Thoughts on TESLA

[nash031]

Ferrari, BMW, Maserati, Jaguar, Volvo, Etal. When will they realize that they have no future?

Do you own stock in all of those as well?

 

[NW-Bound]

... Jeremy Segal, in "Stocks for the Long Run" illustrates this by comparing the performance of dull old RJ Reynolds with exciting IBM beginning IIRC in the 1950s as computers took off. IBM did turn out to be an extremely successful company for a long time, but as an investment it was handily outrun by RJR because IBM's price at the beginning was driven by the optimists and zealots. Segal refers to this as "the growth trap."...

Tesla is still trying to justify its market cap. If it succeeds, it can still go up a bit more. If it fails, there's hell to pay.

I am not buying. I'd rather sell, but am too chicken.

 

[nash031]

Electric or not, Nash031 won't be buying one. Therefore, according to him/her, they cannot survive.

First, please point out where I said anywhere that Tesla "won't survive."

Second, please point out where I've ever said I won't buy electric. I've actually said that I considered buying a Model S, but had concerns that have not yet been alleviated both on the expense front - I have a toddler and another on the way and am not yet FI, so I can't justify $75-95,000 on a car no matter the quality or features - and on the long term support and viability of the company.

Tesla may well "survive", but if I'm putting that kind of money into a car, I want to *know* that the service, parts, support, and charging infrastructure is here to stay, and I don't want it to be compromised.

You've gone a long way to put words into my mouth for whatever reason. My next car purchase may well be a hybrid. It will likely not be an electric because my future employment (and therefore commute and travel requirements) are unknown. I have driven across the country multiple times for work in the last two years and will again in 2019. Electric is not practical for me right now. That does not - in any way - mean I am critical of electric cars or even Teslas themselves on the whole. Quite the opposite, actually. I have been to the local Tesla showroom on at least a dozen occasions to admire the vehicles.

Please address me directly with future criticisms, rather than intentionally misrepresenting my opinions to others on the forum. Thank you.

Edit to add: On a side note, there is a thread around here where I'm very much in the minority about a long-term equity investment that I made. Believe me, it is tempting to trumpet its recent gains to all of the naysayers who told me, in essence, that I was dumb. I get being on a relative island in these discussions, where it can feel like people are ganging up on you. I do not intend to do that to you or Mr. Tightwad. I do find his name ironic, and I do not think Tesla is a good long term investment, and since I don't day trade, I don't follow the ups and downs of volatile stocks like Tesla.

Our opinions on electric cars as the future are very much in line. Our long term outlooks on Tesla differ. I do not think Tesla is a value stock right now; I think it is a purely speculative one. There's nothing wrong with putting money there, so long as you recognize it for what it is.

 

[Mr. Tightwad]

First, please point out where I said anywhere that Tesla "won't survive."

Second, please point out where I've ever said I won't buy electric. I've actually said that I considered buying a Model S, but had concerns that have not yet been alleviated both on the expense front - I have a toddler and another on the way and am not yet FI, so I can't justify $75-95,000 on a car no matter the quality or features - and on the long term support and viability of the company.

Tesla may well "survive", but if I'm putting that kind of money into a car, I want to *know* that the service, parts, support, and charging infrastructure is here to stay, and I don't want it to be compromised.

You've gone a long way to put words into my mouth for whatever reason. My next car purchase may well be a hybrid. It will likely not be an electric because my future employment (and therefore commute and travel requirements) are unknown. I have driven across the country multiple times for work in the last two years and will again in 2019. Electric is not practical for me right now. That does not - in any way - mean I am critical of electric cars or even Teslas themselves on the whole. Quite the opposite, actually. I have been to the local Tesla showroom on at least a dozen occasions to admire the vehicles.

Please address me directly with future criticisms, rather than intentionally misrepresenting my opinions to others on the forum. Thank you.

