TSLA Market Action: 2018 Investor Roundtable

[neroden]

Joe Rogan talks about Elon, 420, and the $20M blunt: "Mea culpa", or "Me accomplice"?

Joe says the SEC contacted him to determine if the marijuana smoking event was prearranged by Musk in an attempt to crash TSLA stock price. Seriously.

Correction. He says that "Jamie" (production staff for the podcast?) was *worried* that the SEC would contact them and ask them that question. The SEC did not actually contact them, apparently. But Joe made it clear in this piece that it was not prearranged.

BTW, the original 2hr30min interview now has over 14.8M views on YouTube

 

[tinm]

I know, all those you see on the streets are driven by Tesla employees round and round the block. They've only sold about 100.

Unclear how a Gigafactory in SA would work. Where would the employees come from? Something like 80% of SA’s labor force is brought in from other countries.
A gigantic solar/battery farm, fine maybe, but a Gigafactory?

The labor issues, the human rights issues, the fact that SA is at war with neighboring Yemen, the fact that the geopolitical situation in the Middle East is historically unstable... all these issues combined suggest you don’t put an asset like a *Gigafactory* in the middle of one of the world’s oldest hot spots. A Gigafactory in SA is just asking for trouble imho.

 

[Drax7]

I test drove the model 3 performance model yesterday. The car is
Amazing, the equivalent of the iPhone in the automotible sector.
The demand for it will be there as far as the eye can see. Beyond
500,000 per year for the next decade I would guess. Unless
You try it you may not understand it.

Just my opinion. However it tells me that tesla will be very
Successful and so will the stock. After the near term turbulence
Settles down , it will appreciate

 

[elasalle]

Unclear how a Gigafactory in SA would work. Where would the employees come from? Something like 80% of SA’s labor force is brought in from other countries.
A gigantic solar/battery farm, fine maybe, but a Gigafactory?

The labor issues, the human rights issues, the fact that SA is at war with neighboring Yemen, the fact that the geopolitical situation in the Middle East is historically unstable... all these issues combined suggest you don’t put an asset like a *Gigafactory* in the middle of one of the world’s oldest hot spots. A Gigafactory in SA is just asking for trouble imho.

If SA is giving cold hard cash to build the GF and no one else is, i guess we don't have a choice.

 

[neroden]

The following reminded me of the above conversation:

There's a bus in that listing. Notice, bus. Not train.

Buses are inherently terrible, as they have all of the disadvantages of cars *and* all of the disadvantages of trains.

 

[neroden]

Why would you put anything more than a small percentage of your portfolio in such a volatile and controversial stock - long or short. Seems insane.

Sunbird, percentages are wrong.

If you've got enough cash for a year in cash and have a million dollars in something liquid, staid and secure, but still have several million more to invest, it may make a lot of sense to put a large percentage of your portfolio in illiquid, volatile investments with a chance of high returns.

It's actually documented that richer people put higher percentages of their portfolio into more volatile and more illiquid investments, and *this makes sense*, because the amount that you want to have in something safe and secure is pretty much a *number of dollars*, not a *percentage*.

 

[scaesare]

It's really interesting to see 2 types of people:
1. Ones that absolutely don't understand how you could be upset from a short term "loss". Elon is in this camp.
2. Ones that do get upset. I was quite intrigued seeing his all-time supporter(bottom), who leaves positive responses to almost all his tweets bark back at him.
View attachment 341297
Seems like a problem that some people that claimed to be supporters get upset? Some who trade options also call themselves supporters, although that's not really investing.

- how do you feel about emergencies? Say, tommorrow you (or relative) get sick and you need to withdraw a lot to pay for the treatment. Well, you're long and have 10 years to get your money back, right? Not really, you need money today and you only get back 2/3. Well, you have 10m and have enough for 10 emergencies. Congratulations! You have a full right to not understand why somebody would get upset. I think 10 years life savings would fit into this category nicely and correlate to cancer treatment costs which may or may not be covered by insurance.

- how about you're long in tax sheltered account and your short term account is 1/3 short after the tweets? When you opened it, you thought the chance you would need this money is pretty low. But some smaller emergency did happen, so it's not 10 years you lost, but maybe 1.

