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

[FireMedic]

Haven’t carried a spare in almost ten years and 165K miles of Tesla driving. Haven’t needed one either. Keep some airbin yoir tires and don’t buy cheap tires.

As a firefighter paramedic in a medium sized city; I can say without hesitation…changing a tire on the side of a road (especially a highway) is the most dangerous maneuver possible.

I’ve seen more fatalities from changing tires (or other roadside maintenance) than from traffic collisions.

I’ve always told my wife to drive slowly with flashers on to a safe spot and call a tow. We will replace the rim. Spare tires are only useful for remote locations with no tow service. JMHO

 

[unk45]

Great post except there's more to quality than most people realize. As a quality engineer I can tell you quality actually affects COGS, margins and production rates profoundly. Most of Production Hell was caused by quality problems; that is, production processes making output that deviated from nominal engineering requirements. It's not uncommon for companies to have like 20-30% of their cost structure actually being cost of poor quality. The challenge of making good quality product is one of the biggest reasons why manufacturing is hard.

Typically in quality engineering we break down cost of poor quality into four categories:

1. Appraisal
2. Internal failures
3. External failures
4. Prevention

What is Cost of Quality (COQ)? | ASQ

Cost of Quality is a method that allows organizations to determine the costs associated with producing and maintaining quality products. Learn more at ASQ.org.

asq.org

Here's a pretty good version of the Juran "quality iceberg" diagram encapsulating some the most common manifestations of these costs:

View attachment 865190
(source)

Maniacal focus on quality was one of the biggest reasons Japan came roaring back after being in ruins in 1945 to become the world's second most productive economy by the 1990s. Deming and Juran came over to help them out with that and they listened. This quality focus also was the main reason Toyota Motor Corp took over the auto industry during those decades and garnered the best margins in the business. I wrote about this a few weeks ago in an essay about Toyota: #202.

When stuff goes right on the first try and parts fit together cleanly, you make more product faster, with higher utility for the customer and lower COGS.

Please place in correct location:
Moderators' Choice: Posts of Particular Merit

As we all know, such innovations as Octovalve, Gigapress, shared OS across all models and so much more are manifested first with higher quality, second with decreased costs. The Deming/Juran approaches were/are conveniently compatible with Elon Musk's 'first principles' thinking. All three are incentives to never accept 'good enough' nor do they easily coexist with delegation to third parties although all three are largely dependent on shared common goals.

Many people are seemingly devoted to a single popular quality process, such as Six Sigma. Those are often handy tools but no benefit at all without highly shared common goals.

We all have difficulty explaining why Tesla and SpaceX can be such overwhelming successes with such a flawed top executive. Forget about FUD follow @Gigapress lessons, then think about how the common elements of Deming/Juran/Musk lead to constant rapid evolution, consistently increasing efficiency and consistent high customer satisfaction. Adding the Musk component to the Deming/Juran thoughts ends out with very rapid evolution and doing impossible things very well, always improving. Safe and efficient Li-ion battery powered cars, Reusable rockets, steadily decreasing parts counts all came from the same principles combined.

@Gigapress deserves our gratitude for putting all this in succinct context. Coming hours before the quarterly earnings report is a serendipitous coincident.

 

[Artful Dodger]

Also in discussing ideas instead of personal attacks.

The ENTIRE Financial Media (fully-funded by shortzes) proves that Wall St. works on emotion as much as on math and science. More, in the short term. And it's ALL short term to them.

This is why they chose to 'play the man, not the ball' years ago by attacking everything Elon says or does. Negative emotions are hard to separate out for most retail investors. Wall St. knows this, and works it. Hard.

Wall St. only cares about the $$$, not the Company. That of course is their bigest weakness, because it makes them blind to the obvious future.

 

[StealthP3D]

Also I don't care if Tesla is a car company or a dildo company. Revenue, net income and growth determines the price of the stock and the PE multiple it gets.

