TSLA Market Action: 2018 Investor Roundtable

[neroden]

Well, this action is somewhat spooky. So now it's "buy on FUD"?

The entire move has been reminding me of Feb 2016 -- I know Elon doesn't like using analogies, but in the stock market sometimes that's the best you got.

 

[Fact Checking]

Of course Starlink sats are supposed to be very low-earth-orbit, at somewhere in the neighborhood of 750 miles up, but that implies a round trip distance of more than 1500 miles added to the packet latency in the best case.

The larger group of satellites is going to operate at altitudes of around 340 km IIRC, so minimum roundtrip is 680 km, with a speed of light delay of 2.2 msecs best-case.

Consider the New York Frankfurt route for example: best ping over fiber optic cable is 83 msecs, the distance is 6,200 km, which in space is about 45 msecs ping distance, plus the 2-3 msecs uplink, possibly less than 50-60 msecs total delay.

Why are fiber optical cables so much slower? Firstly, due to light traveling only at 70% speed of light, secondly because the cables are quite often not straight line (at all), and thirdly because of messy ground topology with a lot of hops: switches, interlinks.

And New York to Frankfurt is a tier 1 connection between two important financial centers with a big, accessible ocean between them. Pick two mid size industrial cities and true optical cable distance is easily 2x-3x that of straight surface distance.

Space is superior for mid and long range network connections.

 

[uselesslogin]

But so is the bandwidth in space essentially unlimited between satellites, with the difference that establishing a new (laser) link between two satellites is essentially free and expansion is fast - while intercontinental fiber optic cables cost billions to lay down on a point to point basis and take years to plan.

Space has its disadvantages, but it also has a couple of strategic advantages ground infrastructure cannot match, and growth of computing infrastructure in space is going to be exponential for a long time.

But that is a 20 years project, global Internet connectivity will be the first step, to fund the rest.

Ok but Amazon is on top of existing fiber and the cost to add another 100 gig wavelength in a terrestrial data center is always going to be cheaper than adding a satellite. You can put like 160 transceivers on a single strand of fiber and probably they'll figure out how to do more.

 

[TNEVol]

I think EM will find a way to reward employee and in line reservations for SR by trying to get some of these produced this year and Q1. I also think there will not be many SRs in US anyway. Look at 40S and 60S. Buyers will stretch as I did. IMO loyalty is bigger than slight margin impact to EM.

 

[KarenRei]

Hmmm... not so sure about that.

Latency for geosync satellites is atrocious...at about 750ms for the bounce to the bird 24K miles up. Of course Starlink sats are supposed to be very low-earth-orbit, at somewhere in the neighborhood of 750 miles up, but that implies a round trip distance of more than 1500 miles added to the packet latency in the best case. Even if it's a coast-to-coast session, that's going to be something like 40% of the duration. If your session is to the nearest cache point 10-1000 miles away the latency will be far worse than fiber.

I suppose trans oceanic or really long haul sessions might start to show some advantage, which might help the developing countries scenario.

That's neither how ground communications works, nor Starlink.

Ground communications don't go directly point to point. They bounce around through a lot of little local hubs before getting to some main link, which may or may not go in the right direction. You have to be *extremely* lucky to have your waypoints all form a straight line. And regardless, all of the local hops add delay beyond simple speed-of-light transmission times.

Starlink is not about end-to-end communications; it's about getting your communications to and from a backbone without your local hops. It also can get you to any backbone within range of the satellite without the need for a physical link - in short, it means it's much more likely that your initial hop is going in the right direction.

Regardless: 1500mi (not an accurate figure, but let's go with it) is 8 milliseconds. I don't know about where you are, but when I ping Google, it takes 55 milliseconds. Strangely, when I ping this site, it takes only 18ms... whitehouse.gov is 59ms, model3ownersclub is 131ms, twitter takes 155ms, etc). Doing a traceroute breakdown, I see that the majority of the time in each case is in getting past my local routing and onto a backbone link.

 

[elasalle]

Tesla uses AWS for autopilot data storage and many computing tasks.

I find the argument that Jeff Bezo is behind all those FUDs hard to believe.

I thought Tesla uses MicroSoft Azure platform and not AWS ..

