Feb 11, 2014
tftf This is a single quick post because my critical remarks over at Seeking Alpha had generated all sort of conspiracy theories in the past (no, I'm no related to John Petersen nor have I ever met him in person :smile: ). Just to let you know: Since yesterday, I entered a new short around $198 (50%), the rest (50%) could be added after TSLA earnings depending on news on battery factory and 2014 etc.
My former TSLA trades were collected here: Long-Term Fundamentals of Tesla Motors (TSLA) - Page 83 I closed my last short at $121 as you can see, I had no position in TSLA since November 2013. (And I still have nothing against the company or the car, it's just about the current valuation).
Happy trading to all.
PS: I will be happy to come back and discuss the plant later in 2014 or 2015 once the details are out.�
Feb 11, 2014
sub Please link me to one positive comment you have made regarding Tesla either here or on SA? I'm not referring to the one you just made "I have nothing against the company". Show me one positive regarding the car or the company, execution etc that you have posted? If it happened I didn't see it. Do you really think anyone here cares about your short position? You may make some bucks in the short term, you may not, either way it doesn't affect me.�
Feb 11, 2014
Robert.Boston This is the chat thread, so, sure, I'm okay with hearing what people are up to. I'm also cool with people who have never said a nice thing about Tesla; what I want to hear is cogent, reasoned discussion about the stock. Otherwise we'll just be living in an echo chamber, hearing only what we hope to hear.�
Feb 11, 2014
Krugerrand Critical along with outright, umm...distortions. I particularly enjoyed the fairy tale with you claiming you knew all along the Giga-factory would happen, while longs said it wouldn't. Try as I might, I was unable to find one regular, long comment contributor on SA TSLA articles that said anything of the sort, and I've read pretty much every comment on those articles. Admittedly, I stopped trying to decipher Mr. Lucky's comments, but then he's not a long, so no matter in this regard.�
Feb 11, 2014
sleepyhead Your post that you linked here from back in November is so ridiculous, that it is pathetic. Paraphrased:
I bought TSLA at $30, then I sold at $120, then I bought back at $90, then I sold at $125, immediately went short, and covered at $110, went long again and cashed out at $180, went short, and covered at $121, now I shorted at $198, blah, blah, blah, blah
Nobody believes a word that you say; go back to posting on seeking alpha because nothing you post has any good faith in it. All you do is twist the truth to push your agenda.
There is no way in the world that one person can make so many trades in one stock in both directions and not only be right every time, but also be able to perfectly time to peaks and troughs.
Get over yourself, and good luck on your short position. You are going to need it, because I am sure that you went short a lot sooner than $198 as you claim.
I wouldn't be surprised if the truth was that you went short TSLA at $30, and kept doubling down along the way.
Good bye!�
Feb 11, 2014
sub
I agree with hearing both sides, but he has claimed a few times that he "has nothing against the company or the car" and I'm calling him out on that. When someone can't think of one positive thing to say about a company like Tesla then I can't take anything they say seriously. This guy clearly only cares about manipulating the stock and seeing the company fail. I've asked him to prove me wrong by showing me one positive comment he has ever made regarding Tesla, I haven't seen it. There are plenty of people of TMC that point out flaws or risks in the company, I have no issue with that.�
Feb 11, 2014
tftf Ok, I will answer that one before quitting again.
This is purely for disclosure only since I have been accused of I don't know what in the past. Let's leave it at that.
I certainly wouldn't care otherwise either.
I have high regards for the current strategy up to Gen II price ranges (i.e. up to and including Model X and maybe a future Roadster) and the Model S car quality (especially given that it's only the second car model made by TSLA).
I have for example written a post in the past about TSLA becoming the Porsche of the EV World. In summary:
In this "Porsche of the EV World" scenario and if the stock was still trading at double-digit levels, I would certainly buy TSLA shares again. (Remember I was long TSLA up to 70-80 USD).
Unfortunately, I think that the forward strategy into the mass market carries too much risk (Gen III at just $30-35k*, maybe even a cheaper Gen IV... which in turn requires huge battery factories etc.) with low margins and a lot of competition from the big car makers long-term. A Gen III/IV car also endangers TSLA branding/brand value, distribution, servicing and free supercharging strategies in my opinion.
This is the Red Ocean (future), not the Blue Ocean (present) strategy.
