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

[BornToFly]

FWIW I could see some of the "FINALLY ABOUT TIME" growth in the home solar/storage business folks are predicting with solid battery supply being pulled back in a recession. While solar is a financial no-brainer in SOME areas today it's still a longer-term payback in others and such folks might reconsider a big outlay in a recession.

Given how tiny a part of the business this is today it's not a big problem or anything, but it's the one thing that came to mind seeing your question.

Maybe, but the 50% increase in production, and 100% increase in EPS is not dependent on solar. And with increased energy costs, it remains attractive.

 

[traxila]

It does seem like a terrible strategy to me as well. I would think low unemployment is a good thing, that means more people working who can afford to buy things which stimulates the economy.

Political perhaps.... but nothing riles the ruling class more than sticky wage inflation. FED going on record time and again they want to break the labor market. They got no problem flooding the market after that with money to save the economy from a depression, as long as that money goes to the right places and people.

Yeah, I have a problem with this approach. Their actions so far since they pivoted not so much, but their rhetoric of late especially is unnecessary. Raise interest rates as needed based on data, put out your dot plots and then for the most part STFU. Going on record continuously how it is the best thing for poor people to lose their jobs and that this is your goal is bad optics to say the least.

 

[bkp_duke]

GDP officially negative for 2 quarters, and jobs came in strong... the latter meaning the Fed will continue to raise rates aggressively (they said they need the job market to tumble).

It's ironic, because one would expect this is the "bottom" that the market has been waiting for. But they can't compute that bottom with labor supply still being tight.

Schizoid market, nuff said.

 

[bkp_duke]

Political perhaps.... but nothing riles the ruling class more than sticky wage inflation. FED going on record time and again they want to break the labor market. They got no problem flooding the market after that with money to save the economy from a depression, as long as that money goes to the right places and people.

Yeah, I have a problem with this approach. Their actions so far since they pivoted not so much, but their rhetoric of late especially is unnecessary. Raise interest rates as needed based on data, put out your dot plots and then for the most part STFU. Going on record continuously how it is the best thing for poor people to lose their jobs and that this is your goal is bad optics to say the least.

Said it before, will say it again:

We have a labor "problem". We also have an immigration "problem". Am I the only one that sees a near-perfect solution here with something like an expanded work visa?

You dig into the labor numbers, it's the low-end jobs that really are open like crazy. Hospitality, construction, etc. Low-skilled positions.

Seems like a perfect solution, if people in charge could put their egos aside and look at things objectively for once.

 

[jeewee3000]

Two reasons:
1. Stock price usually doesn't fair well after these events.
2. Watching Dave Lee and John Gibb yesterday, they said they were expecting "state of the art" (Optimus). Tesla is a year into the Optimus venture, if the world is expecting state of the art, they will be disappointed. Additionally, Tesla's strength in this area is AI. An amazing display of AI will get completely missed if accompanied by an ordinary display of robotics.

My opinions are not a negative on Tesla, they are a negative on the stock market.

The Dave Lee / John Gibb interview did indeed set way too unrealistic expectations. I'm normally quite pro-Dave, but I think he was far from objective on this one.

Which I find weird because in the interview Dave literally states that these recruiting events are generally ill received by the media. But on the other hand he says "this one is different". I recall he said he hasn't been as hyped about a Tesla event like this since the Model 3 reveal.

And then they discuss how the bot will have HW4 installed and do this and that on stage. And that the release that attendees have to sign points to the Roadster or Cybertruck Plaid. Etcetera etcetera.

Not the proposed things aren't possible, but let's please manage expectations.

At best I expect a partly working DOJO system (one cabinet of the exapod?), HW4 details and maybe in cars from now on (would be huge), roadmap to FSD v11 (single stack), and some Optimus basic stuff.

