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

[FrankSG]

Frank - many thanks for this - incredibly useful. You went for 10-20% likelihood - see below, it feels like you are teasing me.... Decisions decisions.
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You're welcome!

Keep in mind I'm not an accountant/auditor This is just my feeling of the likelihood of this happening based on what I know.

 

[defc0n]

First confirmed case of the Coronavirus found in Canada (affected patient is at Sunnybrook Hospital, Toronto) which is 24km from where I live. This shows me how small and interconnected this planet is, and how important it is that what we do as individuals affects each other. We really are all in this together. We are all one people. We all share one environment.

CTV News report confirming Coronavirus now in Canada
Canada's first 'presumptive positive' case of coronavirus found in Ontario

CTV interview with infectious disease specialist Dr. Neil Rau.
This is a very good explanation of Coronavirus virus. Dr. Rau several times refers to this as a "mild" disease, and that for those infected would not kill heathy individuals.

The major Financial Markets will get pushed down in the short term due uncertainty, however the Coronavirus will pass (weeks? months?) and become distant memory like SARS. Longs may be tested. The Tesla thesis and Master Plans are unchanged, even more urgently needed in today's World. My investment in Tesla remains strong. IMHO there is still no better place to invest my hard earned money.

EDIT: removed 2nd link. The interview with Dr. Rau is the 2nd CTV clip that follows the first CTV clip for which link was provided.

Can we at least not eat bats anymore though please?

 

[kbM3]

I wonder if Elon will mention the 2020 Roadster on the earnings call. I know it's not particularly relevant to the financial health or performance of the company, but it's still supposed to come out this year, isn't it? And I know I'm still pretty excited to see what it's like in it's final form...

I think the Roadster 2020 became the Plaid Model S, and the Roadster will be delayed to 2022 or so, as they want Plaid sales to maximize Fremont utilization.

Could be wrong though.

iIRC When Elon gave the later this year timeline for Model S Plaid, he stated the Roadster2 would be available in 2021.

 

[X Fan]

Lots of conjecture that there may be some extra cost to upgrade HW2/MCU1 vehicles (S/X early Feb 2018 or before) to HW3.

Unclear yet, but haven’t been able to verify that one of these beasts has been successfully updated. Therefore lots of folks think that MCU1/HW2 poses extra problems for the HW3 upgrade. If it is just logistics/scheduling where they do the easy ones first (MCU2/HW2), then no issue. If requires some more software to support HW3/MCU1 combination, may or may not be significant extra cost. If requires (or is cheaper than software extensions) upgrade of MCU1 to MCU2, could get more expensive.

If there are a lot of FSD AP1/AP2.x cars with MCU1 (any way to tell?), could be some extra cost. Any way to tell how many of the 50k are in this category?

My first X is a 3000Vin product.

I seem to recall that there are differences in sensors and other parts vs 2.5/3.0 vehicles and that the upgrade is much more problematic (similar to when the revised auto door fix came out it took a Ranger the entire day to change) to implement.

Hopefully it can be updated as it will enhance valuation when I decide to sell and buy the future 400 Mile X.

 

[X Fan]

Unless Toyota has some secret skunk works, I don't see them creating an electric car. They have always disliked electric cars with a passion. When the made the RAV4-EV, they derided it internally as the "battery carrier", even though it was pretty good and the people who purchased one really liked it. My thought is that they will keep pushing hydrogen until it's way too late for them. I actually hope they surprise me because they're really the only legacy car manufacturer that has the resources to make the transition. And real competition always helps the consumer. However, they also have massive bureaucracy and the upper levels are removed from reality. There is also an inability to admit mistakes.

I have some knowledge here.

Toyota has a huge auto driving and non ICE engineering workforce assigned (they started over 7 years ago with an AP equivalent...of course slow to market). .

Typical Toyota, they are not asleep at the switch but rather watching where the market goes (and clearly have been much more public with hydrogen) and then will move quickly.

Also, don’t underestimate their partnership with Panasonic (whose purchase of Sanyo Electric a decade ago was a timely buy).

 

[StealthP3D]

I am horrible at market timing.. so I will keep my dollar cost average buying and be glad to get more shares. But high flying option surfers may want to cut back a little.

Silly advice. I've been in this game long enough to know a flu epidemic might affect stocks and options in the short-term but solid data and information on Tesla's financial standing and growth like we will get on Wednesday after the close will far outweigh any fears about a flu epidemic. Who would buy options expiring past the earnings release if they didn't think good results would be reported? There are no options expiring between now and then. Selling on Monday means you will likely be selling at the peak impact of the coronavirus scare, at least with regard to Tesla.

