2017 Investor Roundtable: TSLA Market Action

[Krugerrand]

Also, AFAIK, the Model 3 exterior body panels are Steel rather than Aluminum

Steel is far easier to Stamp because it doesn't have nearly the "spring back" tendencies that Aluminum has. In other words steel tends to hold it targeted shape better after being stamped

My understanding is aluminum takes a lot longer to perfect the stamping because of the spring back effect with aluminum

I believe they are doing a combination of steel and aluminum body panels.

 

[AlMc]

We are under NDA. Let me just say this wasn’t my experience.

Also, I do not expect the stamping of aluminum parts to be the hold up anyways. Musk showed us something without showing us anything.

Totally agree, without violating the NDA from my last factory tour a couple months ago. I doubt the press is holding up production.

Opinion: It is the BIW line as reported by EM/Tesla and the General Assembly Line. getting the kinks worked out with the robotics. Hopefully it is not an EM last minute change(s) as was the case with the S and X.

 

[Ulmo]

Do we have a consensus on what the hold up could be?

Also, why is he posting these videos if it's not informative?

(This is regarding @elonmusk's Instagram post.)

I think he may not have had stock price on his mind as primary. I know sometimes he posts things to fix stock price related FUD, but that's not all he posts; usually he posts non-SP primary topics. But here are my two guess on both sides of that fence:

My best stock price related guess so far is prophylactic against more FUD. He might even have been tipped off that a (false) article was about to be published that such a video would absolutely refute. Or more likely, he surmised that it could just bulldoze through a few more FUD articles in a prophylactic way.

Or, he was walking out of the factory one day and said "this is cool" and posted it as cool. I find this most likely, i.e., he wasn't paying direct attention to stock price. Or maybe some Halloween scary factor that machines are scary.

I sit here thinking about it, and I realize the most most likely thing is a third thing: he's communicating to reservation holders that they're busy making some Model 3's.

I retract that third thought back to the second thought, that it was just cool.

I came up with a fourth thing. His unconscious, knowing above items #1-3, just decided this was the prophylactic responsible cool communicating thing to do, so his conscious did it. His brain probably already works at this level for at least many things, as any experienced people in their positions already do. This is car type #4 for his brain, and vehicle type #7 for his brain (including SpaceX), which doesn't even count the car type #5 and #6 already being worked on, and #7 in the pipeline someplace, and rocket type #4 (BFR) that's all the rage in his brain right now.

 

[Starno]

So much about this is wrong. Enough said.

If Amazon could do it :

Amazon: Can It Really Be Worth $3 Trillion? - Amazon.com, Inc. (NASDAQ:AMZN) | Seeking Alpha

Social Capital's Palihapitiya says Amazon will one day be worth $3 trillion

I don't see why Tesla could not.

The economics that full self driving capabilities will be able to give are still untapped even by imagination.

 

[kbM3]

I think that the replacement cycle will quicken once autonomous driving advances, so I expect 100m+ per year global unit sales starting 2021.

I was going by an old statement for Elon that if everyone stopped selling ICE cars today, it would take 20 years to cycle through the whole fleet. In reality, probably as we get near that point old ice cars will be outlawed or too inconvenient to find gas something to that effect. Who knows when the last one will be off the road.

 

[Ulmo]

If Amazon could do it :

Amazon: Can It Really Be Worth $3 Trillion? - Amazon.com, Inc. (NASDAQ:AMZN) | Seeking Alpha

Social Capital's Palihapitiya says Amazon will one day be worth $3 trillion

I don't see why Tesla could not.

The economics that full self driving capabilities will be able to give are still untapped even by imagination.

I see Tesla SP going at least 3x easily, but more than that require some steps that haven't happened yet. While those products that would bring Tesla to more than 3x are already in the pipeline, there's time to market issues with them that don't answer the question of whether it will get much above 3x. If everything keeps going great, it could definitely reach the stuff you're talking about in time to get that particular market share, but so could a lot of other things; that's way too far out to figure out who gets what first.

 

[everman]

If you are sure that the SP is going up what's the point of modeling?

