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TSLA Market Action: 2018 Investor Roundtable

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And there’s not much point arguing over long term demand, since in the long term we are all dead. Respectable enough view to take, just one that most of us here disagree with. Given your background, where I’d hope you’d agree, is that what you are spinning as a negative indicator (negative working capital), will actually be a strong positive for the company if there is demand for the product. So if there is demand for 1mln/year (or 5mln for that matter), this feature will help them get there faster, with better capital efficiency and ironically enough, with lower refinancing risk.
If everything goes according to Tesla's plan, then the working capital deficit will have been good for shareholders since you're effectively financing growth with other people's money - suppliers or depositors - which is great if you can do it.

Ordinarily, I would disagree on the refinancing risk, since the problem with with having such a huge deficit of current liabilities over current assets is that the time when short-term creditor groups gets nervous - market downturn/macro-event/recession - is likely to the time when it's difficult to refinance. But maybe Musk has decided that if something bad happens he will just leverage his SpaceX shares and step up personally for the refinancing. In which case, the risk is much less and may well be worth taking.
 
If everything goes according to Tesla's plan, then the working capital deficit will have been good for shareholders since you're effectively financing growth with other people's money - suppliers or depositors - which is great if you can do it.

Ordinarily, I would disagree on the refinancing risk, since the problem with with having such a huge deficit of current liabilities over current assets is that the time when short-term creditor groups gets nervous - market downturn/macro-event/recession - is likely to the time when it's difficult to refinance. But maybe Musk has decided that if something bad happens he will just leverage his SpaceX shares and step up personally for the refinancing. In which case, the risk is much less and may well be worth taking.
Creditors want to get paid. It doesn't help them if Tesla fails, they will get nothing in bankruptcy. They will bend over backwards to accommodate. My guess is that they know Elon is good for it.
 
Apparently Whitney Tilson thinks $TSLA is a decent short right now
This is the guy who shorted $TSLA at $30 in 2013 and covered at 500% higher in 2014
Great contrarian indicator
I would be going super long on this news alone
Plus the 2 hourly charts look fabulous
I bet tomorrow is the last day sub $300
Shorts had their chance and they blew it
$TSLA longs will take over now

Agreed about Tilson. I remember the definition of idiot is someone who make the same mistake twice expecting different result. Seems to me Tilson fit the bill perfectly. He didn't understand Google, Netflix in the past, also didn't/doesn't understand Tesla.
 
It’s just funny that you would call someone else a contrarian indicator...

I chatted with TT007 in the past. He is one of the most intelligent investors I know of. Everyone can get wrong from time to time. I'm not a fan of high leverage, but his understanding of businesses is quite impressive. His memory of past events and numbers are also very impressive. Just my view, I also get wrong from time to time.
 
Regarding Tesla Problems and Risk

Tesla does not need to be perfect. It needs to be better than average to be successful and better than all the competition by a material degree to become a trillion dollar star.

On the automotive side Tesla does not have all the legacy problems like massive pension liability and health care cost for workers retired decades ago, it doesn't have obsolete assets like ICE equipment or obsolete engineering talent like ICE and Transmission engineers. Many OEMs discarded most of their electrical engineers when they discarded their parts subsidiaries. FCA is thinking of doing the same by spinning off Magneti Marelli.

All automakers could fail. The future is uncertain.

No current automaker will be around in a thousand years. Tesla is the least likely American automaker to fail.

I think VW and Toyota will be backed by the full faith and credit of their national governments. So they won't go. But there is no guarantee current stockholders of VW or TM won't get hosed in a future reorganization/bankruptcy.

After that I like Tesla's chances.
 
No current automaker will be around in a thousand years.

Don't bet on it.

S26E06- Simpsorama.mkv_snapshot_20.58_[2018.06.04_23.42.46].jpg


(It's from the simpsons in a cross over episode with futurama, something us kids watch on TV. I'll see myself out.)
 
Indeed, I think one of the key impaired parties in this are ordinary shareholders of public companies. For example, suppose you invest in Amazon. As an ordinary investor you wait for quarterly reports, meanwhile well funded hedge funds buy this sort of data to track sales on a near real time basis. This is a huge information asymmetry, which is trading on non-public information. Where the heck is the SEC?