But mostly I expect powerpoint presentations full of computer jargon that I'll have to Google to make sense of. (not a complaint)

 

[bruce4000]

Re

Can regenerative braking absorb as much energy as the motors produce? If so I guess that’s quite a brake savings.

Also, sham wow and there’s more… just to stay on topic.

I have driven from the highest drivable point on MT Rainier back to south of Seattle WA without having to use the brake’s. That’s going from 6,500 feet to sea level in 80 miles. I’d do much better going down long grades without the car trying to get away from you and having to ride the brakes.

 

[henchman24]

What decrease in Tesla growth do you foresee in the next 18 months because of a possible recession?

(Asking for a friend who sees no change - fewer 3s and Ys (unlikely) means more Semis and Cybertrucks).

In China you have a property bubble that just keeps looking worse and worse by the day. That alongside zero Covid has really hurt their economy. We (meaning the world, not Tesla investors) are used to huge Chinese economic growth, what happens when that stops and what that does to sales of expensive vehicles is a question. It may not hurt the overall sales numbers, but it may hit the margins. Right now, I'd say this is the biggest risk, but the risk that can be most mitigated by exports.

Europe I think is an area that could be hit harder. They are about to go through a very rough winter where there is going to be a recession (and a fairly sizable one from the looks of it) alongside an energy crunch. Both are likely to hit Tesla. Less sales of vehicles just do less spending in general as people have to divert to energy and other necessary goods. There is also a risk that production in Berlin could be limited by outside forces.

In the US, rising interest rates will cause auto loan rates to increase decreasing the affordability and will be running into the natural economic headwinds.

Cybertruck won't be in production until mid next year. The risk is over the next 6-9 months.

IMO the risk is far less than other companies, but instead of 50-60% growth... we might be looking more at 40-45%.

 

[insaneoctane]

To summarize:

The Market: Interest rates rising! Possible recession! Sell!!!

TSLA: We have record sales and profits, and no debt. None of this affects our growth or profits.

The Market: Sell!!!

You forgot the last in the sequence...

TMC: BUY*!!!!! (If you have any money left)

*Not advice

 

[aznt1217]

On the eve of AI Day 2 and yet another day of the financial world taking a dump I thought it would be helpful to put a summary together below. What Tesla (TSLA) has going for it.

Foundational Pillars
Tesla Auto - EV Demand increasing globally for the foreseeable future (even with "competition") Tesla still makes the most units and has coverage in multiple segments

Consumer (B2C)

• Model X - minivan/mid size SUV coverage - Yes the Rivian R1S is fabulous but the market is plenty large and the X has enough differentiation
• Model S - large size luxury sedan market/performance market
• 3 / Y - mass market appeal - there really is nothing that is close to these all around

Business (B2B)

• Tesla Semi – this is going to be HUGE
• Tesla Superchargers – not huge in terms of income, but amazing marketing and potential for incentives and some income when they open up to other manufacturers

Tesla Energy - not a huge contributor yet but this for me is the "hedge" or big enough contribution if there was no auto business.

1. Consumer (B2C) - Solar + Powerwall for residential side
2. Business (B2B) - Bigger opportunity is at the utility level with Powerpack and Autobidder. There really are no players on the commercial battery storage side of the business

Moonshots (happening but not accomplished yet but once done it will be incredible)

Tesla FSD/Tesla Mobility
FSD if fully demonstrated will unlock an enormous amount of value on consumer and business levels (fleet operators and Autonomous Taxi)

Optimus/Tesla AI
Goes hand in hand with the above but the opening revenue stream is at the home level and also the ability to create and license out a platform is quite interesting here

Not on the Map but new opportunities

• Tesla Home – HVAC for the home. Tesla can potentially make this an offer an all in one solution for Home Energy, Home HVAC, and Home Charging
• Tesla Manufacturing Services – they can be the machine that builds the machines… for others

Accelerant to all of the above
a HUGE incentive that will boost margins and speed for Tesla is the Inflation Reduction Act. Tesla is properly positioned to capitalize on multiple areas of the bill and almost immediately due to vertical integration and market positioning. 2023 will be incredibly interesting for Tesla for so many reasons outside of products.