Edit to add: On a side note, there is a thread around here where I'm very much in the minority about a long-term equity investment that I made. Believe me, it is tempting to trumpet its recent gains to all of the naysayers who told me, in essence, that I was dumb. I get being on a relative island in these discussions, where it can feel like people are ganging up on you. I do not intend to do that to you or Mr. Tightwad. I do find his name ironic, and I do not think Tesla is a good long term investment, and since I don't day trade, I don't follow the ups and downs of volatile stocks like Tesla.

Our opinions on electric cars as the future are very much in line. Our long term outlooks on Tesla differ. I do not think Tesla is a value stock right now; I think it is a purely speculative one. There's nothing wrong with putting money there, so long as you recognize it for what it is.

I bought T at 30.50, right about the same time as you. And I'm still a Tightwad.

 

[oneill225]

First, please point out where I said anywhere that Tesla "won't survive."
Our opinions on electric cars as the future are very much in line. Our long term outlooks on Tesla differ. I do not think Tesla is a value stock right now; I think it is a purely speculative one. There's nothing wrong with putting money there, so long as you recognize it for what it is.

I apologize; that was a little snarky.

My point was simply that there is most definitely a market for expensive vehicles. The fact that you are not willing to spend that kind of money on a car (nor am I) is not really relevant to the question of whether Tesla or the other luxury car makers are worth investing in. Put differently, I would never spend $1,000 on an iPhone, but that tells us very little about the investment value of Apple stock.

 

[nash031]

I bought T at 30.50, right about the same time as you. And I'm still a Tightwad.

Tightwad is a relative term, of course! What's tight for you and tight for me could be very different. I consider myself pretty tight with money... until it comes to steak dinners. At any rate, if you bought T at 30.50, we bought at the same exact time.

I apologize; that was a little snarky.

My point was simply that there is most definitely a market for expensive vehicles. The fact that you are not willing to spend that kind of money on a car (nor am I) is not really relevant to the question of whether Tesla or the other luxury car makers are worth investing in. Put differently, I would never spend $1,000 on an iPhone, but that tells us very little about the investment value of Apple stock.

There is definitely a market for those cars, and there are definitely people who make money investing in those car companies. I think you can make money investing in just about anything if you're lucky, savvy, or some combination thereof. One of my goals is to minimize downside risk when investing in equities, hence Tesla is totally inappropriate for me to invest in. That doesn't make it so for everyone.

That said, comparing a $1,000 phone to a $90,000 car isn't really a valid comparison IMO. That $1,000 phone is accessible to a much, much larger market than the $90,000 car, and represents just one segment (albeit the largest one) of Apple's overall business. I've been long Apple since 2011, recently sold half my position, but still sitting on the other half. Had I had the money back when I first heard about the iPod, I would've been in and probably FI if not fully retired by now. My passion for Apple is much the same as yours for Tesla, but outside of the "fanboys" both companies have/had and their visionary albeit eccentric founders, there isn't much comparison between the two, again IMO. When the iPod came out, I immediately thought "all of my friends are going to have these" (I was 24). Tesla doesn't move that needle - while a lot of people undoubtedly want them, simple fact is many/most people can't get there, even at the Model 3 price point, which means it's a niche market, and - my opinion again - the stock is overpriced for such a niche market.

 

[NW-Bound]

There has been a rumor floating around that Tesla has not been able to sell as many Model 3's as it wants, because buyers want the promised $35K car, not the expensive ones. And so, unsold Teslas were sitting around in lots around the country.

Some even snooped around and saw markings on some cars indicating problems that needed fixing before the cars could be sold.

See an article published today (10/2/2018):

https://www.msn.com/en-us/money/com...s-of-parked-cars/ar-BBNORuV#image=BBNORuV_1|2

I searched a bit more, and found another interesting story published on 8/28. That is, other car makers also have a lot of new cars sitting around with no buyers.

See: https://cleantechnica.com/2018/08/28/thousands-of-cars-sitting-on-lots-unsold/

 

[bobandsherry]

Not sure the market considers that "good news", a momentary surge and then reality hit.... down just over 1% on "good news", and down 2.5% from it's intraday high. And this is with DOW and NASDAQ up for the day.

