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re: Investing In Tesla
Posted on 4/29/17 at 10:11 am to Lou Pai
Posted on 4/29/17 at 10:11 am to Lou Pai
The gigafactory and Superchargers are now fixed assets, by investing in them, you are not "losing" money. I don't know where guys can look at tesla and genuinely say they're "losing" money. They make x and spend y, and yes y is greater than x, but that's bc they have .01% market penetration in a market of 80m cars a year and they're trying to build a dominant infrastructure around that industry. I don't really grasp how someone can look at tesla and not see that at this point. It's not a fad anymore, they're selling a ton of these cars currently to rich people and like any other tech product like plasma tvs or handheld pda phones in the early 2000s the rich are early adopters and it trickles down quickly to other people, except this segment has no competition that legitimately can compete.
This post was edited on 4/29/17 at 10:15 am
2
Posted on 4/29/17 at 10:21 am to dabigfella
quote:
I don't know where guys can look at tesla and genuinely say they're "losing" money.
quote:
They make x and spend y, and yes y is greater than x
Posted on 4/29/17 at 10:24 am to dabigfella
You are incredibly emotionally invested in this company.
The man you were responding to has his own parameters for screening stocks. These were likely set in accordance with his risk tolerance.
It is not correct to say that negative margins are an accounting gimmick, as the company obviously hemorrhages cash habitually. What you should be saying is that this is commensurate with where the company is in its life cycle...not "LOL come on man!!! That's a gimmick! Wait, you are saying Musk is a pedophile?!?!"
You seem to know the story well, and it's one of the more interesting ones. But you are married to it.
The man you were responding to has his own parameters for screening stocks. These were likely set in accordance with his risk tolerance.
It is not correct to say that negative margins are an accounting gimmick, as the company obviously hemorrhages cash habitually. What you should be saying is that this is commensurate with where the company is in its life cycle...not "LOL come on man!!! That's a gimmick! Wait, you are saying Musk is a pedophile?!?!"
You seem to know the story well, and it's one of the more interesting ones. But you are married to it.
Posted on 4/29/17 at 10:27 am to dabigfella
quote:"Accounting gimmicks" is what allowed TSLA to report a profit a while back.
Is their profit margin really -22% it isn't, those are legal accounting gimmicks
The company is allowed to sell "green credits" (for lack of a better term) because their cars are all electric.
They sold something like $125 million in those credits and they reported a quarterly profit of $22 million.
quote:Right back at you, but TSLA loses money. That's not to say they won't be profitable someday, but that is my point.
you're one of my favorite posters here
I don't consider it "investing" to buy shares in a company that is a consistent money loser. That would fit my description of "speculating."
Right now, TSLA loses money on every vehicle it sells.
Posted on 4/29/17 at 10:27 am to LSURussian
They're just not making any money. Geeze, quit being so obtuse man.
Posted on 4/29/17 at 10:29 am to LSURussian
Wtf Russian your subtle laughter is really ridiculous, aren't you the biggest Exxon bull? Wtf is Exxon trading at? What multiple is it trading at vs historical averages? What's exxons total return over the last 3-4 years? What happens when Exxon cuts its dividend in a year or two if earnings don't ramp up? They're paying way more than they take in and it's not sustainable and the shares have been nothing short of trash for years. Tesla will outperform Exxon by many fold over the next decade, care to take that bet? Even from these ridiculous multiples it will grow into it while Exxon is at the beginning stages of a multi year decline.
Posted on 4/29/17 at 10:31 am to TigerDeBaiter
You guys are obtuse on this forum as graham investors. Go see the fb thread in the other post, half this board was lol-ing at fb in the $20s lmao. Tesla could stop growth now and be profitable, but they're trying to do in a matter of years what took big auto and the gas station industry 100+ years to accomplish
Posted on 4/29/17 at 10:33 am to LSURussian
Here's what I posted earlier about the credits
quote:
Worth pointing out that "Tesla subsidies" like ZEVs were really lower emission incentives that predate Tesla, if they were so great than big auto should have best selling large luxury EVs, ect. Tesla only exists because big auto found the "incentives" not attractive enough to put much effort into developing compelling EVs And Tesla only gets ZEVs because some big auto would rather buy them from Tesla than earn them.So literally none of the subsidies are Tesla they are industry low emission incentives that big auto ignores, so the market response was Tesla
Posted on 4/29/17 at 10:45 am to dabigfella
quote:No one has said TSLA is a scam, complete or otherwise. It's a unique company founded and run by an acknowledged genius.
