TSLA Market Action: 2018 Investor Roundtable

[neroden]

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

A suprisingly short time; it should be largely over by 2030. Maybe even 2025, but probably not.

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...

Yeah, debt owed by people who can't print money is a huge issue. (The feds can print money... and in practice so can California, even though it's sort of legally questionable whether they can print money, they've essentially done it by calling them "IOUs" and making them tradeable, which is actually what money is)

 

[cheshire cat]

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.

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

"Mea culpa"-----" I AM to blame" surely, since I could only stomach 47 seconds of JR. I leave it for others to decide.

 

[mongo]

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.

That's an interesting range. I'm sub million net worth, I would semi retire at a quarter of your low threshold.

Also don't think net worth helped Elon's QoL. Beyond being able to fund more projects, his life us as wrapped up in work as ever, and he still sleeps on a couch or floor. (Possibly the way he best knows how to enjoy life)

 

[neroden]

So my IB Trading Workstation app window his an indicator in the share purchasing pane saying shares are "shortable". I didn't see way to clear that flag when purchasing shares.

Their online helps says that you can opt out of their "Share Yield" program in order to prevent your shares from being lent out, however the steps in the help page don't match what I see in the app... so perhaps it's an outdated help article. I haven't had time to call them.

My shares (50 in an IRA and 37 in brokerage acct) are all fully paid for, so I assume the sign-up agreement must default to allow lending...

It's Interactive Brokers; I would be unsurprised if they have you sign up to lend shares out automatically, since they're IB, and they can be very *sharp operators* that way. Have you read your contract with them?

If you're with Fidelity or Schwab, the default is not-lent-out and you have to do a lot of paperwork to have fully-paid shares lent out.

 

[neroden]

Like Charlie Munger says, the downfall of every man is the 3 L's:

Liquor, Ladies, and LEVERAGE

That's old-fashioned and sexist (but he *is* very old, so I guess we can give him a pass). Honestly, all the best things and people in my life have been ladies, practically no exceptions.

I'm a teetotaler and I avoid leverage. Maybe we should replace that middle word with "Lasciviousness", which is what actually gets men into trouble...

 

[Joe F]

Thanks for doing this Dave. I was wondering what on earth happened to you...the Tesla community could really benefit from your contributions right about now. Part 1 made a lot of sense, looking forward to part 2&3, more so on your suggestions on how to fix this fiasco.

I don’t agree to a certain extent that the first part was written as well as it could have been, FWIW.

I feel it focused far too much on the unfortunate “pedo” comment while being one sided in that there was no mention of what Unsworth said, how it was said, and to whom it was said. That left out an important part of what triggered the response from Elon, especially after the lengths he, Tesla and SpaceX went to provide humanitarian efforts for a dire situation. Not that the comment was warranted, but as Dave pointed out, it was no doubt due to family history. Who amongst us are able to ignore being attacked without a response?

 

[JRP3]

Frankly I think DaveT's piece was terrible. Way too much focus on the p-do stuff, unlikely to achieve anything at all, other than giving the shorts more ammo that "Tesla supporters" are jumping ship. As I've said you can be sure Elon is getting plenty of advice from those closer to him with much greater influence.

 

[neroden]

Unfortunately, this is quite true. I'm not ready to bail here personally, partly because that would be financial suicide at this point, but also because I love Tesla cars. They are simply outstanding products.

The crazy thing is... go over to the Model 3 delivery subforum. People are furious over the delivery chaos, with appointments getting cancelled four or five times on very short notice, people's fully-paid assigned-VIN cars being sold out from under them to other people, lies and contradictions from Tesla representatives, and all kinds of extremely unacceptable *sugar*. Several people have actually cancelled and demanded full refunds...

...but most people get the car, even after all that *sugar*, and say "It was worth it!". Which is astounding. Nobody would tolerate that for a Toyota or an Audi or a BMW.

This is a company that can beat all other companies in sales even while getting complaints about unacceptable customer service. I consider this an investment thesis. (I mean, I wish they *weren't* getting complaints about unacceptable customer service, but the fact that people still want the cars indicates that there's something exceptional going on here.)

However, she has said that part of her doesn't feel right about driving a car when she doesn't like the person who made it (symbolically.) I remind her how much she likes the X and that there is much more to Tesla than just Elon. Unfortunately, it's pretty clear that she's not the only one who has developed quite a negative impression of Elon over the last year. It's really a shame that things have evolved this way.

I wish Tesla could get the rest of their *sugar* together. They make amazing cars (go Franz), they mass-produce them, they have Superchargers, now they just need to do all the stuff *other* companies do well. This should be the easy part, but apparently it's not.

 

[neroden]

I don't know how anyone could buy a bolt. Regardless of her dislike of EM or Tesla, why would someone buy a Bolt? They are hideous to me but I suppose looks are subjective. Plus, the thought of giving that money to GM, the company that killed the EV, is ironic.

I find that the Bolt has very comfortable seats and is very ergonomic And of course it's all-electric, with all the nice driving features which that has. Only downside is no Superchargers so no road trips, but I'd absolutely get it as a second/city car. Was seriously considering doing so...

... but GM refuses to supply enough Bolts to my local dealer, who has a waiting list !!!! (And of course I can't really drive it from a faraway dealer, because no Superchargers.)