 

[henchman24]

It's ironic, because one would expect this is the "bottom" that the market has been waiting for. But they can't compute that bottom with labor supply still being tight.

Schizoid market, nuff said.

Yeah one of the weirder markets I've ever seen. Recession is everywhere and inevitable, but the job markets is one of the tightest in the last 20 years.

 

[Paracelsus]

After the world is underwhelmed tomorrow, we might be able to pickup shares for 240 on Monday. I'm going to go on record and say 260 for sure.

I do agree there is a likelihood we will see a move down to the 3 year support trendline again before a breakout, and have mentioned that several times before. Just guessing low 260's or high 250's........? But I will respectfully disagree on the 'why' that you mentioned @Featsbeyond50 .

Those that move the needle on WS will absolutely not be 'underwhelmed' with AI day. WS and the media will watch AI Day with great interest. And they will have people that are fully capable of understanding Tesla AI Day watching it for them and telling them that TSLA is light years ahead of everyone else now. In fact, their behind-the-scenes analysts will have their minds blown watching AI Day. And WS and the media will get that message loud and clear. I am absolutely certain of this to the core of my being. And then over the weekend and early next week those of us that have taken the Red Pill will once again have the opportunity be shown with complete transparency which media outlets report news and which media outlets are simply repeating the talking points they have been given by their WS handlers to maximize profits for their WS handlers. And those WS handlers will absolutely benefit from being able to short the stock down from well into the 300's a week ago to the bottom of the 3-year/1-year wedge just before a breakout earnings - to the tune of about an additional 20% move on TSLA stock each way up and down over just letting it run up into earnings.

This is nothing new. It is a recipe for making $$$ that has worked over and over again for WS. And it works because only a very small percentage of us have been willing to take the Red Pill and invest in TSLA early, and stay in TSLA long.......which gives us more clarity about the future of TSLA even when we are getting shouted at by "that prison we cannot smell or taste or touch" that all things TSLA are bad, and 'underwhelming'. We have seen that happen multiple times over the course of our TSLA investments. This recipe works over and over because enough people have taken the Blue Pill and simply want to be told what to think or do by their favorite media channels and talking heads, and because Cognitive Dissonance is such a strong influencer that many of those that might otherwise be open to the idea that news can be fake will never believe that news from their side of the aisle or their favorite media source might not be true.

I love TSLA events like AI Day for much more than what will be revealed to us on AI Day. In my opinion these events are so huge and so impactful that they have the ability to help any TSLA Long Investor do more than pick off a few better dips to buy over the years...................these events have the ability "to show you just how deep the rabbit hole goes".............and what people and what sources you might consider being at least a little suspicious of going forward.

I am a Boomer, but I am fully onboard with Gali's message in his latest video that AI Day will be as bright as the future of TSLA, and I have been an investor in TSLA long enough that I will learn just as much or more after AI Day is over as I will during AI Day. Not an advice.

 

[Electroman]

We have a labor "problem". We also have an immigration "problem". Am I the only one that sees a near-perfect solution here with something like an expanded work visa?

NOPE. That is a very myopic, short term solution for a deep problem. It may help your labor shortages for now, but you need to think about the problems it brings over the next couple of decades and generations. There will be a time you will end up with a huge unemployment, and that will be bring tremendous social unrest and crime if the people you bring in today (and their kids) do not have the same values that you uphold and cherish today, on which this country was built on

History is your friend. I mean world history. Specifically European history. You don't want end up like France or UK.

Unless of course you want to go the route of gulf countries, where almost all labor is imported and are 2nd class residents and will be kicked out when they can no longer be productive. Which I am sure you don't want either.

 

[Artful Dodger]

It's just talk. They are losing to Ukraine now. Can you image if Europe/Nato joined the fight?