But I know that the TSLA management has decided on this mass-market strategy.
Anyway, happy trading.
PS:You must have misunderstood me. I never went long TSLA in the triple digits (I added to my short position at $171 and $180 before closing it at $121. The $121 is even time-stamped in this forum.
I will come back to this thread and update my trade history here - even if I'm wrong. This is time-stamped in the forum (convenient) and I also trade infrequently, so only a few posts.
_____
* just reiterated in Jan 2014 in the latest TSLA investor PDF.�
Feb 11, 2014
NigelM Mod Note: I carved this thread out of the short-term discussions. We are quite happy to tolerate different opinions (but not trolling) here on TMC so long as everyone stays civil; the discussion last Fall boiled over once or twice and we'd like to avoid that happening again pls.�
Feb 11, 2014
bonnie For what it's worth, this long has consistently said the giga-factory would become a reality.�
Feb 11, 2014
rcc <shrug>
Short-term trading is driven more by investor opinion (psychology in other words) than fundamentals. Look at the stock price history of Amazon or Google. People knew the stock was overvalued for years but shorting it was really dangerous because so many people wanted to buy. In other words, it's not about whether the stock is overvalued based on fundamentals, it's about whether the mass market thinks the stock is overvalued.
Since I'm long on the stock, I won't say good luck but I look forward to seeing what happens.
�
Feb 11, 2014
mershaw2001 For what it's worth, I've changed to bearish short term and I've reduced my position by half in the 194-198 range. I've been carrying the extra 300-500 shares on margin/in a margin call since 173, so I'm glad to lighten up. I expect we go into earnings in the 180's. If we go into earnings over 210's I'd expect a drop after earnings.
I absolutely love tesla, but in my opinion its bullish momentum will be snuffed for a week because they will not release more information in the 10 days prior to earnings.�
Feb 11, 2014
ItsNotAboutTheMoney Disclosure: I do not have any shares in TSLA, so there's no money where my mouth is.
I've read that argument from you before. I think you're completely upside-down on it. Tesla's mission (as in their mission statement) is to accelerate the adoption of EVs and their "master plan" as given on their website is to build an affordable long-range EV. Without that ambition nobody would care about them, goodwill and sales would be lower and Panasonic wouldn't be so interested.
I also think that the risks of the giga-factory are overegged. You're assuming that it all has to be a monolithic entity. It doesn't. It takes Panasonic less than 18 months to add a new cell manufacturing line, which means that they can match construction to progress on cost reduction on the Gen 3 design.�
Feb 11, 2014
kenliles That's a similar ambition to more than Tesla.
For me, converting the stated ambition to belief/goodwill transforms in the realm of execution.
And it helps that the executioner in charge has fulfilled other lofty ambitions that many have strived and failed to achieve, in commercial rocketry.
After all, ItsNotAboutTheMoney�
Feb 11, 2014
Gwgan It would be a more interesting conversation if you would post your trades before or simultaneously with the actual trades. You seem to have a great track record making money on this stock but if you want pats on the back for successfully shorting you�re in the wrong room. Make some other people money and you�d be more welcome.�
Feb 11, 2014
Discoducky Ok, we have a data point for the OP of short at $198. Let's see how that works out.
Since you have a dedicated thread now, let's see if we can have a discussion.
Can you sum up your short position business decision? Just curious how deep the rabbit hole goes.�
Feb 11, 2014
sleepyhead And this is the only real-time data point that we got from tftf ever. In the past he mentioned how he made money in TSLA using perfect hindsight and what he wrote is so fantastically unbelievable that I am sure that he left out a bunch of losing trades along the way.
I would like to see tftf continue posting his trades here in real-time, because I think that would be beneficial to everyone on this forum; especially if he is shorting TSLA (it is good to see a short's thought process).
But you come out and say, with perfect hindsight, I bought at the bottom, sold at the top, shorted at the top, covered at the bottom, went long at the bottom, sold at the top, shorted at the top, covered at the bottom, etc. you are not adding any value. Not only are you not adding value, but your reputation goes down the drain, because nobody believes you. And if nobody believes you, then there is no point in posting anymore.
