Sep 8, 2013
jeffhre I would read the article for giggles, but I do not want to cast any more pennies in Mr P's direction with clicks. Pass.�
Sep 9, 2013
Nicu.Mihalache While I think you intervention does not deserves any answer, it seems to me you have a hate problem, rather than me. That would be on top of an honesty problem, I have not seen any sign of hate in what you point out. You still owe me something and I won't answer anything else from you until I get it.
There is no contradiction in a good company and over-inflated stock. Puts and calls are simply a way to put a price on risk and me buying puts is no different to Tesla than a long buying puts for protection. As for JP, it's your opinion that he's a liar, because you do not like the questions he rises and his biases, and I will say for the 1000th time, I do not defend him. And I can very well live with the idea that he may not have a irreproachable behavior at all times (but I will not try to "educate" when he's over 60; I usually do not reeducate my friends, I take them as they are). Who wants to throw the first stone?
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How convenient, everything stays in the same thread, with a clear title, so you could easily avoid reading all this
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I may have got used to process low quality ore if you say so, but it was the best I had at the time. Since early 2000s I've been following the energy / EV / hydrogen / whatever pie in the sky sector (even had some stock in ZENN at some point, if you know what I mean) and have always wondered how come every other week there is a world-changing discovery in the lab, but in the real world there is almost never a step change for the better? Swimming only in academic waters, I was even tempted to think that someone "does not get it" somewhere along the way from the lab to the factory. During the last 2-3 years I have been learning quite a lot about why there is a huge gulf from the lab to the factory, and how that relates to market reactions, most of it thanks to JP. That does not mean he can predict the future (who can claim that, anyway?), but before I have a hard time predicting the past, if you understand what I mean.
Anyway hcsharp, thanks for your kind words
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JRP3, it even starts with the title, a normal person ("normal" as average, as opposed to "Tesla fan") would not even click on the link.
One observation does not make a study. You do the same thing as JP, take a study, randomly modify some assumptions and jump to your desired conclusions. This is not how science is done. As I have told you before, I am not competent beyond general observations in this matter. I have even pointed the person who may help you understand where things are.
Subjective assertion, overruled
�
Sep 9, 2013
NigelM Ummm, no I couldn't....�
Sep 9, 2013
dsm363 JP must be an amazing person. Anyone else who got so much wrong for so long would simply be written off and ignored but he must have some knowledge gems in there worth pursing that no one else on earth has. No matter how many flaws are pointed out in his articles, he still apparently has great insight I guess. Oh well.�
Sep 9, 2013
JRP3 Anyone looking for more data on a Tesla pack might click on the link. The title doesn't even mention Petersen, or what the bad data is or the conclusions. Compared to Petersen's over the top article titles, which clearly announce his bias, my title does not suggest which way the data may point. You simply projected a large amount of your own bias into your interpretation of that subject title.
I didn't randomly modify anything, and unlike Petersen, I didn't take the numbers from the study at face value and apply them to Tesla's pack. I took a known quantity, the cell level energy density of the cells that Tesla uses, and calculated where the finished pack density should end up. Those calculations did not just exist in space on their own, they also matched the calculations of others derived independently. As you say, you aren't competent beyond general observations in this matter, but I am, because I have studied the subject extensively, including having many discussions with MRTTF.�
Sep 9, 2013
Nicu.Mihalache So what did he say about your instablog?�
Sep 9, 2013
JRP3 What he really does is provide a semblance of authority for those who, for whatever reason, are biased against EV's and Tesla. He is not a battery expert or an EV expert and does not understand many of the basics of lithium cells or electric motors and inverters. For the uniformed who don't like EV's and don't care how faulty his reasoning or data are it appears that he knows what he's talking about and he reinforces their preconceptions. It's the same way climate deniers will point to some completely misleading and inaccurate article only because it says things they agree with.
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Nothing as far as i remember, I don't know if he ever saw it.�
Sep 9, 2013
stopcrazypp Neither are JP's conclusions a study either. There's no study that directly models the Tesla pack, so to come up with some relevant numbers, you need to make some assumptions about the pack. What JP did is take that ANL study and then used his assumptions of the Tesla pack to come up with a impact number. JRP3 is doing the same with the same exact study.
JRP3 only made two assumptions in this rebuttal to JP's post:
1)Tesla's pack density is 150Wh/kg.
We've confirmed that's a reasonable estimate via analysis in this thread:
http://www.teslamotorsclub.com/showthread.php/4884-More-anti-ev-gibberish/page165?p=296054&viewfull=1#post296054
But if you choose not to believe those numbers, you can look at numbers for previous Tesla packs to see JRP3 can't be far off: Roadster (121Wh/kg) and Smart ed (132Wh/kg).
http://www.teslamotors.com/roadster/technology/battery
2)The study's 75Wh/kg density can be replaced with the equivalent Model S density (150Wh/kg) to figure out a final impact estimate.
If you look at page 14 of the study you can see that is sound, as the impact is primarily based on weight:
http://www.transportation.anl.gov/pdfs/B/644.PDF
JRP3 also mentions it's likely that the non-cell components have less impact than cell components, but does not play a part in his impact estimate of 20000 kWh for the pack.�
Sep 9, 2013
VolkerP The discussion of a possible hard limit for the lower price of Li ion 18650 cell, based on studying raw materials cost and purity, caused a deja vu with me.
Some 15 years ago, many knowledgeable people said that solar photovoltaics would go no where because
(A) the supply of moncrystalline silicone was limited in volume, effectively banning solar from exploring benefits of mass production, and
(B) as a consequence this technology could never, ever, deliver at a point lower than $10 per Watt.
Well this was right then, as the silicone production capacity these days was dedicated to produce wafers for integrated circuits. Polycrystalline Si ingots with far lower purity is what goes into solar cells today.
So nobody today can tell what advances will help lower the 18650 cell prices an when, but it is a sure bet that research is done in this field as long as market demand stays high.�
Sep 9, 2013
callmesam I will start believing the stock shorters and FUD slingers like JP when they acknowledge the following:
Tesla makes the best and safest car ever produced by a car company.
They have a technological moat of at least three years around them that their competitors have never accomplished.
None of the major automakers (except Nissan) are convinced that pure electric is the future.
Tesla is the only car company that solves range anxiety with Superchargers.
