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

[Curt Renz]

Today, for the third day this week, Cathie Wood's ARKQ fund bought TSLA shares.

 

[Gigapress]

But hey you know...that 4680 ramp is perfect according to some on here.

Who has said it's perfect?

 

[OrthoSurg]

Today, for the third day this week, Cathie Wood's ARKQ fund bought TSLA shares.

Is she good at timing the bottom in TSLA?
It didn’t work well with COIN and HOOD

 

[Nocturnal]

Not sure anyone said that? Why the strawman argument?

Its better to start with a basic chemistry and get the process working (with dry electrode etc) and throw in improvements later than try doing it all at once and delay for years.

This is always the tesla way, do it fast and iterate

With the market for EVs as it is, and the IRA coming, it's BETTER to focus on volume of 4680s, even if they are comparable or inferior to 2170s than it is to focus on making them the best batteries out there.

I was greedy earlier this year....oops.
I'll probably figure this timing thing out when it's time to retire.

You are in good company.

 

[Mengy]

But hey you know...that 4680 ramp is perfect according to some on here.

It's a new battery design with a very new manufacturing process. Tesla will iterate on the 4680 and I'm confident it will eventually have more energy density than the 2170 cells. The big positive of the 4680's will be the manufacturing process, equating to very high volumes at high efficiencies.

This is just the beginning of the 4680 story.

 

[ShareLofty]

https://twitter.com/x/status/1592984332515229696

I thought a succession plan was supposed to be good for key man risk, blah, blah, blah

Well we know what the #1 Say.com question is going to be if this persons name doesn’t leak by mid January

 

[Gigapress]

Todays price action demonstrates nicely why it is a problem when Elon sells and TSLA is Red on Macro green days. Because we don't make it up on Macro red days. We are now closer to the 52 week low than the Nasdaq, which means if the Nasdaq goes back to the 52 week low, TSLA will be in the pre-split 400s, below the 2 year low, despite 3 new factories and massive profits in the last two years.

I disagreed for a couple reasons.

1) Historically this has not been the case when looking at all instances of Elon selling on S&P 500 green days

If anything, TSLA has exhibited bias towards net gain in the week following Elon selling on a green day. The recent tranche of sales is somewhat of an outlier.

2) TSLA is extremely volatile in general, which makes assigning narratives to its price movement a very sketchy endeavor ripe for confident conclusions that are nothing more than psychological illusions and confirmation bias. It's really easy to look at a big TSLA movement than coincides with variable X and say "Aha! X caused TSLA to move" but actually building a strong case for causation is a lot trickier.

From Jan 2020 through today, the absolute value of the week-over-week % change of TSLA has been 8% on average with a standard deviation of 10%. Below is a histogram showing this.

There have been 12 separate instances (not counting multiple days in the same week) in which TSLA has fallen by at least 15% WoW since Jan 2020. Measured by individual trading days, TSLA was down at least 15% WoW on 26 out of 721 days (3.6% or 1 in 27 frequency).

TSLA has moved at least 10% up or down WoW on 201 of 721 days (28% or 1 in 3.6 frequency).

It's just not that rare or unusual for TSLA to crash--or to moon--in the span of a week. There is data indicating that when Elon has made big sales the average short-term price drop is like 7%, but I wouldn't necessarily attribute all of the movement in the last week or two to his selling.

 

[Bet TSLA]

I don't know if Neroden made a rash decision, if he did, the under-lying reasons were long-simmering and the result of Neroden not understanding what was driving demand for Tesla cars and how it would play out. He was convinced that Tesla's less than perfect service would crush demand (when in reality, Tesla was simply transitioning their service from that of a "kiss your butt" luxury brand to a better than typical mass-market service experience). This was a necessary and rational change to make the transition to high-volume, mass-market sales.

In short, he was a terrible analyst. Just plain wrong. I could never figure out why he had so many followers as he had a way of making wrong-headed thinking sound almost reasonable if you didn't look at it too hard. Apparently, he was selling TSLA and complaining about Tesla's execution right about the time I was finally ready to take a huge position without a concern of losing it. I had been waiting eight years for the risk/reward ratio to become that favorable. He saw it as a disaster waiting to happen (and he had convinced a lot of people he was right).

Perhaps it was because he was so right about autonomy. When Elon was saying it would all work soonish, he was adamant that they hadn't even gotten to the hard part yet.

 

[Gigapress]

The 4680 is not a consumer feature. It's a business case. It was unveiled at a shareholder event. Cost reduction is a feature to Tesla and TSLA owners.

Consumers shouldn't care about that unless it translates into a lower purchase price. As a shareholder I care because they have greatly reduced the cost of manufacture.

Maybe some future version of the 4680 will have higher energy density. But Tesla's #1 goal is lower capital expenditure and lower operating costs in battery manufacturing. They've achieved that. Even if the 4680 never surpasses the 2170 in terms of energy density or charging performance, it's already a huge win for Tesla.

The enabling tech for higher energy density and charging speed mostly hasn't been implemented in current versions, but it's coming eventually.

