least two to three times what you think it should be. Obviously, the exact multiplier here will vary depending upon how you calculated your "number" to begin with, and your age and health at the time, but you get the idea. Remember, the first million is the hardest so be very generous when calculating the number. Like at least 2-3X what you think you will actually need, maybe 5x. It's a lot easier to make more money when you haven't mentally 'cashed out' than it is to conserve a dwindling pile. There are a bunch of very good reasons to be greedy like this, I'm only going to mention two or three of the big ones.

1) The luxury of not having a care. This doesn't mean you can be reckless with your money on a grand and continuing scale, but it does mean you can stop thinking about money, stop trying to get a better deal, you can take that vacation when it's most convenient for you, maybe that means tomorrow, rather than planning it for when the rates are the lowest or the weather might not be optimum. It means you can stop waiting hoping the thing you want/need will go on sale, you can just buy it when you need it. Basically, when you have more than you need, you can do whatever you want, whenever you want, without worrying how it might impact your budget. That's very liberating which is worth a lot right there.

2) I don't know what the future holds, and neither do you. It could be there is hyperinflation. Or the future could be an amazing place with amazing options, but only if you have the very large amounts of money that it may cost to be an early adopter of things that could significantly improve your life. Domestic robots, life extension technologies, amazing genetic cures for diseases that cripple quality of life, etc. etc. etc. I could go on and on about why we don't know, the point is, nobody can know how much they might need or want in the future and it's a lot easier if you continue compounding your gains than if you cash out early and start living big early. I'm not saying to delay your dreams so much as I'm saying it might be good to scale them back to require a much smaller part of your net worth so the bulk of it can continue to compound rather than spending it down early on lavish things.

The future is both more certain and yet more uncertain than most people think. That sounds like a contradiction, but the certainty is a function of the aggregate future of everyone (which, with AWG, etc., still has plenty of uncertainty to it) and the uncertainty is a function of each individuals happenstance (human nature is to under-estimate the chances of negative things happening). All the planning in the world cannot prevent bad things from happening. I'm not saying to expect bad things to happen, I'm saying it's easier and better to have contingencies in case they do happen than to squander those away on living large and close to your budget, before you really have the means. It's always helpful to not be constrained by money. Truth: money does not surprise you with how long it lasts (unless it's actively working for you). Conversely, many people have discovered that money vanishes amazingly quickly with little to show for it. This is even true for the majority of big Lotto winners, even those who won more than $50-$100 million. Yes, they were foolish but it still illustrates how quickly things can go wrong.

3) There is no rule that says you have to spend it all, it doesn't matter if you have more than you need. It's only a problem when you have less than you need. Go beyond money and enjoy living so far within your actual means that you can enjoy each moment even more. If your money continues compounding (and it will), there will come a point at which living far within your means is actually living quite large. This is the side you want to err on.

Some people feel they must spend it now to become "the person" they want others to see. Please stop right there. That never made anyone happy and it just might make long-standing family and friends jealous. Conversely, if they are already far beyond your economic "status" and you want to bring yourself "up to their level", stop right there! If they treat you or think of you any differently based upon your perceived economic status, they are not worth knowing, let alone, trying to impress. You only have one life to live, live it on your terms. Do what you do because that's what you believe you should be doing, not because that's what you think others believe you should be doing.

In the current world, even $10 million is not necessarily excessive if one wants to retire before the traditional retirement age of 62-65. Sure, don't live like a college student simply because you 'only' have $2 million or $5 million, or whatever it is, but don't "cash out" and "do big things" because there is a high chance those "big things" won't turn out how you thought. It's much better to continue making money by the proven method of the magic of compounding. It doesn't even have to be in TSLA although I haven't seen any companies that look to me like they have a more favorable risk/reward ratio at this point. At my age, that doesn't stop me from diversifying 50% of my assets into other companies. Elon Musk kept betting it all and winning. He never intended to bet it all but that's just how it played out because the money never goes as far as you think, unless it's actively working for you. I suppose if you are as exceptional as he is, you could emulate his investment style, but I don't recommend it. If you want to bet on yourself, and you do not have a proven track record, limit the amount you invest and get others to make up the difference. Elon did this too but it almost ended up a disaster anyway.

