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

[RobStark]

I think 50% per year is great, Elon and Tesla know what expansion rate is best better than any of us here who don’t think about it 80h per week and have 10+ years experience of growing the business. Sure they make mistakes, but they fix them, they learn from them and very soon they are making fewer mistakes than competition. Some people want the newest Tesla and are okay with it having a few minor issues that can be fixed, other people wait a few more months and get a car with much fewer issues.

I am not saying 50 CAGR is the wrong strategy. There are pros and cons to the strategy.

What I am disagreeing about is that Tesla/Elon are beyond criticism.

If you have to have direct or comparable experience to able to criticize then discussion of any topic would be limited to a tiny circle of professionals on any given topic.

 

[lascavarian]

This generational gaff represents a missing component in our new-age EV mindshare that has not been properly addressed.

Hitting on all phases?

I agree there could be a missing group of language descriptors. What HD has done with torque vs HP with their motorcycles may be instructive. They connect torque with riding pleasure/joy in the riding experience. EVs performance delivers this.

Competing motorcycle vendors lead with HP for performance rather than torque. HD has struggled a bit with torque since HP is a vastly superior descriptor. HD is correct but left with this slightly nerdy term of torque. The vernacular usage sometimes replaces torque with “grunt” but this is not a winner either.

I think we are stuck with torque but it can be embellished a bit. I love the rocket term Max Q. We should bring that over to EVs.

 

[Sancho]

This board sure likes a conspiracy theory. It’s one thing to blame manipulation for nearly every stock drop (as if a stock can only go up). But believing that the big guys are tanking the whole tech sector to make TSLA go down... that’s pretty far out. I’m waiting for someone to predict that Putin will start a war to sink the share price.

I’m usually very skeptical about conspiracy theories generally, and also specifically about TSLA SP moves, which often can be explained simply by market forces.

But Thursday wasn’t the first time that I woke up anticipating that people with an interest in capping the Friday closing price would try to engineer a bear raid, and sure enough, just before open you can see the raid happening, but it isn’t enough because of intense buying pressure. But then, hours later, usually at precisely the top of an hour, the NASDAQ starts to drop, for no apparent reason, and the bear raid re-emerges, this time successfully.

Before you dismiss this as conspiracy-think, answer me this: is there any other stock like TSLA that has both so much weekly option volume and high volatility? Or is TSLA uniquely the hot table at the casino that everyone with big money wants to play at?

Or to put it another way, if you believe that there are MMs who are so powerful that they can sometimes start a bear raid on TSLA to protect their weekly option positions, then given how big the TSLA option market is, why wouldn’t you also believe that they have the power to sometimes start a bear raid on a basket of tech companies to achieve their objective?

 

[Khamul]

NYT has an interview with Elon up. It's very fluffy, and I really don't like the writing style, but there's a few interesting bits about Elon, his state of mind, both lately and in the last couple years and such.

 

[Paul_SF]

That's not going to capture more mindshare. We can do better. Who doesn't remember these catch phrases from Politics, Sports, the Movies, and Advertising over the years?

• 1940s: "Who’s on First?"
• 1950s: "I Like Ike"
• 1960s: "We Choose to Go to the Moon", "Float like a Butterfly, Sting like a Bee"
• 1970s: "Houston, We Have a Problem", "May the Force be with you"
• 1980s: "I'll Be Back", "I Feel the Need, the Need for SPEED!"
• 1990s: "To Infinity and Beyond!", "Show me the money!"
• 2000s: "My Precious"

The art of creating these slogans is big business. Here's some pointers for success:

Guidelines to Create Great Slogans

1. Identification. A good slogan must stay consistent with the brand name either obviously stated or strongly implied. It’s better to include the name of your business to it.
2. Memorable. Some of the best taglines or slogans are still being used today, even though they were launched several years ago.
3. Beneficial. Reveal your purpose and benefits of the product by conveying the message in consumer language. Turn bad into good. Suggest the risk of not using the product. Create a positive feeling for the consumers.
4. Differentiation. In an overcrowded market, companies on the same industry need to set themselves apart thru their creative and original tagline or slogan.
5. Keep it simple. Use proven words and short keywords. One word is usually not enough.

“Instant discharge”

 

[MikeAtkinson]

That's not going to capture more mindshare. We can do better. Who doesn't remember these catch phrases from Politics, Sports, the Movies, and Advertising over the years?