That said, I look forward to your posts if you are willing to disclose your trades in real-time, and not a week or month after the fact.�
Feb 11, 2014
MikeC Sweet, we got someone to replace Realist as the Short of the forum. Please do keep us updated.�
Feb 11, 2014
sub This is a completely different scenario than I was referring to with the OP. I've gone "short" by selling calls a few times, not because I thought anything had changed with the company, I just had a feeling the stock might stay flat or have a slight pull back short term. My problem with the OP is he is the first guy to rush to every SA article and repeat the same thing over and over again, and nothing is ever positive. I don't consider what he posted in his last post as positive, saying that Tesla will only ever be a niche player in the auto industry is what all the shorts say when claiming the stock is over valued.
On another note, I day traded tesla today, had 30 trades and nailed it perfectly every time with a nice 2-4 dollar swing every time up and down....or maybe I'm full of it.�
Feb 11, 2014
DaveT Several months ago I was debating someone online regarding TSLA. He had posted hundreds of remarks on how TSLA was overvalued, etc. He said that he was short on TSLA. After chatting with him for over 2 hours (which wasn't enjoyable because he wasn't open-minded at all), I asked him how many shares he was short TSLA. He said 10 shares.
Case in point, it's not just about someone posting that they went short at $198. Anybody can do that. He should also post how many shares he's short as well. If this is going to be a dedicated thread (which I'm not sure it should be), then we ought to see a screenshot of the actual trade claimed by tftf. The screenshot should show the date of the trade, TSLA symbol, # shares short, and price sold. If we don't get this from tftf, then we really ought to shut this thread down (or at least move it off the Investors Forum).�
Feb 11, 2014
bareyb Yeah. I'm calling shenanigans too. If only I had a Nickel for every person who has told me they bought TSLA at 30 bucks��
Feb 11, 2014
TSLAopt
Yes, agree with this. Somehow of all the TSLA 'shorts' I've corresponded with on other forums, all of them somehow made money shorting TSLA at a high and covering at a low, how is this possible??? It's not, I've yet to meet an honest short...maybe we need them to show their audited financials to get an honest short.�
Feb 11, 2014
DaveT I met someone recently who told me she bought TSLA at $4.
I told her TSLA never traded at $4, ever.
She re-emphasized she bought TSLA at $4/share and that she did stocks/investing for a living and that I would never win an argument with her.
True story.�
Feb 11, 2014
kenliles She said that because she already knew you won the argument with her.�
Feb 11, 2014
bonnie Heyyyyy .... you'd get more than a nickel from me. But I posted when I bought at the time. And I gave my dogs the credit for delaying my order, which got me the low price of $28. Average price for my shares is in the low $30s. And I'm holding. Because I'm still on short term cap gains.
That's my investment account. Not tax-deferred, obviously. On the other hand, I have bought and sold the shares in my retirement account a few times. But that's a diff story.�
Feb 11, 2014
kenliles Same here, bought all my core held shares from $29-$38. Never sold them. Bought others higher that I converted to LEAPS, back to stock, and now LEAPS again, but those core originals were never sold or rolled, and won't be until after GENIII�
Feb 11, 2014
sub I'm not as fortunate as some of you here, but I'm not disappointed with my TSLA investment. Originally got in at 92, tried to time the market when it dropped into the 80's and paid for it, got back in at an average of around $100. I did sell on the big drop and started buying back in at the bottom but I basically ended up right where I started off. I don't plan to sell my current shares anytime soon.�
Feb 11, 2014
Mitthrawnuruodo I put half my net wealth into Tesla at $28.33. Problem was I was a college student with little money who was about to get married. Soooooooooooooooooo I won't be a millionaire anytime soon but I am working up to 6 figures slowly
Sorry I couldnt help myself.�
Feb 11, 2014
kenliles Great story. You did a lot better than JP!�
Feb 11, 2014
Mitthrawnuruodo
Then I applied for options trading sometime in May before earnings, and was totally ready to buy, it got approved 4 days later and the stock had already moved significantly so I never did. Whoops.�
Feb 11, 2014
stopcrazypp I'm in the same "position" of not having any shares in TSLA, so I don't know where that puts me.