Ok so tesla is a complete scam yet the sec doesn't step in and stop it?
But it not only has a negative net profit margin but it also continues to hemorrhage cash.
It has issued stock every year for the last 3 years just to meet its cash needs, $2 billion in newly issued stock just last year alone. It continues to be a net borrower of funds every year during those same 3 years. And its borrowed funds more than doubled in 2016 over 2015.
It has cumulative net losses of more than $6 billion over the last 3 years. It's never made an annual profit.
There is a LOT of risk in the company. I'd call it speculative risk. If you're willing to accept that much risk, more power to you.
It's just that I'm not....
Posted on 4/29/17 at 10:47 am to dabigfella
Your entire argument is based on extrapolating their high demmand of a very very limited supply to the entire market.
Nobody knows if that is going to be the case. Tesla is a good bet to be in the game, no doubt, but you state this as fact and that is where the downvotes come from.
Musk is a genius, visionary, and most of all - an extraordinary salesman. But, right now they are a luxury boutique brand. That's it. If there was actually a wider demmand for the vehicles (and not just putting up $1000 to reserve one) why is musk not putting all her energy into expanding production capacity and not messing spaceX, etc.? just a thought.
Nobody knows if that is going to be the case. Tesla is a good bet to be in the game, no doubt, but you state this as fact and that is where the downvotes come from.
Musk is a genius, visionary, and most of all - an extraordinary salesman. But, right now they are a luxury boutique brand. That's it. If there was actually a wider demmand for the vehicles (and not just putting up $1000 to reserve one) why is musk not putting all her energy into expanding production capacity and not messing spaceX, etc.? just a thought.
Posted on 4/29/17 at 10:48 am to TigerDeBaiter
^His*
Posted on 4/29/17 at 11:01 am to TigerDeBaiter
quote:
Nobody knows if that is going to be the case. Tesla is a good bet to be in the game, no doubt, but you state this as fact and that is where the downvotes come from.
Where do I state it as fact? I stated its a fact that they're dominating the high end segment, this is true, they sold basically 1/3 of all large premium sedans in that graphic I posted. I said, why would anyone think they wouldn't have an equally popular offering in the lower end segment at this point? When has any automaker EVER had even 100,000 preorders for a car ever, much less 600,000?
The demand is there without even a doubt, they're issuing stock not bc they absolutely have to, they're doing it bc they're trying to penetrate so many industries all at once. They could absolutely have simply the model S and grow organically and slowly, but they're trying to do the S, the X, the 3, the gigafactory, the superchargers, everything all at once and yes unless you have tons and tons of cash its not doable in the short timeframe musk wants.
Tencent is the biggest company in china, and if they were comfortable dropping $1.8B on a 5% stake in a money losing venture at $218/share recently, then one has to question if the biggest/smartest co in china is that dumb bc there are tons and tons of chinese EV companies like BYD which warren buffett endorses, and yet this chinese company decided to take a stake in this "overvalued" american company and their insane leader.
Posted on 4/29/17 at 11:04 am to dabigfella
After reading this thread I thought I wanted to invest in Tesla so I called my Buddy who manages a fund. He told me to avoid it right now because it is extremely inflated in value and all of the professional stock traders are all over the shorts for TSLA
Posted on 4/29/17 at 11:08 am to Finch
the shorts have been all over tesla for years, its 30% short and it closed at its highest close ever yesterday. So your buddy and every other fund manager who has thought that have been wrong for years It was $30 in 2012, its $314 now, a value oriented investor wouldn't have bought it. On the flip side that same guy would have never bought amazon,google,facebook, or any other growth company of the last decade. Growth stocks are not cheap.