The message is: money ain't what it used to be so don't be getting all swell'd up in da head thinking yer rich and can cash out and get off the crazy train simply because Tesla doubled yet again. Sure, take some profits and upgrade your day-to-day life a little, but always keep the spending on the conservative side so your assets can continue to compound, and you can reach that point where money truly doesn't matter. I think many will be surprised how quickly that will happen when you patiently hold the course. Of course, your health and age are major determinates of how to think about all of this and how and when to diversify. Finally, never take your eyes off the actual current performance and future prospects of the companies you are invested in.

And don't forget, we'll also want our own Primus Robots, likely expensive at first. I plan on that, and not a minute too late. In 10-15 yrs, I'll teach it everything I know, then Will my inheritance to my Robot who can live here after I'm gone and maybe run my factory and take on some roommates or guests for better utility of these assets. Call it a Robot Trust - may need an identity, we'll see.

 

[The Accountant]

Is this a Peter pays Paul approach? Steal production from Model 3 short-term to increase Model Y output in 2H? The 3 and Y have a lot in common.

As North American Model 3 and Y demand exceeds Fremont production capacity, the Model Y excess demand can spill over to Austin but the Model 3 excess demand cannot. So Tesla needs to put the brake on Model 3 orders until enough capacity has grown at Austin to allow Tesla to convert some Fremont Y capacity to 3 capacity. Maybe late Q4 or early Q1 2023?

 

[SOULPEDL]

Should not think so. The M3 lines are probably working full time to get the backlog down to a manageable time period.

Good point. What was the backlog on Model 3 prior?
I assumed Model Y was much higher in demand by now and that was showing a delivery as soon as early Q1 as of last month. I didn't think Model 3 had similar demand still.)

 

[Snerruc]

I know what you mean and if I was still striving to reach my "number" I would probably be even more than the 50-plus percent (in one company) than I already am. And I would be a bit "on the edge of my seat" the entire time being so concentrated in one investment, no matter how sure of a thing it seemed. As it is, I don't have a care. Which is a luxury in itself. No having a care is a luxury made possible by having a lot more than I know I need.

For that reason, I have some investment/retirement advice for those looking to retire and trying to come to terms with what their 'number' is. Take it or leave it, it doesn't matter to me:

Make the 'number' at least two to three times what you think it should be. Obviously, the exact multiplier here will vary depending upon how you calculated your "number" to begin with, and your age and health at the time, but you get the idea. Remember, the first million is the hardest so be very generous when calculating the number. Like at least 2-3X what you think you will actually need, maybe 5x. It's a lot easier to make more money when you haven't mentally 'cashed out' than it is to conserve a dwindling pile. There are a bunch of very good reasons to be greedy like this, I'm only going to mention two or three of the big ones.

1) The luxury of not having a care. This doesn't mean you can be reckless with your money on a grand and continuing scale, but it does mean you can stop thinking about money, stop trying to get a better deal, you can take that vacation when it's most convenient for you, maybe that means tomorrow, rather than planning it for when the rates are the lowest or the weather might not be optimum. It means you can stop waiting hoping the thing you want/need will go on sale, you can just buy it when you need it. Basically, when you have more than you need, you can do whatever you want, whenever you want, without worrying how it might impact your budget. That's very liberating which is worth a lot right there.

2) I don't know what the future holds, and neither do you. It could be there is hyperinflation. Or the future could be an amazing place with amazing options, but only if you have the very large amounts of money that it may cost to be an early adopter of things that could significantly improve your life. Domestic robots, life extension technologies, amazing genetic cures for diseases that cripple quality of life, etc. etc. etc. I could go on and on about why we don't know, the point is, nobody can know how much they might need or want in the future and it's a lot easier if you continue compounding your gains than if you cash out early and start living big early. I'm not saying to delay your dreams so much as I'm saying it might be good to scale them back to require a much smaller part of your net worth so the bulk of it can continue to compound rather than spending it down early on lavish things.

