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

[Zhelko Dimic]

Have you considered that if he has been investing in TSLA for a few years, or even a decade, a $1m loan on a $25m, portfolio will mean that TSLA shares will have to drop, say, 90% or 95% before this would become an issue?

Or, let us assume that he's a new-ish TSLA investor. With a 50% CAGR, just a few years of growth will result in an astronomical account size, which means that the situation in the first paragraph becomes reality . . . .

Don't be of little faith--that's what the TSLAQ folks are for. If I'd been less a "fraidy-cat" with margin a few years ago, I'd have a 9-figure account instead of an 8-figure account, but they don't teach investing in school. My loss. Margin is a TOOL which can be used, with care, to greatly expand the size of one's investments over time.

Later, it can be used to buy a big house, without having to sell any shares.

And if I've been more afraid with margin a few years ago, I'd have an 8-figure account, instead of a 7-figure account.
But it's all good.

 

[Discoducky]

You wot?

 

[StealthP3D]

Can they use the local RMB to build the cars then export the cars to Europe and get EUR there? Is this not equivalent to getting cash out of China?

TSLAQ told me when Tesla sells a Chinese made car in Europe, they are required to immediately give the cash to a trusted Chinese courier who then hand delivers the proceeds to the leader of the CPC, Xi Jinping, who can then spend the money as he likes. If he is in a good mood he gives some of it to his concubine and the rest to peasants.

There is no way for Tesla to benefit from profits in China but Elon decided to open up shop there because of his close personal ties to Xi Jinping and his general love of communist leaders.

/s

I can hardly believe this is a serious topic of discussion here. C'mon people!

 

[thesmokingman]

^^Any stupid machinations created here (by us all) will end up in a FUD news report coming soon. I'm *not* surprised by the standards of modern journalism any more.

 

[StarFoxisDown!]

Lol you're going to be waiting on time for a little while then

Looks to me like this thing is clearly being pushed back down into it's wedge to follow the top line downwards again which coincidentally will line up with 1,000/share at the wedge point in a like 10 trading days. Progressively weaker throughout the day, now down 5X the macros. Sure must be nice to construct any piece of FUD ya want and have the actual means to drop the share price........regardless of whether anyone believes it or not.

 

[Phobi]

Indeed, the desperation is real.

Interesting tidbit I didn't realize about the HVAC being on the third floor for GigaTexas compared to Berlin. Jeff mentions it in the video with Farzad @ 46:50 to allow for more solar installations. Fun times ahead!

 

[nativewolf]

I
I'm a bit distressed to disagree with you. Thus I will try to explain why you position is incorrect factually.
t's "different views" only because you're ignoring exports. Tesla is making Euro, Shekel, Dirham, Sterling, Kronor, S$, US$ and C$ from China exports.
Beyond that several other OEMs are making cash money from China on similar terms. This thread does need to understand that investments in China are not a one-way-street. TSLA investors are generating large value from Tesla investments there.

We all really need to understand the difference between political positions and economic ones. Tesla has made economic decisions that benefit all of us.
What's more it is just beginning. Once the designed-in-China vehicle/platform arrives there will be large scale exports and production, undoubtedly in more difficult places that tend towards much smaller cheaper models such as India, Mercosur, SE Asia; these things will benefit from China exports and technology transfer.

At present it is difficult to value the cash generated from Tesla Chinese exports, but for 2022 or 2023 we probably will have sufficient details to assess the direct impact.

"..It works today because they take the "profits" and purchase other manufactured products they export out. All fun and good but if you can't take cash out to me those aren't "profits"." This statement is actually contracting itself. For millennia people have sold things to one place and received payment via barter. This practice does absolutely transfer value. In modern times trade subject to exchange controls has regularly used a modern form of barter. There are endless varieties. The present day Chinese trade and investment is fairly open compared to much of the world. FWIW, generic boring terms for this are transfer pricing and trade finance.

Anybody working in trade finance is quite adept at structuring such arrangements. Compared with much of the world the Chinese transfer pricing limitations are trivial.

As always in such business the fine print rules!
NOTE: I loved my years doing this kind of business, especially when the deal was composed of multiple countries and products.

It is always a pleasure to have a discussion like this even if any disagreement. I agree that the trading products is not the issue, it is the fundamental basis of trade and in many countries the only option (due to a lack of capital markets) or in some cases it simply enhances returns due to the ability to manipulate pricing. However, until that car is sold in the USA or EU than it is not cash and cash is king. If, say hypothetically, a 50% or more tariff is imposed on supply chain for battery packs in the EU and/or USA than much of the cash being created in China will be stranded and discounted rules prohibit the export of cash. Or, if the US were to prohibit export of currency...well what would happen. In this regard, China still behaves like a third world developing nation lacking a liquid capital market (not the case) and in general currency controls are a plague. This is a fundamental problem with both India and China and would merit addressing but his is not Tesla specific and may be better discussed over espresso and a croissant and a fine sunrise. Always welcome to visit.

