It’s clear that neither Ford nor Volkswagen have the desire or capability to build their own system, and are content with buying a system from Mobileye. Smaller car manufacturers have even less capability here. When Mobileye IPO’s again sometime this year, I’m considering buying some as they will probably give a nice return over the next decade, and as a hedge in case something goes terribly wrong with FSD.
While investing in the IPO could make some nice shorter-term returns before the autonomy market is mature, I really don't think your investment strategy of buying Mobileye for returns over a decade (in case something goes terribly wrong with FSD) makes a whole lot of sense.
Things are always going terribly wrong with FSD and the FSD team regroups and takes a more viable approach. They are not stuck on one path. My returns over the decades have provided me with a very nice life because I did not use the "scattershot" approach to investing. I minimized risk primarily in two ways:
1) Carefully analyzing situations and only applying real money when I could see the relative certainty of success. Risk to reward.
2) Using enough diversification that I wouldn't have to start over if I was wrong but not so much diversification that my results were overly diluted.
It pays in a big way to be right, and I can generally find investments that have, relatively speaking, a "lock" on things. True, the situation can always change in the future, but this can be mitigated by keeping up on the fundamental developments and using the "sell" or "buy" buttons as the facts change. I'm speaking of strategic, longer-term selling (when you think your investment thesis has weakened) and buying based on careful analysis that the odds now favor a different player. If you need to use the scattershot approach on a long-term basis, there are probably better investments. Fortunately, an investment in TSLA does not depend upon FSD being dominant or even successful. But I think it very likely because the FSD team is thinking about the problem in the way that makes the most sense.
I don't see LIDAR as being a useful "fallback" or "safety check" for autonomous driving in the next decade (and probably not ever). The reason for this has to do with the fundamental problem of which signal to believe. Can the car drive on pure vision or not? If it can't, I don't see how LIDAR is going to fix it. Autonomy will happen when vision is good enough. I think Musk and team made a sound decision here. As an investor. I'm confident enough of this that I don't want to spread my investment capital around in case I'm wrong. I would rather invest in other fields where I have identified good opportunity that I have good confidence than hedge my TSLA bet on a strategy that I think is probably flawed. Mobileye may very well be successful and make a good business in the autonomous space, but you have to apply your capital where you can see with good clarity that the risk/reward is the greatest. Scattershot investing is not how I was able to make huge returns while protecting my capital from being wiped out.
Investors need to avoid as many losses as possible - it's all about superior risk to reward. Mobileye IPO position makes the most sense as a speculative shorter-term play that it will run up in value before autonomy is well solved. Of course, the wisdom of even a shorter-term speculative play is dependent upon the IPO price which is still an unknown. Not to mention the state of Tesla's FSD when the Mobileye IPO happens.
My primary point here is scattershot investing is not a friend of the individual investor. Be deliberate.
