TSLA Market Action: 2018 Investor Roundtable

[Stretch2727]

So much this.

Almost all of 2018's hyperventilation about Tesla's future can be explained by GAAP distortions over an exponential ramp-up process - which gave the bear thesis a false air of authenticity.

Now the Q3 ER exposed the short thesis for the affinity fraud it always was.

Stunned silence from many Wall Street analysts who should have known better.

And I would add, a lack of understanding of how high the fixed costs are in manufacturing autos and how this reduces on a per unit basis as the volume scales. Even part of the labor tends to be in reality a fixed cost, as you need a certain minimum number of people in each area of the factory due to different skill sets even if you only build 1. The 30% reduction in labor hours this quarter per unit partly reflects this scaling.

This spins both ways though with a volume reduction. One reason the auto companies quickly get in trouble with even a marginal reduction in volume. Eliminating the "fixed" costs at the rate the volume is reducing is almost impossible.

 

[hacer]

Average driving 4000 miles a year on trips is not the average. Average 20000 miles a year is 5000 over average of all drivers average. I wont ask your opinion on average penis size

I don't have any real statistics, but I have noticed that the mileage I've been putting on my Tesla significantly exceeds the mileage that i was putting on my previous car. Road tripping is such a great experience in the Tesla that I'm doing a lot more of it. I've talked to a few other owners who've had the same experience. So perhaps the average Tesla miles/year (especially for those with free supercharging) is in fact higher than other cars.

 

[Causalien]

That’s amazing divination to read so much about someone just through posts!

Some people here in TMC think I maxed out with a high school degree and don’t even own a Tesla.

So I am enthralled conversing with a super genius.

Was there a certification for top 1%? Are you a part of any of the high iq societies?

By 1% is that just IQ or EQ or what measures?

Lastly, how do you recognize other 1%ers? Like game recognizing game.

Maybe we should have you start a AMA thread so can get your insight on various topics?

LOL, never seen a smart person brag about being top 1% smart before. IIt's like saying there's9 ppl smarter than me in every 1000. What's there to brag about?

Plus, how do you measure smart? Book smart, sure. That's easy. Life smart? Now that's a science.

I say someone reaching the top 1% of their chosen field from a base of nothing (non athletic based) can claim that. Be it competirive gaming, net wealth, or amount of revolutionary scientific achievements and of course, starting a company that reached unicorn status.

 

[avoigt]

I think Tesla is in an excellent position for a share price between 370 to 420$, but there are two main things that need to play accordingly for us:

a) The macro's of the general market need to be positive, if the market continues to go down - I do not think we'll see over 350$.
b) There needs to be a pause of bad news regarding TESLA and all the old crap needs to get forgotten and we do need Elon to continue to shut his mouth.

The scenarios why the SP will go up or down are unfortunately endless. There are many possibilities out there and I do not even try to start to number them.

Short term we all do not know what happens Monday or this week. We may go up or down and find good reasons in retrospect. Long term is what really counts.

As pointed out from many here the company is heavily undervalued and with every quarter from now on with continuous positive productions units and financials there are not really many scenarios out there that the SP will go down or stay flat on the long run.

Its a while ago that I posted that the stock went flat for 4 years and 2 month until it broke out and we had a nice bull run. Since then only 1 year and 7 months passed by but if we put the fundamentals in relation to the SP than we never had a better situation than today. IOW, a break out is overdue but although I hope it happens soon and there is a good reasoning for it we cannot exclude that it takes longer.

In 6 month from now we have exactly 50% of the previous side move accomplished and that will be in April 2019, end of the month when we will see the Q1 results. Nice coincidence and pure speculation....

As of today I would say there is room to get closer to $380 until Q4 ER. At that stage a lot is possible but it will be a larger resistance to overcome. The good news is if we overcome it we can expect exaggeration on the upside to happen. That would be fun to watch!

To be honest and this may receive a lot of disagrees I believe in the possibility of a scenario that Tesla manage a break even or slight annual profit for 2018. I assume most people will disagree with it and have good reasons for it. I am not an financial expert nor an accountant but lets all make a step back and acknowledge that almost all of those experts have been taken by surprise about the Q3 numbers. What happens if we are taken by surprise in Q4 as well?