As for the OP, I'm not entirely sure what that post was about. Is it simply to say he's not JP? I just looked back at his post history, seems to just pop randomly into this forum to do "reputation management".�
Feb 11, 2014
jak Not quite $30, but I'm willing to donate that nickel considering it's a small price to pay listening to the folks here on this forum a year ago when the first short-term thread started. I bought in at page 6 when the price was $36 and a few were hoping it would hit $40. Nowhere did I (nor others here) think it would get up near $200 in less than the year I've owned it. At the time I bought the shares, I was thinking $45 a year from now would have been incredible. $200 now is rather incredulous... but I don't mind.
BTW, I'm planning on staying long. That's just my investing style. I don't know how to play the short-term calls/puts bets nor do I have the options account, time or patience for it.�
Feb 11, 2014
tftf About data points: It's not the only one, you can follow the link in the first post and see that I closed my last short position back in November around $121. It's time-stamped in this forum. Many of my earlier trades are also time-stamped on SA in comments.
I'm ok to post my TSLA trades in this thread on the same day as I open and close them (As you can see from my trade history, I only do a few over weeks or even months, I wouldn't even call it trading).
Some generic points:
1. I'm doing this for information purposes so that you can get an insight what a person on the other side of the trade thinks, that's all. Shorting is risky. As a rule of thumb, a single short position is only 1% of my portfolio and my overall short position is around 5% (around 10% was the all-time-high).
My last trade at $198 was 0.5x (50% of a normal-sized short-trade as indicated, where x is about 1% of the portfolio size).
2. I'm the first to admit that I was also lucky last year. First, if not for the fire incidents the stock would have never come down so much (and I always maintained the fire incident reactions were overblown, you can check my post history. I entered my shorts before). Second, I was lucky to catch the bottom towards the end of November 2013. But I also have some experience in the markets.
3. Many shorts are not well-informed regarding TSLA details. I say that as a short. These were mostly the ones shorting at $20-30, I was long at that time. I followed TSLA since before the IPO and I have no problem going long again should the stock ever fall back to the $50-70 range (I realize these prices are highly unlikely short-term, many longs probably believe we will never see them again).
The issue persists to this day. For example, in the CNBC video below the fundamentals guest seems to mix up TSLA gross margin targets (25%) with net or operating margins from German competitors like BMW or Daimler:
This chart says Tesla is cheap | Talking Numbers - Yahoo Finance
He's talking about different margins which of course is mixing apples and oranges (but I agree with some of the other points he makes).
So in the same way I called out a long analyst in the past (Andrea James) I have no trouble saying the same for analysts on the short side.
4. I see many stocks, especially the tech sector as overvalued at the moment (TWTR, YELP...). I wouldn't single out TSLA. I see the overall stock market ripe for a correction in the coming months (new FED chair Yellen can probably add some injury time). I see the upcycle in US stock market that started in March 2009 on its last legs. This is my generic reason to focus more on shorting in 2014-2015.
5. I hope this thread can remain civil (The moderators turned my post into a thread of its own). Since the TSLA battery factory announcements could be made public sooner than expected and I started a new position, I thought it was a good time to come back actively as earlier indicated. I will only comment on these two topics (stock positions and battery factory/mass-market strategy) and stay out of other threads. (Hope that reduces moderation work to an absolute minimum).�
Feb 12, 2014
tftf To answer that as well:
I didn't mean this in a disparaging way. That's why I used Porsche as an ICE example and called it the "Porsche exit strategy not taken".
If you look at Porsche figures, being a high-end niche player works great compared to most peers (especially from a financial perspective). This strategy would mean TSLA becoming the equivalent of Porsche for the EV world with similar price points and model offerings - basically never introduce a Gen III (and Gen IV) car.
Porsche achieves the highest margins in the industry on small unit volumes. Even today, after years of growth (Porsche morphed into a SUV and saloon builder although the company would not emphasize that in marketing because of the sports car heritage), they only sell about 250k cars/year - including the new best-selling Macan SUV (!). Yet they make more money than most volume car companies, not just in relative terms, but also in absolute numbers.
But I know that TSLA has a different strategy (outlined by Elon Musk a long time ago), that means entering the mass-market (Gen III, Gen IV etc.) and comes with even higher ambitions (see first slides of the current Jan 2014 TSLA investor presentation available as PDF).