I think I see your point. Even a bedside consumer product would be a huge success, as long as it's rechargeable and capable of Full-Self-Driving.

 

[StealthP3D]

Please place in correct location:
Moderators' Choice: Posts of Particular Merit

As we all know, such innovations as Octovalve, Gigapress, shared OS across all models and so much more are manifested first with higher quality, second with decreased costs. The Deming/Juran approaches were/are conveniently compatible with Elon Musk's 'first principles' thinking. All three are incentives to never accept 'good enough' nor do they easy;y coexist with delegation to third parties although all three are largely dependent on shared common goals.

Many people are seemingly devoted to a single popular quality process, such as Six Sigma. Those are often handy tools but no benefit at all without highly shared common goals.

We all have difficulty explaining why Tesla and SpaceX can be such overwhelming successes with such a flawed top executive. Forget about FUD follow @Gigapress lessons, then think about how the common elements of Deming/Juran/Musk lead to constant rapid evolution, consistently increasing efficiency and consistent high customer satisfaction. Adding the Musk component to the Deming/Juran thoughts ends out with very rapid evolution and doing impossible things very well, always improving. Safe and efficient Li-ion battery powered cars, Reusable rockets, steadily decreasing parts counts all came from the same principles combined.

@Gigapress deserves our gratitude for putting all this in succinct context. Coming hours before the quarterly earnings report is a serendipitous coincident.

I agree that's a great post, as are most @Gigapress posts. I disagree with the reasons given, particularly that "We all have difficulty explaining why Tesla and SpaceX can be such overwhelming successes with such a flawed top executive."

Elon is human, human have flaws. Fortunately, he is MUCH LESS flawed than the CEO's of his competitors-. You make little sense here and seem to admit it by being perplexed by Tesla's and SpaceX's success when you disagree with much of what the CEO does.

Has it ever occurred to you that it might be the watcher who is flawed, and not the watched? Because the results speak for themselves.

 

[Krugerrand]

We all have difficulty explaining why Tesla and SpaceX can be such overwhelming successes with such a flawed top executive.

Since there isn’t a single non-flawed person on this planet, it means every single human endeavor is being executed by *gasp* flawed humans. It might behoove certain flawed persons in this room to keep that in mind.

So, no. I don’t have difficulty explaining any of Tesla’s or SpaceX’s overwhelming successes.

Let me sum it up: The flaws of the guy in charge are not relevant to business success.

 

[UncaNed]

Just FYI for those who don't regularly watch the YouTube videos from the crew that files around the Austin Tesla factory. The Tesla train yard in Hutto is being expanded from the current two train loading docks to now have 6 docks. There is also work taking place in the field immediately next to the train loading area. Gonna be a lot of new Tesla's taking train trips in the very near future

This makes me happy - Rail transport is very efficient, and loading those rail car trains looks very easy and efficient.

But at 5:50 they take on OFF a truck...???

 

[ZachF]

Plus, it wouldn't work. What is being suggested is illegal blackmail and Elon would have no other choice but to tell the blackmailers that he has a legal obligation to his Twitter shareholders and can't take Tesla into consideration. The Chinese government knows and understands this and wouldn't even try because it would discredit them badly.

Of all the things to worry about this one seems awfully unrealistic and contrived.

The CCP has been doing that kind of stuff for a while.

Blackmailing Elon with Giga Shanghai is 100% in line with their past behavior.

Some of you posters here really, really have your head stuck in the sand at how fast China relations, Chinese growth, and Chinese leadership is deteriorating. Sweet summer children… It’s probably the single biggest shareholder threat at this point.

 

[Unpilot]

Thinking about buying some lotto options for 10/28 .....

But then I realize that the pretty girl smiling at me is actually a mirage, and it's a fat guy with a cigar in a speedo.

