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

[Nocturnal]

His critics have less and less ammo while his fans are getting more to defend him. People call him a tsla stock pumper so he intentional tank stock price by calling it too high. They say he is too wastful as a human being and he sold all his houses and now lives in shack.

So if his selling of his stock didn't tank the share price, critics would say "see you should be selling more as it has no affect on shareholder value". They can say that today and his defenders will cry how him selling just a tiny bit ended up crashing Tesla by 30%. His critics doesn't care but again, makes his followers more sticky.

Ok, fair enough. I'm partially convinced.

 

[StarFoxisDown!]

The 22 EPS estimates have been pretty consistently updated. Last December they were around 5.50, June 6.50, Sept 7.40, and basically since early Nov 8.60. I wouldn't say they are delaying at all, they are just more conservative in their estimates. Going up ~3 (over 50%) in 12 months is pretty substantial, but I think the group here overwhelmingly think that is still ~50% low and EPS for 23 is likely 60-70% low (so be prepared for the same story next year).

That's delaying......purposely, at least IMO. They had to start updating the EPS estimates somewhat starting with Q1 earnings because Tesla was posting earnings much higher. But they updated to the bare minimum they could and essentially was just taking the last earnings EPS and applying it to the remainder of the year.....except with no further growth in volume. Then when Q2 earnings came around, they did the same thing.

They've been consistently doing the bare minimum of updating their EPS estimates even though it didn't match up with their production volume estimates for 2022. The consensus estimate for 2022 volumes has been around 1.2 million for a long time. Yet you could look at Q2 earnings, take those margins, extrapolate EPS off of 1.2 million deliveries in 2022, and you would get a MUCH higher EPS for 2022 than $6.50, which is what it was back in June. It was the most blatant thing I've seen in a long time amongst Wall St.

 

[3mp_kwh]

RE Texas blackout: Better control systems, allowing to selectively shed the load, would have stopped the total collapse.

...

I think thats where megapacks and autobidder come in.

Gas wells signed up as demand responders. That's how backwards the TX railroad commission prefers things. Scarcity microeconomics work, for them. Tesla being a Retail Electricity Provider, on ERCOT, will mean good things. They know that market. They could some day be another FPL, with the difference being their customers saying "please, may I have another".

 

[MTL_HABS1909]

It would be nice to have that same 2-5x macros on the way up

 

[henchman24]

That's delaying......purposely, at least IMO. They had to start updating the EPS estimates somewhat starting with Q1 earnings because Tesla was posting earnings much higher. But they updated to the bare minimum they could and essentially was just taking the last earnings EPS and applying it to the remainder of the year.....except with no further growth in volume. Then when Q2 earnings came around, they did the same thing.

They've been consistently doing the bare minimum of updating their EPS estimates even though it didn't match up with their production volume estimates for 2022. The consensus estimate for 2022 volumes has been around 1.2 million for a long time. Yet you could look at Q2 earnings, take those margins, extrapolate EPS off of 1.2 million deliveries in 2022, and you would get a MUCH higher EPS for 2022 than $6.50, which is what it was back in June. It was the most blatant thing I've seen in a long time amongst Wall St.

A lot of analysts are conservative in their estimates, but more than that, Tesla has extremely unusual margins. Porsche and Ferrari have similar margins to Tesla, but they are very niche and low production/high dollar vehicles. The auto industry hasn't seen Tesla like margins on normal cars and crossovers since the 60s (not that crossovers really existed then). Through that, there have been some one time blips for some companies (Toyota even had a strong run for a while, but was still under). That causes skepticism, especially when the majority that cover Tesla cover it like an auto maker... that simply has different assumptions built in. This is a major root cause of the valuation debate. Tesla like margins were not supposed to happen in this industry and with this level of growth. It is pretty unheard of over the last 30-40 years (even 100 years). To expect all analysts to flip the page and ignore their whole prior experience is unreasonable. It is why these estimates are continuously falling short and they will for as long as Tesla is in extreme growth and they are keeping up their margins. This isn't pure villany, this is disruption that isn't well understood.

IMO if Tesla can maintain their margins while Berlin and Austin open. The narrative will flip on them being unreasonably high to being the expectation. The valuation will increase based on that, but any margin slip will hurt the stock.

