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

[StealthP3D]

The L/S fund is a clever bit of financial structuring.

Not as clever as you think.

Chanos is probably a criminal trying to juice his returns by literally performing a confidence trick.

That's a strange use of the word "probably". Do we say, The sun will "probably" rise tomorrow?

 

[StealthP3D]

Lol, did you read this part?


Wait for it to make a right turn. It'll likely continue at that elevation all the way to the main factory (like an overhead tram), then make another 90 degree right turn to cross the road at height w/o interrupting the flow of truck traffic.

So, you are saying all the battery packs won't end up in a big pile in a muddy field?

 

[StealthP3D]

I took the Factory Tour about 2 weeks ago. Big take away was so many smiling and waving employees. Everyone who even noticed us seemed very happy to be there. We exchanged a lot of thumbs up. The tour is pretty noisy. I hadn't been there since the Model S party in October of 2011. Highly recommend if you can get there.

How gullible can you be? They only smile and wave because Musk told them they don't get to pick up their paycheck on Friday unless they smile and wave enthusiastically at visitors.

 

[StealthP3D]

This is factually incorrect. One of the main takeaways from modern finance research is that you have to consider your portfolio as a whole, not as single positions, to properly construct and evaluate it. A nobel prize has been given for a work in this area, which is called Modern Portfolio Theory. A portfolio consisting of only shorts should be and is considered completely differently from one that uses shorts as hedging.

It's apparent that you don't understand the subject matter that you are trying to educate us on, I fully understand that the short portion of a Long/Short fund is there to increase leverage and that selection criteria will be different than for a 100% short fund. I get that. But what you fail to understand is that the fund is still liable for any losses in the fund, regardless of which side of the fund racks up the loss.

In other words, the fund manager still wants each company's stock in the short portion of their fund to perform as poorly as possible and this is the part that is no different from a fund that is 100% short. Sure, the selection criteria will be different, but once a fund is short a company, they would prefer that it go down. You are trying to say that is not so.

So the same temptation exists, namely for a fund manager to create false and negative impressions to try to reduce confidence in the companies his fund is short. Chanos is well known for this in the financial world and I'm not sure how you could still be in the dark about it.

 

[StealthP3D]

If they're going to go through with this, bringing Einhorn to Buffalo when they're making ~1000 solar roofs per week and videotaping it (so all investors are on an equal playing field), could be fun.

Oh, come on! Everyone knows solar is silly and there is no market for 1000 solar roofs a week once the early orders from starry-eyed Musk fans are filled!

 

[jerry33]

Oh, come on! Everyone knows solar is silly and there is no market for 1000 solar roofs a week once the early orders from starry-eyed Musk fans are filled!

All 500,000 of them.

 

[Artful Dodger]

Let's conclude this brief discussion of the bty workshop with a reminder of the business case for Tesla to build their own battery cells:

• vertical integration of cell manufacturing means increased Gross Margins
• Telsa likely has industry-leading tech that it does not want to out-source
• speed-to-market is critical for any new EV tech (ie: fast ramp-up)
• maintaining control of all phases of new product deployment is best done in-house

With that in mind, let's take one last detailed look at the GF3 bty workshop. This image is a detail taken from a frame of drone video released on 2019-10-21:

Here are some observations:

• there are TWO separate structures shown in this image:
  • a heavily built grey-beamed racking-like structure on the right
  • a more lightly built main building on the left in white, with its own separate concrete slab (note the contrast in ground color)
• the 'Utilities Bridge' shown in the Oct 31 video (and discussed earlier today) attaches to the SE corner (bottom-left in this image) of this heavily built structure
• if that bridge is delivering large amounts of electrical power to that part of the structure, it may be further evidence its purpose is to condition newly assembled bty cells (the SEI formation stage is very power intensive)
• finally, there is evidence of a 3rd structure inside the main workshop (bottom-right of this picture) that is also constructed of large grey beams
  • this structure seems even more heavily built than the one on the far left
  • it is placed near a large door and driveway access point (see drone video)
    
  • it may in fact be the storage area for completed bty packs before shipping

While of course not definative evidence that Tesla will build their own bty cells at GF3, this workshop is planned for completion by end of Q1 2020, which would work well with other known time-tables for Tesla's global bty production rampup.

I also see this as potentially being the prototype for Telsa's 'G-Cube', the "giant, giant, giant machine" that Jerome Guilline could NOT talk about during his interview with @ZachShahan for CleanTechnica in March 2019.

I'm guessing we'll know much more on 'Bty and Powertrain Day' sometime during 2020Q1.

Cheers!

