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

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some frequently mentioned names on TMC:

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Some discussion over the weekend of Tesla and BTC. Maybe BTC isn't the worst hedge on inflation and banking fears after all....?
 
but the short term pain gain for them will be low industry-leading profit margins, increased struggling competition, and a bad lower-imput cost economy.
FTFY.

TSLA is an extremely risky investment.

Warren Buffet got rich while buying when there was blood in the Street. Elon said to invest in companies that make real stuff that people want and need. TSLA checks both boxes. I'd rather invest here than in something ACTUALLY risky, like say, FINTECH.
 
[...] but the [TSLA] valuation at 500 billion is still too high. Most car company's trade at book value, TSLA does not and factors in the robotaxi income and other future income. Tesla already is valued as the most valuable car company in the world without producing or being the most valuable on paper.

TSLA is an extremely risky investment.
Tesla is not a car company. Robotaxi / Optimus robotics is a sparkle in Elons eye and not priced in. What is priced in is the fact that they are self funded at this point, but future cash flows from ever cost-optimizing innovation and operations, battery production, car production, megapack production and the ability to survive a recession are.
 
some frequently mentioned names on TMC:

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Components of the S&P 500​

#CompanySymbolWeight PriceChg% Chg
375First Republic BankFRC0.046035
down.gif
24.25
-57.51(-70.34%)
387KeyCorpKEY0.044561
down.gif
11.72
-3.94(-25.16%)
475Comerica IncorporatedCMA0.023866
down.gif
46.11
-12.71(-21.60%)
488Zions Bancorporation N.A.ZION0.018756
down.gif
32.33
-8.02(-19.88%)
303Fifth Third BancorpFITB0.064497
down.gif
25.63
-4.74(-15.61%)
318Huntington Bancshares IncorporatedHBAN0.059131
down.gif
11.38
-1.99(-14.88%)
82Charles Schwab CorpSCHW0.276281
down.gif
52.90
-5.81(-9.89%)


Some discussion over the weekend of Tesla and BTC. Maybe BTC isn't the worst hedge on inflation and banking fears after all....?
$BTC made a nice recovery. It was below $19K USD on Friday. :D

It's Great to have a strong balance sheet, no debt, endless demand, and the most exciting product roadmap on Earth, wot?
 
FTFY.



Warren Buffet got rich while buying when there was blood in the Street. Elon said to invest in companies that make real stuff that people want and need. TSLA checks both boxes. I'd rather invest here than in something ACTUALLY risky, like say, FINTECH.

I respectfully understand your position, but Buffet bought company's that were valued at fair market value and moats in their industry. Tesla is a Moat in their industry (EV world) however, their valuation is not fair market value or aligned with those in their industry. To be fair, yes Tesla is not like the other car company's. But is Tesla really worth 20x book value? when Ford is worth 1x book value?

Tesla's stock price is not an accurate representation of their real world performance, yet. Not saying the company isn't worth what they are, but there are Significant headwinds on the horizon and that doesn't bode well for profitability short term.

It's a simple fact that I'm stating, with some opinions mixed in the bunch with my professional stock experience. Over the last year you would have made more on your XOM (Exxon mobile stock) than you would have with TSLA. Would I recommend buying XOM now? No.

The Tech world is being hammered hard right now for this very reason - unrealistic stock values and poor performance. Isn’t Tesla a tech company?
 
Great points! I think you are correct, but the short term pain for them will be low profit margins, increased competition, and a bad economy. If you're long a stock it may pay out - but the valuation at 500 billion is still too high. Most car company's trade at book value, TSLA does not and factors in the robotaxi income and other future income. Tesla already is valued as the most valuable car company in the world without producing or being the most valuable on paper.

TSLA is an extremely risky investment.

Go do your homework, then come back and post.