 

[ZachF]

Yeah blah blah blah

GM 2019 revenue: 137B
GM net income: 6.58B

Tesla 2022 TTM 67B
Tesla Net income: 9.5B

I don't care where or how Telsa puts R&D, but last time I checked we only care about the bottom line, and at half the revenue, Tesla is making almost 2x the net profit. Also I don't care if Tesla is a car company or a dildo company. Revenue, net income and growth determines the price of the stock and the PE multiple it gets.

I like operating income because it filters out some of the noise and allows more signal… but yes, the above is 100% true.

Gordo is working from a pre-determined solution and adjusting the variables to fit it.

 

[betstarship]

I disagree with the reasons given, particularly that "We all have difficulty explaining why Tesla and SpaceX can be such overwhelming successes with such a flawed top executive."

I never get why people conflate perfection with productivity. Humans are most definitely flawed and trying to be productive and make their and other's lives better (for the most part).

After scaling up my net worth stack and having doors opened that weren't open before? I just see a bunch of flawed, highly successful individuals (based on luck and/or skill) trying to manage and/or further scale up that productivity, again, to help themselves and others in whatever they're passionate about.

It's made me appreciate Elon Musk and other highly successful people more. The world's not as perfectly contructed as most think it is. As an aside - Charlie Munger's thoughts on people keeps on being right, the world is based on envy.

 

[Spacep0d]

What would happen if Mary Barra ran Tesla for a year? She's socially acceptable to a wide variety of people and even checks diversity boxes for those who care about this over merit, but would we TSLA Hodlers want her as CEO? Nope. How about the CEO of Toyota, Akio Toyoda? Too conservative, and doesn't have a vision for EVs. Carlos Ghosn is right out.

Elon's flaws are also some of his greatest assets, which is true for many of us. If Elon cared about what people thought, Tesla may not exist today and perhaps SpaceX wouldn't be around either. If he cared about money too much then Tesla and SpaceX would not likely be around today because he bet it all on these two ventures.

Elon's risk-taking, courage, honesty, transparency, raw intellect, single-focus problem-solving, strong work ethic—these are all part of the success story. Elon is critical to the success and rapid iteration of Tesla, SpaceX, and every company he touches—especially in the face of a whirlwind of FUD, character assassination, and other roadblocks that would bring most people to their knees.

Put another way, I would say Elon's personality is not just optimal for the success of Tesla, SpaceX and other companies, but necessary.

 

[Mengy]

I think I see your point. Even a bedside consumer product would be a huge success, as long as it's rechargeable and capable of Full-Self-Driving.

Tesla will make the Model O next. (that's an O, not a zero!)



Also, IT'S EARNINGS DAY!!! Get the snacks and drinks ready!

 

[Prunesquallor]

…

We all have difficulty explaining why Tesla and SpaceX can be such overwhelming successes with such a flawed top executive. ….

No, THIS is a flawed top executive:

 

[unk45]

... "We all have difficulty explaining why Tesla and SpaceX can be such overwhelming successes with such a flawed top executive."

...

Has it ever occurred to you that it might be the watcher who is flawed, and not the watched? Because the results speak for themselves.

I disagreed only because you misunderstood the intention of the post. Humans, all humans, are flawed. Pointing that out is not an attack. The wonder of continuous improvement is the ability to correct past mistakes and enhance past good decisions. Elon does that better than any top executive I have known about. He often seems to be the first person to see his own mistakes.

Those flaws are exactly why he seeks 'First Principles', since that is the way he manages to do things never done before so frequently. Exactly those abilities took him from Zip2, to X.com, SpaceX and Tesla, not to mention The Boring Company and Starlink.

So, don't be dismissive of my point. Yes, Elon is flawed. Yes, ignorant people blame him for his obvious and very public flaws. Those flaws are quite real. Despite those he accomplishes more than nearly all of us, his fans, can actually comprehend.