 

[AudubonB]

If any are finding this discussion of taking profits out of China to be arcane or otherwise difficult to follow, may I suggest you envision it as analogous to corporate dividends. Does a company pay dividends (Y/N)? If No, then does that mean for you that its corporate stock is thereupon worthless (Y/N)? If No, then you might likewise be comfortable with Tesla and its activities in China, particularly insofar as the effect of those activities on the company’s balance sheet and income statements.

 

[Big Time]

Flame on Dumpster, Flame on

 

[HG Wells]

What just happened ?
NOTE THIS IS WRONG

EDIT:
Got really excited when I saw this.
Until I did the math.
EDIT:
Try

Tesla, Inc. (TSLA) Stock Price, News, Quote & History - Yahoo Finance

Find the latest Tesla, Inc. (TSLA) stock quote, history, news and other vital information to help you with your stock trading and investing.

finance.yahoo.com

 

[Artful Dodger]

Flame on Dumpster, Flame on

OT

Spoiler: SpaceX Transporter 3 Mission | Entry Burn to Landing LZ1

SpaceX performs a flawless onshore landing at LZ1 at Cape Canaveral, FL

 

[advocate8]

You know the writers are stoned when the top navigation of the site has "cannabis" as an option. Sorry Dan go smoke another bowl.

Just the existence of the evo prot

You know the writers are stoned when the top navigation of the site has "cannabis" as an option. Sorry Dan go smoke another bowl.

Just the very existence of the second, more refined version of the CT spotted recently on the test track should be enough all by itself to prevent someone from writing this kind of pablum. You don’t go that far in prototyping without intent to build.

 

[wtlloyd]

IIRC the 1st Gigapress was installed at Giga Texas about 3-4 months ago. That time lag to today likely gives us a good indication about their intentions for the Model Y ramp timeline.

Remember this will be the 5th Model Y line (Fremont, 2xShanghai, 1xAustin). They should be getting good at it by now (or the 6th Model Y line in production if Berlin is allowed to begin before the 2nd line is ready in Austin).

Cheers!

Not too timely, catching up.
Gigapress parts started arriving at Austin late January 2021. That machine was making test castings by mid June 2021, literally while sitting on a pad surrounded by a dirt field with little more than an awning roof over it. Casting production parts were accumulating from two additional machines before the room enclosure was completed 5 months later.
There is a ferocious attack on production initialization in the core of this company and I have long felt (and said fwiw) the Shanghai ramp up experience will not be repeated but rather, improved upon.

 

[AudubonB]

On the discussion of trading versus long-term investing.

In calendar 2021, I performed for our account exactly TWO transactions. The first involved the company below….one which most of you have at least a passing knowledge:

We had purchased its predecessor - the SPAC known as Social Capital Hedosophia - on 18 Sept 2017 at $10.586. We sold it on 27 January of last year at $57.181 for a gain of 440% over 4.3 years, and just shy of its all-time intraday high of $62.80. It now trades, as I type this, at $10.21.

4.3 years is an anomalously short holding period for us but the changed circumstances determined it no longer belonged in our portfolio.

The second of the two trades we made was to take the cash from that trade and buy TSLA on 29 January at $791.178; it currently stands at $1,0xx for an unrealized appreciation of 33%. That that noticeably raised our combined cost of purchase for TSLA is an irrelevant red herring.

And THAT is how you amass capital whilst being able to sleep at night AND without churning your portfolio, incurring transaction costs and exposing yourself to capital gains taxes. Can a sophisticated trader perform as well? Our annualized overall five-year performance (2017-2021) is 85.7% vs 18.5% for the S&P500, all the time absolutely minimizing taxes. Some traders may, but very, very few.

 

[jbcarioca]

It is always a pleasure to have a discussion like this even if any disagreement. I agree that the trading products is not the issue, it is the fundamental basis of trade and in many countries the only option (due to a lack of capital markets) or in some cases it simply enhances returns due to the ability to manipulate pricing. However, until that car is sold in the USA or EU than it is not cash and cash is king. If, say hypothetically, a 50% or more tariff is imposed on supply chain for battery packs in the EU and/or USA than much of the cash being created in China will be stranded and discounted rules prohibit the export of cash. Or, if the US were to prohibit export of currency...well what would happen. In this regard, China still behaves like a third world developing nation lacking a liquid capital market (not the case) and in general currency controls are a plague. This is a fundamental problem with both India and China and would merit addressing but his is not Tesla specific and may be better discussed over espresso and a croissant and a fine sunrise. Always welcome to visit.