THEN they can write how they won't be able to procure batteries, or there isn't enough lithium in the universe or the grid won't support EVs or the Model S is dirtier than a Hummer.�
Sep 10, 2013
Dan5 The issue with the energy density is while JRP3 could be wrong, he could be right. He made an assumption based on known data that Tesla already used in older generations. Its a completely reasonable assumption that the wh per kg would increase. No sense in putting out a less energy dense product for more money.
Now we get the the 75 wh per kg is definitely wrong, unless you assume that Tesla took a 39% hit on energy density in order to use the latest and greatest batteries, and NCA is much less energy dense than LCO (roadster batteries). This claim is contradictory to common sense.
Conversely, a battery expert would know how much the 18650 batteries weigh and someone who writes about Tesla would be knowledgable on the number of cells in the pack, and would not propose that the Tesla pack would weigh ~2500 lbs, when we know that each cell weighs ~45 grams and Tesla has ~8000 cells. That is unless they were intentionally trying to distort data, then say mea culpa when proven wrong.
If i said 4 years ago Apple was putting a 400 MHz processor in their iphone 3, now in their iphone 5, they have a single 240 MHz processor, i would get funny looks and the apple people would call me out on that ( note i made up the MHz numbers). While the 240 MHz may be cheaper and have some merits, there would be absolutely no reason for apple to use it.�
Sep 13, 2013
smorgasbord Petersen thinks Tesla's stock will rise in late September, as a result of Tesla's Book Value doubling:
http://seekingalpha.com/instablog/1631091-axion-power-host/2215052-axion-power-concentrator-267-september-12-10q-filing-for-q2-two-axion-forbes-articles-john-petersen-on-pipe-mechanics-incentives#comment-23207132 (no money to Petersen)�
Sep 13, 2013
Nicu.Mihalache Yep, I have the feeling that comments only on TMC are the property of the commenter and should not be cited without written permission�
Sep 13, 2013
ckessel You might run an anti-virus scan. Your system seems to have contracted something that causes vastly oversized fonts.�
Sep 13, 2013
callmesam I just got a little crazy with the size. Sorry.�
Sep 13, 2013
austinEV Are we sure that Nicu is not just JP in sock-puppet form?�
Sep 13, 2013
bonnie No more sure than we are that you're not someone else or I'm not someone else. (Well, okay, a lot of you have met me.) But I doubt Nicu is JP. Why would you say that?�
Sep 13, 2013
JRP3 Nicu did write some good pro Tesla articles, before Petersen lured him to his castle in Transylvania, I mean Switzerland, and put some sort of spell on him :wink:�
Sep 13, 2013
Causalien +1
Nicu was one of the more vocal anti Petersen commenter back then. So imagine my surprise when he does a 180. Then again JP telling people not to short TSLA is another 180 I didn't expect. I think he will probably use this to pivot his view to pro Tesla.�
Sep 13, 2013
kenliles you guys are hilarious - get off the Nicu (Bonnie is on target here)-
you guys are starting to sound paranoic-
JP is who he is for what he is and why he is... and Nicu is NOT!
TSLA is priced too high right now - you know it, I know it (and still added cal options today), JP knows it (but thinks it will go higher now), Nicu knows it; hell, Elon knows it and says it now in so many words; I siuppose you think he's pro JP now too----
Stop... Just stop...
(adopt the class of the company you are invested in...)�
Sep 14, 2013
SebastianR Thanks a lot. Well said.�
Sep 14, 2013
Nicu.Mihalache There are several things that happened during the last 2-3 years. I used to think too green and to feel guilty whenever I traveled long distances for my work or took the car instead of public transport. I used to think that at least the second part can be "solved" by some EV (not only for me, but for the ROW). Tesla does great EVs so it would have been the perfect match. Then I had a very obnoxious discussion with a more established colleague of mine who took the train even to go from France to China to avoid the plane and basically insulted me for owning a car (if you actually do the computation for that, it is much worse than taking the damn plane). It's then that I understood that there is no better explanation for such an intelligent person (basically the best research position you may imagine around the world - payed to do theoretical research with no teaching load at senior level, permanent position, and in maths no less !?) behaving like this, than all this eco-smugness is in fact a religion. So my inner self esteem just pushed me away from the movement. If I have the choice between recycling something or saving some energy or not, I still do the "right" thing, but I avoid any kind of discussion about that and I would never, never point out to someone that they should make my choice.
There is no 180. It's just going back to the center position and being able to look equally left and right both with admiration or criticism, depending on the facts. Of course I may be a bit off center and not realizing it. But as most of you guys are close to the rainbow in one side, you see me as if I would be at the other extreme. That's why I point extreme asymmetries like copying entire comments or articles but marking that your own comments are copyright. Asking extremely high standards from people who point out weaknesses in the TSLA story (like going back years in their lives and pointing out some error), but when one Musketeer (I hope this is not pejorative, I find it quite funny) is proven completely wrong, he just disappears and another one takes on the battle on another argument - and nobody has any problem with that.
I used to bee very emotional both about AGW (and related stuff) and Tesla. Now I only care about local poison (like diesel exhaust that has been proven cancerous, used by half the cars in this crowded and filthy city where my young daughter grows up) and investing. And I reason about AGW at global scale (because local solutions may prove to be global disasters, just like the German grid which increased by orders of magnitude solar and wind electricity production and now electricity is 2-3x the price, the entire european grid is at risk, and Germany's CO2 emissions went up). Not to count the example of ethanol, which basically is putting food in the SUV tank while billions of children are hungry or starving (I know nobody argues for ethanol here, but go back 5-8 years and read the ideological battles on forums, not far from what we have with EVs today).
If I come here to enjoy my cigar in Tesla's church, it's not for blowing smoke (I couldn't care less about your opinions about me) it is just to try to influence those who are not completely lost to come back to the center (and so avoiding losing their nice profits from TSLA). Those who are lost, you may clearly identify them, they answer facts with personal attacks, because they have absolutely nothing better to counter with.
As you may have observed during your life experience, there is basically no way to reason people out of their convictions, be it political, religious, alimentation (vegetarian, gluten etc.), strange theories about raising their children and even the brands on their shopping list. Therefore my attempt with sarcasm, humor and irony. Not claiming I'm a funny person, especially in my third language, but I do my best. That's how JP managed to communicate to me through a thick cloud of emotion.