1. Dry deposition for cathode
2. Silicon in anode
3. Reduce cell can thickness
4. Increase cathode and anode active material layer thickness (maybe)
5. Use less pink glue (maybe)
6. Reduce excess non-battery structural mass
7. Reduce binder material usage in anode (maybe)

For now, Tesla appears to be focusing on:

• Solving the dry electrode manufacturing process on the anode side
• Getting the production line working smoothly in volume production
• Gathering data from real-world usage

 

[MC3OZ]

The enabling tech for higher energy density and charging speed mostly hasn't been implemented in current versions, but it's coming eventually.

1. Dry deposition for cathode
2. Silicon in anode
3. Reduce cell can thickness
4. Increase cathode and anode active material layer thickness (maybe)
5. Use less pink glue (maybe)
6. Reduce excess non-battery structural mass
7. Reduce binder material usage in anode (maybe)

For now, Tesla appears to be focusing on:

• Solving the dry electrode manufacturing process on the anode side
• Getting the production line working smoothly in volume production
• Gathering data from real-world usage

Once Berlin, Austin and perhaps a few other 4680 factories ramp, Kato Rd may revert to making batches of "test cells" more frequently.

Or Tesla might open new 4680 R&D testing and production centre somewhere else.

Many of the changes listed above require "test cells" to under go a lot of testing and validation.

Initially making a very safe cell design that doesn't push the boundaries, is an additional guarantee of reliability.

Same goes for the structural pack, over engineered is a low risk way to start.

 

[WattsHappening]

I'm as pollyanish as anyone on this board. But no way you are going to convince me this recent drop is just random and is within statistical/volatility reason.

Yashu pointed out today that QQQ is flat to slightly up over the past 16 days, while TSLA is down 18-20%. It's been painful and somewhat depressing. Yes, I know, I haven't lost anything unless I sold, which I didn't. Still not fun.

It's ok to admit that Elon's actions are causing some short term pain while creating way bigger long term gain.

 

[Gigapress]

I'm as pollyanish as anyone on this board. But no way you are going to convince me this recent drop is just random and is within statistical/volatility reason.

I'm not trying to convince that it entirely is, but rather that it's been overblown.

There is data indicating that when Elon has made big sales the average short-term price drop is like 7%, but I wouldn't necessarily attribute all of the movement in the last week or two to his selling.

Yashu pointed out today that QQQ is flat to slightly up over the past 16 days, while TSLA is down 18-20%. It's been painful and somewhat depressing. Yes, I know, I haven't lost anything unless I sold, which I didn't. Still not fun.

TSLA's volatility is even more wild when looking at two-week spans compared to one-week spans, and this has historically been true even when macros are flat. It sounds like Yashu made an assumption without backtesting for validity against the past data.

This plot below shows all days since 2020 when the S&P 500 opening price was within 2% of its opening price two weeks prior. The red points came from Nov 4th and later, when Elon first began this latest round of selling and Twitter acquisition. Notice how the red points are buried in the crowd of blue points, indicating that the recent results are not statistically anomalous.

There is maybe a bit of downward bias but nothing crazy, unless you have a different explanation for all the other times TSLA dropped big in two weeks while the macros were flat.

If you randomly picked any trading day from Jan 2020 up to Nov 3rd (last day before Elon's latest round of selling), you'd have a 1 in 7 chance of picking a day when TSLA was down at least 10% from two weeks prior and a 1 in 26 chance of TSLA down 20% in two weeks.

Out of those 10% down instances, 41% of them happened with the S&P 500 being within +/- 2% of its level two weeks prior. This is not a rare occurrence.

 

[MrMoo]

I'm not trying to convince that it entirely is, but rather that it's been overblown.



TSLA's volatility is even more wild when looking at two-week spans compared to one-week spans, and this has historically been true even when macros are flat. It sounds like Yashu made an assumption without backtesting for validity against the past data.

This plot below shows all days since 2020 when the S&P 500 opening price was within 2% of its opening price two weeks prior. The red points came from Nov 4th and later, when Elon first began this latest round of selling and Twitter acquisition. Notice how the red points are buried in the crowd of blue points, indicating that the recent results are not statistically anomalous.

There is maybe a bit of downward bias but nothing crazy, unless you have a different explanation for all the other times TSLA dropped big in two weeks while the macros were flat.

View attachment 875452

If you randomly picked any trading day from Jan 2020 up to Nov 3rd (last day before Elon's latest round of selling), you'd have a 1 in 7 chance of picking a day where TSLA is down at least 10% from two weeks prior and a 1 in 26 chance of TSLA down 20% in two weeks.

Out of those 10% down instances, 41% of them happened with the S&P 500 being within +/- 2% of its level two weeks prior. This is not a rare occurrence.

The problem here is you are looking at the % point movements in a vacuum. TSLA could be trading at $10 right now and those statistics would still be accurate.

You need to be comparing them absolute S&P500 values with absolute TSLA values. This'll give you a relative comparison.