• 1940s: "Who’s on First?"
• 1950s: "I Like Ike"
• 1960s: "We Choose to Go to the Moon", "Float like a Butterfly, Sting like a Bee"
• 1970s: "Houston, We Have a Problem", "May the Force be with you"
• 1980s: "I'll Be Back", "I Feel the Need, the Need for SPEED!"
• 1990s: "To Infinity and Beyond!", "Show me the money!"
• 2000s: "My Precious"

The art of creating these slogans is big business. Here's some pointers for success:

Guidelines to Create Great Slogans

1. Identification. A good slogan must stay consistent with the brand name either obviously stated or strongly implied. It’s better to include the name of your business to it.
2. Memorable. Some of the best taglines or slogans are still being used today, even though they were launched several years ago.
3. Beneficial. Reveal your purpose and benefits of the product by conveying the message in consumer language. Turn bad into good. Suggest the risk of not using the product. Create a positive feeling for the consumers.
4. Differentiation. In an overcrowded market, companies on the same industry need to set themselves apart thru their creative and original tagline or slogan.
5. Keep it simple. Use proven words and short keywords. One word is usually not enough.

A clean, green dream machine

 

[UkNorthampton]

I am not saying 50 CAGR is the wrong strategy. There are pros and cons to the strategy.

What I am disagreeing about is that Tesla/Elon are beyond criticism.

If you have to have direct or comparable experience to able to criticize then discussion of any topic would be limited to a tiny circle of professionals on any given topic.

Sandy Munro worked with W. Edwards Deming - Wikipedia and it sounds like Deming had a big effect on Sandy.

"When people and organizations focus primarily on quality, defined by the following ratio,

quality tends to increase and costs fall over time.
(b) However, when people and organizations focus primarily on costs, costs tend to rise and quality declines over time.
. "

Elon/Tesla are concentrating on speed, but a bit more quality in construction would help in many ways, costs more to fix downstream and hurts reputation (which will last for years). China factory seems much better.

It may be as simple as letting production know how important this factor is. It might have been Bob Lutz that told a story about bad panel gaps (at GM?) and he said heads would roll if it didn't improve and he was willing to spend to fix it. Punch line being it cost nothing, the managers just needed to let production staff know and they were just a bit more careful.

 

[Opus BC fan]

That's not going to capture more mindshare. We can do better. Who doesn't remember these catch phrases from Politics, Sports, the Movies, and Advertising over the years?

• 1940s: "Who’s on First?"
• 1950s: "I Like Ike"
• 1960s: "We Choose to Go to the Moon", "Float like a Butterfly, Sting like a Bee"
• 1970s: "Houston, We Have a Problem", "May the Force be with you"
• 1980s: "I'll Be Back", "I Feel the Need, the Need for SPEED!"
• 1990s: "To Infinity and Beyond!", "Show me the money!"
• 2000s: "My Precious"

The art of creating these slogans is big business. Here's some pointers for success:

Guidelines to Create Great Slogans

1. Identification. A good slogan must stay consistent with the brand name either obviously stated or strongly implied. It’s better to include the name of your business to it.
2. Memorable. Some of the best taglines or slogans are still being used today, even though they were launched several years ago.
3. Beneficial. Reveal your purpose and benefits of the product by conveying the message in consumer language. Turn bad into good. Suggest the risk of not using the product. Create a positive feeling for the consumers.
4. Differentiation. In an overcrowded market, companies on the same industry need to set themselves apart thru their creative and original tagline or slogan.
5. Keep it simple. Use proven words and short keywords. One word is usually not enough.

TESLA charging forward
(I actually suggested this years ago as a name for the Tesla Custer Rally. I think it covers the Tesla experience on many levels)

 

[Snerruc]

[

Sandy Munro worked with W. Edwards Deming - Wikipedia and it sounds like Deming had a big effect on Sandy.

"When people and organizations focus primarily on quality, defined by the following ratio,

quality tends to increase and costs fall over time.
(b) However, when people and organizations focus primarily on costs, costs tend to rise and quality declines over time.
. "

Elon/Tesla are concentrating on speed, but a bit more quality in construction would help in many ways, costs more to fix downstream and hurts reputation (which will last for years). China factory seems much better.

It may be as simple as letting production know how important this factor is. It might have been Bob Lutz that told a story about bad panel gaps (at GM?) and he said heads would roll if it didn't improve and he was willing to spend to fix it. Punch line being it cost nothing, the managers just needed to let production staff know and they were just a bit more careful.

It wasn’t Lutz. It was a Volkswagen story.