I don't need to imagine. I spent 10 years as a Army Officer in NATO training for war against the Soviet Union. You don't want to know what it would be like.

 

[Drax7]

Until FSD is complete, and the solar roof is viable,
and the semi truck is delivered, and the roadster gets manufactured,
and the 4680 battery is produced in scale, and the
cyber truck is manufactured, I don’t think the
iRobot will make a difference.

The P/D numbers for the 3rd qtr should help,
though that’s the past, and the mkt
seems fixated on recession
for the near future.

Negative sentiment dominates for now, it’s best
to ignore and stay calm.

 

[Featsbeyond50]

If for instance, if I tell the Robot, "go get me one sharp red pencil from the drawer", and the Robot picks the right one from a bunch of 20 pencils and brings it back to me, that would be an amazing display of plethora of abilities - visual, AI, and cognitive.

The stupid media and institutional investors will smirk and retort saying, my 3 year old can do that. The AI engineers will be giddy. Stock will fall with many 'anal'yst comments comparing Tesla Robot to a diminutive 3 year old.

There's no chance it will do anything that advanced. If it does, I'm selling my house and making my family live in a cardboard box so I can buy more shares.

 

[bkp_duke]

NOPE. That is a very myopic, short term solution for a deep problem. It may help your labor shortages for now, but you need to think about the problems it brings over the next couple of decades and generations. There will be a time you will end up with a huge unemployment, and that will be bring tremendous social unrest and crime if the people you bring in today (and their kids) do not have the same values that you uphold and cherish today, on which this country was built on

History is your friend. I mean world history. Specifically European history. You don't want end up like France or UK.

Unless of course you want to go the route of gulf countries, where almost all labor is imported and are 2nd class residents and will be kicked out when they can no longer be productive. Which I am sure you don't want either.

I think you missed my point: these people are already HERE. Already coming across the border. Nothing we have done has stopped that, and it is accelerating.

Might as well find a way to make them pay taxes on their wages (SS, Medicare, etc.). They are going to pull money out of the system regardless, at least with Visas they could put something back into it.

 

[Electroman]

There's no chance it will do anything that advanced. If it does, I'm selling my house and making my family live in a cardboard box so I can buy more shares.

I agree. I won't be shocked if it was all just some slides and videos. I will take that.

Media will pan it either way.

 

[SOULPEDL]

FWIW I could see some of the "FINALLY ABOUT TIME" growth in the home solar/storage business folks are predicting with solid battery supply being pulled back in a recession. While solar is a financial no-brainer in SOME areas today it's still a longer-term payback in others and such folks might reconsider a big outlay in a recession.

Given how tiny a part of the business this is today it's not a big problem or anything, but it's the one thing that came to mind seeing your question.

Fear of our Future (FOOF) keeps solar/battery alive and well on the home front I think. Energy independence will be a continued trend, driven by global threats such as infrastructure security, hydroelectric on the brink of failure (Lake Powell/Mead), and whatever comes out of Putin's mouth on the war front.

I cannot over emphasize the comfort of having new Solar and Powerwalls - installed right before Covid hit. It was no longer simply an attempt to break even or save on power, it was peace of mind insurance. Energy hoarding and rising costs will be a thing that keeps solar on track... FOOF!

 

[ZachF]

GDP officially negative for 2 quarters, and jobs came in strong... the latter meaning the Fed will continue to raise rates aggressively (they said they need the job market to tumble).

It’s likely that US GDP will be revised upwards to come more in line with GDI. The two should be the same by they have diverged ~3%.

 

[henchman24]

Russian can’t even win a war against Ukraine , they don’t stand a chance against Europe and NATO.
Russia knows that .

They know that, but that doesn't mean they are going to lie down right now. They are much more likely to continue to escalate in an attempt to break the West's will on arming and funding Ukraine. I'd expect the winter will be pretty rough in that area.