P.S. Here's a reminder of what Elon & Drew said about batteries in June 2019:

Part Deux of the CleanTechnica interview with Jerome was published last week, although the actual 45' interview with Jerome happened "in early March".

So although that info isn't necessarily stale, we have received additional clues since from Elon, JB, and Drew Baglino at the June 11 AGM (links below to video; my annotations in color):

Elon: (1:00:39) "If I were an outside investor, I would really focus on two things: what is the timeline to full self driving, and what is your plan to scale battery production and get the cost per kilowatt hour lower. It's basically battery cells, and full self driving. Those are the two strategic things that are of most importance." (Note that strategic priorities dictate capital spending priorities. The FSD budget is set, bty cell production is the next strategic opportunity).

Elon: (1:01:34) "We don't want to let the cat out of the bag too much." (Battery and Driveline Investor Day gag order in effect -- nudge, wink).

JB: "I think its right on. Those are the right problems we need to solve to scale (JB refers to Elon's immediately preceding comment about battery cells and full self driving), and they have been for some time (acknowledges ongoing supply issues w. Panasonic) but its more obvious now than I think it ever was that we need a large scale solution to cell production." (this part is CRITICAL. Is JB saying they need to build a giant, giant, giant machine to build battery cells? Is this necessarily in addition to GF1? Is this what Jerome was alluding to in early March? Whole lotta nudgin' and winkin' goin' on up in here!)

Drew: "And we're not sitting idly by, we're taking all the moves required to be masters of our own destiny here, technologically and otherwise. (Maxwell acquisition, Q2 Capital raise) I think through all the experience we've developed through partners (Panasonic) and otherwise (Maxwell, Jeff Dahn) we have solutions in place." (oh yeah, they have a plan in motion, they're just not ready to share. Gotta supply cells for 10K/wk Model Y, Tesla Semi and Roadster, Pickup truck, eventual Model S/X refresh, Model 2, Bicycle...)​

 

[Curt Renz]

Can someone help me with this math? If you short $900k of something, you have to give $900k in cash (or other) collateral. That leaves you $100k left to go long.

You don’t get cash for shorting. What am I missing?

You do get cash for shorting. If I short $1000 worth of stock, I get paid instantly $1000. The profit or loss I realize depends on whether I can buy back the shares with less than the $1000 I got paid instantly.

If chanos gets $1M from an investor and shorts $900K, that means he's borrowing $900K worth of stuff and instantly selling it. Now he has a total of $1.9M cash (but he's still worth $1M, as the $900K of cash are offset by -$900K of liability - the stock he's short).

Small retail accounts like mine have a maximum leverage of about 2. Also, if I receive $1000 because I am short $1000 worth of stock, my account is still worth whatever it was worth before doing the short, and I can't use these $1000 to buy additional things. Institutional funds can leverage much more, and effectively finance the long positions with the $1000 cash they receive by shorting.

Remember, when you short something, you loan the shares from someone, which "costs" you nothing, and then you immediately sell them.
In a small retail account, you just make some small nominal interest from the cash you receive and have to keep there as collateral. Someone with a 190/90 fund will instead use the cash to buy more stuff on the long side.

You only have to provide 25-50% cash of your shorted position. So $900k cash gives to the ability to short up to $3.6 million worth of stock, and the money from shorting can potentially be put into other investments.

From the TD Ameritrade website:

Proceeds from a short sell transaction are segregated from other funds in your account and are labeled as your short balance. The funds in this short balance are not available until after the short position is closed using a buy to cover order and the closing transaction has settled.

 

[Drax7]

From the TD Ameritrade website:

Proceeds from a short sell transaction are segregated from other funds in your account and are labeled as your short balance. The funds in this short balance are not available until after the short position is closed using a buy to cover order and the closing transaction has settled.

I was hoping to withdraw the proceeds and pay my rent or buy myself another Tesla.
Would buying the car with the proceeds against shorting the stock be a legitimate hedge?
I need guidance .

 

[Singuy]

Well that just happened. Stumbled on a porn video by Vixen where the Model X picked the girls up without a driver and the two girls get it on in the car...without a driver.

There you go, more advertisement for Tesla.

 

[JustMe]

Leaked video from inside Tesla queue HQ:
TSLAQ after Q3 2019 results

It looks like they’re not ready to give up...

 

[kcveins]

Elon responds to David Einhorn's investor letter on twitter:

Elon Musk on Twitter

"To the extent that you have any desire to learn about the amazing progress the people of Tesla are making, I would like to extend an open invitation to meet with me to discuss Tesla and tour our facilities. For their sake, I'm certain your investors would appreciate you getting smart on Tesla"

Am I the only one who does not feel that Elon wrote this?
He had a "I love this" emoji above the letter, and I thought he had simply retweeted this...