 

[Gigapress]

The problem here is you are looking at the % point movements in a vacuum. TSLA could be trading at $10 right now and those statistics would still be accurate.

You need to be comparing them absolute S&P500 values with absolute TSLA values. This'll give you a relative comparison.

That is not a problem. It makes almost no difference, but % change was better to look at because 1) I'm covering Jan 2020 to now, and the absolute TSLA price has increased tremendously so that would muddy the analysis and 2) investors generally care about % change, not absolute change.

Nevertheless, here is the same graph but in absolute terms, with the same general conclusion: TSLA varies wildly over two-week intervals even when the S&P 500 has barely budged. Also, the variance is stronger to the downside than to the upside for TSLA; extreme drops are more common than extreme rallys.

 

[Todd Burch]

From Near-future quarterly financial projections:

Based on VINs seen in the wild, Berlin may be at 3682/wk. If true—and that could be the case given the expectation of 5k/wk by end of year—then Troy’s prediction for Berlin is quite low.

 

[Todd Burch]

It's ok to admit that Elon's actions are causing some short term pain while creating way bigger long term gain.

No it’s not, because any time someone brings it up in the investor forum it’s deemed as off-topic, lol.

Having said that, I think probably everything on those topics has already been said.

While TSLA is clearly in the doldrums right now, I think investors should consider a few things:

1. It’s natural to want to give up on a stock and throw in the towel when it’s not doing well. This should only be considered if there are concerns about your thesis on the company itself. This is what shorts and manipulators want you to do. Recall that “sell low” is not part of a healthy investor strategy.

2. Has anything changed about Tesla, the company? No. They are on-track for a massive record this quarter, seemingly nearly catching up even with the shutdowns in Shanghai earlier this year.

3. Ask yourself: are recent downgrades such as those from Dan Ives really based on performance and health of the company? Of course not. Ives acted impulsively out of frustration, downgrading purely from Elon’s recent news. But Tesla the company is firing on all cylinders. This suggests to me that once the current news cycle has cooled off and things are more at a steady state, his price will return to reflect company performance.

4. It’s amazing that the market is *still* falling for the “competition is coming” thesis. Yes, competition is coming, as in “additional models coming to market”. But, (and this is a Sir Mix-a-Lot-sized but),

-Only Tesla is truly focusing on what’s needed to massively reduce cost and be prepared for massively-increased volumes.

Rivian has a cost problem. They’re working on additional models and factories without yet solving the cost problem. Little to no innovation in manufacturing.

Lucid has a cost problem. They’re working on additional models without yet solving the cost problem. Little to no innovation in manufacturing.

Ford has a cost problem. Same story.

GM has a cost problem.

All the OEMs except Tesla lack a unified, well-oiled charging network.

Only Tesla is actively pursuing vertically integrating the battery supply chain.

Only Tesla is developing new battery tech in-house, including DBE.


I could go on, but we’re kinda in the second “heads down, bust ass” stage of Tesla’s growth. The first was in the mid 2010s as they scaled up to volume manufacturing.

While all the others are tossing more announced car models at the problem (here’s looking at you, Mary Barra), or more batteries at the problem (hi, Lucid) or more manufacturing cost at the problem (hi almost everyone), Tesla is focused on doing the hard work now that will pay massive dividends in the not-too-distant future.

While ramping 4680 tech is not glamorous, and Wall Street is currently irrationally punishing them for Semi/4680 being “late”, ask yourself this:

-Will the Semi be profitable for trucking companies? If so, who else is making electric class 8 trucks? Ok, Nikola—kinda. But we know where that’s headed.

-Who else is working on their own revolutionary battery tech, AND bringing lithium refining in-house, AND probably bringing mining itself in-house?

Only Tesla. Because Tesla thinks 10 years down the road, not about propping the stock price up for the current quarter.

While this hard work can sometimes result in the stock price languishing for a while, it increases Tesla’s lead.

It’s analogous to two athletes. One spends all of his time making Nike ads and promoting his new shoes. The other spends his time practicing and working out.

Eventually the hard work pays off. It’s why no other private company has landed an orbital rocket and taken astronauts to space like SpaceX.

In the athlete analogy, which one do you think is going to win when they end up competing against each other?

 

[Xd85]

Thanks @Todd Burch

1. The beating will continue until morale improve
2. Share on sale not advice

Got it

 

[CHGolferJim]

Is she good at timing the bottom in TSLA?
It didn’t work well with COIN and HOOD

Were these trading/timing profits, or sales and buys due to fund flows?

 

[Unpilot]

Also, the variance is stronger to the downside than to the upside for TSLA; extreme drops are more common than extreme rallys.

This is the depressing part. And the reason I tell myself it's ok to drink a few more mid-strength beers at night.

 

[elasalle]

Macro .. Fed Up, Market down

Treasury yields rise after Fed speakers hint at more rate hikes to come

Treasury yields were higher Thursday as markets weighed comments from Fed officials signaling rate hikes are far from over.

www.cnbc.com

+ based on poor showings from retailers ... is the Santa rally dead for this year?