 

[Christine69420]

That's not going to capture more mindshare. We can do better. Who doesn't remember these catch phrases from Politics, Sports, the Movies, and Advertising over the years?

• 1940s: "Who’s on First?"
• 1950s: "I Like Ike"
• 1960s: "We Choose to Go to the Moon", "Float like a Butterfly, Sting like a Bee"
• 1970s: "Houston, We Have a Problem", "May the Force be with you"
• 1980s: "I'll Be Back", "I Feel the Need, the Need for SPEED!"
• 1990s: "To Infinity and Beyond!", "Show me the money!"
• 2000s: "My Precious"

The art of creating these slogans is big business. Here's some pointers for success:

Guidelines to Create Great Slogans

1. Identification. A good slogan must stay consistent with the brand name either obviously stated or strongly implied. It’s better to include the name of your business to it.
2. Memorable. Some of the best taglines or slogans are still being used today, even though they were launched several years ago.
3. Beneficial. Reveal your purpose and benefits of the product by conveying the message in consumer language. Turn bad into good. Suggest the risk of not using the product. Create a positive feeling for the consumers.
4. Differentiation. In an overcrowded market, companies on the same industry need to set themselves apart thru their creative and original tagline or slogan.
5. Keep it simple. Use proven words and short keywords. One word is usually not enough.

Kickdown!

Yes I know my Tesla don't downshift when I kick the pedal but that only make the acceleration more ludacris.

 

[CorneliusXX]

That's not going to capture more mindshare. We can do better. Who doesn't remember these catch phrases from Politics, Sports, the Movies, and Advertising over the years?

• 1940s: "Who’s on First?"
• 1950s: "I Like Ike"
• 1960s: "We Choose to Go to the Moon", "Float like a Butterfly, Sting like a Bee"
• 1970s: "Houston, We Have a Problem", "May the Force be with you"
• 1980s: "I'll Be Back", "I Feel the Need, the Need for SPEED!"
• 1990s: "To Infinity and Beyond!", "Show me the money!"
• 2000s: "My Precious"

The art of creating these slogans is big business. Here's some pointers for success:

Guidelines to Create Great Slogans

1. Identification. A good slogan must stay consistent with the brand name either obviously stated or strongly implied. It’s better to include the name of your business to it.
2. Memorable. Some of the best taglines or slogans are still being used today, even though they were launched several years ago.
3. Beneficial. Reveal your purpose and benefits of the product by conveying the message in consumer language. Turn bad into good. Suggest the risk of not using the product. Create a positive feeling for the consumers.
4. Differentiation. In an overcrowded market, companies on the same industry need to set themselves apart thru their creative and original tagline or slogan.
5. Keep it simple. Use proven words and short keywords. One word is usually not enough.

 

[ByeByeJohnny]

IMO this isn't the first rodeo for the committee, the index funds, and wall street, they would have faced this situation before and handled it..

This.

While the TMC braintrust is way smarter than all of the above in stuff relating to Tesla there is no way anyone here has a better understanding of how the S&P inclusion could play out in different scenarios.

Sure Tesla is a big elephant to let in compared to previous cases but they can still use data from all previous inclusions that we just don't have.

If the committee is worried about the situation based on previous data they are likely to do something about it. No inclusion at all, delaying inclusion, lower than standard weight at inclusion, trying to get Tesla to make more shares available etc etc.

And if they are not worried based on previous data they'll just make a standard inclusion.

They might not get it right but they have way more info on how it is likely to go than anyone here can possibly have.

 

[traxila]

NYT has an interview with Elon up. It's very fluffy, and I really don't like the writing style, but there's a few interesting bits about Elon, his state of mind, both lately and in the last couple years and such.

Well, this is a helluva lot better than the endless hack jobs the yellow rag know as the New York Times has unleashed on the Tesla Universe.

I will take it.

 

[H Mak]

I want to knock on the head the idea that a "secondary issue" is anything other than a complete disaster for existing shareholders.

It will have the doubly detrimental effect of 1) diluting the proportion of the company we own and 2) give the index fund managers a cheap way in to the company without having to bid up the price of the shares we own.

If some Jonny-cum-lately index fund manager wants to buy $TSLA shares, they should be made to prize them them out of the tightly clenched fists of existing long-term shareholders, not be offered to them on a plate. And a spike in the price should follow, thank you very much.

 

[Steve m]

There are only so many good engineers available to hire and minerals available for purchase. There are bottlenecks to growth that can't be solved with spending more money.

Tesla is no longer a 200 employee firm that can grow without regard to human and mineral resources available.