One of the very few that has been criticized here heavily but hit the numbers very close is @ValueAnalyst . We should all applaud him or her for that prediction. Congrats by the way for the successful establishment for your own investment community.

Break even or even a slight profit for 2018 may look unreasonable for most but the Q3 numbers did as well. I would appreciate if the smarter people than me here take their pencil out and tell me how unrealistic that really is.

 

[KarenRei]

Let's be clear. I don't much care about you kids. You understand that right?

I'm not young - even by your "35 years old" cutoff. But if I asked to to battle for one side or the other - the under-35 or the over-35, I wouldn't even wait for the question to finish before throwing my hat in the ring with the former, covering my face in warpaint and heading out to the front.

To "young" people: Keep changing the world. You rock.

 

[elasalle]

SIAP (Sorry If Already Posted) .. from twitter feed
Marcelo P. Lima on Twitter

Larry Ellison’s rant on Tesla and @elonmusk is just awesome

 

[HG Wells]

You want to have a side bet here. I bet Netflix beats Amazon in returns to 2025. What say you?

Netflix already beats Amazon in returns. Every DVD they mail out gets returned.

 

[ValueAnalyst]

The scenarios why the SP will go up or down are unfortunately endless. There are many possibilities out there and I do not even try to start to number them.

Short term we all do not know what happens Monday or this week. We may go up or down and find good reasons in retrospect. Long term is what really counts.

As pointed out from many here the company is heavily undervalued and with every quarter from now on with continuous positive productions units and financials there are not really many scenarios out there that the SP will go down or stay flat on the long run.

Its a while ago that I posted that the stock went flat for 4 years and 2 month until it broke out and we had a nice bull run. Since then only 1 year and 7 months passed by but if we put the fundamentals in relation to the SP than we never had a better situation than today. IOW, a break out is overdue but although I hope it happens soon and there is a good reasoning for it we cannot exclude that it takes longer.

In 6 month from now we have exactly 50% of the previous side move accomplished and that will be in April 2019, end of the month when we will see the Q1 results. Nice coincidence and pure speculation....

As of today I would say there is room to get closer to $380 until Q4 ER. At that stage a lot is possible but it will be a larger resistance to overcome. The good news is if we overcome it we can expect exaggeration on the upside to happen. That would be fun to watch!

To be honest and this may receive a lot of disagrees I believe in the possibility of a scenario that Tesla manage a break even or slight annual profit for 2018. I assume most people will disagree with it and have good reasons for it. I am not an financial expert nor an accountant but lets all make a step back and acknowledge that almost all of those experts have been taken by surprise about the Q3 numbers. What happens if we are taken by surprise in Q4 as well?

One of the very few that has been criticized here heavily but hit the numbers very close is @ValueAnalyst . We should all applaud him or her for that prediction. Congrats by the way for the successful establishment for your own investment community.

Break even or even a slight profit for 2018 may look unreasonable for most but the Q3 numbers did as well. I would appreciate if the smarter people than me here take their pencil out and tell me how unrealistic that really is.

Thank you for your support, and I agree with your "break even or slight annual profit for 2018" call.

2018 GAAP profitability would have immense implications, so your prediction is critical.

Kudos for making a bold call and good luck.

 

[bdy0627]

words that shall live in infamy, from Elizabeth Holmes. Among others.

It annoys me when people compare Elon/Tesla to Holmes/Theranos. It's a fantasy comparison many shorts/media use as a scare tactic. It's like saying Martin Luther King and rapper The Notorious B.I.G. are similar because they were both shot and killed. Where is the reality behind the comparison? She talked the talk but sure didn't walk it. Lots of promise but no actual products, ever. She claimed they worked but they didn't. Nothing remotely like Elon/Tesla. Tesla has released some pretty decent products, a couple of which have received car of the year awards by various publications. Model 3 is now the best selling car in the U.S. by revenue. It's beyond silly to compare him to Holmes.

 

[electracity]

*Sigh* So Tesla's growth ceiling is probably the growth rate of the world electric car business, i.e. 50% per year. And if you want to value by PEG (which is mathematically unsound, but whatever), all non-Chinese stock-market-listed car companies are clearly *shrinking*. You can give it a shot, but a DCF analysis makes more sense.

There are signs that Tesla is not planning to maximize growth. Their expansion choices so far seem to be more designed to reduce risk. Tesla almost certainly could have made a more aggressive deal in China with production starting sooner with more capacity. Instead the choice seems to be to assure success and non-dilution of ownership.

