Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Singuy]

I didn't expect there to be a consolidation week. May even last for two weeks. This is good as it builds support for which the high 500s will be where the stock bounce off of incase there's a flash crash post inclusion.

 

[Robocop]

WAG — we finish at 593.xx today. This is a major limb I’m going out on here. You should all be supportive of me now. To take the guess work out of it, send me TSLA shares as a sign of your appreciation for me making this call. We’ll follow a classic sliding scale of appreciation. The more you send, the more you appreciate this bold call.

Go.

Instantly turns to 594. Thank you.

 

[EVortex]

Here's my summary of the video:

Most auto insurance companies spend their revenues this way:
70% losses paid out
28% to operate the business, including 10--12% customer acquisition cost.

Tesla is presently acting as an insurance agent and will be thus able to keep 10--12, or 15% of insurance payments risk free. This may account for Elon's "30 to 40% of the value of the car business". Tesla has a very powerful tool to acquire customers since offering insurance to car buyers saves those buyers from having to search out insurance on their own. Called the funnel effect.

There is little profit in the loss underwriting. Typically underwriting produces only a 1% profit. Insurance company revenues come from customer payments plus the profits from investing their reserves.

-------------------------

I was disappointed that there was no discussion of the idea that Tesla insurance was developed to save Tesla drivers from over-priced insurance rates on Teslas.

I agree. Insurance fundamentals are fine to understand more about the current industry and offerings, but what insurance really needs is significant disruption. Insurance needs an entirely new approach based on information and helpful offerings that affordably protect the consumer and society. Tesla could do this with the right people and Elon setting the direction to think beyond the staus-quo.

 

[Krugerrand]

Instantly turns to 594. Thank you.

You’re welcome for the breaking $595. But save your posts, just send those bloody appreciation shares.

 

[Curt Renz]

The link doesn’t work or the article was removed.

Must have been some weirdness with the link you copied, Curt:

URL='http://Tesla CEO Elon Musk Tells Friends He's Planning To Move To Texas'

Benzinga - 8 minutes ago: Tesla CEO Elon Musk Tells Friends He's Planning To Move To Texas

EDIT: Newer version of the link has been entered

 

[Cherry Wine]

Little bit of Friday FOMO kicking in.

 

[Drumheller]

I'm re-reading Jack Rickard's wonderful Tesla Conspiracy write-up ( The Tesla Conspiracy... or Am I a Dead Whistleblower? - EVTV Motor Verks ) and came across this quote, "It reminds me of Sandra Bullock and Sylvester Stallone, in the movie DEMOLITION MAN. In the future, ALL restaurants had consolidated under the brand name TACO BELL. If SOMEBODY doesn’t do SOMETHING pretty quickly, in the future ALL automobiles will be Tesla’s."

Thought it interesting to see again considering Elon's tweet from last night.

 

[Singuy]

Listening to this gem in my car.

Lets just call it Mary Barra spins her way to success.

Is it Too Late for General Motors to Go Electric? (Ep. 442) - Freakonomics Freakonomics

 

[adiggs]

I was disappointed that there was no discussion of the idea that Tesla insurance was developed to save Tesla drivers from over-priced insurance rates on Teslas.

A reason alluded to, but not directly stated or explored, is that car insurance is a low margin / high competition business. That 1% underwriting profit is a good indicator of that - actual profits come from investment of the float (and understanding this concept in more detail is a good reason to be reading Buffet's Annual Letter to Shareholders - I've been reading them for a couple of decades now, and they're all available on the Berkshire investors site).

The problem with a 1% underwriting profit of course is that is an aggregate value over the industry, over the years. Some years are better, some are worse.


That thin margin is also our protection as car owners. An insurance company that is badly misplacing Tesla car insurance to the high side will earn some incremental underwriting profit, and will lose business to other companies that aren't.

One of Geico's strategies, talked about 1 year by Buffett, was to make their premiums easy to see, and to keep them low (which puts heavy emphasis on their ability to price correctly). The way they see it, it's a win either way. Showing lower premiums will bring in customers. Accurate pricing of those contracts at low prices, where the customer goes elsewhere even cheaper, will be losing contracts for their competition.


That doesn't mean that Tesla can't develop a lower priced insurance using superior information at the individual consumer level and their individual driving habits. Only that I don't see it as a no-brainer (mostly because the loss of privacy will be an impediment for many potential consumers).

Then again, I think I'm personally closer to $1200/year on our Model X insurance with State Farm, partially due to having our entire collection of insurance coverage with State Farm. So maybe I'm just happy with the rates we're getting, and don't feel a need to go looking for something better.

 

[FireMedic]

I know this sounds a little ridiculous…and it may have been mentioned before.

Seeing Uber hitting all time highs SP and closing in on $100bn for no apparent reason; anybody think there’s a chance the Tesla has a potential partnership. To me, it makes sense to try to launch a ride healing network; but I just don’t really think they have the available bandwidth to develop their ride hailing network.

Elon mentioned being open to a partnership with an existing company, it kind of got my brain moving in that direction. I didn’t think it would be a car company because they have nothing to gain.