 

[StealthP3D]

not sure why you think i am misrepresenting ARK you are reading things into my post that are not stated... my point was to remove TSLA as a thought exercise and and look at their performance... minus TSLA ... i am not going to do the work ... because i have made up my mind ...but my guess is w/o TSLA they are just above average returns ..... nothing wrong with ARK strategy in general ... just does not match my investing philosophy pick a few names and understand them deeply... ARK has way too many companies in their funds to follow in enough depth... and it seems to me they trade in out out of names way too much ... we shall see how this plays out for ARKx in the long run .. i think Cathy is a great macro-economist and has done a great job at identifying the key macro trends for innovation and disruption for the next 5-10 years ....

Sorry if I wasn't clear. I think you were misrepresenting ARK when you wrote this:

Cathy was an early Tesla supporter , but to think all these disruptions will play out like Tesla is just naive... she references the Telecom/Tech bubble/bust of 2000 and all the companies not ready for prime time .. many of ARK picks are in the same boat in my opinion ....

Cathie has never said the thinks "all those disruptions" will play out like Tesla. She admits some of them will go bankrupt, some of the same ones they hold in their fund.

 

[StarFoxisDown!]

A lot of analysts are conservative in their estimates, but more than that, Tesla has extremely unusual margins. Porsche and Ferrari have similar margins to Tesla, but they are very niche and low production/high dollar vehicles. The auto industry hasn't seen Tesla like margins on normal cars and crossovers since the 60s (not that crossovers really existed then). Through that, there have been some one time blips for some companies (Toyota even had a strong run for a while, but was still under). That causes skepticism, especially when the majority that cover Tesla cover it like an auto maker... that simply has different assumptions built in. This is a major root cause of the valuation debate. Tesla like margins were not supposed to happen in this industry and with this level of growth. It is pretty unheard of over the last 30-40 years (even 100 years). To expect all analysts to flip the page and ignore their whole prior experience is unreasonable. It is why these estimates are continuously falling short and they will for as long as Tesla is in extreme growth and they are keeping up their margins. This isn't pure villany, this is disruption that isn't well understood.

I agree with most of your post except for the last third. I simply do not believe Wall St is that dumb/ignorant.

I could see waiting for another earnings after Q1 to see if margins were sustainable. But we've had 3 earnings now of not just Q1 margins, but expansion beyond those margins. Combined with the drastic drop off of volume in 2021 starting in March 2021, to me it's clear what the plan was here.

 

[Zero CO2]

Sorry if I wasn't clear. I think you were misrepresenting ARK when you wrote this:



Cathie has never said the thinks "all those disruptions" will play out like Tesla. She admits some of them will go bankrupt, some of the same ones they hold in their fund.

fair point ... that particular sentence was a bit over the top

 

[henchman24]

I agree with most of your post except for the last third. I simply do not believe Wall St is that dumb/ignorant.

I could see waiting for another earnings after Q1 to see if margins were sustainable. But we've had 3 earnings now of not just Q1 margins, but expansion beyond those margins. Combined with the drastic drop off of volume in 2021 starting in March 2021, to me it's clear what the plan was here.

Wall Street is notoriously bad at disruption within industries. It isn't that they are dumb or ignorant, they try to push the the people familiar with those industries to evaluate the disruption and all the prior calculations end up being useless. We see it time and time again... and it is happening here.

The excuse right now is that the Shanghai margins can't be duplicated in Germany and US with a more expensive workforce. If that thought is right, the margins will fall significantly over the next year. If they are wrong, the narrative will change on the margins and the valuation will change.

 

[Beltsbear]

Blackout could have been prevented with $200 chainsaw, if someone in the US mid west did their job and pruned brush under the power line

Seriously though ... grid is a very complex system and as such there are countless ways it could have been propped up. Yes, system was close to capacity at that time making it more fragile, so extra generation capacity would have helped, but there is also a question of systems and algorithms ... how system is controlled and what procedures are used in an emergency to contain failure zone, instead of letting it spread. Better control systems, allowing to selectively shed the load, would have stopped the total collapse.

I was relatively close to one of the power plants when grid went down .. ironically loss of grid stability resulted in "too much energy" in the power plant which produced a need to vent steam to atmosphere (it looked a bit concerning for a few minutes). The irony of lights going out and power plant having too much energy to handle is still not lost on me until today.