If I had to resume all that JP says about EVs (not Tesla, he still gets some of the things wrong, but not the fact that TSLA is overvalued), is the following. Even if you use your lollypop assumptions (as in the instablog JRP3 pointed out to), EVs with small batteries are only marginally better than conventional or hybrid cars, and only in some places. And even if they improve a bit, large battery EVs will not be considerably better any time during the following 10 years. Moreover, the resources for such a movement to make any difference (double digits market share) are either not available or would be terribly constrained, therefore prices will go to the sky, and we know how cheap EVs are today compared to their ICE equivalent car ("equivalent" - make abstraction of the fact that EVs will save the world, I'm talking about going reliably from A to B in comfort and safety).
I'm not sure my time is well spent here so I don't know when I'll come back to the discussion. But I would like to offer some advice to those who feel the urge to throw eggs or stones here or in other forums:
Great minds discuss ideas, average minds discuss events and small minds discuss persons and gossip.�
Sep 14, 2013
JRP3 By that reasoning EV's are the ideal solution, they solve the local pollution issue for most quite well.That rather describes Petersen quite well.
That may be the difference, my support of EV's and Tesla came from looking at data, data from other potential alternative transportation methods as well as EV's. I didn't wake up one day and think "EV's are cool, yay!", and no one ever chastised me about my "greenness" and caused me to question my "beliefs". I try to question my interpretation of data on a regular basis, that's one of the reasons I engage so often on SA and other sites, and if someone comes up with anything that suggests EV's can't scale up, can't improve, and can't be part of a more sustainable future then I'd have to change my mind. That has not yet happened. When disected, all of Petersen's arguments have fallen flat.
My "lollypop" assumptions are based on real world data and corroborated by other sources, but the main problem with your and Petersen's argument is the assumption that battery density will never improve and that their manufacturing has no room for emission reduction. That's like saying the first coal trains were so dirty that future ones could never possibly be cleaner. The idea that EV's can only come to market in their final, absolutely perfect form, is deeply flawed. We need to build them now and sell them now to push their future development. If you can't see that future potential that's fine, but many of us can.
And you have spent a good amount of time discussing the emotions and motivations of others, Petersen has made a career out of it on Seeking Alpha. Funny how you don't see that aspect of your friend.�
Sep 14, 2013
dsm363 It's very easy to pick a stock that has shot up 1000% in the last 2 years and say 'it is over valued and will go down at some point'. JP as a self-professed expert should be more knowledgable and right more often than most yet he hasn't gotten a single thing right about Telsa so far. Again, why anyone would listen to him just because he is a nice guy and used to live in a castle is beyond me.�
Sep 14, 2013
JRP3 From my point of view this has nothing to do with the stock price, it has to do with trying to discredit the company and EV's using bogus data, something Petersen does regularly, and pretending that Petersen is some saintly battery expert who doesn't use ad hominem attacks repeatedly. Nicu has chosen to defend that behavior, which is fine, but it's somewhat odd since he was once able to see through it.�
Sep 14, 2013
Discoducky I hope you continue to participate, but would agree that it might not be the best experience for you. It might be better to find common ground first and try to build from there.
How about we start from a fundamental: Can we all agree that we need sustainable transportation?
If so, then how about the next point: Is TM fostering that transition in the best possible way?
I doubt that point is ubiquitous so lets consider it up for debate so that might be the best place to start. So what could TM be doing better? If the debate is framed from this vantage it might be a more fruitful/valuable discussion. Once someone concedes a fundamental next step we can move the conversation forward.
I could be totally wrong...but I've refrained from debating since the conversation was a bit heated for my taste.�
Sep 14, 2013
smorgasbord
FACT: On June 28th you said: "Talking with people who are wrong by almost two orders of magnitude and then come back with cocky answers is not too interesting for me, sorry."
Petersen was wrong by three orders of magnitude on his TSLA/AXPW price prediction, yet continues to be cocky, and you're still interested in him.
FACT: You wrongly predicted that TSLA's Q1 announcement would be bad: "there is no way earnings (overall, not only the numbers) will beat the galaxy-high expectations."
FACT: Even after the Q1 announcement, you said the earnings were bad and that investors were stupid: "You should read the article and the shareholder letter. There was $0.00 EPS excluding the one time artificial profit, but INCLUDING the $68M of ZEV credits that Tesla themselves predict will go down dramatically starting this quarter. They guide for a Q2 loss, BTW!
The fact that investors do not know how to read this document or that they are happy for other reasons (reservations, gross margins etc.) does not invalidate at all the numbers presented in this article.
I am ecstatic that investors like you are wrong "
At this point, it seems extremely unlikely that TSLA will drop to the $50 level at which you first characterized it as being overvalued. Fact is, you sold TSLA too soon and bought AXPW too early (or perhaps should not have bought at all). IMO, buying AXPW only serves to help prop JP's own investment from failing completely. Like everyone else here, it was JP that introduced you to AXPW. The stock is down to less than 20% of its value when you first bought it, and down almost 50% since your claim of buying at the "all time low."
I submit that listening to your warnings is the last thing anyone should do.�
Sep 15, 2013
Nicu.Mihalache First, let me tell you how refreshing is to hear about facts around here. Then, if you also remember, I have stressed several times that JP should be used mostly as a data source wrt to Tesla, not as a crystal ball. Especially with stock price predictions. Everyone should have their own conclusions from the data. It's one thing to be wrong by a factor of x10 or x100 about historical facts or scientific truths, and another ball game to be wrong about the future of the voting machine on Wall Street.
Q1 and Q2 were good only wrt to # of cars delivered. But the "profits" were either one-time items or from hypothetical "non-GAAP" revenue (it's a phony non-GAAP, in fact). Especially in Q2, GM including ZEV was 22% and GAAP EPS was a disaster even including those. You guys remember how 8000 cars / year should be break-even for Tesla but annualized 20 000 now it's not enough with GAAP (standard accounting) ?
I am not pretending I know something bad will happen. Just that there is a non-negligible probability that it will. Both your argument above and hundreds of posts on JP's articles bring out this argument. You said it will be bad, but we got rich. If you have read "The Black Swan" (otherwise, I can recommend it, an easy to read, funny and deep book in the same time), this is like the turkey arguing that because it was fed and sheltered for 1000 consecutive days so will continue to be even after Thanksgiving.