Agree that all investment is risk yada yada, your own fault. Just saying that longs are not the only supporters. Tesla did not benefit from your long money(and my money specifically), unless you bought at IPO.
So, somebody who's not "long", but was recommending products to their friends, would be more valuable to Tesla.

It is possible that some of these recommenders are upset and it is possible that this is related to tweets. Longs are not the only ones Elon should be concerned about.

 

[neroden]

Re: Twitter, now that @mayemusk has decided to weigh in the the tide is likely to turn.

New strategy: Elon stops tweeting, and Maye gets to tweet whatever she likes. Nobody can accuse her of representing Tesla.

 

[scaesare]

After rework of course.

Naturally.... in order to replace the aluminum with something that... uh... actually "rusts".

 

[neroden]

Not one word about the tremendous debt overhang on a federal, state, local, corporate and consumer level. The rising interest rates are going to cause a recession. But that is their purpose in the end.

Federal debt isn't really debt; it's actually money. Reductions in federal debt can cause recessions.

Consumer debt is a huge, huge issue. But I don't believe it's going to trigger a recession until *after* the Great Energy Transition plays out. The jobs boom from renewable energy and building retrofitting will keep things going until renewable energy hits near-100% saturation; then the recession will hit hard.

 

[22522]

Are the shorts unaware of markets outside the US?

 

[CorneliusXX]

I've been thinking about this the past few hours. Didn't really get what Artful Dodger was talking about in that original post. But now the puzzle pieces are coming together. It does seem to make sense. It is only prudent for the Saudi's hedge against oil in the long term. They see the paradigm shift. Tesla would be the perfect partner for Saudi. Only logical right? They seem to like Elon too (they didn't take the bait when bloomberg questioned them about Elon's behavior calling him an eccentic)

In addition to ADs comments, the Saudi's aren't the only ones in a similar position. Every country across the Middle East and North Africa has an abundance of opportunity for solar battery energy production and storage. They also have a gigantic market just a little to the north which is easily reachable by HVDC power. SA is the first country out of the blocks, But Iran, Iraq and Jordan shouldn't be too far behind - they all have plenty of desert and can see the end of easy oil revenues. At some point in the not too distant future I am sure private investors will see opportunity investing in N.Africa and selling power to Europe, production costs for solar/battery are just reducing too fast now for this not to occur.

 

[2virgule5]

We have thought about it...and placed our pet's accordingly...have you?
Do you have skin in the game or not?

Well, @Krugerrand certainly placed his/her pet accordingly...

 

[mongo]

Naturally.... in order to replace the aluminum with something that... uh... actually "rusts".

Since you went there...
Aluminum does rust (in the sense that rust is oxidation and aluminum does oxidize. Unless you were going for a semantic argument that aluminum oxidation is not rust...) very rapidly, but the coating of Aluminum Oxide prevents further corrosion.
Or you meant rust as in rust to pieces/ oblivion which aluminum will not normally do (unless you add mercury or certain cleaners to the environment)

Should I have just hit funny?

 

[Fact Checking]

It's actually documented that richer people put higher percentages of their portfolio into more volatile and more illiquid investments, and *this makes sense*, because the amount that you want to have in something safe and secure is pretty much a *number of dollars*, not a *percentage*.

That's because for most people the "value of money" decreases exponentially as personal wealth increases. Unless the person lives a particularly expensive life-style there's diminishing returns starting somewhere between $10m and $100m net worth or so.

I'm pretty sure zero-to-$10m made a lot more difference to Elon's quality of life than $10m to $10b and beyond.

Yes, there are wealthy people to whom having control over more and more wealth is very important personally - but it's not typical.

With that in mind it becomes very important to protect 'core wealth' with very conservative investments and guaranteed returns that maintain that life-style until expected end of life plus maybe 20 years, and a significant portion of the rest can be put into volatile/illiquid investments - if the draw-down and higher chance of loss is not a big problem.

 

[CorneliusXX]

Unclear how a Gigafactory in SA would work. Where would the employees come from? Something like 80% of SA’s labor force is brought in from other countries.
A gigantic solar/battery farm, fine maybe, but a Gigafactory?

The labor issues, the human rights issues, the fact that SA is at war with neighboring Yemen, the fact that the geopolitical situation in the Middle East is historically unstable... all these issues combined suggest you don’t put an asset like a *Gigafactory* in the middle of one of the world’s oldest hot spots. A Gigafactory in SA is just asking for trouble imho.