It then took 3 days to restart everything, again not for the lack of generation capacity but for the difficulty of balancing generation and load.

I think thats where megapacks and autobidder come in.

The $200 has nothing to do with it. It would be the combined cost of all the maintenance across all the states to prevent the act that broke the fragile system. In other words $200 x 50,000 locations. Or the actual cost up bringing the generation capacity out of the fragile zone.

 

[StarFoxisDown!]

Wall Street is notoriously bad at disruption within industries. It isn't that they are dumb or ignorant, they try to push the the people familiar with those industries to evaluate the disruption and all the prior calculations end up being useless. We see it time and time again... and it is happening here.

The excuse right now is that the Shanghai margins can't be duplicated in Germany and US with a more expensive workforce. If that thought is right, the margins will fall significantly over the next year. If they are wrong, the narrative will change on the margins and the valuation will change.

I think it's a convenient excuse for them.......which again still doesn't work for me. Mainly because of the margin expansion since Q1. Even if Berlin/Austin weren't as profitable as Shanghai and margins returned to Q1 levels, their estimates still wouldn't line up with reality.

But we can agree to disagree on the intent here. Either way estimates, even from the buy side analysts, are way off.

 

[Artful Dodger]

...MeanwYile:

Tesla Model Y captures IIHS Top Safety Pick+ award

Tesla Model Y captures IIHS Top Safety Pick+ award

The 2021-22 Tesla Model Y has captured the Top Safety Pick+ award from the Insurance Institute for Highway Safety (IIHS). Only the most worthy vehicles are labeled with the Top Safety Pick+ label. The Model Y qualified for the elusive label by earning top marks in each of the IIHS’ six...

www.teslarati.com

 

[Thekiwi]

Sorry if I wasn't clear. I think you were misrepresenting ARK when you wrote this:



Cathie has never said the thinks "all those disruptions" will play out like Tesla. She admits some of them will go bankrupt, some of the same ones they hold in their fund.

One of the main problems with the way ARK operates is that they are taking a VC approach in terms of company selection, but are managing the funds in a way that prevents VC like returns.

VCs rely on the formula that despite careful selection, out of every 10 companies, approx 7 will be turds (fail or achieve below average growth), a couple will hopefully outperform market, and one will be a massive success, which generates 100x returns that greatly surpass the losses from the 7 turds.

However ARKs funds start selling the 1 in 10 “winners“ well before they have achieved the 100x returns, which means they will never achieve the returns to counter the losses from the mediocre & failures they are invested in, breaking the VC model.

 

[mrmage]

I’ve said it before, but will repeat.

I have not seen Elon deviate from the mission nor prioritize his personal wealth over others. His assets are just a means to accomplish his humanistic priorities. Yet he has been vilified by leaders who nip mercilessly at his heels, lying or distorting for their personal gain.

I have seen Elon react as someone wounded might when his best intentions and accomplishments were not merely ignored, but flung in his face, rejected, scorned or refuted. I know this hurts him, and cannot imagine the frustration that he’s had to endure.

This world must appear a thousand times more unworthy, mad, and illogical to Elon than I often feel it is. The vitriol directed at him resulting from their actions is ceaseless.

Like many here, I sometimes worry when the value of my portfolio drops. Having a brain, however, means that I can suppress this lizard-like emotion to realize there will be no long term impact. Elon has always said he supports his long term investors and works tirelessly to support what he believes in.

The benefits of his unending efforts accrue while I sit on my butt in front of the monitor, paddleboard in the ocean and eat at a nice restaurant. Therefore, I take a temporary haircut to the great wealth that he generates for me quietly, to show my solidarity and appreciation.

The non-lizard part of my brain says that anyone who believes in Tesla, Elon, and fundamentals will be fine. No long term investors he cares about will come out behind. Far from losing, I will be much further ahead due to this buying opportunity.

I’ll eat my words if I lose a substantial amount of my assets in the years ahead because of this. However, it’s far more likely that I’ll see my assets double or triple in value in a year, if not in just a few months.

/soapbox

 

[TheTalkingMule]

As we approach peak bickering, I've never seen such bullish indicators!

Exciting times!