What I'm arguing, is that if you are rich only on paper, maybe you should be at least half rich in cash and half-rich on paper. After having lost (small) fortunes once or several times from ignoring the downside, you become much more aware of risks. I have lost several times hundreds of thousands (which is a lot wrt to my salary as employed by the state in a semi-comunist country) and JP has lost several times a few millions.�
Sep 15, 2013
smorgasbord �
Sep 15, 2013
ItsNotAboutTheMoney No, Elon Musk said no such thing about 8000 cars.
Elon Musk said that they could break even at 8000 cars per year. But Tesla isn't operating on that basis so using it as an argument is bogus.�
Sep 15, 2013
Norbert This isn't fair to Tesla, not at all. The company as it exists today, and with what it does today, in fact has turned into reality those promises which many industry experts claimed would be nearly impossible to fulfill, for a start-up auto company. And that's not just a high stock price. The promised to build the "best" car in a volume of 20,000 annually. And amazingly they have achieved this beyond most, if not all, expectations. Today. They didn't promise profits (neither GAAP nor non-GAAP), they promised growth, and they've proven, already, an unexpected ability to deliver.
For that which remains to come true (currently being most apparent is cost-effective mass manufacturing of the Model E, and the resolution of supply problems), there aren't nearly as many industry experts who say it wouldn't be possible for Tesla, as there were just 18 months ago, in regard to what is now a reality.
I don't think it is just wishful thinking to expect that the battery production "problem" (actually that was one of the goals, to create battery demand and thereby innovation) will be resolved, to expect that Model X and Model E will be as good as Model S, and that the company who has already achieved the "impossible" will also be able to implement mass-manufacturing cost-effectively.�
Sep 15, 2013
dsm363 As a data source for what though? What 'facts' has he been correct about? Why use him for data when he is consistently wrong in his predictions and analysis regarding Tesla (and other things it seems) over any other expert out there? I'm still finding it hard to believe why his expertise or track record makes him worth paying attention to. He posts on a financial and stock website and puts himself up as an expert and speaks with authority about Tesla as a company, the Model S as a car, EVs as inferior technology, and as TSLA as a bad investment but we are supposed to ignore that and just use him as a data source. Please help explain that.�
Sep 15, 2013
gg_got_a_tesla Nonsense from John Petersen
I feel that Nicu thinks that JP brings some sort of an objective, dispassionate look at Tesla/TSLA while, in reality, JP appears to bring a lot of (negative) emotion to the discussion.
It's almost as if JP practically hates the company and wants it to fail; hence the way he dismisses us acolytes in his articles/comments. Trying to depress the stock price is his way of attempting to throttle the company's growth - directly, in terms of reducing future capital raise prospects and indirectly, via triggering key employee attrition over time.�
Sep 15, 2013
Nicu.Mihalache I was indeed wrong about that PbC life cycle thing. It's not that I did not know what cycle life is, but I did not know those "cycles" they measured in the micro-hybrid test were only a few %. And I have acknowledged my error and the fact that you were right.
Unless there is some miracle in Li-ion tech, there will be material shortages before Tesla's cars will touch even a few % of the market to matter in the environmental debate. Talking about a short candidate is more a statement about future prices. Even if viewed as a "weighting" of the company at the present time, a bubble in the stock does not mean the stock is not over-valued, on the contrary.
The word "delivered" should make you think both production and demand (not to say the demand was accumulated over more than two years).
You seem a smart guy (even if a bit obnoxious) but sometimes you insist in not understanding things (if you let me quote JP here, I can explain things to you but I cannot understand them for you). The analogy is with this over-repeated argument, "look ma', huge profits". It only proves there is a bubble going on and you were in the right place at the right time, not that you are a genius who predicted the future (if you do that repeatedly and consistently, you should start thinking you are genius indeed). And the fact that everything worked okay until now, does not mean anything for the future.
As for my trades in TSLA, if you are really interested, I have posted almost everything in almost real time on traderhood.com (you enter TSLA on the left and then trades are in a different color). I still had in April about 1/7 of the # of calls that expired in March and about 1/18 of the # of calls that expired in January. Those that I got left were Jan 14 calls and I was already on margin due to AAPL so I could not continue my strategy with the short squeeze. When it started climbing, I knew it could be it, and I may have advised people to take some profits, because it was not sure. It may have been just a wave. I kept cashing out call spreads and every $20-$30 up I was cashing out completely a small double digit percentage of the remaining calls. Around $60-$70, my wife started to call me crazy for keeping them open and I kept insisting I have huge trust in human nature: "believe me baby, people are crazy! if they pushed it up to here, there is no hard limit !". At some point (end of May or early June) I have exchanged all my calls to Jul 20 calls (wanted my time premium in cash and more liquid calls for spreads plays - better prices for the same strike spreads), I could not believe the craziness could last longer than that (so I was contradicting myself, because people ARE crazy !). So I milked then until $129.9 and lost a few thousands in unrealized profits the last week when it took a dip.
Now if you insist, let me ask how do you think Tesla could justify a $20B valuation. I hope you know the basic rule of investing, that the intrinsic value of the company are future profits discounted for interest and risk. The stock price will oscillate from undervalued to overvalued and back around intrinsic value (which also moves by itself as the company realizes or not its goals, risks change etc.). While we are living in very low interest times, it will change, and at least 5% compound should be used for the long term, at least for inflation. But then including risk separately would be too hard to explain without an Excel table. So let's say we use 10% compound to include risk (It should be much more IMO). Tesla aims to have about 12% of operating margin on a Models S or around $10k. Same for Model X. About 10% OM or about $4k on a Model E. Or 2.5 high end cars for a standard car, that will be our unit (U). So lets's say 62.5k U in 2013, 130k U in 2014, 200k U in 2015, 300k U in 2016, 500k U in 2017 and another 100k U extra every year until 2022. 10 years out is more than anyone would count for valuation of a young growth company. My assumption are great success, no hiccups or delays, no demand problems or costs increases, not much risk.
You get to a total present value of around 2.772M units, or at $4k / unit in operating profits a total of $11.1B. Even today when the company is still small, they burn about $400M per year in R&D and S,G&A. Let's assume that by some miracle it does not increase with several factories around the world, super-charger networks on three continents and so on. That's about $4B expenses in 10 years. About 25% of the remaining $7.1B go to the tax man. So with the best assumptions in the world, you get a $5.3B company, not a $20B one. How do you hope to get another double or two from here? Do you really think it will become obvious Tesla is a $50B company faster than the market changing hats and start perceiving a $5B company as a $2B or $3B company when there will be some dark clouds gathering around?
