TSLA Market Action: 2018 Investor Roundtable

[Starno]

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.

We are about 2 years away from the crisis. Probably 12-18 months away from reaching the top, then trade sideways, then crash.

 

[neroden]

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.

His analysis is mostly fine. (The more I look at the book, the more I like it, actually. I know a lot of the stuff in there, but not all the details, and it's been put together very well. He has a few spots I disagree on, of course, but it's good work.)

What I'd say here is: basically, the cleantech investments -- putting solar on people's roofs and batteries in people's houses and EVs in people's driveways -- are still in the "Early Part of the Cycle" and haven't even reached the "Bubble" phase yet.

We're still in the phase where companies are scrambling to borrow money to switch to EV trucks, and agencies are scrambling to borrow money to switch to EV buses, *because the financial payback is so good*. In fact, we've only just arrived at this phase, after getting out of the "early adopter willing to pay extra for new tech" phase. As people and companies cut their costs by switching to renewables, their (unchanged!) income can cover the debts they incur to switch to renewables, plus more. While this is going on, you don't get a debt blowup.

And the hiring due to the Great Energy Transition means that you have more people with income. And pressure to raise wages, which is something which is actually happening. This heralds *inflation*, not recession.

There can be mini-bubbles which pop during this phase (such as the yieldco boom/bust or the overleveraged business model of SolarCity) but they don't translate to full economic recessions. When we start approaching 50% cleantech adoption rates, then we start having high chances of a bubble and a pop, IMO. (Norway's already there with electric cars -- wonder if we'll see something happen there.)

Dalio discusses the 1923-1927 economic boom, a tech boom driven by real improvements such as motorcars and automation. *That* is where we are standing right now: we're in 1923, economically.

----
Dalio's main weakness in his book is failure to analyze the 19th century extensively; he doesn't have a good Industrial Revolution analysis.

On the other hand, he's dead right about the risk of war, in the War Economies section. The rise of dumbass authoritarian leaders, the rising conflict between the mistreated poor/middle-class masses and the economic aristocracy, it's a recipe for destructive wars. I'd *really* like to avoid this but basically the only way out of it is for supporters of wealth redistribution and/or power redistribution to win (as FDR did, as Wilson did, as Lord Grey did in the UK in 1830). The renewables revolution *may* help this happen or it may not.

 

[Ulmo]

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.

I think they're trying to get their existing citizens to learn how to work themselves rather than pay for outsiders. That's how I interpreted the new policy direction, what little I read about it.

A gigantic solar/battery farm, fine maybe, but a Gigafactory?

The labor issues,

Which I mentioned above

the human rights issues

Most claims of their human rights issues are false; there are a lot of evil people who bought out "Human Rights" organizations and flat out lie about the good guys (KSA).

the fact that SA is at war with neighboring Yemen

A very just war being fought by KSA with more morals than any country has fought a war in humanity before in history

the fact that the geopolitical situation in the Middle East is historically unstable

Yes, but one of the methods they can use to stabilize it is the successful moral good countries becoming more stable with projects such as their own products

... 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.

The magic here is that they may be willing to invest in it so that is not a risk. We're at a point with Tesla's batteries that it's a matter of quantity of widgets, not secrecy of a core group of Tesla scientists that need to achieve some great good and have nowhere to hide and whose work could be messed up somehow. (Having said that, I feel embarassed, because KSA has been quite good even at that in some places I am aware of.)

A Gigafactory in SA is just asking for trouble imho.

I think a Gigafactory in KSA would likely be good for Tesla, for KSA, and for the world. I think there's even a fairly likely potential it could lead to very good things. Quite frankly, the unstable wildcard in such an engagement would more likely be Tesla with its seemingly bordering on the potential of becoming rogue "Independent" Board of Directors and its restless CEO (I'm seemingly suggesting that any such deals allow the Kingdom's investors to specify some success measures in case the Board goes sour (idk, have an out clause that if there becomes some sort of problem at Tesla, have KSA take ownership of the GF and sell the batteries under KSA's brand but with a declining-minimum-with-time committment from Tesla as a buyer, but no disallowance for maximum future business between the two of them in case they want to get back together in some ways).

 

[SW2Fiddler]

But you've got to think outside the box. Listen to their press conference when they announced the charges against Elon. They are very articulate in expressing the problem they're solving is protecting the public and shareholders from an out-of-control CEO.

You’re saying they articulately expressed [URL='About – Quote Investigator GOOD REASON[/URL]. Of course they did. I would say to think outside a bigger box.

 

[Mobius484]

Ok, excuse my ignorance as I’m not a financial guru, bought 50 shares, long investment, 2 yea ago when I bought my model S, have enjoyed learning about the finance world through this(alone worth the price at purchase), but could Elon have shorted some shares, tweeted his opinion about the sec, then use the money of the drop to pay his fine? Or would that be insider trading?

