Bubbles and Billionaires

Topspin · Aug 16, 2014

RationalOptimist said:
Here's one way to sketch out the impact.

1. Total cars sold before the problem largely addressed. (guess: 10k)

2. Percentage of those cars which will make warranty claim in years 4-8: (guess: 10%. Many more than that will make the claim in first 4 years, but that shd already be accounted for.)

3. Total cars sold after problem largely addressed (30k).

4. Percentage of those more recent sales who will make warranty claim in years 4-8 (guess: 3%. Again, the majority of any probs likely taken care of years 1-4)

5. Average cost to Tesla to remove, fix, and replace drive train. (guess: $2k)

Those assumptions would generate a one-time warranty reserve increase of just under $4m. That would be consistent with 'moderate'. But the assumptions may be way off.

This

Benz · Aug 16, 2014

Topspin said:
This one issue won't even ding the stock, but at some point tesla being a decade old will have to start showing profits or the bubble will pop.

It's not important to show a profit, although a very small profit would be nice.

What's important is realising growth in every aspect of the company, the sooner the better.

Most of the money that comes in (and eventually would have been considered as profit) should be invested in the company in order to realise growth.

Time is more important than money.

Confidence in the company and it's products is vital. Therefore, the warranty should not be limited to a certain number of miles.

twan · Aug 16, 2014

Topspin said:
This one issue won't even ding the stock, but at some point tesla being a decade old will have to start showing profits or the bubble will pop.

However, 8 years after a car's purchase, Tesla can record that car's warranty reserve as revenue.

Topspin · Aug 16, 2014

Benz said:
It's not important to show a profit, although a very small profit would be nice.

What's important is realising growth in every aspect of the company, the sooner the better.

Most of the money that comes in (and eventually would have been considered as profit) should be invested in the company in order to realise growth.

Time is more important than money.

Confidence in the company and it's products is vital. Therefore, the warranty should not be limited to a certain number of miles.

I think tesla

Krugerrand · Aug 16, 2014

Topspin said:
I think tesla will likely get a pass on profits for no more than another 2 years, they will be 6 years into being a public non profitable co. I'd love to be wrong and see the model three be the bubble deadline

How much profit would satisfy you? Or how much profit do you think this public you speak of would need to see to satisfy them?

I actually think the 'important' public, that would be those who get what Tesla is trying to do, don't care nor do they expect Tesla to realize profit of any significance (if at all) for many more than two years - as in well into Model 3 production (5 yearsish+ depending on what next Tesla decides to do - like build Gigafactory 2, Gigafactory 3, R&D for new Roadster, pick up truck, home storage stuff, etc...)

Lastly, what bubble?

Topspin · Aug 16, 2014

Krugerrand said:
How much profit would satisfy you? Or how much profit do you think this public you speak of would need to see to satisfy them?

I actually think the 'important' public, that would be those who get what Tesla is trying to do, don't care nor do they expect Tesla to realize profit of any significance (if at all) for many more than two years - as in well into Model 3 production (5 yearsish+ depending on what next Tesla decides to do - like build Gigafactory 2, Gigafactory 3, R&D for new Roadster, pick up truck, home storage stuff, etc...)

Lastly, what bubble?

The

Krugerrand · Aug 16, 2014

Topspin said:
The bubble of a thirty billion market cap company with zero profits and a fuzzy ever changing timeline on profitability.
For me I'm ok buying it as a small speculative asset.

Oh, the thirty billion market cap company turning a trillion dollar Auto Industry upside down and on its ear, and the thirty billion market cap company about to create a new trillion dollar industry called Home Energy Storage. That thirty billion market cap company?

There is a reason none of the top 20 billionaire investors owns it.

Uh, huh. And I'm sure none of them are kicking themselves for not getting in at the IPO, or even the following year.

Again I ask, how much profit do you need to see? Or how much profit does the public you speak of need to see?

Topspin · Aug 16, 2014

Krugerrand said:
Oh, the thirty billion market cap company turning a trillion dollar Auto Industry upside down and on its ear, and the thirty billion market cap company about to create a new trillion dollar industry called Home Energy Storage. That thirty billion market cap company?

Uh, huh. And I'm sure none of them are kicking themselves for not getting in at the IPO, or even the following year.

Again I ask, how much profit do you need to see? Or how much profit does the public you speak of need to see?