Was this data already tipping off certain shorts to attack Tesla on grounds of "conversion" rates? As I have argued before conversion rates are quite misleading in a situation where customers are waiting considerable time for certain product configurations to become available. A cancellation rate would be much more concrete and measurable in real time. But those launching this attack seemed to avoid framing this as a cancellation question. Perhaps this would have been too much of a tip off that they had NPI visibility Tesla's transactions with customers.

As others have pointed out, this report is actually not so bad. So my beef is not with that. Rather my concern is that this is a violation of corporate privacy that puts ordinary shareholders at an information disadvantage. How the shorts played this was to insinuate more than what the data would bear out, but we were at a disadvantaged to defend the stock against this insinuation because of information asymmetry.
The only way to beat the game is to hold long term. If an ordinary person trades on weekly or monthly time horizon, and the hedge funds know things a week or month in advance, guess who's getting his pocket picked. If he holds for a few years, then the advantage of knowing some news a week or month in advance would have much smaller influence.
 
Agreed about Tilson. I remember the definition of idiot is someone who make the same mistake twice expecting different result. Seems to me Tilson fit the bill perfectly. He didn't understand Google, Netflix in the past, also didn't/doesn't understand Tesla.

Not the definition of 'idiot' but one definition of 'insanity'. ;)
 
I chatted with TT007 in the past. He is one of the most intelligent investors I know of. Everyone can get wrong from time to time. I'm not a fan of high leverage, but his understanding of businesses is quite impressive. His memory of past events and numbers are also very impressive.
Proof that intelligence and memory provide zero insight into future price movements. He's been consistently and spectacularly wrong more than any other long I've seen on this board, and unfortunately taken some others along with him on the ride. No one should give any credibility to anything he says. To do so is dangerous, as is encouraging others to do the same.
 
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The only way to beat the game is to hold long term. If an ordinary person trades on weekly or monthly time horizon, and the hedge funds know things a week or month in advance, guess who's getting his pocket picked. If he holds for a few years, then the advantage of knowing some news a week or month in advance would have much smaller influence.
Indeed. I think we should bear this in mind when ever we think we know where the stock is headed over the next month or two. Do we have visibility into customer transactions with Tesla? If no, perhaps other traders do. So our short-term ability to prognosticate is trumped by others who can pay for data. Only on a long term horizon will we be rewarded for seeing through the near term noise where Tesla headed.
 
Proof that intelligence and memory provide zero insight into future price movements. He's been consistently and spectacularly wrong more than any other long I've seen on this board, and unfortunately taken some others along with him on the ride. No one should give any credibility to anything he says. To do so is dangerous, as is encouraging others to do the same.

All of us on this forum should try to be nice to each other. It's obvious everything posted is opinion, not advice. Even if it were advice, it's each individual's responsibility to decide taking the advice or not. When we hear something, try to think if the reasoning makes sense, not blindly follow someone else's opinion/action. Nothing is 100% sure in investment or trading, anyone who think he can repeatedly predict price movement with success will be humbled in the end, this is especially true for short term predictions. Anyone can get wrong, at various degree.

If we start to treat others harshly, some people will leave and not come back. It's unfortunate over the years I saw quite a few smart investors/traders left the forum. I guess some of them got frustrated. It's a loss for the forum.

TT007 made good calls in the past too. He was very bullish in 2016, especially in late 2016 when the stock was between $180~$200. Also, I remember in March 2017, the stock was pulling back ~$40 from 280. Many people were worried. One day TT007 posted something like "the stock made a intraday double bottom just above 240, this could be the turning point for the next leg up." He was precisely right, both the timing and the move. It moved from $241 to $386 in 3 and half months.

I used to say don't use leverage, buy and hold shares, keep adding on every pullback. Now I hesitate to say that again. Because I think there is a good chance we get big rally in the next few years, will those people blame me for missing the leveraged gain? On the other hand, every time the members on this forum pile up on short term options, we get a disappointing result. So I hesitate to say anything.

The most important part is to keep learning, make yourself a better investor and/or trader. Everyone's situation is different, someone with a lot of other assets and constant cashflow can use an aggressive approach. Some others should be very conservative and stay diversified. Each investor should honestly assess his/her own situation and personality. Write down the proper action you should take, and follow it. If you have questions, ask, members on this forum will try to help. There are quite a few very experienced/intelligent members on this forum. In the end, make your own decisions.

Let's keep this forum a great place. I genuinely hope everyone get great investment results while supporting Tesla.
 
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