 

[Cattledog]

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.

Perhaps Tesla will sell a Gigafactory to SA - the machine that builds the machine, Gigafactory as product - and maybe even sign a contract to operate it for X years until the locals are trained. SA might even agree to some front-loaded payments as they know that would dramatically lift the value of their 5% investment in TSLA.

 

[Singuy]

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.

Perhaps this explains my attitude toward paper loss as a non-event. I understand and sympathize with people who actually need the money they put in Tesla and hoping that it stays positive just in case they need to withdraw it on any given notice. But I feel like greed plays a major part of this behavior. Why Tesla? Why not something way more safe? I think people on one hand wants to get rich fast, and on the other hand doesn't ever want to lose their life savings. You can't have it both ways..if you want to get rich fast, be prepared to get poor fast too.

 

[scaesare]

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?

Where's our "pedantry" subforum when we need it??

 

[neroden]

In all likelihood, he's just venting frustration. I'd rather he not do it this way, but I'm not going to condemn him over it. Whatever frustration we're feeling, he's feeling it a thousand times over, and that built up energy needs a way out or it could wreck him internally.

Maybe we should get together and invite him out drinking or something. Maybe Pictionary?

What, you don't like Pictionary? We have Scrabble too.

NOT DRINKING. NEVER DRINKING.

A fun night of designing Mars habitats, I think.

 

[CorneliusXX]

The crazy thing is... go over to the Model 3 delivery subforum. People are furious over the delivery chaos, with appointments getting cancelled four or five times on very short notice, people's fully-paid assigned-VIN cars being sold out from under them to other people, lies and contradictions from Tesla representatives, and all kinds of extremely unacceptable *sugar*. Several people have actually cancelled and demanded full refunds...

...but most people get the car, even after all that *sugar*, and say "It was worth it!". Which is astounding. Nobody would tolerate that for a Toyota or an Audi or a BMW.

This is a company that can beat all other companies in sales even while getting complaints about unacceptable customer service. I consider this an investment thesis. (I mean, I wish they *weren't* getting complaints about unacceptable customer service, but the fact that people still want the cars indicates that there's something exceptional going on here.)



I wish Tesla could get the rest of their *sugar* together. They make amazing cars (go Franz), they mass-produce them, they have Superchargers, now they just need to do all the stuff *other* companies do well. This should be the easy part, but apparently it's not.

I think Tesla see it the same way as you, and the delivery experience has not been near the top of their most important problems list. Now that production hell has from level 9 to level 4, there will be more focus on some of these issues that weren't important before.

 

[ggr]

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

There's a thing in the twitterverse, #frunkpuppyfriday. Here's my entry:

 

[EinSV]

There has been some discussion in this thread about a potential Gigafactory in Saudi Arabia funded by the Saudis. Hopefully there will be some sort of deal with the Saudis but from the Bloomberg interview with the Saudi Crown Prince it doesn’t sound like building a Gigafactory will be part of it:

“Bloomberg: Do you think of battery manufacturing as being part of the future?

MBS: We believe battery manufacturing is really changing and moving and will not mature until today so we don’t know what’s the future battery. We believe it’s too risky to invest in battery manufacturing in Saudi Arabia and outside Saudi Arabia because it moved. The source of battery and energy could be changed in the next five or 10 years. So we don’t know what kind of material that battery will use, what kind of technology that battery will use because demand is rising. We think we should just watch that area before we get into it.”​

Bloomberg - Are you a robot?

Buying batteries from Tesla is still a possibility though.

 

[neroden]

I hardly want to talk to people about Tesla anymore because the first thing that comes up is Elon's behavour and I don't want to defend that.

I've been telling people that Musk is a bit of a nut but that Tesla is a lot more than just Musk for years. You're right that it comes up when you talk to people who don't know much about Tesla.

 

[mongo]

I find that the Bolt has very comfortable seats and is very ergonomic And of course it's all-electric, with all the nice driving features which that has. Only downside is no Superchargers so no road trips, but I'd absolutely get it as a second/city car. Was seriously considering doing so...

... but GM refuses to supply enough Bolts to my local dealer, who has a waiting list !!!! (And of course I can't really drive it from a faraway dealer, because no Superchargers.)

Simple, get a car trailer from u-haul and drive an X to the dealership that has one...
Regarding your prior post on delivery issues, it's nice to have the largest complaint about the 3 being not getting one.

Where's our "pedantry" subforum when we need it??

Oh, I think the mods will come up with one...

I've been telling people that Musk is a bit of a nut but that Tesla is a lot more than just Musk for years. You're right that it comes up when you talk to people who don't know much about Tesla.

People buy Van Gogh's paintings...

 

[Singuy]

Most young people i know that invest in shares own some tesla.

I would say millennial who actually invest owns some Tesla, Apple, Amazon, and AMD. My argument was that most people are not investors at all.

 

[Dig deeper]

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.

Do you have an opinion on the arguments that Dalio makes in his new book? https://www.principles.com/A-Template-For-Understanding-Big-Debt-Crises-By-Ray-Dalio.pdf I'm not sure I understand macroeconomics well enough to have an accurate picture but a lot of evidence presented in this book leads me to believe we are much closer to a top. Although i agree with you, that investments in green tech are capable of providing enough juice to keep the economy and the market as a whole going, i dont know that i share the optimism.