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I never said Tesla is a bad company (unless I was drunk, which as far as I remember was not the case during the last three years). I have even said they have done the impossible. The problem lies with valuation and the hopes people put into a stock that has almost no room to grow in the short term and on a rational basis, but can go much lower without being out of touch with reality.
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John has 10 years of experience in the battery industry as an insider. He has recently been invited to give talks to some of the most prestigious battery conferences, both lead-acid and Li-ion. He meets the CEOs of the largest companies in these industries and shares with SA readers their broad views about the evolution of their industry. If you think you can get that anywhere else and on top of that for free, be my guest.
TSLA is very probably a bad investment today (again, because of valuation, not the company). Nobody knows for sure if it is so, but the market is a weighting machine and will give us the answer, even if it takes longer than shorts can stay solvent.�
Sep 15, 2013
dsm363 The fact that he has 10 years of experience in batteries and meets with CEOs makes the fact that he has been right about almost nothing even worse.�
Sep 15, 2013
dsm363 Again, what with his vast knowledge and experience has he gotten right about Tesla or EVs for that matter?�
Sep 15, 2013
Nicu.Mihalache You will probably understand when it will be too late. After all this talk, you come back with the turkey argument ?!? Let's agree to disagree and leave it here.�
Sep 15, 2013
dsm363 Nice dodge. Could he be right in 5-10 years? Maybe. Question again of you can answer it is what had he gotten right? Is he really the world's expert in this area and no one can question his judgement? He certainly has a big fan in you so kudos to him for that.�
Sep 15, 2013
Norbert While this isn't part of your response to my post:
I think for most of those who expect there to come a general transition to electric cars, it *already* appears very likely that Tesla will be a BMW-like ($50B) company, if not larger than that (and aiming for higher margins through exceptional cost/value ratio).
Given the "idealistic" value of Tesla's goals, many will be willing to invest without "discounting" as much for risk and interest, the vote-with-your-wallet component comes into play, as many supporters are affluent enough for it to matter.
Furthermore, Tesla will keep growing and also expand into more areas, still in 10 years, so the share price then will still reflect growth expectations, not only revenue/share -like metrics.
Tesla will also in 10 years not be a company perceived merely through its balance sheet.�
Sep 15, 2013
Nicu.Mihalache "To understand why the hype cycle happens again and again with each new innovation, and why it keeps seducing even those of us who have been burned before, we must look more deeply at what drives the rise and fall of expectations that create the cycle.
In a theoretical, completely rational world ruled by logic, excitement about an innovation would track perfectly with the reality of what the innovation could do. As the performance of the innovation improved, and as people's understanding of how to derive value from it evolved, people would become increasingly confident about it, and their adoption of it would grow. [...] in the real world, wonderful, warm, passionate human beings repeatedly develop levels of excitement and disillusionment that don't match the current reality of what the innovation can do."
My first impulse was to offer a real world prize for the first to identify the source, but Google is simply ruining the joy of that kind of games. Anyway, the chapter explaining why this happens with regularity and predictable results if full of gold nuggets, I wholeheartedly recommend it.�
Sep 15, 2013
sleepyhead Nicu - I believe that you wrote an article a year or two ago about TSLA being a potential 10 or 20 bagger opportunity. I have never read the article myself so I am not sure about its content, but it sounds like you had it right the first time.
The sad thing is that you did a 180 and have turned bearish. Instead you should have continued pumping up TSLA and you could have been the guy who called TSLA early and rode it all the way up into the 4 digits. Time will tell, but I think you "screwed the pooch" on this one.
TSLA is not overvalued right now and I gave you a simply calculation a few pages back to show why it is still a good idea to buy TSLA at $160. Now I am going to use one of your "optimistic" numbers and pick a one year sample:
TSLA makes 500k units in 2017 or 2018, whatever it is it really doesn't matter - 2019 works as well. Let's say 100k S and X for $10bn in revenue. Another $20bn for 400k of Gen 3. That gives you $30bn in revenue and a company that is still growing like crazy at that point. You are looking at a 2x - 5x price/sales ratio or up to $150bn TSLA valuation in 5 years. IMO it might take a little longer than 5 years to reach 500k units, but you really never know with this company.
Using your numbers I get a $60bn - $150bn valuation, while you get a $5bn valuation; albeit my valuation is 5 years from now and yours is discounted back to today. Mine discounted back would be like $30bn - $60bn, i.e. still a great buy at $20bn market cap.. This just shows how skewed the views are of the longs and shorts. The correct answer is probably somewhere in the middle.
All I know for sure (95% chance) is the TSLA will have a $100bn+ market cap eventually and probably a lot more. That is still a 5-10 bagger opportunity. It might take 5 years or it might take 10 years. 10 bagger in 10 years is still a great investment, even a 5 bagger in 10 years is awesome. So the real question is do you want to buy today at $165 and get a 5 - 10 bagger in 5 to 10 years or do you want to sit on the other side of the trade and whine about how much TSLA is overvalued?
Shorts are going to get crushed again and it is going to be legendary.
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I have no idea, but if I had to guess without googling it, I would say that JP wrote this.
I don't really read any JP articles, because I get annoyed after a few sentences, but I can envision JP saying something like this. Whoever wrote this probably thinks that he/she is a superior human being. That is the kind of vibe I get from reading this, and it does not hold true in every example. TSLA would be the greatest exception. People are not even close to over-hyping Tesla yet. Tesla is under-hyped right now. It will be a lot better than the vast majority of people can imagine.�
Sep 15, 2013
Discoducky Thanks mod's?OP for changing the title of the thread to something more relevant to what's going on in this thread. It seems like there is more FUD than real conversations/discussions as all that is being presented as a challenge to the current market behavior is more of the same from the subjective/fundamental/bees can't fly variety.�
Sep 15, 2013
Norbert To me it seems there is a real and basic difference in POV here, other than about share price valuation and pro-hype vs. anti-hype:
Will electric cars be a niche market, or will there be a general transition?