The future is both more certain and yet more uncertain than most people think. That sounds like a contradiction, but the certainty is a function of the aggregate future of everyone (which, with AWG, etc., still has plenty of uncertainty to it) and the uncertainty is a function of each individuals happenstance (human nature is to under-estimate the chances of negative things happening). All the planning in the world cannot prevent bad things from happening. I'm not saying to expect bad things to happen, I'm saying it's easier and better to have contingencies in case they do happen than to squander those away on living large and close to your budget, before you really have the means. It's always helpful to not be constrained by money. Truth: money does not surprise you with how long it lasts (unless it's actively working for you). Conversely, many people have discovered that money vanishes amazingly quickly with little to show for it. This is even true for the majority of big Lotto winners, even those who won more than $50-$100 million. Yes, they were foolish but it still illustrates how quickly things can go wrong.

3) There is no rule that says you have to spend it all, it doesn't matter if you have more than you need. It's only a problem when you have less than you need. Go beyond money and enjoy living so far within your actual means that you can enjoy each moment even more. If your money continues compounding (and it will), there will come a point at which living far within your means is actually living quite large. This is the side you want to err on.

Some people feel they must spend it now to become "the person" they want others to see. Please stop right there. That never made anyone happy and it just might make long-standing family and friends jealous. Conversely, if they are already far beyond your economic "status" and you want to bring yourself "up to their level", stop right there! If they treat you or think of you any differently based upon your perceived economic status, they are not worth knowing, let alone, trying to impress. You only have one life to live, live it on your terms. Do what you do because that's what you believe you should be doing, not because that's what you think others believe you should be doing.

In the current world, even $10 million is not necessarily excessive if one wants to retire before the traditional retirement age of 62-65. Sure, don't live like a college student simply because you 'only' have $2 million or $5 million, or whatever it is, but don't "cash out" and "do big things" because there is a high chance those "big things" won't turn out how you thought. It's much better to continue making money by the proven method of the magic of compounding. It doesn't even have to be in TSLA although I haven't seen any companies that look to me like they have a more favorable risk/reward ratio at this point. At my age, that doesn't stop me from diversifying 50% of my assets into other companies. Elon Musk kept betting it all and winning. He never intended to bet it all but that's just how it played out because the money never goes as far as you think, unless it's actively working for you. I suppose if you are as exceptional as he is, you could emulate his investment style, but I don't recommend it. If you want to bet on yourself, and you do not have a proven track record, limit the amount you invest and get others to make up the difference. Elon did this too but it almost ended up a disaster anyway.

The message is: money ain't what it used to be so don't be getting all swell'd up in da head thinking yer rich and can cash out and get off the crazy train simply because Tesla doubled yet again. Sure, take some profits and upgrade your day-to-day life a little, but always keep the spending on the conservative side so your assets can continue to compound, and you can reach that point where money truly doesn't matter. I think many will be surprised how quickly that will happen when you patiently hold the course. Of course, your health and age are major determinates of how to think about all of this and how and when to diversify. Finally, never take your eyes off the actual current performance and future prospects of the companies you are invested in.

Having retired 35 years ago, I agree with Stealth’s points. 35 years ago I could retire comfortably on a million. Nowadays it takes about 10 times that to have the same life. In my case, my wife and I had modest desires and requirements, so we were able to live and also grow our assets at about the inflation rate. For years we never were able to spend all the income our assets produced and this helped us increase our assets. You need to take a realistic examination of what you want to do with your life and your spending habits. Also, you need to plan as best you can for life’s ugly surprises. Things like deteriorating mental ability as you age, and things like dementia are a bitch. The expense for my wife’s care is enormous and life changing. Eventually you need to protect yourself from yourself. Also, at retirement, depending on the performance of a single company is a big mistake. No matter how good they are, *sugar* happens. I know people who stayed with one company, usually the one they worked for, and wound up destroyed in their 70s or 80s. Spreading your assets out isn’t perfect, but it is safer than a single holding.

 

[Webeevdrivers]

I’m sure there is not much money to be made in selling things like CCS adapters, but from what I can tell, in the last month there are about 3 new companies selling after market CCS adapters to the North American market out there. Seems to me tesla could have made a few bucks there. And this is not about a chip shortage as they are passive devices. I’m sure they have their reasons but to me it seems obvious that someone was going to fill that void once the tesla version got taken off the market.