The most successful investors adhere to the "steady as she goes" philosophy, not reacting to every development that scares them. Sometimes they will take a hit but 9 times out of 10 the "steady as she goes" philosophy wins out.

 

[StealthP3D]

Has there ever been an 85 year-old "in the running" for President?

I'm predicting the same thing I've been predicting since well before impeachment began: Trump will not even be on the ballot.

 

[JBRR]

https://www.washingtonpost.com/worl...4ce4f94494b4_story.html?utm_source=reddit.com

"
Although Chen had all the symptoms of the coronavirus that is spreading across China and beyond, she is not counted on the official list of those who have died as a result of the infection. Her death certificate, which her family showed to The Washington Post, reads “severe pneumonia.”

But hospital staff told her stepson, Kyle Hui, that they strongly suspected she had “that” kind of pneumonia. At the crematorium, where the workers were in hazmat suits, Chen’s body was immediately incinerated without a proper farewell, and the vehicle it arrived in was disinfected.
"
There's definitely under reporting going on.

If you want an idea of how sensitive epidemics are to change in the variables, this is a good tool.

Going Critical

MODERATOR FINAL WARNING -

THIS is the sort of post that appears when a topic appears someone thinks has the slightest connection to this thread's subject matter. One person suggests a link to TSLA....and with just 3 or 4 posts removed, were talking about crematoria.

Which is exactly where further such posts will go.

Mod - the market open tomorrow and trading during the week is gonna be affected by this only second to the actual earnings report.
It might not be TSLA relevant but for anyone who is a short term trader, understanding how this is playing out is vital.

 

[StealthP3D]

I doubt we will see gross margins under 25% any more with exceptions of major ramp-up period. Otherwise gross margins will climb over 40% within 2 years.

I don't think we will see gross margins over 40%, ever. But the profit at 30%-33% margin will be unbelievable.

I think Elon has even said he plans to reduce prices as needed to maintain margins around 30%-35% or so.

 

[StealthP3D]

Mod - the market open tomorrow and trading during the week is gonna be affected by this only second to the actual earnings report.
It might not be TSLA relevant but for anyone who is a short term trader, understanding how this is playing out is vital.

The point is, we don't need the forum clogged with detailed virus debate. You can find epidemic info elsewhere. The Mods have said they will only allow the most relevant (to Tesla) virus posts here and it makes complete sense.

 

[SageBrush]

The point is, we don't need the forum clogged with detailed virus debate. You can find epidemic info elsewhere. The Mods have said they will only allow the most relevant (to Tesla) virus posts here and it makes complete sense.

If Elon is seen wiping his nose, should it be included ?
Are the moderators so learned in viral epidemiology and natural disease, and public health that they can filter successfully ?

I don't think so

 

[Unpilot]

@Leo9 Do you mind if I steal this for my Signature?


"Adam Jonas put out a $10-500 price target on $TSLA and was still wrong."

 

[StealthP3D]

Short term calls look pretty pricy. I might take my first long shot in a while but only a day or two before ER once the premium has come down. But only if there is consensus here that there is a 20%+ chance on immediate S&P inclusion. The sheer number of potential short squeeze catalysts is off the charts - surely one of them is gonna spark into life.

Buying short term calls at current prices is definitely very high-risk behavior. But the potential rewards are very juicy. Whether you think it's a favorable risk/reward depends upon what you think the chances are of Q4 results lighting off the next stage of this rally. Only play if you like the odds and are willing to write off your ENTIRE investment!

 

[gerebgraus]

I don't think we will see gross margins over 40%, ever. But the profit at 30%-33% margin will be unbelievable.

I think Elon has even said he plans to reduce prices as needed to maintain margins around 30%-35% or so.

I don't think we will see gross margins over 40%, ever. But the profit at 30%-33% margin will be unbelievable.

I think Elon has even said he plans to reduce prices as needed to maintain margins around 30%-35% or so.

My recollection is that the goal of gross margin is around 50%. Do you have a link Elon saying that he plans to reduce prices to maintain gross margin?! I am fairly certain that he never said that and absolutely certain that he never thought that.

 

[SOULPEDL]

Software is the biggest bottleneck for HW3 retrofits (at least for HW2.5 cars). If the software doesn’t install correctly, Tesla has held cars for two days before the software loads correctly.

Off the cufff, what if FSD hw3 isnt meeting expectations and there is a hw3.5 in the works? Maybe just a crucial rev. The result might be delays in the upgrades as we seem to be experiencing.
My only basis for this is how humans completely underestimated cpu/bus/memory needs... like forever. I still think this is the 64kb, 8 bit version by alalogy. My other reasoning is that my FSD is still doing crazy things, leading me to believe Tesla also underestimated the requirements. IMO, turning reliable left turns is another 2-3 years out. My car still changes lanes in an intersection if the road has a slight turn in it. (Predicting roads behind the mountain turn? How about the road right in front?) Many other improvements are being addressed, not this one (but I am completely enjoying the biggest Beta test in history).