 

[hacer]

...Any strategy that’s public and works will be copied by others, including high-frequency algos, until all the alpha is arbitraged away...

Please explain how this "arbitrage" works. Given a scenario where something is "public and works" - meaning there is public knowledge that the stock price will go up (or down) because "x". Once "x" is observed, what does the arbitrager do that stops the stock from going up (or down)? Bonus points for explaining how they make money doing it while preventing others from the same.

 

[Drax7]

There are signs that Tesla is not planning to maximize growth. Their expansion choices so far seem to be more designed to reduce risk. Tesla almost certainly could have made a more aggressive deal in China with production starting sooner with more capacity. Instead the choice seems to be to assure success and non-dilution of ownership.

Cover your shorts.
Unless you hold a sizeable naked put.

 

[Webeevdrivers]

What’s the feeling on this FBI investigation possibly playing out badly. Not an American so not familiar with the system. Can this really turn into prison terms, for who, how much, does it open the door for more Sec involvement etc.

From a foreigners point of view, it seems weird that missing production goals can lead to prison terms.

 

[electracity]

Cover your shorts.
Unless you hold a sizeable naked put.

I have a small long position. I also pay attention to what is actually said:

Adam Jonas

That's a good reason. If I can just squeeze in since I couldn't ask the first one that you could answer, do you think that the third quarter is a milestone, Elon, where you think Tesla becomes sustainably self-funding, and perhaps not in need of outside capital? Thanks.

Elon Musk

Yeah. That is our goal. We do not intend to raise equity or debt. At least that's our intention right now, that may change in the future. But the current operating plan is to pay off our debts not to refinance them, but pay them off and reduce the debt load and overall leverage of the company......

See the words about reducing leverage?

 

[Sparky4life]

Guess What? Everyone Was Wrong About Tesla

Not “EVERYONE”....

 

[avoigt]

Guess What? Everyone Was Wrong About Tesla

Not “EVERYONE”....

"This quarter’s spectacular results have confounded the analysts’ forecasts, proving what some of us have been saying for a while now, (...). That "some of us" certainly does not include all articles from Forbes ever written about Tesla.

 

[Boomer19]

The positive side of the story is Elons behavior and reaction that I strongly agree with and call excellent. He has been often cririzised for his Twitter posts but this time he did master the situation. Great Job!

yes, thumbs up!

 

[Artful Dodger]

The scenarios why the SP will go up or down are unfortunately endless. There are many possibilities out there and I do not even try to start to number them.

Here's the version of events I glean:

• SEC is reading Elon's tweeter feed looking for *sugar*
• Elon chaffs, trolls SEC minions:
  • tweets a request to his twitter legions:
  • "Send me ur dankest memes!!"
• said SEC minions boil dafaq over
• minion whinges to WSJ
• WSJ times stale hit piece to disrupt TSLA runup
• algo's have no sense of humour
  
• Market laffs@joke, shakes it off by Close
• SSDD

That last term describes Friday's Market Action quite succinctly, wot?
--
"None of this ever happened, and I was never here. Got that?"
Admiral James Greer, The Hunt for Red October

 

[Boomer19]

It annoys me when people compare Elon/Tesla to Holmes/Theranos. It's a fantasy comparison many shorts/media use as a scare tactic. It's like saying Martin Luther King and rapper The Notorious B.I.G. are similar because they were both shot and killed. Where is the reality behind the comparison? She talked the talk but sure didn't walk it. Lots of promise but no actual products, ever. She claimed they worked but they didn't. Nothing remotely like Elon/Tesla. Tesla has released some pretty decent products, a couple of which have received car of the year awards by various publications. Model 3 is now the best selling car in the U.S. by revenue. It's beyond silly to compare him to Holmes.

nobody smart is comparing them. it’s an anti-tesla jargon put forth by the usual suspects.

you know, print it and say it enough, ands the human gerbils will repeat it and believe it.

that these tactics still work, is unbelievable to me.
(but then i find myself falling for it sometimes too, on a subject i’m not that familiar with, and i catch myself and am like dammit!!!)

 

[Intl Professor]

We need Elon Musk much more than he needs us

My Americanist colleagues rate The Hill very highly. Of course this choir sings the same tune.