Hey I hope we get one more dip wed before the model 3 launch, but to me, there are too many catalysts moving forward to short tesla right here, but best of luck to your friend and all the other funds short tesla, as david einhorn said the other day "its been painful"
Einhorn: Tesla Has Been A Painful Short
Hey I hope we get one more dip wed before the model 3 launch, but to me, there are too many catalysts moving forward to short tesla right here, but best of luck to your friend and all the other funds short tesla, as david einhorn said the other day "its been painful"
Einhorn: Tesla Has Been A Painful Short
Posted on 4/29/17 at 11:11 am to dabigfella
quote:Well, yeah, I own over 10,000 shares of XOM, so I guess I do like Exxon stock.
aren't you the biggest Exxon bull?
quote:A little over $80/share. My cost basis is about $20/share. And I'm getting over $30,000 year in dividends taxed at 15%.
Wtf is Exxon trading at?
quote:Not too good. Oil prices might have had an effect on that.
What's exxons total return over the last 3-4 years?
quote:I've been through these oil price cycles with Exxon many times. Exxon's dividend ratio has been historically low compared to most other oil majors, which is always a bone of contention at every XOM shareholders meeting. But I have supported management's dividend policy because of oil price time periods like the last few years.
They're paying way more than they take in and it's not sustainable
Every analysis I read (except for yours, of course) is that Exxon's dividend is sustainable for the foreseeable future.
quote:Not sure what you mean by "trash" or "for years" but it has increased about 40% over the last 10-12 years. And it has increased its dividend every year over that time period.
the shares have been nothing short of trash for years
In fact, Exxon has increased its dividend every year since 1982.
quote:I don't think oil nor Exxon are going away anytime soon.
while Exxon is at the beginning stages of a multi year decline.
Look, I don't consider Exxon to be a growth stock. But it's also not a speculative stock. I avoid speculative stocks.
TSLA is definitely a speculative stock. Speculators like you might make a bundle on TSLA, and, if you do, CONGRATULATIONS! Or, you might lose it all.
I agree with Lou that you're really emotionally involved with TSLA. As an investor, that's dangerous.
Posted on 4/29/17 at 11:21 am to LSURussian
quote:
you're really emotionally involved with TSLA. As an investor, that's dangerous.
Posted on 4/29/17 at 11:29 am to LSURussian
First off, I think we all know me on this board and as large a bet as I have on Tesla, its a nominal portion of my net worth. With that said, I invest more for growth than dividends or income. So my portfolio is mainly Tesla,Amazon,Google at this point. I missed facebook, the PEG is still cheap but those are the big 3 that comprise the bulk of my stock holdings.
All I try to do in this thread is discuss what Tesla is now and what it can be. Exxon for as great as its been over the last century, its peaked. Oil is never seeing $100 again, we're finding massive fields literally everywhere, the chronicle told me BP just found some massive field in the gulf this week. I never said oil was going anywhere, its used in so many things outside of cars that it isn't going anywhere even if every human drove an EV.
All Im saying is, here is a stock, with probably the most polarizing story of our time, the potential end of the gas powered engine. At first it was a fad for the rich with the roadster, then with the $100k sedan, but this summer, for the first time ever we have a $35k, 200 mile EV, that was so in demand 600,000 people reserved one. Reminds me of when Plasma Tvs went from $10k to $2k and everyone got one and now the same 60" is $600 from vizio. Truly amazing how tech prices can always be driven down, the same will happen with the battery.
Meanwhile this market is 80m cars a year and the penetration to this point is 88,000/year. The demand is there obviously, but production issues and capital have prevented them from making millions of cars to this point. With that said, investing for some is about growth, and for others its about dividends and safety. If you're interested in growth, its gonna be tough to move the needle at a massive conglomerate like Exxon without growth, and we're not seeing it recently and in my opinion wont again. Thats my opinion, you have yours, but Exxon is not showing any growth.
Tesla meanwhile is showing insanity growth, literally insanity, obviously its still young, but we haven't seen a product as hyped as theirs in a long time, since the iphone basically. The notional value of 600,000 cars at an ASP of $45k is staggering sales in the pipeline considering they did $7B in sales last year. The model S has shown us that we can drive far and fast without spending thousands a year on gas and having ultimately a safer car, with more storage space bc of the trunk and frunk where the engine used to be. The electric car has shown us we can have cars faster than the $1M hypercars of the past with a sub $15,000 battery today. Thats pretty impressive move forward.