Do not deify him, he's not perfect. Do respect him. Do laud his amazing accomplishments.
Just so you understand here are some of the 'impossible' things he's done:

The Best Tech Innovations of Elon Musk

From X.com to SpaceX, Elon Musk has become a huge name in the innovation game. Here are five of his tech innovations throughout his career.

techreport.com

For all of you who object to my failure to pretend the man I have admired since 2000 and who has had more to do with my own financial well-being than any other, since then, Please think quite carefully. All humans are flawed. What a human can accomplish despite flaws is the point.

 

[traxila]

Great post except there's more to quality than most people realize. As a quality engineer I can tell you quality actually affects COGS, margins and production rates profoundly. Most of Production Hell was caused by quality problems; that is, production processes making output that deviated from nominal engineering requirements. It's not uncommon for companies to have like 20-30% of their cost structure actually being cost of poor quality. The challenge of making good quality product is one of the biggest reasons why manufacturing is hard.

Typically in quality engineering we break down cost of poor quality into four categories:

1. Appraisal
2. Internal failures
3. External failures
4. Prevention

What is Cost of Quality (COQ)? | ASQ

Cost of Quality is a method that allows organizations to determine the costs associated with producing and maintaining quality products. Learn more at ASQ.org.

asq.org

Here's a pretty good version of the Juran "quality iceberg" diagram encapsulating some the most common manifestations of these costs:

View attachment 865190
(source)

Maniacal focus on quality was one of the biggest reasons Japan came roaring back after being in ruins in 1945 to become the world's second most productive economy by the 1990s. Deming and Juran came over to help them out with that and they listened. This quality focus also was the main reason Toyota Motor Corp took over the auto industry during those decades and garnered the best margins in the business. I wrote about this a few weeks ago in an essay about Toyota: #202.

When stuff goes right on the first try and parts fit together cleanly, you make more product faster, with higher utility for the customer and lower COGS.

Great post and true for all endeavours and creations.

Working in the pharmaceutical world, I can tell you any error destroys the day if you are lucky, and destroys your business if you are not. Correcting errors might well be the biggest cost for any company and those that cannot adapt, system correct and streamline will fail.

 

[Artful Dodger]

The CCP has been doing that kind of stuff for a while.

Blackmailing Elon with Giga Shanghai is 100% in line with their past behavior.

Some of you posters here really, really have your head stuck in the sand at how fast China relations, Chinese growth, and Chinese leadership is deteriorating. Sweet summer children… It’s probably the single biggest shareholder threat at this point.

Tesla is in China because it is the largest car market in the world. Without Tesla leading the industry there and driving EV adoption, China would not be on a path right now to lower CO2 emissions from the auto sector. This is Tesla's Mission, and it has to happen in China for the Mission to succeed.. Everything else is cruft.

Your opinions are overblown.

 

[traxila]

So U.S. House Starts came in low: You'd think this might help calm the FED.

United States Housing Starts - September 2022 Data tradingeconomics.com › United States

Calendar GMT Reference Reference Actual Previous Consensus TEForecast
2022-09-20 12:30 PM Housing Starts Aug 1.575M 1.404M 1.445M 1.42M
2022-10-19 12:30 PM Housing Starts Sep 1.439M 1.566M 1.475M 1.465M
2022-11-17 01:30 PM Housing Starts Oct

You would think but they have gone on record several times now that the data point they care the most about is CPI and they will be hawkish and tightening until it reacts the way they want it to.

Probably not the best strategy but this is their current position. Pain is assured. Already present I might add.

 

[ZsoZso]

Thinking about buying some lotto options for 10/28 .....

But then I realize that the pretty girl smiling at me is actually a mirage, and it's a fat guy with a cigar in a speedo.

Now, you had to ruin my hopium...
I already bought those tickets -- and I definitely do not like fat guys in speedo

that image will hunt me for the next week

 

[TheTalkingMule]

Not a NFLX fan, but listening to these shorts try to spin a good earnings quarter on CNBC is hilarious.

I guess we'll be seeing a lot of this "fake news" logic from TSLA shorts tomorrow as well.