I’m not sure yet what percentage of my IRA holdings I would convert, and at what strikes. Factors not only include added leverage but also the LEAP strike prices and their adjusted value based on when I think SP will move over the next 6-9 months, timing to initiate the position based on any near term weakness opportunities (recall?) and resulting downside exposure if my timing estimates are incorrect.

Are there other factors I should be considering as well?

 

[DaveT]

If Amazon could do it :

Amazon: Can It Really Be Worth $3 Trillion? - Amazon.com, Inc. (NASDAQ:AMZN) | Seeking Alpha

Social Capital's Palihapitiya says Amazon will one day be worth $3 trillion

I don't see why Tesla could not.

The economics that full self driving capabilities will be able to give are still untapped even by imagination.

I’m not arguing that Tesla can’t be worth $1T+ in the future. I am arguing that anything under 1T market cap is a massive buy, as you said. If TSLA had market cap of $900B next month (or even $200B), no it would not be a massive buy but a massive sell.

 

[MitchJi]

I was going by an old statement for Elon that if everyone stopped selling ICE cars today, it would take 20 years to cycle through the whole fleet. In reality, probably as we get near that point old ice cars will be outlawed or too inconvenient to find gas something to that effect. Who knows when the last one will be off the road.

Maybe oem's can try to hang on for a few years by converting some of their existing models to EV's like this:

Driveline by Rimac. It's designed so that the same driveline will bolt into a large percentage of existing jaguars.

Published on Oct 11, 2017
One of the most beautiful sports cars ever produced, converted to electric drive by Jaguar Land Rover. It's faster and lighter than the original!

For more information: https://goo.gl/an3kKv

Or:

http://media.jaguar.com/news/2017/0...ul-electric-car-world?q=&start=0&brand=jaguar

JAGUAR E-TYPE ZERO - “THE MOST BEAUTIFUL ELECTRIC CAR IN THE WORLD”
7 SEPTEMBER 2017

Jaguar Land Rover Classic is presenting an electric-powered Jaguar E-type at the Jaguar Land Rover Tech Fest, which opens to the public on 8 September in London

Jaguar Land Rover Classic electrifies the past with an inventive Jaguar E-type sports car featuring fully electric powertrain.

Acclaimed by Enzo Ferrari as “the most beautiful car in the world”, the Jaguar E-type now combines breathtaking beauty with zero emissions for the first time
E-type Zero is based on 1968 Series 1.5 Jaguar E-type Roadster, and features a cutting-edge electric powertrain enabling 0-62mph in just 5.5 seconds
Engineered by Jaguar Land Rover Classic at company’s new ‘Classic Works’ in Warwickshire, UK
E-type Zero makes world debut during Jaguar Land Rover Tech Fest at Central Saint Martins, University of the Arts London. The event begins with a media preview on 7 September and is open to public visitors from 8-10 September
E-Type Zero will sit alongside the all-electric Jaguar I-PACE at Tech Fest, which goes on sale in 2018

Enquiries regarding E-type Zero should be made using: +44 (0)203 601 1255 or [email protected] #jaguarelectrifies

The car, known as E-type Zero, has been restored and converted at Jaguar Land Rover Classic Works in Coventry, not far from where the E-type was born.

A more pessimistic evaluation:

I dont know if im reassured or concerned that Jaguar...who have developed a range of EVs themselves,....went to Rimac to design and build the key electrics for this. ( battery, motor, controls etc ?)
They certainly do not make that clear in their PR release info....conversion

As you would probably expect, Jag pulled from its existing all-electric vehicle lineup to build the E-Type Zero, including the I-Pace, the automaker’s first all-electric SUV. Specs include a 220-kW powertrain juiced by a 40-kWh battery pack, with power routed through a new prop shaft, finally mating to an original E-Type differential in the rear before reaching the ground.

 

[MitchJi]

I’m not sure yet what percentage of my IRA holdings I would convert, and at what strikes. Factors not only include added leverage but also the LEAP strike prices and their adjusted value based on when I think SP will move over the next 6-9 months, timing to initiate the position based on any near term weakness opportunities (recall?) and resulting downside exposure if my timing estimates are incorrect.

Are there other factors I should be considering as well?

IMO if you wait for the J20's and get strike prices of less than ~$380 you don't need to worry about timing or risk. It's like shooting fish in a barrel. I'd just convert them 100% but that's me.