On the otherhand you have the internal combustion engine, which literally has nominally improved over the last 30 years. Dont believe me? A mid 80s Mercedes 560SEL had 300 HP, the same S550 now makes I dont know 450-480hp. So a 50% increase in power/efficiency over a 30 year timeframe. Meanwhile in the past 5 years, the Tesla Model S has gone from a 40 kwh battery at the start to a 100 kwh battery now, and the car has gone from 0-60 in 6.5 seconds to a world record 2.2 seconds......that is innovation, that is pushing the envelope of mankind.
What people are missing about Tesla is that it is not a car company. Its a tech company that produces energy efficient products. The cars are one piece of the puzzle, the solar roofs another, the battery storage another, the supercharger network, there are so many things they do. Hell Morgan Stanley as I posted earlier said they're entering many multitrillion dollar markets, and I know there is risk when you are investing for the future. Many people go back to the dotcom bubble, but this isn't pets.com and this isn't webvan or momma.com, the tech bubble was utter garbage being sent to the moon.
This is possibly the finest car ever produced, well actually it is, it wont every award early on and its a glimpse of what the future can be. The skeptics would rather continue investing in the past, I prefer investing in the future and when you look at a few years back how everyone kept saying amazon was overpriced, it made no money and walmart was a better buy.....well the amazon bulls won that one, and to this point the tesla bulls are winning vs the ford and gm bulls.
There's always a long and short thesis to every trade, I've made my long thesis and im still waiting for a short thesis from someone about something other than money bc money is the least of worries in this world awash with cash. Tencent could give tesla money anytime they want now, jim cramer said as much on squawk box when that was announced, he said the tesla money woes are done with tencent on board.
So am I passionate about what I invest in? Sure, otherwise I wouldnt invest in it. If it doesn't excite you or invigorate your soul, whats the point of me reading so much about it and investing alot of money in it? I could just index and live the rest of my life, lord knows Im wealthy enough as is but I truly enjoy the tug of war chess match of me vs the market and Tesla to me is the ultimate chess match on the planet today. It's the future vs the past and the past is fighting tooth and nail to maintain the status quo.
All I try to do in this thread is discuss what Tesla is now and what it can be. Exxon for as great as its been over the last century, its peaked. Oil is never seeing $100 again, we're finding massive fields literally everywhere, the chronicle told me BP just found some massive field in the gulf this week. I never said oil was going anywhere, its used in so many things outside of cars that it isn't going anywhere even if every human drove an EV.
All Im saying is, here is a stock, with probably the most polarizing story of our time, the potential end of the gas powered engine. At first it was a fad for the rich with the roadster, then with the $100k sedan, but this summer, for the first time ever we have a $35k, 200 mile EV, that was so in demand 600,000 people reserved one. Reminds me of when Plasma Tvs went from $10k to $2k and everyone got one and now the same 60" is $600 from vizio. Truly amazing how tech prices can always be driven down, the same will happen with the battery.
Meanwhile this market is 80m cars a year and the penetration to this point is 88,000/year. The demand is there obviously, but production issues and capital have prevented them from making millions of cars to this point. With that said, investing for some is about growth, and for others its about dividends and safety. If you're interested in growth, its gonna be tough to move the needle at a massive conglomerate like Exxon without growth, and we're not seeing it recently and in my opinion wont again. Thats my opinion, you have yours, but Exxon is not showing any growth.
Tesla meanwhile is showing insanity growth, literally insanity, obviously its still young, but we haven't seen a product as hyped as theirs in a long time, since the iphone basically. The notional value of 600,000 cars at an ASP of $45k is staggering sales in the pipeline considering they did $7B in sales last year. The model S has shown us that we can drive far and fast without spending thousands a year on gas and having ultimately a safer car, with more storage space bc of the trunk and frunk where the engine used to be. The electric car has shown us we can have cars faster than the $1M hypercars of the past with a sub $15,000 battery today. Thats pretty impressive move forward.