I think, now as much as I already did for a long time (on this forum since 2009), that the increased market for batteries will drive innovation in range and price, kWh/kg and $/kWh, through research and mass production, which along with other factors will enable and drive an almost complete transition to electric cars, of the whole auto industry. (And this is also in the interest of battery producers.)
Furthermore the question of the 18650 format, as well, is hiding a much more important difference: that of short range EVs (established ICE manufacturers) vs. long range EVs (Tesla), leading to a corresponding difference in battery technology optimization. Needless to say, I favor Tesla's approach, and the Model E is going to show the value of this approach in a larger market.
Some want to believe that Elon's remarks about battery factories are indicative of a larger problem, however apparently they were only about the question of who builds the necessary factories. JP was wrong about so many things where he said Tesla was heading towards disaster, that I just don't believe him, and don't even feel the need to research his sources in this regard. There was a time when I tried to make sense of some of his articles, but that time is over. I believe Elon when he says it's going to happen one way or the other, and that won't depend on the success of the upcoming attempt to let the new Falcon 9 hover over water.�
Sep 15, 2013
NigelM I carved these ~160(!) posts out of the Petersen thread as this sparring with Nicu seems to be becoming a regular weekend thing. I'm still trying to decide why this is in the Investors section though.....
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Mod Note: a little more cleaning up, some posts went here - Random Chitchat�
Sep 15, 2013
JRP3 Somehow this "battery expert" didn't understand the fundamental differences of various lithium ion chemistries until we educated him on them. This "expert" kept saying that EV's were dangerous, would spontaneously catch fire and explode, catch fire and explode when crashed, and repeatedly talked about children burning in them. In reality EV's are turning out to be as safe or safer than ICE's, just as I repeatedly told him they would. This "expert" claims that lithium batteries can't be recycled, yet they are, claims they must cost at least $500/kWh, (more than Tesla prices them at the retail level), claimed no lithium chemistry could match the performance of the PbC, until I showed him otherwise, and on and on and on. What little Petersen actually knows about lithium ion chemistry has been force fed to him in his comment streams, not that he'd admit it. Then there are all the technical errors he makes about EV's in general.
I will admit that Petersen is sort of an expert on the Axion PbC because he's been immersed in it for so long, but that's about it. He's been able to use that and bamboozle some people in the battery industry I guess as well as some of his readers on SA.�
Sep 15, 2013
Norbert I also remember the time when it suddenly became necessary to keep pointing out that electric motors do not necessarily need rare earth metals, and that in fact Tesla's motors don't.�
Sep 15, 2013
Nicu.Mihalache Investing is a blood sport, not a charity. When you vote with your wallet (translation: invest from emotion), sooner or later the wolves on Wall Street will skin you alive.
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Yep, that's about two years ago, when TSLA was in the low $20s and was about a 10x. But I was talking about fundamentals justified growth and the time scale was 5-10 years if I remember correctly (in a separate article I have also predicted the short squeeze; in another one, I have explained how Tesla is doing a disruption from the top just like Apple, in opposition with the very well known and accepted theory of disruption by the famous prof. C. Christensen). I still believe TSLA will eventually go in the neighborhood of $250. But why buy at $160 to ride it maybe to $250 in five years, when you have a good chance to buy below $70 (or even $50) in the near future and the ride it to $250?
The ratio between fundamentals and the stock price changed 180, not me. I am an investor, not someone searching for "online fame". Even if I am not searching for that, imagine what happens if TSLA crashes indeed. Those very few who were influenced by my words and have built an extra margin of safety will probably become my friends
That's exactly what I meant earlier when saying that many Tesla fans (or investors) are assuming away risks. I do not know when, but this will come back to bite you hard if you do not protect your back.
As soon as something suggests an inconvenient truth, instead of listening and trying to understand, you activate you shield. Be assured, this is perfectly normal behavior at this stage of the hype cycle. Been there, done that. Let me assure you, that this is from a book published by Harvard Business Press about two years before Tesla's IPO. It's a well documented general fact, and they try to explain why it arises with such regularity and how to avoid being trapped. If a scientific study threatens you, it should raise some questions about your own position in all this saga.�
Sep 15, 2013
brianman This is an incorrect translation. Voting with your wallet has (to me at least) a very specific meaning with a broad tent of motivations that vary case by case. Many of them have absolutely nothing to do with emotion.
IMO, almost all investing is "voting with your wallet" -- meaning that you're voting on a stock (or fund or whatever) that you think will yield a return you are happy with, or for a product or technology you see promise in, or whatever.�
Sep 15, 2013
Mario Kadastik There's a far simpler way to show that TSLA is not overvalued. If you take about as conservative as you can and go with price / sales. I just looked at GM and F and if I read the data about right the cash from operations (which I'd assume is car sales for simplicity) is for both about $10B. Their respective market caps are ~$50B-$70B. This means that a price / sales rate of 5-7 for an established company. If we now assume the average price of a MS of ~$100k for simplicity and due to large part P and P+ sales and about 25k cars sold this year (realistic considering we're seeing VINs in the 23k region already now), then that alone would give ~$2.5B of sales which at 5-7x gives $12-18B market cap. As TSLA plans to sell 40k cars next year we can lower the average to say $85k we'll get sales of $3.4B, which with same multipliers give $16B-$23B market cap. And that is with established players multipliers. TSLA is a growth stock with Model X coming in 2015 in volume and Gen III on the 5 year horizon so a multiplier at least 2x-3x of the F/GM for the next few years that would mean $40-60B market cap or a share price that's 2-3x above current one.
Update: Ah, might have been misled by cash from operations. Oh well it was a nice theory while it lasted�
Sep 16, 2013
Nicu.Mihalache Voting with your wallet, as far as I understand English, is about buying products, not shares - and that may indeed make a huge difference for a company. Trying to influence market prices with your wallet, even as a community, is like going out in sandals trying to stop the rain and call the sun to shine. As soon as you offer them your hard earned wool on a plate, they will take the scalp too.�
Sep 16, 2013
brianman I get the impression your definition of "voting with your wallet" is narrower and/or quite different than mine.
"Influencing market prices" is never my intent when voting with my wallet on investments.