That's my main reason for being short. I see too much risk ahead given the current valuation and the long-term competition, but this was discussed already. I only posted the above as a summary (For people interested in details and numbers, see my older posts here or over at SA in blog posts such as "Mind the three I" regarding Incentives, Infrastructure and Battery Innovation in the mass market segments).�
Feb 12, 2014
Robert.Boston Elon has never advocated Tesla Motors becoming a "mass market" brand. The strategy presentations I've reviewed always position Tesla against BMW/Audi, but explicitly NOT against Honda/Ford. Likewise, the volume projects that JB Straubel showed at Stanford were volumes that would compete as a major player in the premium range globally, but far below volumes that a successful "mass market" automaker would target.
I don't think the January 2014 investors slides tell a different story. It shows Tesla's share of the US Premium segment, World Premium segment, and overall car sales. I haven't heard an executive talk to these slides, but the fact that two of three charts talk about the "premium" segment tells me where their real emphasis lies. The final chart helps scale the enterprise against the bigger "all vehicles" market, but I don't read that to mean that Tesla intends to sell econobox cars -- at least under the Tesla marque. I could see Tesla selling drivetrains to other OEMs for use in lower-end cars.�
Feb 12, 2014
tftf I agree with you on TSLA not going after Honda/Ford with Gen III (*) and more against BMW/Audi and similar car brands, also in terms of unit sales. I used "mass-market" as a general term since the ASP of new cars is around $25-30k in many developed countries and TSLA would be very close to that with the proposed base price of the Gen III. I think the competition will be very intense in this price segment in EVs in a few years.
Right now, the big car makers are only mildly "annoyed" by TSLA in a few regions (California etc.) and in a few hig-end segments. This will change once the Gen III is introduced - and the Gen III plans are public, many execs do take TSLA seriously (this is also different to when Model S launched and many in the industry thought of Tesla as another Fisker or Coda, especially off the record).
I think BMW, Nissan-Renault and lately also VW Group (Audi...) and unnamed Asian car brands are adding more resources in EVs - this can be seen in hirings and key initiatives over the past months. I think competition will be very intense in 2017-2022 when the next generation of mass-market EVs and PHEVs (around $35k or lower) is launched.
____
* The Gen IV vehicle may change that with even lower price points, but it's too far off and the specifics quite vague (from the little I know, I don't think much was said about Gen IV in public).�
Feb 12, 2014
bonnie Yes, competition will increase. But a key point that many seem to miss is that while the various auto groups are starting to wake up and beginning to scramble to compete with Tesla, Tesla is not stagnant. Tesla continues to innovate from today's platform. They have a wealth of EV knowledge - both about the technology and about how consumers interact with it. The other guys are already behind them in the race, with many wrong assumptions. And it shows.
The competition has a long way to go. And don't get me wrong. I see that as a good thing. More experience, more knowledge, everyone gains. Nothing Elon has ever said would indicate that he doesn't welcome competition - but he's looking for real competition. So far we haven't seen anything that remotely qualifies.�
Feb 12, 2014
Causalien Make sure you don't modify your timestamp posts. Posts with "modified" cannot be timestamps.
You will also need to include your position % based on your net worth. Since a $1000/or a 1% investment with perfect execution shows no conviction at all.
I did the same and if you do this, you hold weight in my world. Even more weight is if you include a price target and a time frame of when it will happen. These are the steps in becoming an oracle if you are not explaining why you are shorting.�
Feb 12, 2014
Robert.Boston I don't think you quoted the post you intended to, @Causalien.�
Feb 12, 2014
Causalien phat fingers on a tahlet.�
Feb 12, 2014
tftf You can always see the last edit time of my posts in the forum (I sometimes edit a few minutes or at max a few hours later for clarity because I'm not a native speaker). Comments on SA can't be edited a few minutes after posting anyway.
I can't give price targets (these depend on future - yet unknown - news in my opinion so I constantly revise them) or timeframes and I'm certainly not an oracle. (I only do this because some people accused me of being short when I had no positions or assumed I was "short since $30" etc.).