On the otherhand you have the internal combustion engine, which literally has nominally improved over the last 30 years. Dont believe me? A mid 80s Mercedes 560SEL had 300 HP, the same S550 now makes I dont know 450-480hp. So a 50% increase in power/efficiency over a 30 year timeframe. Meanwhile in the past 5 years, the Tesla Model S has gone from a 40 kwh battery at the start to a 100 kwh battery now, and the car has gone from 0-60 in 6.5 seconds to a world record 2.2 seconds......that is innovation, that is pushing the envelope of mankind.
What people are missing about Tesla is that it is not a car company. Its a tech company that produces energy efficient products. The cars are one piece of the puzzle, the solar roofs another, the battery storage another, the supercharger network, there are so many things they do. Hell Morgan Stanley as I posted earlier said they're entering many multitrillion dollar markets, and I know there is risk when you are investing for the future. Many people go back to the dotcom bubble, but this isn't pets.com and this isn't webvan or momma.com, the tech bubble was utter garbage being sent to the moon.
This is possibly the finest car ever produced, well actually it is, it wont every award early on and its a glimpse of what the future can be. The skeptics would rather continue investing in the past, I prefer investing in the future and when you look at a few years back how everyone kept saying amazon was overpriced, it made no money and walmart was a better buy.....well the amazon bulls won that one, and to this point the tesla bulls are winning vs the ford and gm bulls.
There's always a long and short thesis to every trade, I've made my long thesis and im still waiting for a short thesis from someone about something other than money bc money is the least of worries in this world awash with cash. Tencent could give tesla money anytime they want now, jim cramer said as much on squawk box when that was announced, he said the tesla money woes are done with tencent on board.
So am I passionate about what I invest in? Sure, otherwise I wouldnt invest in it. If it doesn't excite you or invigorate your soul, whats the point of me reading so much about it and investing alot of money in it? I could just index and live the rest of my life, lord knows Im wealthy enough as is but I truly enjoy the tug of war chess match of me vs the market and Tesla to me is the ultimate chess match on the planet today. It's the future vs the past and the past is fighting tooth and nail to maintain the status quo.
This post was edited on 4/29/17 at 11:32 am
Posted on 4/29/17 at 11:41 am to dabigfella
Really good discussions on both sides of the coin here what a time to be alive. I think the next few months should tell us a lot about Tesla but it is hard to bet against it at this point.
what a time to be alive. I think the next few months should tell us a lot about Tesla but it is hard to bet against it at this point. Posted on 4/29/17 at 11:44 am to dabigfella
quote:
Meanwhile this market is 80m cars a year
Worldwide new car sales exceeded 80 million for the first time ever in 2014 with most of the growth coming from China. Your statement above would mean literally almost every new car sold in the world would be an all electric car.
Total worldwide sales of all electric cars last year was 800,000. So to meet your 80 million sales figure, there would have to be an almost 10,000% increase in all electric car sales with virtually no increase in internal combustion engine sales.
quote:Okay, I'm out.....
Oil is never seeing $100 again
Posted on 4/29/17 at 11:49 am to LSURussian
quote:
orldwide new car sales exceeded 80 million for the first time ever in 2014 with most of the growth coming from China. Your statement above would mean literally almost every new car sold in the world would be an all electric car.
Total worldwide sales of all electric cars last year was 800,000. So to meet your 80 million sales figure, there would have to be an almost 10,000% increase in all electric car sales with virtually no increase in internal combustion engine sales.
They're penetrating that market as rapidly as anyone. As for China, you are correct, thats why Musk was there this week meeting with their leadership. Tesla sells cars in China as is, but bc of the way China is setup, the locals pay an additional 45% on top in taxes to buy one. It hasn't stopped Tesla sales from being great in china, but by opening a gigafactory there, they wont have that 45% tax anymore. Again Musk is ontop of this issue, thats nothing new.
So you think Oil is going to $100 again? And you mocked my sweet baby tesla? O man, I love you too much russian, Im not gonna say anything about that one. I'll say this here, and if Im wrong, I will seriously never come on TD again. Oil will never see $75 again. It wont, they're literally finding oil in every nook and cranny on earth, we're drowning in oil at this point frankly.Thats my ban bet, $75 oil and its adios bigfella.
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