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

[JRP3]

I don't care if Elon came from wealth or not (although he clearly didn't).

I'd say he came from at least upper middle class wealth. You should check out the interviews with Errol, they paint a bit of a different picture. Not that I think it diminishes Elon's achievements in the least.

 

[wtlloyd]

Did you read what I wrote? Because you’re arguing against nothing that I said. I was responding to a call to sue him for libel — I merely pointed out that was silly, since the tweet was factually accurate. My opinions on Elon or billionaires in general were never even mentioned.

But I get it, you got mad, and that anger hampered your reading comprehension and critical thinking skills. It happens.

Now you're just being....a punk.

 

[unk45]

Interesting that over the last week the Nasdaq has been stronger than the SP500 and that continued through the day before a Fed rate increase. Seems like positioning..


I'm not assuming they go back to normal. I'm saying the margin that Ford has on F150s and larger SUVs simply gets pushed to Q4. Not all vehicles that Ford makes are zero margin. Quite the opposite actually. F150s have Tesla like margins. The Super Duty series are nearing that. The Explorer (and especially the Lincoln offshoots) are also high margin for them. Where Ford doesn't make any money are their cars in Europe, EVs, and small SUVs. Many of those are negative or zero margin.

Ford already has and will continue to increase the prices on their trucks. This is one area, as long as Tesla isn't in the market, where Ford dominates and pretty much has control of the market like Tesla does for the 3 and Y.

Ford has also been losing money in otherwise profitable markets because of huge pension obligations (they did not declare bankruptcy, remember) low capacity utilization in many factories and less attractive model mix outside of the US, where they exited the car market almost entirely. So...

As Ford confirms closure of its Saarlouis plant: Lessons from 50 years of car production

Ford’s decision to halt production at its Saarlouis plant in 2025 is part of the biggest international assault on the social gains and rights of the working class since the 1930s.

www.wsws.org

That follows:
ford-will-close-six-european-plants-as-part-of-global-downsizing

Ford to close Brazil manufacturing operations, take $4.1 billion in charges

Ford Motor Co said on Monday it will close its three plants in Brazil this year and take pretax charges of about $4.1 billion as the COVID-19 pandemic amplified the company's under use of its manufacturing capacity.

www.reuters.com

Then consider what they're trying to do with the paint that defined Ford more than a hundred years ago:
fords-rouge-redesign

When contrasting these developments with Tesla there is no vestige of comparison. Probably Ford might survive, but that is not at all assured. As Tesla expands they will continue to play the technological advances they're already done.

Ford really made pneumatic tires (Firestone), car batteries and lights (Edison) auto gasoline stations (Rockefeller) and integrated manufacturing (River Rouge) all work together coupled with close friendships with Firestone and Edison.

Today Tesla is performing the same roles. From charging stations (no modern Rockefeller probably can't exist) to BEV (Edison tried but really could not make enough progress) to manufacturing technology (Tesla is now delivering the 21st century version of S. Colt's interchangeable parts that Ford adapted) Tesla is accelerating progress in part buy ensuring mass adoption of new battery technology by buying from every battery producer that meets their standards.

When we consider those facts it becomes easy to understand why there is so much resistance and envy. It's also evident that Tesla needs many other OEM's success in order to accelerate adoption.

Then add in the storage products that are just beginning to accelerate production, so nobody knows how to value that today. The previous comparison with Ford illustrates that the Giant Issue is refueling. That should show that Tesla, unlike Ford, is about to build on the Supercharger network, Solar (perhaps a bit of wind) and grid services plus Virtual Power Plants. They have quite a few licenses already. This one we're ignoring. What? Why?...

Most of us think of Supercharging as a facilitator to sell cars, which it certainly is. We miss the point.
John D Rockefeller was vastly more successful than Henry Ford. One sold vehicles, the other sold energy.

Now, in 2022 we have one who's selling both. This one knows that:

Elon Musk says we must switch to renewables or plunge into "the Dark Ages"

Though Musk was being interviewed about Australia, he emphasized that renewables are essential to all of humanity's future.

futurism.com

but also that:
elon-musk-renews-push-for-fossil-fuels-as-he-claims-civilization-will-crumble-without-oil-and-gas
(sorry for quoting 'The Capitalist Tool" for the old world part)

So, should we not think about how Tesla can attract more customers to their fundamental product rather than thinking about customers only as competitors?

Imagine Tesla as a global provider of EV charging, grid services and Virtual Power Plants, while continuing to innovate in all manner of vehicles, HVAC systems and so on! Add to that improved automation such as FSD, all manner of robotics, and more efficient transit systems (tunnels, etc) plus every kind of freight.

Ships (space and water) probably will be separate companies. Fueling, though, is Tesla, as is mass manufacturing technology.

Am I the only one who sees the future developing this way, if we humans do not destroy ourselves first?
To me, the entire point of TSLA holdings is to do what I can to help the mission. If in the process those holdings increase in value, GREAT! But making money is not my primary motivation.

By the way, I do understand why my view of purpose is not universally held among us.