 

[Yonki]

I'm reading this wonderful new book about the Beatles (Dreaming the Beatles by Rob Sheffield), and when I came across this passage I LOL'ed at the similarities to the current hysteria around Tesla. The Beatles are just about to release their highly-anticipated Sgt. Pepper album, and

"the English music press was already running thinkpieces asking if Pepper was going to ruin music (actual Melody Maker headline: The Danger Facing Pop)".​

 

[MarcusMaximus]

Hmmm... not so sure about that.

Latency for geosync satellites is atrocious...at about 750ms for the bounce to the bird 24K miles up. Of course Starlink sats are supposed to be very low-earth-orbit, at somewhere in the neighborhood of 750 miles up, but that implies a round trip distance of more than 1500 miles added to the packet latency in the best case. Even if it's a coast-to-coast session, that's going to be something like 40% of the duration. If your session is to the nearest cache point 10-1000 miles away the latency will be far worse than fiber.

I suppose trans oceanic or really long haul sessions might start to show some advantage, which might help the developing countries scenario.

Since the signal travels at c, that 1500 mile round trip translates to 8ms. Unless you’re doing some pretty intensive stuff, adding 8ms to ping isn’t going to be noticeable...

 

[TrendTrader007]

The entire move has been reminding me of Feb 2016 -- I know Elon doesn't like using analogies, but in the stock market sometimes that's the best you got.

Good point Neroden
I see the parallels too
42% drop in February 2016 over 26 trading days vs 35% over 22 days now
90% rally over 40 trading days in February thru early April 2016
Would you please give me some color on the FUD back in February 2016?
beside the Nasdaq drop in early 2016
Thanks

 

[scaesare]

Since the signal travels at c, that 1500 mile round trip translates to 8ms. Unless you’re doing some pretty intensive stuff, adding 8ms to ping isn’t going to be noticeable...

My point is that means latency isn't going to be better than fiber at 0.7c unless the route is something like 5000 miles via fiber.

 

[defc0n]

Ok but Amazon is on top of existing fiber and the cost to add another 100 gig wavelength in a terrestrial data center is always going to be cheaper than adding a satellite. You can put like 160 transceivers on a single strand of fiber and probably they'll figure out how to do more.

DWDM is a wonderful thing this is horribly off topic, though.

 

[defc0n]

Also I had never heard of supporting more than 80 channels on a single fiber. I’ve admittedly been out of the game for awhile now, though.

 

[KarenRei]

My point is that means latency isn't going to be better than fiber at 0.7c unless the route is something like 5000 miles via fiber.

Try doing a traceroute sometime and see how much of your latency is accumulated just getting out of your immediate area.

Then take a look at the tortured route your communications sometimes take on top of that.

Then remember that light in a vacuum actually moves at speed c, unlike light in fibre.

Starlink is a huge win in all regards.

 

[TrendTrader007]

The best way to trade $TSLA currently is to count the # of trading days and keep a very open mind
Def the background is super bullish for this move and getting off the escalator too early will hurt as much as overstaying welcome
Technically agnostic is the word I’m looking for

 

[scaesare]

That's neither how ground communications works, nor Starlink.

Ground communications don't go directly point to point. They bounce around through a lot of little local hubs before getting to some main link, which may or may not go in the right direction. You have to be *extremely* lucky to have your waypoints all form a straight line. And regardless, all of the local hops add delay beyond simple speed-of-light transmission times.

Starlink is not about end-to-end communications; it's about getting your communications to and from a backbone without your local hops. It also can get you to any backbone within range of the satellite without the need for a physical link - in short, it means it's much more likely that your initial hop is going in the right direction.

Regardless: 1500mi (not an accurate figure, but let's go with it) is 8 milliseconds. I don't know about where you are, but when I ping Google, it takes 55 milliseconds. Strangely, when I ping this site, it takes only 18ms... whitehouse.gov is 59ms, model3ownersclub is 131ms, twitter takes 155ms, etc). Doing a traceroute breakdown, I see that the majority of the time in each case is in getting past my local routing and onto a backbone link.

Unless every site an end user wants to get to has it's own downlink, the packet will hit a common downlink point and traverse whatever routing infrastructure feeds that site.

So my point is that the statement that starlink is going to be faster than fiber because of the lesser transmission speed of fiber isn't ne necessarily going to hold true depending on distance.