OK, before having that delightful event I'd probably want to offer you some basic references so we do not need to rehash misconceptions.
1. tariff barriers nearly always have practical workarounds.
2. non-tariff barriers are harder.
3. I'd offer also a couple of primers on China. People overwhelmed by disdain usually miss the facts.
4. It's wise to study individual taxation rules, corporate taxation rules and 'unitary' income, both individual and corporate.
This will go off topic soon. The primary point is that TSLA understands and managed all these points superbly. They're given little to no credit because prejudice overwhelms the actual facts. Securities analysts never understand international business, Never. Nor do nearly all the denizens of TMC.
5. To illustrate the points Singapore, Taiwan and Hong Kong offer some valuable information references.

 

[dl003]

Today is a fake macro dip manufactured by LEAP calls closing and/or profit taking before a long holiday weekend. Absolutely no other reasons for tech to drop this massively given yield is down for the day. I continue to see divergence between TSLA A/D and OBV charts, which suggests dips buying. After 1/21/22 is FOMC on 1/26 so market may just continue to brace for impact and QQQ is close to a bottom. Big green days ahead after next week.

 

[EVMeister]

Now we're into the 2nd half of the trading day, TSLA can rise back up to create a nicer-looking chart!

 

[M|S|M MYP]

Did my part for Q1 22:

 

[petit_bateau]

IIRC the 1st Gigapress was installed at Giga Texas about 3-4 months ago. That time lag to today likely gives us a good indication about their intentions for the Model Y ramp timeline.

Remember this will be the 5th Model Y line (Fremont, 2xShanghai, 1xAustin). They should be getting good at it by now (or the 6th Model Y line in production if Berlin is allowed to begin before the 2nd line is ready in Austin).

Cheers!

I am pretty sure the primary constraint is cell supply rather than (ordinarily) GA lines, casting machines, stamping machines, paintshops (hmmmm, paintshops - Fremont - pos local constraint), etc. I haven't been able to get good splits between the 3 and Y production in the various faciities, but these are my best estimates from the various puzzle pieces (anyone with better data please let me know). Note the implication that in Fremont a 3 or a Y line can do about 50k/qtr if I use a 50/50 split. Then turn your attention to Shanghai and in Q4-20 we observe the single 3 line did 67k. An implication is that in Fremont each GA line can do more but that the paintshop is a bottleneck. Another implication is that during the Shanghai ramp the cell supply was diverted from Fremont to ramp Shanghai, see the Q2 reduction in Fremont as partial evidence for this (though that was also affected by Covid). Now in Q4-21 the best data I have gleaned suggests the single 3 line in Shanghai is now nearer to 86k/qtr. If so the two Y lines that are now operating in Shanghai ought to be able to reach ~172k/qtr in the coming quarters, meaning that Shanghai's true capacity is now ~ 258k/qtr or over 1m/yr.

Therefore we should be alert as to whether history will repeat itself. Will cell supply be diverted from Fremont/Sparks and Shanghai to Austin and Berlin ? Or will Tesla be able to ramp new cell supplies in parallel with the new assembly lines, and still keep accelerating to 1m/yr at Shanghai ?

 

[Artful Dodger]

On the discussion of trading versus long-term investing.

In calendar 2021, I performed for our account exactly TWO transactions. The first involved the company below….one which most of you have at least a passing knowledge:
View attachment 755281

We had purchased its predecessor - the SPAC known as Social Capital Hedosophia - on 18 Sept 2017 at $10.586. We sold it on 27 January of last year at $57.181 for a gain of 440% over 4.3 years, and just shy of its all-time intraday high of $62.80. It now trades, as I type this, at $10.21.

4.3 years is an anomalously short holding period for us but the changed circumstances determined it no longer belonged in our portfolio.

The second of the two trades we made were to take the cash from that trade and buy TSLA on 29 January at $791.178; it currently stands at $1,0xx for an unrealized appreciation of 33%. That that noticeably raised our combined cost of purchase for TSLA is an irrelevant red herring.

And THAT is how you amass capital whilst being able to sleep at night AND without churning your portfolio, avoiding transaction costs and exposing yourself to capital gains taxes. Can a sophisticated trader perform as well? Our annualized overall five-year performance (2017-2021) is 85.7% vs 18.5% for the S&P500, all the time absolutely minimizing taxes. Some traders may, but very, very few.

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