1) Tesla makes more in NET PROFIT (and gross) than Ford and GM combined.
2) Tesla makes as much Auto Gross Profit per car as Toyota does on EIGHT cars
3) Tesla has ZERO net debt. The other autos have billions, sometimes HUNDREDS of billions on their books in debt.
4) Toyota just finished tearing down the Model Y and called it a "work of art". This from the largest (by volume) auto maker in the world with a history of (until Tesla) the best construction methods there are. And guess what? CURRENT Auto can't even match what Tesla did with the 2012 Model S (FULL OTA updates? Only Tesla can still do that - all others are limited to partial OTA updates - a limitation of how they have built their crappy architectures).

Notice I didn't even mention anything aspirational like FSD or robotaxi, or Optimius?

Fun FACT - there was recently a meeting of major auto manuf C-suite execs. They were polled and asked if they could catch up to Tesla technologically and profit wise. 92% said they believed they could NOT catch up. Ford's CEO even went on record during that meeting affirming that position.


No, Tesla is innovating faster than "the competition" can manage. They are doing so in such a quick manner that despite price cuts, they are finding additional efficiencies to keep profit margins up.


And I didn't even mention the elephant in the room . . . Tesla Energy . . . . which has already started their S-curve run and is poised to grow to the same size or larger than Tesla Auto in just 5-7 years.
 
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Remember that Tesla started when other car companies were going bankrupt, and they got their first facility at fire sale prices. It's not impossible to grow or thrive in a market downturn, if your cards are played correctly. SP, however, is completely irrational, so who knows where it ends up - but the fundamentals remain sound, and Tesla's direction/vision seems to be precisely what is necessary for an auto maker to survive in this current (and future) climate.
It is much harder to grow in a recession when you are the size of what Tesla is now, as opposed to when they were starting out. Tesla will do fine, but let’s not try to make an equivalence on this particular point.
 
Go do your homework, then come back and post.

1) Tesla makes more in NET PROFIT (and gross) then Ford and GM combined.
2) Tesla makes as much Auto Gross Profit per car as Toyota does on EIGHT cars
3) Tesla has ZERO net debt. The other autos have billions, sometimes HUNDREDS of billions on their books in debt.
4) Toyota just finished tearing down the Model Y and called it a "work of art". This from the largest (by volume) auto maker in the world with a history of (until Tesla) the best construction methods there are. And guess what? CURRENT Auto can't even match what Tesla did with the 2012 Model S (FULL OTA updates? Only Tesla can still do that - all others are limited to partial OTA updates - a limitation of how they have built their crappy architectures).

Notice I didn't even mention anything aspirational like FSD or robotaxi, or Optimius?

Fun FACT - there was recently a meeting of major auto manuf C-suite execs. They were polled and asked if they could catch up to Tesla technologically and profit wise. 92% said they believed they could NOT catch up. Ford's CEO even went on record during that meeting affirming that position.


No, Tesla is innovative faster than "the competition" can manage. They are doing so in such a quick manner that despite price cuts, they are finding additional efficiencies to keep profit margins up.


And I didn't even mention the elephant in the room . . . Tesla Energy . . . . which has already started their S-curve run and is poised to grow to the same size or larger than Tesla Auto in just 5-7 years.

I appreciate the input and added details. Excellent points! But does that justify their market value of 500B
 
It is much harder to grow in a recession when you are the size of what Tesla is now, as opposed to when they were starting out. Tesla will do fine, but let’s not try to make an equivalence on this particular point.
It is much much harder to grow in a recession when you are the size of what Toyota is now - particularly if you have no decent BEVs to show for it.
 
I think the real kick-in-the-nuts for legacy auto, which already have huge debts, a useless dealership network, and tens of billion in stranded assets, plus no brand association with evs...
... is that they are now where talent goes to die.

If you are a top notch software engineer, or materials science expert, or just finished your phd or masters in battery chemistry or electricial engineering... are you going to sit down, look at the options available and go 'Gee, I bet Ford or GM are exciting places to work'.

Investors keep missing that Teslas 'battery day' and 'ai day' etc, are almost always 'recruitment day'. They make it very clear how cool their tech is, and how rapidly it evolves. Its like catnip to newly qualified and keen technical experts.