 

[bdy0627]

This is a post I made two weeks ago while the stock was above $300. Technical indicators do work. I guess those who purchased on margin at $295, $290, $280 didn't work well.

Don't sell covered Calls near the bottom, because after rally, the buyer could gain a lot on those and leave you empty handed.

If you got in correctly based on valuation and technical indicators, don't rush to sell for a few dollars. Try to estimate the next best selling point.

Tesla has very low risk at this level. If you bought with free cash, you probably can hold the shares for another 10 years. Meanwhile, accumulate cash for the next buy point. If you bought with high margin, then you need to watch closely. You don't want to become a victim of stock manipulators.

I will post it if I see a possible sell point for these trading shares. My investment shares will stay as long as Elon holds his shares. I think he plans to hold at least 15 years.

Nice work. Please do post when you see indications suggesting a sell point. I've got my own as well but very much appreciate the input.

 

[scaesare]

Try doing a traceroute sometime and see how much of your latency is accumulated just getting out of your immediate area.

Then take a look at the tortured route your communications sometimes take on top of that.

Then remember that light in a vacuum actually moves at speed c, unlike light in fibre.

Starlink is a huge win in all regards.

Believe me, I know... I worked for a satellite-based vertical services provider.

 

[Xpert]

#1 cause of the recent drop was CAO leaving, and HR head not coming back, both on the same day, that's alarming unless you truly understand what's going on with Tesla's business. Institutional investors hesitate to buy on that kind of news. The chart broke down too, so shorts shorted more, traders jumped on it with weekly options to push it lower. Unfortunately the weed news didn't help.

In my new post I was not predicting another fresh drop. Instead I was saying after you have bought the recent low, you can plan to sell the next top, this is referring to the Trading shares, (never sell the investment shares). I found the problem for some investors is that they get excited and load near the top with margin, then get painful at the bottom, they are selling when they really should "buy low". If every long investor learn the lesson, shorts can't do much. I hurt the shorts a lot every time they rig the stock like this.

Also, on Friday when stock hit $255 in the morning, I posted "It has reached the lower end of the Bollinger band on weekly chart." That should be a major buy signal for trading or investing in TSLA. It seems most people don't care about this kind of info.

Predicting the next top is an ongoing effort, it depends on factors that continue to unfold, there is a small chance we retest the recent low, all depends on future events. But indicators will give us clue when is a good time to reduce, my best guess is in a few months. I will post when I see it.

In the long run, I think the stock will reach a few thousand dollars a shares. So all the talk about "top" is only talking about swing trading shares in near term.

Thanks for the detailed explanation. Please keep posting these levels when you see it, very helpful.

 

[EVNow]

Not impossible, but automotive is not Amazon's core competency.

I believe we have to look at the even wider historic and personal context and background: to both Jeff Bezos and Elon Musk their space companies are their real obsessions:

• We all know Elon's obsession about interplanetary travel and colonizing space, Mars in particular.
• Bezos is a space geek too: "While at Princeton, [Jeff Bezos] [...] was the president of the Princeton chapter of the Students for the Exploration and Development of Space"
• I cannot find the quote, but Jeff Bezos said in the past that he is willing to put effectively unlimited funds into Blue Origin. His obsession about space is real and genuine.

So I think the Tesla media reporting distortion and negative bias phenomenon @ZachShahan documented could in part be the opening skirmishes of a nasty proxy war for space.

SpaceX as a private company and as an amazing success story is much harder to attack - so Tesla gets attacked as a "soft target", with plenty of collateral damage. The shorts and Wall Street might be helping, but Business Insider's motivation to attack Tesla systematically could also stem from its ownership structure I believe.

Both Jeff and Elon are thinking big. Really big. Very, very big:

Which competition I totally support, I only wish Bezos would stop fighting dirty ...

(Assuming I'm right, which I might not be.)

Saying something like this is highly speculative at best. There is no history or reports of EM and Musk talking badly about each other, for eg. Something you'd expect if there is anything other than professional rivalry between them.

 

[TrendTrader007]

Okay I’ll cut to the chase here
Technically speaking only 3 things matter:
14 to 15 trading days when delivery # comes out
40 to 41 trading days when Q3 ER happens
$400 stock price
Rest is conversation
And useless technical jargon
Goodnight!