Perhaps profit taking, but if people truly believed the "good news" story then it should be a "hold" instead of "sell".

Heh - the market thought that all the "good news" needed to be rewarded. Tesla continued to trickle down all day and closed today at $301.02, 3.12% lower than the when it opened and after the "good news".

Here's what the good news is.... yes, they met their target, and sold cars at a higher price. The future is sometime in the near/distant future, perhaps never, but on paper Tesla is talking about selling cars for much lower price ($35K) and therefore much thinner margins. That's perhaps the "news" that the market digested and reflected today. Guess we'll see what the market thinks tomorrow as after hours it popped back to $304.10, but still below the open today.

 

[ERD50]

Volvo has a future...it no longer will make ICE cars starting in 3 months..They've already planned and adjusted for the future

You just lost a ton of credibility.

I gotta run, but I suggest you research that, and come back with an accurate assessment of what Volvo's plans are. If you get it right, I'll return 90% of your credibility score.

-ERD50

The company thinks it will hit 50% electric sales by 2025...thats not too long of a process

I never said all car sales will be 100% EV's, not now and not in 2025. ...

Well, I gave you a chance. But instead of taking back your erroneous statement that "Volvo ... no longer will make ICE cars starting in 3 months.", you diverted the topic to other EV numbers.

But I'm feeling generous today. I'll give you another chance to explain to us what the Volvo story really is. Get that right, and I'll still give you 90% of your credibility rating back. Fail, and you are in negative numbers.

It's easy - instead of reading the EV fanbois interpretation or some headline of what Volvo said, just tell us what Volvo actually said, and what it means. Hint - it certainly doesn't mean they won't sell a car with an ICE 3 months from now.

What does "new models" mean? Another hint: I can still buy a Ford Mustang, a model introduced over 50 years ago, in a time before catalytic converters, electronic fuel injection, air bags, ABS, ECM, cassette decks, etc. That's a long time, and many advances ago

-ERD50

 

[aja8888]

There has been a rumor floating around that Tesla has not been able to sell as many Model 3's as it wants, because buyers want the promised $35K car, not the expensive ones. And so, unsold Teslas were sitting around in lots around the country.

Some even snooped around and saw markings on some cars indicating problems that needed fixing before the cars could be sold.

See an article published today (10/2/2018):

https://www.msn.com/en-us/money/com...s-of-parked-cars/ar-BBNORuV#image=BBNORuV_1|2

I searched a bit more, and found another interesting story published on 8/28. That is, other car makers also have a lot of new cars sitting around with no buyers.

See: https://cleantechnica.com/2018/08/28/thousands-of-cars-sitting-on-lots-unsold/

It looks like all the major auto makers are having sales troubles:

September Carmageddon for Ford and GM

Ford drops to 4th place. Industry sales in the red for the year. But FCA sales jump.

GM stopped giving out monthly numbers of new-vehicle deliveries earlier this year, and switched to quarterly releases. Today it reported its third quarter new vehicle deliveries, and they plunged 11% compared to a year ago, to 694,638 cars and light trucks. All of its brands lost ground.

Because we stubbornly insist on monthly numbers, even if GM is hiding them, they’re now being estimated. Based on Bloomberg’s survey of analysts, GM’s sales in the month of September plunged 14%.

Current article. Note that Tesla is ahead of Mazda in U.S. sales.

https://wolfstreet.com/2018/10/02/september-auto-sales-carmageddon-ford-gm/

 

[indiajust]

Tesla's value is in the powertrain, controls, electronics, batteries, etc. They are a tech company masquerading as an auto company.


Had they given the body design concept and component specs to Toyota... They would be a contract manufacturing car company with marketable tech to sell.