Not an advice.

 

[Snapdragon III]

IMO if you wait for the J20's and get strike prices of less than ~$380 you don't need to worry about timing or risk. It's like shooting fish in a barrel. I'd just convert them 100% but that's me.

Not an advice.

In my opinion, that it terrible non advice. I would never suggest that anyone go all in 100% on options, and think it would be foolish. Especially if you did not spend any time worrying about timing or RISK. Even if the stock ends up way over $380 per share by the expiration, there is a very decent chance that those options could have some huge draw downs between now and 2020. It would be very easy to go in 100% on them, have them plummet 80% In value, freak out and sell at a huge loss, only to watch them go charging back later. Or there is also the possibility of a big macro crash that could easily have Tesla's stock price below $380 in Jan of 2020. I am not saying you shouldn't buy any, but to put in 100% of your portfolio in them is suicide in my opinion. The two caveats might be if you were very young, like early 20's, and have very little money, so getting wiped out wouldn't affect your future that much. Or if you had a psychic wife, that could accurately predict the stock market.

Caveat to my first caveat. Personally, my wife and I were very focused on saving and investing when we were in our early 20's and started putting money into the stock market, and bought our first house years before any of our friends did. Twenty years later, our net worth is millions higher than all of them, even though we did not have the highest paying jobs. Relatively small investments you make in your early 20's can grow to be surprisingly huge if you don't blow up your portfolio with crazy options bets.

 

[AlMc]

I won’t comment on the wisdom of buying options.

However if one does go with a strike price and expiry that is heavily traded as the liquidity if much better for both buying and selling

 

[jelloslug]

Also, AFAIK, the Model 3 exterior body panels are Steel rather than Aluminum

Steel is far easier to Stamp because it doesn't have nearly the "spring back" tendencies that Aluminum has. In other words steel tends to hold it targeted shape better after being stamped

My understanding is aluminum takes a lot longer to perfect the stamping because of the spring back effect with aluminum

Ford had all kinds of trouble with the aluminium F150.

 

[ValueAnalyst]

I’m not arguing that Tesla can’t be worth $1T+ in the future. I am arguing that anything under 1T market cap is a massive buy, as you said. If TSLA had market cap of $900B next month (or even $200B), no it would not be a massive buy but a massive sell.

Keeping in mind that corporate valuations are as subjective (forecasts of future, personal return expectations, and risk tolerances) as they are objective (fundamental factors, discounted cash flow models, technical analysis methods, risk models, and so on), could you please walk us through how you reached the conclusion that TSLA would be a massive sell at a market cap of $200B next month? Thanks in advance.

 

[LoveTSLA]

If it was not the recall , we should have been above 357 yesterday. I still see we will be above 360 today.

 

[Navin]

Over last week :
2 wsj hit pieces
5-8 bs lawsuits
1 recall

Stock price - basically flat

Sometimes day to day monitoring of tesla can be more harmful than helpful

LOL -

 

[Starno]

I’m not arguing that Tesla can’t be worth $1T+ in the future. I am arguing that anything under 1T market cap is a massive buy, as you said. If TSLA had market cap of $900B next month (or even $200B), no it would not be a massive buy but a massive sell.

900B yes, but 200B, it's still a massive buy. (x5 opportunity is great). Most value investors are thinking it's a great opportunity when it is even half the target price.

And even when it reaches the 1T market cap and assuming you don't think it is worth much more than 1T. It's still not a sell, if you have Warren Buffett thinking (you save taxes, gain dividends, and over time if it's a great company you have superior returns than the market....).

 

[bdy0627]

Over last week :
2 wsj hit pieces
5-8 bs lawsuits
1 recall

Stock price - basically flat

Sometimes day to day monitoring of tesla can be more harmful than helpful

LOL -

Agreed! I have my wife in DITM buy and hold LEAPs vs much more active trading of options for me. You can guess who is doing better with their TSLA investment. But, I just can't seem to step away....

 

[avoigt]

More than 3 M Shorts covered in September bringing the Shorts down to 27 M from 35 M in August. Looks like some finally realized that Tesla is not a good stock to go short with....

 

[geneclean55]

Wonder if we have enough energy to go through 360 on a Friday