 

[pnungesser]

IMHO our biggest problem is the lack of well thought out information from EM. Forget Twitter and send an open letter to investors, employees, and possibly the SEC. The letter should be a detailed explanation of what this thought processes were the last couple of months including at least the following:

1. Why he wanted to go private.
2. Why he thought funding was secured.
3. Why he thought small investors, and funds could be protected. (Apologize for not investigating the issue further before tweeting.)
4. Why he changed his mind.
5. Make his case why the SEC is in error with many of the items in the complaint.
6. Explain why he agreed to a settlement even, though he did not agree with many of the charges.
7. Explain why he believes that SEC actions are supportive of short sellers instead of investors as they are charged to do.
8. Discuss the major charges made by FUDsters and why they are false.
9. Provide a list of positive talking point about the company. Sales/production, customer satisfaction, profit/cashflow/margins guidance to the extent possible before the ER, market share, status of future plans such as GF3, model Y, Semi, PU without setting a hard time schedule that can bu used by the FUDsters, etc.
10. Gently call out the press for covering the mis-information and ignoring the positive side. Make the letter something they can not ignore.
11. If coverage is not provided adequately, buy space in some major papers.
12. Emphasize the this a true American success story. Made in America, by Americans, fuled by American energy and sold to the world. A true "America First" story that should be celebrated.
13. Offer to personally (or provide a spokesperson) to appear on the major business networks to provide a balanced story.

What do people think? I think TSLSA and EM need to go on a information offensive.

I'm sure my list is not complete so feel free to add to it. Of course, lawyers should look at it before issuance so no one can can claim it was designed to manipulate stock price.

Still long, but feeling shaky.

 

[Boomer19]

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

haha i love krugerrands pet
that cat would prob kick boomers a$$

 

[AndyH]

IMHO our biggest problem is the lack of well thought out information from EM. Forget Twitter and send an open letter to investors, employees, and possibly the SEC. The letter should be a detailed explanation of what this thought processes were the last couple of months including at least the following:

1. Why he wanted to go private.
2. Why he thought funding was secured.
3. Why he thought small investors, and funds could be protected. (Apologize for not investigating the issue further before tweeting.)
4. Why he changed his mind.
5. Make his case why the SEC is in error with many of the items in the complaint.
6. Explain why he agreed to a settlement even, though he did not agree with many of the charges.
7. Explain why he believes that SEC actions are supportive of short sellers instead of investors as they are charged to do.
8. Discuss the major charges made by FUDsters and why they are false.
9. Provide a list of positive talking point about the company. Sales/production, customer satisfaction, profit/cashflow/margins guidance to the extent possible before the ER, market share, status of future plans such as GF3, model Y, Semi, PU without setting a hard time schedule that can bu used by the FUDsters, etc.
10. Gently call out the press for covering the mis-information and ignoring the positive side. Make the letter something they can not ignore.
11. If coverage is not provided adequately, buy space in some major papers.
12. Emphasize the this a true American success story. Made in America, by Americans, fuled by American energy and sold to the world. A true "America First" story that should be celebrated.
13. Offer to personally (or provide a spokesperson) to appear on the major business networks to provide a balanced story.

What do people think? I think TSLSA and EM need to go on a information offensive.

I'm sure my list is not complete so feel free to add to it. Of course, lawyers should look at it before issuance so no one can can claim it was designed to manipulate stock price.

Still long, but feeling shaky.

I agree with this. More information is never a bad thing. But can he still talk freely about this after the settlement?

 

[neroden]

Most claims of their human rights issues are false

You are so delusional. Try sending a *female* member of your family to Saudi Arabia and afterwards, try saying with a straight face that they don't have human rights issues. Saudi Arabia has massive, massive, massive human rights issues, and everyone except you knows it. They have been bad guys for most of their history, being founded by a warlord who took concubines as prizes. Come *on*.

Maybe they'll become civilized soon, but right now they're destroying archaeological sites and bombing civilians from aircraft while imprisoning bloggers for heresy. Most of the population can't vote and doesn't have citizenship.

This isn't controversial; they *advertise* that they're doing this stuff. Maybe the current crown prince will change things, maybe not, but right now, they have massive issues. They've gotten away with it because of oil.

 

[SOULPEDL]

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.

Maybe the Saudi deal in 2 weeks is solar panels. Enough to launch that ignored part of Tesla into the stratosphere. With their current 5% stake, they also want Tesla to succeed. If they couldn't buy Tesla on their terms, why not be a part of it by driving it's growth? That date is on my calendar along with when Elon must step down as the last day he has extreme control of the board right after elections. All interesting dates.

 

[copyhacker]

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.

I wish I could put more than one Love on this.