Let's hope one or two more selling days gives us a sweet sweet buying opportunity.

Elon is selling because it's in his interest to do so. Create "payment" opportunity for all the options given to these new Berlin/Austin employees. Take care of some liming taxes. Try to make himself seem like less of a Dr Evil type.

Perfectly fine (ok) with all of the above!

 

[StarFoxisDown!]

As we approach peak bickering, I've never seen such bullish indicators!

Exciting times!

Let's hope one or two more selling days gives us a sweet sweet buying opportunity.

I still think pretty much this week is the last chance. FOMO Q4 P/D sets in starting next week

 

[StealthP3D]

...MeanwYile:

Tesla Model Y captures IIHS Top Safety Pick+ award

Tesla Model Y captures IIHS Top Safety Pick+ award

The 2021-22 Tesla Model Y has captured the Top Safety Pick+ award from the Insurance Institute for Highway Safety (IIHS). Only the most worthy vehicles are labeled with the Top Safety Pick+ label. The Model Y qualified for the elusive label by earning top marks in each of the IIHS’ six...

www.teslarati.com

The article says this:

The Model Y received top marks for each of its crashworthiness tests, and the Performance trim of the all-electric crossover also captured a “Good” rating for its headlights. The Long Range variant held a slightly lower “Acceptable” rating for its front beams, as it had “some glare,” a characteristic the Performance variant lacked, which resulted in a higher rating.

Wait, the Performance and LR versions of the Model Y come equipped with different headlights?

Ok, so one more good reason for men all over this country to get the Performance Model Y as the family car instead of the more pedestrian Long-Range version.

But honey, the Performance is the safer choice for our family, even the IIHS agrees, and I know you love our kids as much as I do!

This is good for margins going forward!

 

[Zero CO2]

As we approach peak bickering, I've never seen such bullish indicators!

Exciting times!

Let's hope one or two more selling days gives us a sweet sweet buying opportunity.

Elon is selling because it's in his interest to do so. Create "payment" opportunity for all the options given to these new Berlin/Austin employees. Take care of some liming taxes. Try to make himself seem like less of a Dr Evil type.

Perfectly fine (ok) with all of the above!

"peak bickering" on TMC is an historically bullish signal

 

[generalenthu]

Pretty robust volume today as of 1:10 PM. I wouldnt be surprised if today was an Elon sales day and the larger funds waiting on the sidelines have started buying in.

ticker Today Yesterday relative_volume QQQ 24641535 35160503 0.700830 SPY 36764806 49463973 0.743264 IWM 22570675 26825538 0.841388 AAPL 47817469 60132926 0.795196 TSLA 14012626 12573687 1.114440

 

[Artful Dodger]

I’ve said it before, but will repeat.

I have not seen Elon deviate from the mission nor prioritize his personal wealth over others. His assets are just a means to accomplish his humanistic priorities. Yet he has been vilified by leaders who nip mercilessly at his heels, lying or distorting for their personal gain.

I have seen Elon react as someone wounded might when his best intentions and accomplishments were not merely ignored, but flung in his face, rejected, scorned or refuted. I know this hurts him, and cannot imagine the frustration that he’s had to endure.

This world must appear a thousand times more unworthy, mad, and illogical to Elon than I often feel it is. The vitriol directed at him resulting from their actions is ceaseless.

Like many here, I sometimes worry when the value of my portfolio drops. Having a brain, however, means that I can suppress this lizard-like emotion to realize there will be no long term impact. Elon has always said he supports his long term investors and works tirelessly to support what he believes in.

The benefits of his unending efforts accrue while I sit on my butt in front of the monitor, paddleboard in the ocean and eat at a nice restaurant. Therefore, I take a temporary haircut to the great wealth that he generates for me quietly, to show my solidarity and appreciation.

The non-lizard part of my brain says that anyone who believes in Tesla, Elon, and fundamentals will be fine. No long term investors he cares about will come out behind. Far from losing, I will be much further ahead due to this buying opportunity.

I’ll eat my words if I lose a substantial amount of my assets in the years ahead because of this. However, it’s far more likely that I’ll see my assets double or triple in value in a year, if not in just a few months.

/soapbox

Nominated for "Moderators' Choice: Posts of Particular Merit". Thank-you