I'm also not a technical or short-term trader, I usually hold for a few weeks or even months.�
Feb 12, 2014
Causalien Irregardless, when an argument arises. A timestamped posts with no edits holds more weight than ones that has. Explaining how an edited timestamp that occurred shortly after just weakens your position. Some of the masses cannot understand why that is so, even though tmc have a special breed of people. but we are about to be flooded with an army of newbies like the last time we approached $200.�
Feb 12, 2014
keithz Honestly, I really don't get the obsession with the size of somebody's portfolio and the assumed correlation to their conviction. To a person who earns $30k per year, a $10k portfolio is an achievement. I think the percentage of your portfolio dedicated to a particular stock or trading philosophy or position says a lot more about your conviction. My own portfolio is at $50k. 85.41% is Tesla stock and long calls. Undiversified? Sure. That's cause TSLA shot up so quickly and I got incredibly lucky. My very first TSLA trade was in Fall 2012 at about $28. The average price of my position is around $85. So basically, Tesla was a huge chunk of my portfolio at the start. And it's grown to absolutely dominate my portfolio, largely because of my conviction and belief that TSLA will go up.
Now is my conviction worth less because my portfolio is only $50k?
I was hestitant to be sure. I was getting back into the market after I had cashed out my portfolio to put a downpayment on a house. So I had spent all of Summer 2012 hesitating on getting back into the market. I had actually been lusting over the Model S too. But decided that it was too rich for my blood and I would need to wait for the E. In the meantime, whatever I read about the car convinced me that I needed to put some dough into Tesla directly. I opened the trading account in September. On top of savings on hand, I actually even borrowed from my own line of credit. And plunked about $10k into TSLA to start. Over time, my total investment in TSLA has been about $17k, but that position is worth over $40k. I'm happy.�
Feb 12, 2014
kcveins I agree wholeheartedly..�
Feb 12, 2014
DaveT So if your TSLA short position at $198 was 0.5% of your portfolio, then what's the point of posting (and kind of bragging about it) on a Tesla Motors fan site? That's like 2.5 shares short if you're portfolio is $100k (or 10 shares short if your portfolio is $400k). It's not very noteworthy.
If you want to add to the short argument, then you should join a thread that's already discussing that...
Devils advocating...from someone who shorted TSLA
Actually, I think this thread should be merged with the thread I linked to and we should keep all the devils advocates/shorts posts together there.�
Feb 12, 2014
NigelM That other thread is in the past tense; Realist finally abandoned the dark side. ;-)�
Feb 12, 2014
tftf That's a valid point. Let me discuss why I spend a disproportionate amount of time (the long positions in my portfolio are larger, I only have 7-20 positions on usually, some of them are passive ETF investments, so they require less attention) on Tesla with respect to the current portfolio size:
Tesla in my view is a disruptive company (even if it fails or remains a niche player far in the future).
It has a large influence (or "halo" effect) on the entire personal transportation market. Let me give two other examples: Apple had and has the same halo effect on the PC and CE industry, Bitcoin has a halo effect on traditional fiat currencies. Since I can't analyze all companies or trends in a sector as an independent, I focus on these kind of organizations or developments more than established companies to look into the future and develop scenarios.
In the auto industry (*), I look at two companies at the moment: TSLA and Nissan-Renault (actually 2.5 companies, because Nissan and Renault are still two companies but working closely together. A good article on this: What is Carlos Ghosn waiting for? | FT Alphaville ).
I also keep an eye on Toyota should they make progress in hydrogen (I know that Tesla execs like to call this "fool cells") and Honda (mainly because of their R&D in robotics) as well as BMW.
I see two major long-term trends in the auto industry:
- Alternative propulsion (but I'm not sure yet if long-range EVs really will be the winners)
- Driverless cars and related services, shrinking long-term ownership ratio of cars (what some pundits like to call "Transport as a service")
Both companies are doing interesting things in these areas, that's why it's worth looking at them more closely. There will also be many potential new entrants in my opinion because these two trends require different skill sets. For example, I see Asian consumer electronics companies (such as Samsung) enter the EV space and make cars in 5-10 years from now. GOOG is another name but so far their entries into making hardware for consumers failed quite miserably.
PS: As an additional disclosure, I think going long again Renault or Nissan in the future, especially if they speed up a merger. I was long both companies in 2009 into early 2010.
__________
* I know some people say Tesla is a tech company, not an auto company. I discussed this earlier.�
Feb 12, 2014
austinEV There are 2 reasons position size matters. One, as Dave T points out that his short position might be so small as to be a dalliance in his portfolio. The second reason is that you could say you shorted at 198, and the stock goes to 210 he could say he shorted more, then it goes to 220, he says he shorts more. Then the stock goes down to 210. Then he could divulge the amounts: 2 shares at 198, 2 shares at 210 and 200 shares at 220. So you can dial in a victory even with "timestamps" without quantity.�
Feb 12, 2014
TSLAopt It should be very clear to everyone that tftf lost a lot of money already trying to short TSLA. Why else would he be on these boards and SA incessantly trying to talk the stock down if he wasn't short the stock??