Cool design, great fundamental tech, terrible leadership, dead man walking, Yugo quality

 

[oneill225]

Tesla's value is in the powertrain, controls, electronics, batteries, etc. They are a tech company masquerading as an auto company.
Had they given the body design concept and component specs to Toyota... They would be a contract manufacturing car company with marketable tech to sell.
Cool design, great fundamental tech, terrible leadership, dead man walking, Yugo quality

Yugo quality? Not according to the current owners, professional reviewers and the NHTSA (which gives all three Tesla models their top safety rating). What do you know that they are missing?

 

[Texas Proud]

It has been mentioned a few times about the big drop in car sales YOY...


Remember that Harvey hit Texas last year and there were up to 1 million cars destroyed... lots of people bought new cars which spiked last year... when they reported the drops they also mentioned this... one reason why just seeing a number can be meaningless...




https://www.wired.com/story/harvey-houston-cars-ruined/

 

[Mr. Tightwad]

Tesla's value is in the powertrain, controls, electronics, batteries, etc. They are a tech company masquerading as an auto company.


Had they given the body design concept and component specs to Toyota... They would be a contract manufacturing car company with marketable tech to sell.


Cool design, great fundamental tech, terrible leadership, dead man walking, Yugo quality

I agree with you about Tesla being a tech company more than an auto company.

Yugo? I don't know how you could think that.

 

[Mr. Tightwad]

There has been a rumor floating around that Tesla has not been able to sell as many Model 3's as it wants, because buyers want the promised $35K car, not the expensive ones. And so, unsold Teslas were sitting around in lots around the country.

Some even snooped around and saw markings on some cars indicating problems that needed fixing before the cars could be sold.

See an article published today (10/2/2018):

https://www.msn.com/en-us/money/com...s-of-parked-cars/ar-BBNORuV#image=BBNORuV_1|2

I searched a bit more, and found another interesting story published on 8/28. That is, other car makers also have a lot of new cars sitting around with no buyers.

See: https://cleantechnica.com/2018/08/28/thousands-of-cars-sitting-on-lots-unsold/

What I heard was that there was model 3's stockpiled in late June. They delayed deliveries so that they would not reach the threshold (200,000 I think?) that kicked in to reduce the federal tax credits. Meaning they wanted delivery # 200,000 to occur July 1st or later. This would extend the full tax credit til 12/31. I have no idea if this is true, but it sounds plausible.

 

[ERD50]

What I heard was that there was model 3's stockpiled in late June. They delayed deliveries so that they would not reach the threshold (200,000 I think?) that kicked in to reduce the federal tax credits. Meaning they wanted delivery # 200,000 to occur July 1st or later. This would extend the full tax credit til 12/31. I have no idea if this is true, but it sounds plausible.

You aren't a big fan of facts, figures, and evidence, are you?

Anything could sound plausible to someone with below zero credibility:

Volvo has a future...it no longer will make ICE cars starting in 3 months..They've already planned and adjusted for the future

-ERD50

 

[bobandsherry]

Heh - the market thought that all the "good news" needed to be rewarded. Tesla continued to trickle down all day and closed today at $301.02, 3.12% lower than the when it opened and after the "good news".

Here's what the good news is.... yes, they met their target, and sold cars at a higher price. The future is sometime in the near/distant future, perhaps never, but on paper Tesla is talking about selling cars for much lower price ($35K) and therefore much thinner margins. That's perhaps the "news" that the market digested and reflected today. Guess we'll see what the market thinks tomorrow as after hours it popped back to $304.10, but still below the open today.

Guess Tesla should be real glad they had "good news", market up this morning and yet Tesla down now under $300. I'm not so much interested in if Tesla is a good company, makes a good product, etc. This is more reflective of the valuation and opportunity to make a decent return in the long term. The market is still indicating it's over valued, that's been my thought as well.

 

[kcowan]

This strategy of buying dips and selling on upward swings has worked well for me with volatile stocks and a volatile market overall. I would not keep buying Tesla on the dips if I did not believe that the upward trajectory will continue.

I am not really a "day trader". For example, I may end up sitting on a buy for months before it sells at the price I am hoping for. It is really a strategy of buying good companies on a big drop and then selling when they come back up 3 or 4 percent (if they ever do).