Safe weekend travels all.

 

[SOULPEDL]

As North American Model 3 and Y demand exceeds Fremont production capacity, the Model Y excess demand can spill over to Austin but the Model 3 excess demand cannot. So Tesla needs to put the brake on Model 3 orders until enough capacity has grown at Austin to allow Tesla to convert some Fremont Y capacity to 3 capacity. Maybe late Q4 or early Q1 2023?

Makes sense. Maybe our Model 3 would sell at peak value around Dec then. Especially if the 3 came back online with new tech to then depreciate mine.

Tesla stuff is always such a fast moving target. Now I'm wondering about "New Solar Products" coming in '23, hoping for a lower cost roof perhaps.

 

[StealthP3D]

Based their current cost structure they have massive hurdles to clear. They are at their infancy when it comes to spending money as the nearest service center near me, the second largest EV market being Florida, is in Texas.

It's good to reduce the cost per revenue, but their starting point is a massive massive loss. As I pointed out, Tesla already had a positive gross margin at Rivians scale and still took them another 8 years to hit a constant rate of profitability. And if you look at Tesla as they scale, expenses got bigger and bigger. If you were to apply the same multiplier of 22.5x to rivians spending as they grow in scale, they will end up having cogs plus operations to be something like 38 billion a quarter if they hit 1M car run rate.

As Elon said, if they don't change dramatically at reducing cost yesterday, their chance of survival is very low.

I agree with all that as my previous posts on Rivian will show. But just to play Devil's advocate, what are the chances that we don't know as much about Rivian as we think? It has occurred to me that they have been pretty tight-lipped about the manufacturing of Amazon delivery vans. They did make a statement almost a year ago now, I believe, about planning to make the RT1/RS1 production ramp slower than anticipated so they could focus resources more heavily on the van contracts. When they said this, it sounded more like an excuse than anything. But there are some big "buts" here.

We already know just how favorable the operating economics of EV delivery vans are from Amazon's perspective. They need a last mile solution with lower operating costs. That means Rivian might be able to make this their cash cow if they really are focusing on an efficient production system and supply chain for the big vans. If Rivian stock is going to perform well, they really need to pull this rabbit out of the hat. And it's a much easier rabbit to pull out than making a complex EV like the RT1/RS1 cheap to build. Sure, Amazon vans are not sexy, but if Rivian can establish a cost effective and reliable supply chain for batteries and other components and an efficient manufacturing system, delivery vans could very well save them.

Or, it could turn out that saying they were focusing on manufacturing vans was just their excuse for not ramping RT1 and RS1 into high volumes more quickly.

I'm just throwing the "saved by the van" possibility out there because I've been surprised before and we have so little visibility inside Rivian, maybe they could start cranking vans out in large numbers? And maybe that's why they are burning cash so fast?

 

[winfield100]

While it is fun to talk about the Rivians of the world and I think they may in fact make it (#AmazonMoneyIsFun), I used to think the various established automakers were the real threat to tesla. Now, however, it seems the real threat will come from the Chinese automakers. To be clear though, while there is some threat to Tesla (at least in terms of end state market share), they are primarily a threat to every other established auto maker.

In my own myopic thinking I never would have imagined such a rapid shift to an automaker eco system that consisted of Tesla and Chinese automakers...with the rest falling by the wayside or ending up as shells of their former selves. I predict a lot of "traditional automaker + Chinese EV maker" partnerships occurring over the next few years as they all try to "find their place" in this new world. Ironic given the recent "inflation reduction act" or whatever it is called and its "supposed" goal to bring more manufacturing back to the U.S.A., etc.

@cab
to me, the "inflation reduction act" seems a bit of a watered down "Green New Deal" except that set of words is an anathema to many short sighted folks.