SA could well start their own education programs to increase the knowledge base over the medium term. In the short term I'm sure they will just hire a bunch of expats like Dubai has done.

Tesla could structure the deal in a way that they own the plant but SA funds it through non-recourse debt, or have clauses in the contract that debt obligations are forfeit in the event or war or other political changes. It seems SA is highly motivated to pursue a sustainable energy future and could well make deals that wouldn't occur in a purely capitalist market.

 

[brian45011]

Is there a way to see this company's short positions? Only see a link to intl' shorts

I have not been able to find any. WW does show Put positions and Converts.

 

[traxila]

Federal debt isn't really debt; it's actually money. Reductions in federal debt can cause recessions.

Consumer debt is a huge, huge issue. But I don't believe it's going to trigger a recession until *after* the Great Energy Transition plays out. The jobs boom from renewable energy and building retrofitting will keep things going until renewable energy hits near-100% saturation; then the recession will hit hard.

Interesting. So you believe there will not be a recession for another decade at least? How long will the Great Energy Transition take?

I know that as the reserve currency the fed debt should not be an issue, unless some grandstanding politicians make it one in a fit of self destructive idiocy, but all the other debt...

Ten year T bill between 5 and 6 come 2020. No impact? That would have to really hit real estate hard, and I can’t recall a time where that did not make a huge difference in economy.

 

[neroden]

I don't think Tesla sells because it's superior. The bolt/volt are superior than a corolla but you don't see bolts flying off the lot.

Here in Ithaca, we do see Bolts flying off the lot, actually; our Chevy Bolt dealer says they're gone within a day of arrival and he has a waiting list.

But our Chevy Bolt dealership can't get GM to assign him any more Bolts. So he's been buying Bolts off of dealers all over the rest of the country -- dealers who were trying not to sell the car and didn't bother to learn anything about it. At least two of the dealers he bought them from didn't bother to charge the car before trying to drive it over to him, and he had to tow them back to his dealership when them ran out of charge halfway through the trip.

This goes to show two things: (1) that the dealership model is seriously harming all other EV brands, and (2) also that GM corporate is not serious about mass-selling the Bolt (if they were, the Ithaca dealership would be getting a lot more Bolts).

The year-long waiting list for Bolts in Canada is another data point; apparently now GM is redirecting Bolts to Canada -- but now dealers can't get them in the US. GM's plan for increasing production can only be called embarassingly modest -- from 20,000/year to 30,000/year, still way less than Model *S* which sells for three times as much.

And it's actually this that forms my core investment thesis on Tesla. As long as the would-be competitors are going out of their way to avoid selling their electric cars in volume, Tesla can get away with astounding amounts of bullshit (the tales in the Model 3 Delivery forum are hair-raising), and people will deal with it because, unlike GM, Tesla is actually trying to deliver cars to everyone. I wish Tesla wasn't providing a crappy delivery experience. I wish Musk would not post on Twitter without review. I wish Tesla would actually improve things in software updates rather than routinely breaking things. I wish Tesla had something approximating internal communications.

But the bottom line is, nobody else is mass-producing EVs, they're not *willing* to even when the demand is evident, and customers want EVs. In August, Tesla delivered *15%* of the plug-in cars in the *world*, and Model 3 production was 2.4 times as high as Leaf production, and 3.8 times as high as the next most popular model (the Geely Emgrand). That's August.

Tesla's still increasing production faster than Geely or BYD (who are also trying to ramp up).

EV Sales: World

If you accept the basic thesis that EVs are better and will take over, then it's clear that Tesla is seizing the largest share of the market. This is particularly true outside China, since Geely and BYD don't do much in the way of export business.

 

[theschnell]

I just want to clarify that the reason I was so mad at Elon for his most recent SEC tweet is that my initial reaction was that it would threaten his position as CEO.

I still think that is a risk, hopefully not as much as I had originally feared.

And if that were to happen I would be angry on so many levels, of which one is the risk to my personal investment, but that’s not the only reason.

And it’s a totally unforced error on his part.

Hopefully I am totally wrong in regards to that risk. I have not kept up over the last 24 hours so I don’t know of the latest developments if any...