As some of that comes to fruition

Krugerrand · Aug 16, 2014

Topspin said:
As some of that comes to fruition I'm sure the top investors will start to partake

They've missed millions and millions and millions to date. Not sure where your confidence in them comes from, especially since it already is all coming to fruition. But hey, I'm sure there are quite a few people here who'd be more than happy to see them join club TSLA and push the price higher. Princess Tesla will be throwing her party at some exclusive, exotic location and all will be right in the world.

Topspin · Aug 16, 2014

Krugerrand said:
They've missed millions and millions and millions to date. Not sure where your confidence in them comes from, especially since it already is all coming to fruition. But hey, I'm sure there are quite a few people here who'd be more than happy to see them join club TSLA and push the price higher. Princess Tesla will be throwing her party at some exclusive, exotic location and all will be right in the world.

Well

Benz · Aug 16, 2014

Krugerrand said:
How much profit would satisfy you? Or how much profit do you think this public you speak of would need to see to satisfy them?

I actually think the 'important' public, that would be those who get what Tesla is trying to do, don't care nor do they expect Tesla to realize profit of any significance (if at all) for many more than two years - as in well into Model 3 production (5 yearsish+ depending on what next Tesla decides to do - like build Gigafactory 2, Gigafactory 3, R&D for new Roadster, pick up truck, home storage stuff, etc...)

Lastly, what bubble?

+ 1

Tesla Motors is not a bubble. It's real, and it's here to stay and to grow.

Topspin · Aug 16, 2014

Benz said:
+ 1

Tesla Motors is not a bubble. It's real, and it's here to stay and to grow.[/
1

Electroman · Aug 16, 2014

If they are successful, 5 years from now they will still be expanding. Building more GFs, opening more stores etc.. So that will put a damper on profits, which is actually a good thing.

On the contrary, in 5 years if they are not expanding and showing a small profit, i would consider that as a failure.

Benz · Aug 16, 2014

Topspin said:
I love tesla, I think it can sell the most electric cars over the next decade
i also think I will buy it much lower

How much lower do you think you will be able to buy it then?

brianman · Aug 16, 2014

Recommendation: Pretend he didn't use the word "bubble" (which is a bit charged and also implies an expected end result) and reevaluate if his points have some merit. Might be productive, might not, but it should help pull some emotion out of the discussion.

ggr · Aug 16, 2014

Topspin said:
There is a reason none of the top 20 billionaire investors owns it.

I don't understand why people make stupid statements that are easily proven false. It is well known that Sergey Brin and Larry Page are investors in Tesla, and according to Forbes (googled just now) they are #19 and #20.

Krugerrand · Aug 16, 2014

brianman said:
Recommendation: Pretend he didn't use the word "bubble" (which is a bit charged and also implies an expected end result) and reevaluate if his points have some merit. Might be productive, might not, but it should help pull some emotion out of the discussion.

Nothing wrong with emotion, though, I'm not seeing where it's over the top, therefore not understanding the need to address that point at all.

I'm still waiting for some hard data answers on those profits the public expects to see within the given 2 year time frame. The public I'm familiar with doesn't have the kind of profits being suggested are needed to prevent the bubble from bursting on their radar or their wish list.

RABaby · Aug 16, 2014

Topspin said:
Well when I wanted to be a millionaire I studied them, I partied a little now I'm studying billionaire investors.

If you are studying billionaire investors, you must be following Buffet. You see he just tossed hundreds of millions of dollars down a rat hole, as in good money chasing bad via GM? Do you consider that a wise investment? And Buffet is happy with his new Cadillac. Buffet is not as successful today as in his prime.

You can close your eyes and insulate yourself from many things when you have enough money. And you can lose a lot more money than those who follow your bad choices without feeling the effects of those losses while those following are penniless.

Most billionaires started businesses, and Elon continues to start billion dollar businesses. Investing in the businesses he starts is today's best avenue for those who aspire to wealth.

Topspin · Aug 16, 2014

ggr said:
I don't understand why people make stupid statements that are easily proven false. It is well known that Sergey Brin and Larry Page are investors in Tesla, and according to Forbes (googled just now) they are #19 and #20.

thanks they are not in the top twenty billionaire investor group I track

Chickenlittle · Aug 16, 2014

Topspin said:
thanks they are not in the top twenty billionaire investor group I track

I believe Walton's kids are in the top 20. Do you track those? Are they there for their investing skills or the birth lottery?

of course Mars family up there too. Do you track the matriarch

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