But maybe an existing ride hailing service. I know they already have some sort of deal with Uber; when I’ve needed to go to a service center they put me in an Uber instead of a loaner car sometimes.
Anyone have any thoughts on that? That’s all for now.

 

[jerry33]

That doesn't mean that Tesla can't develop a lower priced insurance using superior information at the individual consumer level and their individual driving habits. Only that I don't see it as a no-brainer (mostly because the loss of privacy will be an impediment for many potential consumers).

If you drive a Tesla, Tesla already knows your driving style. There's no loss of privacy that I can see (in addition to what's already there Tesla insurance or no Tesla insurance).

 

[Sudre]

......THEY are probably selling some 590 Puts today.
View attachment 614209

They did manage to sell a bunch of $590 strike Puts but Calls went right up with them so we seemed to have gravitate towards $590. I bet so THEY could close the Calls out by buying them back cheaper as the ones who bought them saw the price dropping to make them worthless. Once that is done they can..... let go.

While not the perfect GIF, lets look at how things played out for next week. It seems Puts are coming in around a strike of $540 up to $600. Calls are coming in... well everywhere but a lot above the $600 strike. Mr Market seems to be bipolar. $700 is going to be a wall IF there is a run. $565 seems to be the current floor. I am seeing this as a move up above $600. Let the games begin!

 

[jerry33]

I know this sounds a little ridiculous…and it may have been mentioned before.

Seeing Uber hitting all time highs SP and closing in on $100bn for no apparent reason; anybody think there’s a chance the Tesla has a potential partnership.

No. Ride hailing makes no sense when robotaxi is going to overtake it. It would be like Tesla investing in ICE manufacturing.

 

[M|S|M MYP]

Toilet boy with some friday FUD:

 

[FireMedic]

But the folks at ARK invest have suggested that starting a ride hailing network with drivers could be the ultimate strategy. And I really don’t think TSLA is ready to go it alone with robotaxis. A partnership in this regard could be beneficial imho.
Until the FSD is ready, you get high mileage teslas on the road and develop the network in preparation for Robo taxi. Just a thought experiment I’m running through.

 

[Tim S]

Here's my summary of the video:

Most auto insurance companies spend their revenues this way:
70% losses paid out
28% to operate the business, including 10--12% customer acquisition cost.

Tesla is presently acting as an insurance agent and will be thus able to keep 10--12, or 15% of insurance payments risk free. This may account for Elon's "30 to 40% of the value of the car business". Tesla has a very powerful tool to acquire customers since offering insurance to car buyers saves those buyers from having to search out insurance on their own. Called the funnel effect.

There is little profit in the loss underwriting. Typically underwriting produces only a 1% profit. Insurance company revenues come from customer payments plus the profits from investing their reserves.

-------------------------

I was disappointed that there was no discussion of the idea that Tesla insurance was developed to save Tesla drivers from over-priced insurance rates on Teslas.

Judging by the fact that about half of the commercials I fast forward through while watching network and cable TV are for State Farm, Geico, Progressive, Liberty Mutual, Farmers, Nationwide etc., Tesla Insurance will save about 99% of the "customer acquisition cost" vs other insurance companies.

 

[Singuy]

No. Ride hailing makes no sense when robotaxi is going to overtake it. It would be like Tesla investing in ICE manufacturing.

Ride hailing is actually the best way to get non tesla owners to sit in a tesla (or EV in general). I would say a ride hailing network is better than any kind of advertisement while making some chump change in the process. Gives the public to educate people about EVs as there's a huge gap of information between people who are in the know and the majority of the driving public.

 

[Rarity]

Benzinga - 8 minutes ago: Tesla CEO Elon Musk Tells Friends He's Planning To Move To Texas

EDIT: Newer version of the link has been entered

Texas doesn't have income taxes, which could be substantial on his Tesla capital gains. It also has high real estate taxes. Good thing he doesn't personally own houses any more. I think he stays in an Airstream at the rocket factory.

 

[Mo City]

Here's my summary of the video:

Most auto insurance companies spend their revenues this way:
70% losses paid out
28% to operate the business, including 10--12% customer acquisition cost.

Tesla is presently acting as an insurance agent and will be thus able to keep 10--12, or 15% of insurance payments risk free. This may account for Elon's "30 to 40% of the value of the car business". Tesla has a very powerful tool to acquire customers since offering insurance to car buyers saves those buyers from having to search out insurance on their own. Called the funnel effect.

There is little profit in the loss underwriting. Typically underwriting produces only a 1% profit. Insurance company revenues come from customer payments plus the profits from investing their reserves.

-------------------------

I was disappointed that there was no discussion of the idea that Tesla insurance was developed to save Tesla drivers from over-priced insurance rates on Teslas.

Unfortunately, the insurance guy nuked the idea of making price a point of discussion because he hates the idea of "commoditizing" insurance. As a shareholder, I was fine with the emphasis on monetization.

Gene really missed the boat when he didn't explore Tesla's massive information advantage.

I'm not an insurance guy, but my first read is this: Because Tesla has an intimate knowledge of every owner's driving habits, they could just skim off the safest drivers and pocket a tidy sum every month.

 

[M|S|M MYP]

Did my small part to contribute to Q4 Will be giving these out as Christmas gifts to friends/family that are curious about Tesla