 

[kbM3]

Well that just happened. Stumbled on a porn video by Vixen where the Model X picked the girls up without a driver and the two girls get it on in the car...without a driver.

There you go, more advertisement for Tesla.

Stumbled upon? Ummmm

 

[capster]

@StealthP3D, let me reiterate that I do not know whether Chanos is operating morally or he is guilty of all the accusations I'm reading in these last few pages. I will try to research them to make up my own mind. I was not defending anything. I hoped to clear some confusion regarding the mechanics of most short sellers for some people, that's all.

Many people here already know how these kinds of funds work (as many people replying to me explained what I was trying to explain, but better, and effectively gave me homework with stuff to study I did not know about).

It seems like I did not go about this in the right way. I can understand this reaction and why in a Tesla forum shorts are not very welcome, but I would ask you to consider whether I'm trying to poison discussion or just trying to chat in good faith with people with a viewpoint that is different from my own, trying to learn from it, and whether my behavior warrants the animosity you seem to have towards me.



This is factually incorrect. One of the main takeaways from modern finance research is that you have to consider your portfolio as a whole, not as single positions, to properly construct and evaluate it. A nobel prize has been given for a work in this area, which is called Modern Portfolio Theory. A portfolio consisting of only shorts should be and is considered completely differently from one that uses shorts as hedging.



I think we're in completely in agreement about everything, actually. I might just be bad at... words.
Another poster did say about my post that it was "Insanely obfuscatory and absolutely ridiculous".

You obviously know what Chanos was shorting: TSLA. You recently started to do as well as I recall. (Was the lesson learned worth the price of tuition?) You presumably know that such shorting is not benign and potentially even lethal for Tesla.

One would hope you are aware of the risks of climate change and the role of CO2 emissions. Your writing suggests that you are intelligent and informed enough to realize that Tesla is one of best hopes we have to create real world climate solutions that scale.

I bought a Tesla, spending much more than I would have on any other car, and I own TSLA shares, holding a much, much larger percentage of my net worth than any financial advisor would call prudent, in no small part to help Tesla.

I certainly did not enjoy the period of my TSLA investment being down more than enough to buy a nice home in most parts of the US -- but I held on (and bought a few more shares) in part to defeat 'investors' such as Chanos and yourself.

Your actions have consequences. I suggest to you that shorting this company at this time in history indicates that you might best spend your time 'researching' on your moral compass. Where to start? Perhaps with "Don't kid yourself."

 

[HG Wells]

Well that just happened. Stumbled on a porn video by Vixen where the Model X picked the girls up without a driver and the two girls get it on in the car...without a driver.

There you go, more advertisement for Tesla.

Is that the one were the 18 wheeler truck is passing the model X and the truck driver is looking down into the model X ?
He eventually runs off the road.

 

[AudubonB]

Well that just happened. Stumbled on a porn video by Vixen where the Model X X Model picked the girls up without a driver and the two girls get it on in the car...without a driver.

There you go, more advertisement for Tesla.

Fixed it for you.

 

[Unpilot]

You obviously know what Chanos was shorting: TSLA. You recently started to do as well as I recall. (Was the lesson learned worth the price of tuition?) You presumably know that such shorting is not benign and potentially even lethal for Tesla.

One would hope you are aware of the risks of climate change and the role of CO2 emissions. Your writing suggests that you are intelligent and informed enough to realize that Tesla is one of best hopes we have to create real world climate solutions that scale.

I bought a Tesla, spending much more than I would have on any other car, and I own TSLA shares, holding a much, much larger percentage of my net worth than any financial advisor would call prudent, in no small part to help Tesla.

I certainly did not enjoy the period of my TSLA investment being down more than enough to buy a nice home in most parts of the US -- but I held on (and bought a few more shares) in part to defeat 'investors' such as Chanos and yourself.

Your actions have consequences. I suggest to you that shorting this company at this time in history indicates that you might best spend your time 'researching' on your moral compass. Where to start? Perhaps with "Don't kid yourself."

I swear you read my mind when you wrote this.

Thank you.

 

[anthonyj]

Chanos sold me some calls at $177 that are WAY in the money, so he’s cool in my book

 

[GOVA]

Not sure if posted yet.

Made-in-China Model 3 First Drive: the Miracle 丨 ENGLISH

 

[Singuy]

Is that the one were the 18 wheeler truck is passing the model X and the truck driver is looking down into the model X ?
He eventually runs off the road.

No this is Vixens, porn with lots of class.