You are definitely not a day trader. You are a swing trader. The only difference is that you only bet on upswings.

I dunno. For Jobs, it was software, computer hardware, then computer chips (they worked closely with MOT and IBM on the PowerPC series of microprocessors), then he jumped to NEXT to build a new computer hardware and software (unix based), and back to Apple with a NEXT-based OS, jumped from PowerPC to Intel, dealt with PIXAR originally as a hardware and software company, before he was dragged into producing content (commercials, CGI, shorts, and eventually full length animation).

And a music player, and a music store, and a phone, then AppleTV (I think that was still during Job's time?). They even changed the name of the company from "Apple Computer" to "Apple".

Not sure that qualifies as a narrow focus for Jobs.-ERD50

I was referring to Jobs 2.0 when he returned. No doubt he had learned his lesson from prior experiences.

that there is this one lady who couldn't figure out how to charge her car...

I must have missed that one. The lady I read about found that the charging stations were offline, much to her surprise. It seems she did not realize the " experimental" nature of EV ownership. Silly woman probably expected them to be ready for prime time.

 

[oneill225]

Guess Tesla should be real glad they had "good news", market up this morning and yet Tesla down now under $300. I'm not so much interested in if Tesla is a good company, makes a good product, etc. This is more reflective of the valuation and opportunity to make a decent return in the long term. The market is still indicating it's over valued, that's been my thought as well.

I look forward to hearing from you when the stock rises again. Commenting on small daily moves is just silly.

 

[oneill225]

You are definitely not a day trader. You are a swing trader. The only difference is that you only bet on upswings.

Yes. I like to swing (in the up direction).

 

[oneill225]

You aren't a big fan of facts, figures, and evidence, are you?
Anything could sound plausible to someone with below zero credibility:
-ERD50

Cheer up. It is going to be okay.

 

[bobandsherry]

I look forward to hearing from you when the stock rises again. Commenting on small daily moves is just silly.

I'm just following the market reaction to "good news" you shared. When market is up and Tesla is now down almost 4%, the market is reflecting that the good news wasn't really that good. But here's your chance to add to those shares you bought at $304. With your expectation of pop to $314 it's time to double down.

 

[oneill225]

I'm just following the market reaction to "good news" you shared. When market is up and Tesla is now down almost 4%, the market is reflecting that the good news wasn't really that good. But here's your chance to add to those shares you bought at $304. With your expectation of pop to $314 it's time to double down.

I do agree with the last part.

More "good" news expected in the coming weeks; Tesla will need to name a new chairman and two independent board members.

Buy now; you won't regret it.

 

[kcowan]

There has been a rumor floating around that Tesla has not been able to sell as many Model 3's as it wants, because buyers want the promised $35K car, not the expensive ones. And so, unsold Teslas were sitting around in lots around the country.

Some even snooped around and saw markings on some cars indicating problems that needed fixing before the cars could be sold...

Yes I also heard that they got some more tents just to hide the unsold inventory.

I agree with you about Tesla being a tech company more than an auto company.

Yugo? I don't know how you could think that.

I agree with both.

What I heard was that there was model 3's stockpiled in late June. They delayed deliveries so that they would not reach the threshold (200,000 I think?) that kicked in to reduce the federal tax credits. Meaning they wanted delivery # 200,000 to occur July 1st or later. This would extend the full tax credit til 12/31. I have no idea if this is true, but it sounds plausible.

I don't think reporting rumours aids in the discussion (like I did about the tents above). But when the subsidies dry up, what then?

 

[Fedup]

I'm just following the market reaction to "good news" you shared. When market is up and Tesla is now down almost 4%, the market is reflecting that the good news wasn't really that good. But here's your chance to add to those shares you bought at $304. With your expectation of pop to $314 it's time to double down.

I was thinking of shorting it at $310, but I chickened out. I just checked it was down to $293, I would have made some money. But now it’s too late to short, or buy puts in my case.