I do think the next big leap for the stock will be FSD, but still several years out. The legal battle has only begun. Model Y sales could be a nice booster soon, but that's kinda baked into the SP already. Who doesn't want an SUV right?

So here's my "Analyst" prediction as good as any: Q1 pulls back to $450 but never breaches 600 until 2021, and 1,000 is years away tied to FSD approval somewhere in the US. Still holding, no changes here.

Personally I preferred the smell of horse manure to gas exhaust. Anybody else remembers? )

Ya, I still remember what gas smells like. (My preference was always 2 cycle mix... still like it.)

 

[SageBrush]

Do you have a link Elon saying that he plans to reduce prices to maintain gross margin?!

I have the same memory but I think it was during Elon Q/A
Tesla is not just in the business of maximizing profit, they want to accelerate the transition to sustainable transport. It seems fairly clear to me that Tesla will price cars as cheaply as it can while accumulating enough capital to expand as fast as the market allows. For Elon profit is a means to that end, not the goal itself.

It is also true that profits and scale are pretty tightly linked when it comes to cars. A dwindling number of boutique auto manufacturers are exceptions to the rule. Scale is achieved when car prices go down.

 

[StealthP3D]

My recollection is that the goal of gross margin is around 50%. Do you have a link Elon saying that he plans to reduce prices to maintain gross margin?! I am fairly certain that he never said that and absolutely certain that he never thought that.

No, that's just from memory so I could very well be wrong. I should have made that clear.

 

[Krugerrand]

The point is, we don't need the forum clogged with detailed virus debate. You can find epidemic info elsewhere. The Mods have said they will only allow the most relevant (to Tesla) virus posts here and it makes complete sense.

Interestingly enough my one and only post on the topic a couple of days ago was deleted. It was approximately the third post on the topic at the time and entirely aimed at *subduing overreaction* by letting people know that everyone (medical personnel) around the world already knew about it and were on it, so stop trying to rile the troops.

Strangely the moderator claimed it was a discussion on prevention/cure of the virus, which it wasn’t. Yet here we are, now dozens of posts later...overreaction, discussion on prevention, cure etc...

I don’t actually care what people talk about here, I’m just having a petty *haha, serves you right* moment.

Of course TSLA will be affected by the dramatization and panic going on, right along with the rest of the market. That’s how humans roll. How much remains to be seen, but this too shall pass.

 

[jerry33]

Off the cufff, what if FSD hw3 isnt meeting expectations and there is a hw3.5 in the works? Maybe just a crucial rev. The result might be delays in the upgrades as we seem to be experiencing.
My only basis for this is how humans completely underestimated cpu/bus/memory needs... like forever. I still think this is the 64kb, 8 bit version by alalogy. My other reasoning is that my FSD is still doing crazy things, leading me to believe Tesla also underestimated the requirements. IMO, turning reliable left turns is another 2-3 years out. My car still changes lanes in an intersection if the road has a slight turn in it. (Predicting roads behind the mountain turn? How about the road right in front?) Many other improvements are being addressed, not this one (but I am completely enjoying the biggest Beta test in history).

Sort of. There's always going to be the next revision (I'm pretty sure I recall that on Investor Day they said HW4 design was 50% done.). However it has to be brought in at a price that makes sense. It's why you don't purchase a 32T SSD for your home computer. Even if you have the HW3, you're still running HW2 software. No one other than those with NDAs have actually seen what HW3 software really does.

 

[JohnnyEnglish]

My recollection is that the goal of gross margin is around 50%. Do you have a link Elon saying that he plans to reduce prices to maintain gross margin?! I am fairly certain that he never said that and absolutely certain that he never thought that.

I did some modelling of the impact of gross margin on profit a couple of months ago. Q3 gross margin was 22.8% and the trend is increasing as production increases. I expect the 10% production increase in Q4 to push this towards 25% and for it to remain around that level going forward. However on top of this we will have to add FSD revenues (when it is released) and the impact of FCA. I am sure that will be good for another 5-10% margin increase. Giga Shanghai may be lower initially but as the ramp up progresses and local content increases towards 100% I am sure they will achieve at least similar margin levels.

As Tesla made a profit at 22.8% margin in Q3 (with lower production levels than Q4 and those projected for 2020) this increase in margin should, all else being equal, flow through directly to profit. If this happens, the resulting figures would be, as noted by @StealthP3D , impressive.

Let's all hope that Tesla is able to achieve this .