It is that purpose that makes me hope traditional OEMs can succeed. Frankly, I much prefer the Nokia's and the IBM's to the Renault's and GM's. Better to survive and thrive from time to time than to fail and be bailed out repeatedly by governments.

Of course the Tesla's, Space X's and CATL's are the ones that Really excite me. It is those that help improve the odds of human survival. My investment strategy builds on the premise that survival is vastly preferable to any other option.

 

[unk45]

Amazon has high revenue because it’s a retailer. The ratio of value added to revenue (and thus profit potential) for retailers is low.

What about AWS?

 

[JRP3]

I guess the market is comfortable with the expected .75 hike.

 

[BornToFly]

I guess the market is comfortable with the expected .75 hike.

The NASDAQ went off a cliff after Sept 12. It may be comfortable with .75 now that it has finished dropping for it.

 

[Mengy]

I guess the market is comfortable with the expected .75 hike.

I'm sure once Powell starts talking this afternoon the entire market will crap itself.

 

[SOULPEDL]

OEMs gonna freak on this. Not only Tesla showed the industry how to implement a centralized computer (vs distributed computers/modules on a congested, slow CAN bus), but now NVidia seems on the right track with their newest chip coming in 2025.

Who will buy these in 2025? And who will own the modules that are currently run by their own computers. (What are brakes without computer and software? So then OEMs provide plugins and functions? Who owns it when the brakes break?)

NVIDIA unveils next-gen chip for autonomous driving - Drive Thor

NVIDIA has unveiled its next generation chip which the company says will not only be able to help drive your car autonomously, but also perform a wide range of other vehicle functions like driver monitoring […]

driveteslacanada.ca

 

[phoggy123]

I'm sure once Powell starts talking this afternoon the entire market will crap itself.

I dont think the fed is going to back off till the real estate market is in tatters and EPS has crumbled. They dont seem like they are messing around this time. The longer inflation goes the harder it is to undo if wages accelerate.

Fortunately for us TSLA seems almost immune to this strategy. Zero debt and an insatiable appetite for their products.

 

[SOULPEDL]

I happen to believe that the Feds considered Elon's inputs on risks with further interest rate hikes. I believe Elon is correct in saying that the simulations do not comprehend the current scenario and that the effects are quite delayed in time (like 1 yr+ as I vaguely recall).

I'm rooting for a .5% compromise. A .75% will hurt the markets; it is baked in, yes. It is not immune to the noise and subsequent fear that will follow because the next conversation will be how hard the backlash recession could become from overcompensating.

(Edit: Before anyone comments on how ridiculous this is, I would bet the Fed would go with .75 as they also don't want to sound flaky or unsure. I'm hoping for 0.5%, just so we're crystal clear.)

 

[Singuy]

I happen to believe that the Feds considered Elon's inputs on risks with further interest rate hikes. I believe Elon is correct in saying that the simulations do not comprehend the current scenario and that the effects are quite delayed in time (like 1 yr+ as I vaguely recall).

I'm rooting for a .5% compromise. A .75% will hurt the markets; it is baked in, yes. It is not immune to the noise and subsequent fear that will follow because the next conversation will be how hard the backlash recession could become from overcompensating.

The fed has been following the sentiment of markets expectations and doesn't deviate. Currently the market is expecting a 0.75 so those hoping for a 0.5 or a 1.0 will be disappointed.

 

[Artful Dodger]

To the best of my understanding, MM's aren't manipulating the market, they're supplying liquidity to the markets and hedging the options, they don't manipulate the market for OPEX as they don't care, their books are balanced at the end of each day - or should be

It's the Hedgies that are manipulating, they are the ones to gain or lose on the options markets

If someone knows better, please correct me

Mostly true, except to add that many large Hedge Funds also have Market Maker priviledges for Options contract trading. This is their edge. The are allowed by the "Madoff Exemption" to sell shares naked short, and with almost no oversight or supervision by Regulators (self-regulated industry)

This is being abused.

 

[Sofie]

I wonder when this economic “recession” business turns around and the market starts to trend positive? I’ve heard November?

 

[Paul_SF]

The fed has been following the sentiment of markets expectations and doesn't deviate. Currently the market is expecting a 0.75 so those hoping for a 0.5 or a 1.0 will be disappointed.

Maybe they’ll take Elon’s advice and cut .25?










/s

 

[SOULPEDL]

I dont think the fed is going to back off till the real estate market is in tatters and EPS has crumbled.

The fed has been following the sentiment of markets expectations and doesn't deviate. Currently the market is expecting a 0.75 so those hoping for a 0.5 or a 1.0 will be disappointed.

I guess I edited my comment too late. I agree with you.

 

[Nocturnal]

I happen to believe that the Feds considered Elon's inputs on risks with further interest rate hikes. I believe Elon is correct in saying that the simulations do not comprehend the current scenario and that the effects are quite delayed in time (like 1 yr+ as I vaguely recall).

I'm rooting for a .5% compromise. A .75% will hurt the markets; it is baked in, yes. It is not immune to the noise and subsequent fear that will follow because the next conversation will be how hard the backlash recession could become from overcompensating.