(a whole bunch of farmers in Virginia, last year, managed to turn down a massive Solar farm on what was extremely poor farmland, lots of shale etc right next to the intersections of Interstate 66 and Interstate 81 due to effective scare tactics, refusing free money to manufacture "free" (virtually zero marginal cost)(V0MC) energy from free sunlight)

Its hastening the switch to renewable energy, and EV's with their much higher efficiency of energy use, Federal tax credits lasting 10 years for Renewable Energy, EV's and such

If you look at

Search results | Home

www.bp.com

and do a simple download of the Excel file and merely look at the installed base of Solar and Wind, renewable energy, a few quite obvious things pop out

The US and China combined have around 50%+ of the installed base of Wind and Solar, renewable energy and rapidly growing
(it's really nice that PV was around $1,600 - $1,800 a watt around 1956, (66 years ago) a bit over $100 a watt ~1974 (~45-50yrs ago) and ow is around 0.20 (20 cents a watt)

over 400 gigwatts of PV installed in China and the US (~47%) out of 843 gigawatts BUT note the growth rates

over 460 gigwatts of Wind installed in China and the US (56%+) out of 824 gigawatts and also note growth rates

So around 1,670 gigawatts of RE installed, very nice growth rates (which mean jobs for one thing, cleaner, cheaper energy for another, AND the world passed 10% renewable energy from virtually NIL 20 years ago, so with luck and work, 100% by 2036 and 200% by 2041.

Additionally ICE =>wastes<= 70% - 80% of the "use once and pollute the planet" energy, and losses in heat and noise
the =>manufactured<= "free" (V0MC) used in EV's is around 80% efficient, ie around 3-4 times as efficient

The fossil fuel dinosaurs are fighting this some more than others

cheers

 

[bkp_duke]

As North American Model 3 and Y demand exceeds Fremont production capacity, the Model Y excess demand can spill over to Austin but the Model 3 excess demand cannot. So Tesla needs to put the brake on Model 3 orders until enough capacity has grown at Austin to allow Tesla to convert some Fremont Y capacity to 3 capacity. Maybe late Q4 or early Q1 2023?

The lines really can't be "converted". The number of steps and robots on the 3 line is substantially greater than on the Y line. There just isn't the physical space to convert a Y line into a 3 line, not unless you release a new "version" of the car built with casting. Now, if Tesla did convert a 3 line to use castings (HUGE IF there - this would require either more casting machines, or swapping molds, which is not trivial), then in theory they could leverage some space savings, as it looks like the number of robots on a Y line such as Austin (front+rear casts) is 1/3 to 1/4 that on the Fremont 3 line.

 

[Usain]

What if, gasp, Elon simply wanted out of TSLA? He could not have picked a better way to sell and keep the price up.

I think Musk wants business that can make new things. The success of Tesla with the 3/Y has likely turned Tesla into a chore. His excitement/interest in the semi and cybertruck probably peaked two years ago. FSD has become a burden.

I think Optimus alone is plenty to keep Elon excited about Tesla for several years to come.

 

[Singuy]

I agree with all that as my previous posts on Rivian will show. But just to play Devil's advocate, what are the chances that we don't know as much about Rivian as we think? It has occurred to me that they have been pretty tight-lipped about the manufacturing of Amazon delivery vans. They did make a statement almost a year ago now, I believe, about planning to make the RT1/RS1 production ramp slower than anticipated so they could focus resources more heavily on the van contracts. When they said this, it sounded more like an excuse than anything. But there are some big "buts" here.

We already know just how favorable the operating economics of EV delivery vans are from Amazon's perspective. They need a last mile solution with lower operating costs. That means Rivian might be able to make this their cash cow if they really are focusing on an efficient production system and supply chain for the big vans. If Rivian stock is going to perform well, they really need to pull this rabbit out of the hat. And it's a much easier rabbit to pull out than making a complex EV like the RT1/RS1 cheap to build. Sure, Amazon vans are not sexy, but if Rivian can establish a cost effective and reliable supply chain for batteries and other components and an efficient manufacturing system, delivery vans could very well save them.

Or, it could turn out that saying they were focusing on manufacturing vans was just their excuse for not ramping RT1 and RS1 into high volumes more quickly.

I'm just throwing the "saved by the van" possibility out there because I've been surprised before and we have so little visibility inside Rivian, maybe they could start cranking vans out in large numbers? And maybe that's why they are burning cash so fast?