Even if there is, somewhere, a bunch of qualified geniuses who could, in theory, turn around Ford or GM and help them not go bankrupt, the chances of them choosing to do that are almost zero.
 
But is Tesla really worth 20x book value? when Ford is worth 1x book value?
No, it's worth 2,000x book value. That's why it's a great investment, because Wall St has it drastically wrong, again, just like 2019. Ford has book value? I think they have net debt.

Tesla's stock price is not an accurate representation of their real world performance, yet.
No stock should be bought on their current performance, it's where they're going that matters. Like Wayne Gretzy said, "skate to where the puck is going to be".

Not saying the company isn't worth what they are, but there are Significant headwinds on the horizon and that doesn't bode well for profitability short term.
Hahaha, when has that ever not been the case? Guess that keeps the short-timer out though, so that's all good. CLUE: I'm not here for short-term gains. I'm in for the long-haul, baby!

my professional stock experience. Over the last year you would have made more on your XOM (Exxon mobile stock) than you would have with TSLA.
Wow, you REALLY don't know me. I'd as soon buy XOM as buy a turd. But you can burn a turd and still be net carbon-neutral... :p
 
Have you already forgotten this?

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Not at all @JRP3 - my point was two-fold. Tesla made a very vocal investment in BTC. It was for "when the sh*t hits the fan". That day is here - the banking sector is blood red today - some banks will no longer exist - and we were cautioned it was coming. And now we see when the curtain is pulled back that the Fed and some of our lending institutions are wearing no clothes because DC doesn't have a plan beyond printing more money. There is more to come IMO.

You are right that BTC got hit hard like many other stocks in the massive run up and sell off across the board. Down about 50% from ATH's. But Tesla didn't buy BTC at ATH's. And many people here would be pretty happy if their TSLA and some other investments were at 50% of the ATH's like BTC is. BTC is outperforming TSLA - isn't it? - so I could have done better if I would have moved some TSLA into BTC? And buying BTC at the time Tesla did has probably outperformed even a stock buyback from the same time for TSLA to this point - from the perspective of Tesla's spreadsheet. There are some banks and lending institutions that are down more in one day than BTC is down since ATH's. Tesla's point was to diversify for this day, and having that money all in the banks isn't a diversification for this day - especially if it was the wrong bank. Tesla creating EV's in Fremont with a Green agenda could have easily been doing business with SVB instead.

A dozen S&P 500 banks stocks are falling more than 10%, and half of those are down more than 20%


I am not advocating for BTC, nor do I hold any BTC. I am just looking at the concept of todays events (holding BTC vs money in certain banks, or even FTX) with a broader brush than we were able to view those concepts last week or last month. And while we can all get a little negative on TSLA and Elon in the short term, maybe Elon & Tesla are correct more often in the long run than we want to give them credit for. I honestly am really uncomfortable seeing all the blood red in the banking sector at one time.
 
Great points! I think you are correct, but the short term pain for them will be low profit margins, increased competition, and a bad economy. If you're long a stock it may pay out - but the valuation at 500 billion is still too high. Most car company's trade at book value, TSLA does not and factors in the robotaxi income and other future income. Tesla already is valued as the most valuable car company in the world without producing or being the most valuable on paper.

TSLA is an extremely risky investment.
All in short TSLA and never cover. Ride this pony to $0.
I'm sick and tired of people talking big game while lacking the balls to put money where their mouth is. Dude telling us TSLA is risky as if he'd just discovered fire.
 
I appreciate the input and added details. Excellent points! But does that justify their market value of 500B

Yes it certainly does. TSLA current PE is extremely undervalued based on fundamentals, their rate of growth, and their future outlook. Don't look at Tesla as a "car company", just look at it's financial fundamentals as a COMPANY and then judge if it's worth it's current valuation. The answer is a resounding yes to anyone paying attention and doing the math with more than a very short term outlook.