A way of doing long term institutional investors a solid and screwing over the shorts at the same time would would be to sell institutions $10B in fresh TSLA shares then do a $10B buyback a week later.

There is no guarantee that you could buy the same number of shares back or more as you sold. Doing this would definitely come across as trying to manipulate the market and invite an SEC investigation. In my opinion playing financial games would severely damage their reputation.

Right now Tesla is building or enlarging 4 factories and only has 8.5 billion in cash.

Major projects underway include battery production, CV truck, semi truck, solar roofs.

 

[traxila]

In Elon's owns words, the pace of innovation is what really matters. Therefore, using part of Tesla's cash pile for stock buybacks or dividends will never happen while he is in charge. Doing so shows complacency and a lack of urgency, which run counter to his nature.

As Tesla generates cash, Elon will spend it to "accelerate the world's transition to sustainable energy". For example, I don't care how big Tesla becomes, Elon will never allow the company to build a cash mountain of anywhere near $200 billion like Apple.

Tesla will never do dividends. If it shocks me and it does, I am outta here.

Stockpiling cash is very different. First off I think TSLA should try to stockpile a certain percentage of its market cap in the long term view as a matter of insuring survival. I think five percent is a reasonable number. Obviously a general number to aim for, not a hard rule.

If not for cash piles, Apple would be a footnote of history.

Second of all, I do not expect Tesla to blow cash on bad return investments simply because it has a lot of cash. If you cannot put the cash to work well, then hold it until you are sure that you can. If Tesla turns into the cash producing machine we believe it will, do not be surprised to discover huge piles of cash on the balance sheet in the future as they determine how to deploy it.

 

[AlMc]

"That's the Sound of Inevitability, Mr. Anderson".

Quick book review: How to capture mindshare so you can grow market share | bizjournals.com › how-to › marketing › 2014/10

Off topic weekend: 1980s addition (applies to competition)

 

[Steve m]

I want to knock on the head the idea that a "secondary issue" is anything other than a complete disaster for existing shareholders.

It will have the doubly detrimental effect of 1) diluting the proportion of the company we own and 2) give the index fund managers a cheap way in to the company without having to bid up the price of the shares we own.

If some Jonny-cum-lately index fund manager wants to buy $TSLA shares, they should be made to prize them them out of the tightly clenched fists of existing long-term shareholders, not be offered to them on a plate. And a spike in the price should follow, thank you very much.

Dilution should only be done if it is going to increase the value more then it dilutes the value. If Musk knows how to use the additional cash effectively speeding up important projects, beating competition then they should do so otherwise not.

 

[elasalle]

I want to knock on the head the idea that a "secondary issue" is anything other than a complete disaster for existing shareholders.

It will have the doubly detrimental effect of 1) diluting the proportion of the company we own and 2) give the index fund managers a cheap way in to the company without having to bid up the price of the shares we own.

If some Jonny-cum-lately index fund manager wants to buy $TSLA shares, they should be made to prize them them out of the tightly clenched fists of existing long-term shareholders, not be offered to them on a plate. And a spike in the price should follow, thank you very much.

Now that the SP is down, Secondary might not be required by the Fund Mgrs, prior to S&P. (The price is now a lot lower than the new price targets by many of the analysts)

With 8.6B$ in cash balance, an upgrade by Moodys and general low interest rates - Debt via Bonds/Convertibles etc would be the way to go, if required at all.

Funds should buy EM's new tranches

Slow and Steady Pricing Pressure coming ...

(+ If S&P committee does not stick to it's objectives, algorithms and formulas in inducting a company into their index, in long term the more irrelevant they will become)

 

[SpeedGoat]

I want to knock on the head the idea that a "secondary issue" is anything other than a complete disaster for existing shareholders.

It will have the doubly detrimental effect of 1) diluting the proportion of the company we own and 2) give the index fund managers a cheap way in to the company without having to bid up the price of the shares we own.

If some Jonny-cum-lately index fund manager wants to buy $TSLA shares, they should be made to prize them them out of the tightly clenched fists of existing long-term shareholders, not be offered to them on a plate. And a spike in the price should follow, thank you very much.

If the S&P wants Tesla to issue more shares I hope Elon tells them to take a hike. They will have to include TSLA eventually unless they want to change what the S&P500 represents and everyone knows it.

Q3 will be profitable, likely highly profitable, and Q4 is likely to be still stronger than Q3.

What choice do they have really? Just pretend Tesla doesn't exist?