I seriously doubt these companies are hiding any kind of secret excuses that can potentially explain their current financials. If you listen to these calls, they are throwing the kitchen sink at trying to justify their current cash burn rate before stock goes to zero.

 

[wtlloyd]

I know what you mean and if I was still striving to reach my "number" I would probably be even more than the 50-plus percent (in one company) than I already am. And I would be a bit "on the edge of my seat" the entire time being so concentrated in one investment, no matter how sure of a thing it seemed. As it is, I don't have a care. Which is a luxury in itself. No having a care is a luxury made possible by having a lot more than I know I need.

For that reason, I have some investment/retirement advice for those looking to retire and trying to come to terms with what their 'number' is. Take it or leave it, it doesn't matter to me:

Make the 'number' at least two to three times what you think it should be. Obviously, the exact multiplier here will vary depending upon how you calculated your "number" to begin with, and your age and health at the time, but you get the idea. Remember, the first million is the hardest so be very generous when calculating the number. Like at least 2-3X what you think you will actually need, maybe 5x. It's a lot easier to make more money when you haven't mentally 'cashed out' than it is to conserve a dwindling pile. There are a bunch of very good reasons to be greedy like this, I'm only going to mention two or three of the big ones.

1) The luxury of not having a care. This doesn't mean you can be reckless with your money on a grand and continuing scale, but it does mean you can stop thinking about money, stop trying to get a better deal, you can take that vacation when it's most convenient for you, maybe that means tomorrow, rather than planning it for when the rates are the lowest or the weather might not be optimum. It means you can stop waiting hoping the thing you want/need will go on sale, you can just buy it when you need it. Basically, when you have more than you need, you can do whatever you want, whenever you want, without worrying how it might impact your budget. That's very liberating which is worth a lot right there.

2) I don't know what the future holds, and neither do you. It could be there is hyperinflation. Or the future could be an amazing place with amazing options, but only if you have the very large amounts of money that it may cost to be an early adopter of things that could significantly improve your life. Domestic robots, life extension technologies, amazing genetic cures for diseases that cripple quality of life, etc. etc. etc. I could go on and on about why we don't know, the point is, nobody can know how much they might need or want in the future and it's a lot easier if you continue compounding your gains than if you cash out early and start living big early. I'm not saying to delay your dreams so much as I'm saying it might be good to scale them back to require a much smaller part of your net worth so the bulk of it can continue to compound rather than spending it down early on lavish things.

The future is both more certain and yet more uncertain than most people think. That sounds like a contradiction, but the certainty is a function of the aggregate future of everyone (which, with AWG, etc., still has plenty of uncertainty to it) and the uncertainty is a function of each individuals happenstance (human nature is to under-estimate the chances of negative things happening). All the planning in the world cannot prevent bad things from happening. I'm not saying to expect bad things to happen, I'm saying it's easier and better to have contingencies in case they do happen than to squander those away on living large and close to your budget, before you really have the means. It's always helpful to not be constrained by money. Truth: money does not surprise you with how long it lasts (unless it's actively working for you). Conversely, many people have discovered that money vanishes amazingly quickly with little to show for it. This is even true for the majority of big Lotto winners, even those who won more than $50-$100 million. Yes, they were foolish but it still illustrates how quickly things can go wrong.

3) There is no rule that says you have to spend it all, it doesn't matter if you have more than you need. It's only a problem when you have less than you need. Go beyond money and enjoy living so far within your actual means that you can enjoy each moment even more. If your money continues compounding (and it will), there will come a point at which living far within your means is actually living quite large. This is the side you want to err on.

Some people feel they must spend it now to become "the person" they want others to see. Please stop right there. That never made anyone happy and it just might make long-standing family and friends jealous. Conversely, if they are already far beyond your economic "status" and you want to bring yourself "up to their level", stop right there! If they treat you or think of you any differently based upon your perceived economic status, they are not worth knowing, let alone, trying to impress. You only have one life to live, live it on your terms. Do what you do because that's what you believe you should be doing, not because that's what you think others believe you should be doing.