For me it's about "where do I think I get value for my money". How people interpret my vote is black magic, and I get the impression your own biases are coloring your perspective -- as you seem to think you can interpret what people are voting for when they vote on investments with money.�
Sep 16, 2013
Nicu.Mihalache This is why I have posted this link earlier, GM has a sales multiplier in the vicinity of 0.3x, not 5-7x
Tesla Investors Are Crazier Than Elon Musk (TSLA)
Tesla has 180 times the valuation of GM per car sold. Of course, the ASP is now about 4-5x (included in my rough estimates as a multiple of OM), but with Model E this should go down to about 2x. That is, Tesla has to sell about 90x or almost 1.9M cars per year (units in my previous computations) to justify today's valuation. I think the chances of that happening in the following decade (before 2023) are beyond remote.
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In my vocabulary this is investing, not voting. So, here we are, both talking about the same thing but with different definitions. However, if fundamentals do not justify your choice, sooner or later the market will correct and show you the true value ("weighting machine", as opposed to "voting machine").�
Sep 16, 2013
marvinat0rz Nicu, have you considered that Tesla might be ahead of the curve in terms of P/E and other valuation metrics, and that this will remain true all the way from its current position to a (potential) situation as a major, global car company? If you're off by a factor of 2 in your "today" valuation, you'll miss out completely. I'm guessing that the risk/reward curve is too steep for you at the moment and that potentially losing out is a risk you're willing to assume. Implicitly that's what you've done by selling early, just wondering whether it was a conscious choice.
I think you provide a good voice of caution during these euphoric times, and I think it's valuable to have some skeptics around. I only agree with you up to the point that there are underappreciated execution & macro risks, though. It isn't unprecedented that growth companies take on ridiculous P/E multiples (by traditional standards). I'm thinking of Amazon, which was widely criticized and compared to the established book sales industry. Tesla is very similar in that it breaks the traditional rules of the auto industry, which means that there are considerable differences which would make a direct comparison more dodgy. ("Just-in-time"-style manufacturing, no sales through dealerships, purely electric design, infrastructure investments, software industry inspiration, relentless focus on design, no unions or pension benefits ++).
Thanks for having the balls to post though, in spite of being in disagreement with almost everyone here!�
Sep 16, 2013
neroden Because that opportunity will not exist. To put it simply.
Tesla is going to retain an elevated multiple as long as it is expanding. At some point it will get overpriced, most likely, and then it will retrench. You can do your own estimates of inherent value.
What will *not* happen is this: TSLA will NOT drop from an already-less-than-inherent-value price to a deep discount price to provide convenient purchase opportuninties for you.�
Sep 16, 2013
Nicu.Mihalache It's not about balls. It's about time and energy. While I have to filter at least 10x harder here than what I get reading JP's articles and comments, I have some fun (even laughter sometimes) and confirmation (most of the time) about my hypothesis about the human mind / emotions and the way that it manifests in groups / society. Since I have got here about 5 months ago, I have learned only two new things: the interest shorts were paying during the short squeeze, and the fact that I got the PbC cycle life backwards (and that neither me or JP are perfect human beings, but I had been strongly suspecting that already). Also, among aggressive posters, there are some very intelligent, experienced and courteous fellows here but they seem shy to post in the middle of the usual brouhaha. And the moderators ... while they move things around sometimes confusingly so, overall they do a great job cleaning up stuff and keeping a decent level for the exchanges.
About the balls. Since I am a father, I am only afraid for Her and things that would hurt her indirectly (like me having a bad car crash, for example - quite hard to do in a Prius LOL). Emotions and social inhibitors are details, hard to ignore sometimes, but details in the great picture nevertheless. So coming here, I can ask "what is the worst thing that can happen?". I can get insulted or banned, but as long as I stay polite, this only reflects on the other side of the equation. Or I can say stupid things that would easily be pointed out to be wrong. But this is learning, the greatest gain you could get in a forum, as long as you keep your eyes and ears open and hormone taps closed.
Sorry for the twisted answer, in short I just wanted to thank you for your kind words�
Sep 16, 2013
Norbert "invest from emotion": Your language is more emotional than anything else I've been reading on this forum lately. And I don't think you are really making a point regarding either Tesla or TSLA. ....thanks for your concern, but my account is doing fine.�
Sep 16, 2013
jeff_adams The big problem I see with Nicu's "valuation" of Tesla is counting units sold.
As pointed out by Citizen-T and others, Tesla will have many other sources of revenue besides car sales. Supercharger access fees for competitors, grid storage at superchargers, licensing Tesla technology, the list goes on and on.
Trying to say that Tesla will have to sell a certain amount of cars to justify their market cap is incorrect.�
Sep 16, 2013
qwk And comparing Tesla to GM. Lol
That is like comparing Apple to Kodak.�
Sep 16, 2013
Nicu.Mihalache If you had payed attention to the discussion, there was a Musketeer who initiated the comparison to GM. After the facts proved there was an erroneous factor of 20x in his "easy dismissal" ... crickets!�
Sep 16, 2013
Krugerrand You're more like JP then you even know. :frown:�
Sep 16, 2013
qwk And that's not a good thing....
A Nigerian scammer has more credibility than JP.�
Sep 16, 2013
NigelM Who should play Richelieu? ;-)�
Sep 16, 2013
Nicu.Mihalache This was a deliberated choice of words to illustrate my previous comment (using the same funny word) where i explained how this goes. Hordes of them come and shoot one crooked arrow, miss the target and then go back into the black forest. But in aggregate, they build "credibility" here�
Sep 16, 2013
Krugerrand And here again, you continue on in the same vein that JP would if I'd said the same type of thing to him. It's not funny to label people in a manner meant to be derogatory, ever. Crooked arrow, miss the target, black forest, equally not funny in a crowd of people you're aiming to hurt. Putting a smiley face at the end of yet another statement meant to wound doesn't act as a Band-Aid for that injury.
Any time you want to take the high road, it'll do wonders for how others perceive you, especially when someone purposely aims below the belt at you.�
Sep 16, 2013
JRP3 Well said. Nicu seems to have a habit of trying to pretend he's above it all and debating on a higher level. I guess he has studied the Petersen playbook very closely.
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He admitted the error. What else needed to be done?�
Sep 16, 2013
qwk There are people that are definately on a higher level, but JP is definately not one of them.
Speaking of shooting crooked arrows, that all-in AXPW investment that JP suggested would have bankrupted anyone that followed, and that shorting TSLA in the $20's and $30's would have done the same. Now, how in the world can anybody proclaim themselves an expert in battery technology AND make forecasts like that, is beyond me.