(Edit: Before anyone comments on how ridiculous this is, I would bet the Fed would go with .75 as they also don't want to sound flaky or unsure. I'm hoping for 0.5%, just so we're crystal clear.)

They can only raise so much without bankrupting the US. Also worth noting that inflation is the easiest way for the US to effectively pay it's debt down.

What Would Higher Interest Rates Mean for the Debt? | Committee for a Responsible Federal Budget

2022-06-14-Interest payments on the national debt are projected to be the fastest-growing part of the federal budget.

www.crfb.org

CBO's latest economic forecast projects the interest rate on three-month Treasury notes will average 0.9 percent in calendar year 2022 and then rise to 2.6 percent by 2025 before falling to 2.3 percent by 2032, while the interest rate on ten-year Treasury notes will average 2.4 percent in 2022 and rise to 3.8 percent by 2032. In reality, however, current interest rates are well above CBO's forecast and there is growing pressure on the Federal Reserve to raise short-term rates even higher than previously assumed.

• If interest rates are 50 basis points (0.5 percentage points) above CBO's forecast, interest payments would total $9.4 trillion over the FY 2023 to 2032 period and budget deficits would increase by an average of $143 billion per year.
• If interest rates are 100 basis points (one percentage point) above CBO's forecast, interest payments will total $10.7 trillion over the next decade and budget deficits will increase by an average of $285 billion per year.
• If interest rates are 200 basis points (two percentage points) above CBO's forecast, interest payments will total $13.4 trillion over the next decade and budget deficits would increase by an average of $570 billion per year.
• These scenarios would boost debt-to-GDP in FY 2032 by 4 to 16 percentage points, to as high as 126 percent of GDP and well above the 110 percent of GDP projected under current law. Interest costs in 2032 could reach as high as 5.6 percent of GDP, well above the current law projection of 3.3 percent and the prior record of 3.2 percent of GDP.

 

[Mengy]

I wonder when this economic “recession” business turns around and the market starts to trend positive? I’ve heard November?

I don't know, I still need to get my crystal ball fixed...

 

[henchman24]

I guess the market is comfortable with the expected .75 hike.

There was a ton of short closing over the past two days. That is probably the main piece of the market getting a slight rally. As long as the raise is 75bps or less, the market will have a bit of a relief rally.... but a short-term squeeze rally won't happen on this go round.

 

[Paracelsus]

Lol there's multiple other "lines" that could be drawn that have more contact points than the one you picked that are all more bullish than this one

Ummmm..........duh. Of course there are 'more bullish' points than the 1 year trendline I shared yesterday into the 1-year/3-year converging wedge. I could have easily picked shorter-term 'more bullish' upper wedge resistance lines than the 1-year as you suggest. And in doing so I could have shown that we have already broken above the wedge, if one were so impatient as to only look at a daily chart, or a weekly mid-week, or use shorter-term charting for the wedge. But my point is.......and has been with the the previous posts I have made regarding this huge wedge we are trading sideways into - is to convey the need to exercise some caution before jumping in too early. Because there will be intentional head-fakes by MM's in the shorter "more bullish" charts along the way that are specifically intended to encourage less patient investors to jump too soon. Which is really the only reason I am responding to your post, because I think your post could be easily interpreted to convey too much risk to some on TMC that might not have had the benefit of watching TSLA trade for many years. And which is also why I have had enough humility in my previous posts to share my past mistakes of not waiting for confirmation on the longer charts in the many years I have traded this stock - i.e. the importance of looking at the weekly close (or longer) before making a decision on a 1-year trendline confirmation.

This week is a perfect example of why being "more bullish" as you suggest 'could' encourage others to jump too soon. TSLA's mid-week price action this week has already taken us above the more conservative 1-year upper resistance line that I shared. Which is exactly why I chose a trendline that wasn't "more bullish" than you offer. Because the week hasn't ended yet and the 1-year resistance line of the wedge is determined by the trading price at the close of each week. And perhaps most importantly, at 2:00 pm today we might see the Fed opt for 1 full basis point increase instead of 0.75 as the market has already prepared itself for. The result of that would likely be TSLA getting spanked back under the 1 year resistance line and trading back into the wedge until closer to earnings...............and perhaps all the way down to the 3-year support one last time before once again turning positive and breaking out on earnings. Under those conditions WS has the opportunity to make >10% down and then another >10% back up before break out while the rest of us hold long..................so why not? They played TSLA right up to the point of a breakout on the longer chart, and well into positive territory for those that are playing the short game to encourage them to jump in or miss out. That would be the ultimate setup that I have cautioned against. And WS could do that if they already got the memo for the rate hike, which I would imagine would not surprise anyone here. I have not trouble admitting that I was that person trading 'too soon' on several similar occasions in the past if that helps others here on TMC. And although HODLing resulting in a very satisfactory long term position anyways, I would certainly like to have had >10% more shares at this point, and on at least one case >20% more shares on those trades too. And I wish a better outcome for everyone else here on their trades. This is not in any way advice, it is only shared experiences and some personal lessons learned. And as I have previously shared, I hope I am wrong.

 

[Zero CO2]

Now you're just being....a punk.