In the current world, even $10 million is not necessarily excessive if one wants to retire before the traditional retirement age of 62-65. Sure, don't live like a college student simply because you 'only' have $2 million or $5 million, or whatever it is, but don't "cash out" and "do big things" because there is a high chance those "big things" won't turn out how you thought. It's much better to continue making money by the proven method of the magic of compounding. It doesn't even have to be in TSLA although I haven't seen any companies that look to me like they have a more favorable risk/reward ratio at this point. At my age, that doesn't stop me from diversifying 50% of my assets into other companies. Elon Musk kept betting it all and winning. He never intended to bet it all but that's just how it played out because the money never goes as far as you think, unless it's actively working for you. I suppose if you are as exceptional as he is, you could emulate his investment style, but I don't recommend it. If you want to bet on yourself, and you do not have a proven track record, limit the amount you invest and get others to make up the difference. Elon did this too but it almost ended up a disaster anyway.

The message is: money ain't what it used to be so don't be getting all swell'd up in da head thinking yer rich and can cash out and get off the crazy train simply because Tesla doubled yet again. Sure, take some profits and upgrade your day-to-day life a little, but always keep the spending on the conservative side so your assets can continue to compound, and you can reach that point where money truly doesn't matter. I think many will be surprised how quickly that will happen when you patiently hold the course. Of course, your health and age are major determinates of how to think about all of this and how and when to diversify. Finally, never take your eyes off the actual current performance and future prospects of the companies you are invested in.

Great all-encompassing post. I am mystified when people speak of "cashing out" - like, to do what with the money? Wallow in it like Scrooge McDuck in his vault? Where will you keep it once you take it out of TSLA? I'm all in, because I can't think of a better place to put it, that would have to be a place with high growth that is immune to force majeure effects - is there even such a place?

 

[Bet TSLA]

Great all-encompassing post. I am mystified when people speak of "cashing out" - like, to do what with the money? Wallow in it like Scrooge McDuck in his vault? Where will you keep it once you take it out of TSLA? I'm all in, because I can't think of a better place to put it, that would have to be a place with high growth that is immune to force majeure effects - is there even such a place?

I have a large chunk set aside (it was 1/3, now it's >1/2 because TSLA has gone down) as cash (like in a savings account) because that's what's required to keep my wife happy. Keeping my wife happy is perhaps my most important investment. I've been retired over a decade now, and she for longer.

 

[StealthP3D]

I seriously doubt these companies are hiding any kind of secret excuses that can potentially explain their current financials. If you listen to these calls, they are throwing the kitchen sink at trying to justify their current cash burn rate before stock goes to zero.

That's helpful to know, as I said, I don't really follow Rivian. And if the cash burn was in prep for cranking out delivery vans in high volume, they would have no good reason to hide that from investors listening to the call.

Still, I hope they crank out a lot of delivery vans for Amazon before they run out of money because they will do more to meaningfully electrify transport than RT1's and RS1's.

 

[StarFoxisDown!]

Great all-encompassing post. I am mystified when people speak of "cashing out" - like, to do what with the money? Wallow in it like Scrooge McDuck in his vault? Where will you keep it once you take it out of TSLA? I'm all in, because I can't think of a better place to put it, that would have to be a place with high growth that is immune to force majeure effects - is there even such a place?

Well some of us have been putting off major purchases like ya know a home, for many years . Like 7+ years now . I’ll likely cash out half of my shares when TSLA reaches a 2.5 trillion valuation. There’s plenty to do/buy with that 50% cash out.

 

[zecar]

I seriously doubt these companies are hiding any kind of secret excuses that can potentially explain their current financials. If you listen to these calls, they are throwing the kitchen sink at trying to justify their current cash burn rate before stock goes to zero.

Rivian just needs enough cash to build two plants, and enough good design to sell the outpuit of those two plants. That doesn't make RIVN a great stock, but getting to positive cash flow and some profitability seems like the most likely outcome.

Rivian is the one of the group that is not undercapitalized. Staying in business long enough to figure it out is often the key.

Rivian went big with their plans and capitalization. I'm sure that plan came from the VCs. They were right.