I went through the above experience firsthand 6 years ago with a Volt. Dealers were anti-selling it except for a very few who saw the opportunity and poached cars from other dealers who didn’t want to bother.

I helped organize my local Drive Electric Week event this year, and it’s no different today. 6 years later, its still like pulling teeth getting any local dealer to participate. Most don’t have any EV or PHEV models on the lot to bring to the show. The couple that do are usually junior sales reps who probably got stuck being the “electric car guy” because nobody else wanted it. Every year they bring their cars to the show with little to no support from their employer and are largely ignored by the crowd who are gathered around the Model X watching the Christmas light show. Our event photographer had to go out of his way to take pictures of passersby talking to the legacy dealers because the opportunities were few and far between.

- Tesla as a company doesn’t participate in Drive Electric Week events as a rule because they’re too busy selling every car they make—and they don’t need to because the Tesla owners do a superior job representing anyway.

Legacy manufacturers are stuck in a trap of their own making. And I don’t know if they care.

 

[MXWing]

You are so delusional. Try sending a *female* member of your family to Saudi Arabia and afterwards, try saying with a straight face that they don't have human rights issues. Saudi Arabia has massive, massive, massive human rights issues, and everyone except you knows it. They have been bad guys for most of their history, being founded by a warlord who took concubines as prizes. Come *on*.

Maybe they'll become civilized soon, but right now they're destroying archaeological sites and bombing civilians from aircraft while imprisoning bloggers for heresy. Most of the population can't vote and doesn't have citizenship.

This isn't controversial; they *advertise* that they're doing this stuff. Maybe the current crown prince will change things, maybe not, but right now, they have massive issues. They've gotten away with it because of oil.

Honesty, claims of Saudis not having human rights abuses is equivalent to claims of the earth being flat.

I’m glad I’m not a foreigner working as some slave in some sheiks house.

 

[Ratanpara]

Ok, excuse my ignorance as I’m not a financial guru, bought 50 shares, long investment, 2 yea ago when I bought my model S, have enjoyed learning about the finance world through this(alone worth the price at purchase), but could Elon have shorted some shares, tweeted his opinion about the sec, then use the money of the drop to pay his fine? Or would that be insider trading?

No way, Elon is extremely honest person he would never do that, short sellers makes bad image out of him because he is super optimistic and his time line is always off but what he says generally happens just not on the time.

 

[pnungesser]

I

I agree with this. More information is never a bad thing. But can he still talk freely about this after the settlement?

I'm not sure the settlement is in force. Even if it is, he only needs to run it through appropriate filters.

 

[MXWing]

I'm not sure the settlement is in force. Even if it is, he only needs to run it through appropriate filters.

What does it matter if its in force or not?

Not a done deal is not a done deal.

Also, have to ask ourselves:

"So what was GAINED by taunting the SEC?"

 

[Remus]

Bloomberg - Are you a robot?

Bloomberg reports that Elon hired Butswinkas in SEC case Friday. Does this mean he is backing out of the settlement or just prepare for the event SEC is backing out?

 

[powertoold]

ask ourselves:

"So what was GAINED by taunting the SEC?"

Elon's pride. I hated that he took the settlement (have hundreds of shares). He probably hates it too.

 

[neroden]

Bloomberg - Are you a robot?

Bloomberg reports that Elon hired Butswinkas in SEC case Friday. Does this mean he is backing out of the settlement or just prepare for the event SEC is backing out?

At this point I don't care.

I just want Musk to stop making childish tweets, and I want *Tesla* to be in the clear with the SEC. What Musk decides to do with the SEC case is his problem, but I think it should be clear that Tesla as a company had nothing to do with Musk's tweets (I think Musk made that clear).

 

[Tslynk67]

I believe this chard describes the sentiment some people here are in pretty well.

Alex, are you doing this deliberately now, just to annoy me?

It's freakin' chart, dude, a chard is a leafy vegetable...

 

[SOULPEDL]

We are about 2 years away from the crisis. Probably 12-18 months away from reaching the top, then trade sideways, then crash.

Curious, is your prediction election based? I'll venture to guess you're a Trump fan and it all collapses in 2020. Perhaps, but I think Rep will screw it up before then and leave Dems a financial disaster like last time. Somewhere between now and then, Christmas will probably get ruined... maybe from Trade wars, and maybe necessary, who knows.

So I still have 1/3 cash in my IRA for that big discount sale. It's way overdue, the greed never lets up. The whole leveraging of TSLA shares concerns me with all this shorting. Are there really as many shares as there are claimed? How many times can a share be creatively borrowed (that we haven't yet figured out but someone already did). To those about to say that's impossible, maybe. But it will be something creative and dirty as hell, and so complicated you'd think it was magic.

My ongoing concern is that the market crashes before the TSLA pop. Will I die of exhaustion before I orgasm?