I guess in order to be a genius nowadays, one has to lose a ton of money?�
Sep 16, 2013
Nicu.Mihalache Even in my initial post using the word I said I do not see that as derogatory, give me a "name" that you like for Tesla fans and I'll use it. That one was particularly condensed between infantry fighter for the Musk's cause and Tesla fan, with a funny twist.
First, I'm not trying to hurt anyone. I have explained at large the choice for humor and sarcasm and it seems that it works. When I have first explained the principle, nobody noticed. Once it is condensed in a funny statement, everybody gets up in arms.
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If by that you mean trying to talk about facts and ideas instead of JP's person, yes, I can admit that. If you try to imply that I pretend being smarter than you, no, I think you're wrong. I may just have different (of course I'm biased and think it's better!) perspective of the situation: I have no positions in TSLA, so very probably much less emotion and I've seen this movie before. Please don't serve me "this time is different", the four words that are responsible for the largest monetary losses in the history of mankind.
First, I have not reproached Mario Kadastik the error - everybody make errors, that's how we learn -, that's why I answered to him and explained the situation. Moreover, I think you are wrong, I think there is no answer from Mario Kadastik above.
But then, another "Tesla fan and fighter for the Cause" (please give me the word you prefer for that), qwk, was making fun of me for comparing Tesla to GM, unaware of the entire situation. Instead of serving him the embarrassing bare truth, I have made a reference to my previous comment, where I explained that hundreds of highly vocal and mostly wrong comments (again, I preferred "crooked arrow" instead of this embarrassing bare truth) seem to be more convincing here than a few factual ones.�
Sep 16, 2013
Mario Kadastik If you look at mu original post you will see there was an update: mentioning the error and oh well statement with need to account for future car sales as well. I noticed the error within 10-15 minutes and my comment was still the last in the thread so I could have just deleted it, but I do have the balls to not hide a mistake I made so I just edited the post to add the update even before Nicu came to comment that it's 0.3x the sales (more like 0.5x, but that's just nitpicking)�
Sep 16, 2013
Nicu.Mihalache Genius is a rare species and it's usually recognized after one's death. What I may have in common with JP related to your sleazy remark, is experience. It's the thing you have 15 minutes after you need it.
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OK, I barely have the time to quickly check new posts, did not see you modified post. I had no intention to make fun of you in particular (I am a teacher and encourage my students all the time to have the courage to try things, even if they make mistakes, especially during the learning process), just the funny situation that repeats itself. And that, only after qwk's misguided attack.�
Sep 17, 2013
NigelM Stop. I don't see anything "sleazy" and you're playing games claiming that you replied to a post but didn't see the edit that was was already there. Prodding people and then accusing them of attacks when they respond is dangerously close to trolling.�
Sep 17, 2013
Nicu.Mihalache Associating genius with losses is just a coincidence in your opinion? No condescendence? I did not realize how delicate are the souls populating this thread to get offended from the word sleazy associated to a remark, not a person.
I was waiting for the moment people here cannot take the heat they try to push on others. And no, I had not seen the correction (once I have the citation in my reply, I complete my comment and check later only if the thread has new comments). The link to the list of threads is in a bundle of tabs that open simultaneously, I will probably remove it not to be tempted to respond to further provocations.
Anyway, I was planning to stop posting here for a while because of several reasons: whatever inconvenient ideas (be it truth or otherwise), people take it personally and then steer the discussion toward mud balls throwing games - I'm not interested in that. Also, those who have a chance to receive my message at this stage have probably already done so, for the others, it's beyond my powers to contribute anything.
I will come back to take the temperature when either TSLA will be above $200 (probably with the same advice to secure some profits, same opposition with the turkey argument about the same message at $130, $160 etc. etc.), or when TSLA will be below $100 and see how many woke up with the help of the cold shower and how many got even deeper in the TSLA "movement".�
Sep 17, 2013
NigelM Oh, come on. Stop playing the coy victim; you come here to joust so don't get prissy when someone reminds you of the rules.�
Sep 17, 2013
JRP3 No, not what I was saying. I'll try to be clear. You try to pretend that you don't try and degrade the person posting and deal only with facts and ideas, yet a review of this thread shows otherwise. Just as Petersen tries to pretend he deals only in facts while in reality he constantly lashes out and attacks those who come up with facts that he doesn't like. Since the original thread was "Nonsense from John Petersen", discussing his attempts to discredit commenters who correct him, and his use of misdirection, is appropriate since that is part of his "nonsense". By defending that behavior and/or excusing it you also contributed to the discussion of JP the person. You also talk about the emotions and motivations of "Musketeers", so again you are talking about people, not ideas. Which is fine with me, just don't pretend you aren't doing it.�
Sep 17, 2013
smorgasbord Nicu, you have a serious problem. You care more about attacking people here than about contributing to any real discussion on Tesla. You tried to turn our previous discussion about your decisions on TSLA into an argument about emotions and claiming that I was bragging about being right and being obnoxious, when I was simply showing that you were wrong on the facts, the market reaction, and some stock price predictions. This twist from facts to insults is not something I'll participate in.
This is too funny. As the one you worship says: "I can teach it to you, but I can't learn it for you." Your comments in this thread show that you still don't understand what "cycle life" means. Hint: it's not PbC specific. There is much to be learned here, and it's unfortunate that you're apparently not taking advantage of it.�
Sep 17, 2013
Krugerrand Here's a novel idea: How about we don't give them any name to begin with? Why does anyone insist on labeling others? As soon as you do that you make the debate/discussion personal.
If your intent is not to hurt others, then stop with the special names, the metaphors, the sarcasm etc... The truth can be spoken simply and plainly without the personal slights and without hiding behind supposed humor.�
Mar 19, 2014
smorgasbord Well, it's been 6 months and Tesla is above $200. Where are you, Nicu?�
Mar 21, 2014
Causalien I find it interesting how someone's opinion who was right can be reversed with wining and dining.
This further reinforced my belief that we should never discuss our investments with people we know.�
Mar 21, 2014
dsm363 Anyone who doesn't think JP doesn't have a clue what he is talking about (at least in terms of Tesla and the stock) probably will never change their mind. I do find the reversal just by him meeting the guy surprising too.�
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