If he wasn't short those times and was waiting for an entry point (ie. 198) he would have kept his mouth shut hoping it goes higher and only then begin touting his horn once he put on his short at 198.�
Feb 12, 2014
sleepyhead Didn't you read his post from last November where he claimed, with perfect hindsight, that all the trades that he ever made in TSLA (both long and short) were perfectly timed and big winners, without ever making a losing trade?
I agree with you completely TSLAopt, I don't think he is posting in good faith.�
Feb 12, 2014
tftf I had a losing trade around $90, please see my post again. I also wrote later in this thread that I was lucky because of overblown (imho) fire incident reactions in mass and financial media and closing my short position at the right time back in November 2013. I was also lucky that Goldman Sachs issued a negative report on TSLA right after I entered my first short position around $125.
70-80% of my portfolio is usually in ETFs, I do not believe in picking stocks or being able to beat the market consistently for my core portfolio, luck is often involved in my opinion even if I try to analyze my few active picks in detail.
About sizes: I will specify that, usually I do simple trades opening/closing the entire or half of the position (so 0.5x at $220 would be the same amount of shares again as the 0.5x at $198. The default size when not specified is 1x).
Anyway, before the dicussion turns unproductive again:
I will just post my TSLA trades from now on (and hopefully discuss the battery plant and financing in a constructive way when that news is public. This plant will influence TSLA stock and long-term strategic outlook a lot in my opinion).
PS: I went long AAPL recently around $501 after staying on the sidelines at AAPL for months despite writing a lot about the company (see 'halo' explanation above). Is that also nefarious since that happened to be the short-term bottom back in January? Proof: tftf's StockTalks - Seeking Alpha�
Feb 12, 2014
NigelM Please don't turn this into your trading diary, that won't be useful to anyone. The interest level in your trades is undoubtedly because you'd have to be a genius or very lucky to have succeeded so much shorting a stock that's had such long-term upward momentum. You also have to acknowledge that you must have some motivation to come to Tesla's biggest fan club and announce that you're shorting the stock.
WRT luck: I understood Realist's position (although I disagreed with it) because he just doesn't like Model S. I understand that you argue on the financials but I'm actually more curious why you've shorted again when you say yourself you lost money once and got lucky a couple of times? If that GS report had timed differently or the fires hadn't happened you wouldn't be shorting again would you? If I shorted a stock that had a meteoric rise and I had a lucky escape, I doubt I'd go back there to play; I think I'd have more fun in a casino at the roulette wheel.�
Feb 12, 2014
tftf My motivation? Simply showing my positions after being accused of being short when I had no TSLA position or people accusing me of "being short since $20-30". I can't add a disclosure line to every comment I make on SA, it's simpler to add it here.
As for luck vs skill: I have been in the stock market since 1988 (although I could only buy a few stocks back then as a teenager), so I have some experience. However, I think many people retro-actively attribute their winning trades to skill and forget about luck. A good book has been written on the topic recently (no relation to the author):
Luck and Skill Untangled: The Science of Success - Wired Science
I do look at valuation numbers (PEG, EV/EBITDA...), running DCF on a few future scenarios, company news and management, trading volumes, analyst estimates, institutional holdings and short positions, general stock market sentiment and outlook for regions the company generates future revenue and finally simple technical analysis (I do not believe in hundreds of studies from Ichimoku clouds to Elliott waves) to create entry and exit points.
After all that, I still think luck plays a role.�
Feb 13, 2014
NigelM I'm not sure you're bolstering your reputation on SA by talking shorts here, but maybe you are. It also seems like a lot of work for what you say is a tiny fraction of your portfolio, but who am I to judge.
P.S. You're welcome to continue discussing here under the same conditions as everyone else; but, just to reiterate, this thread should not become your trading diary.�
Feb 13, 2014
NigelM Mod Note: some posts went here - Grammar-Misteaks-Spelling-Misteaks-and-Bad-Puns-)�
Feb 13, 2014
TD1 [email�protected] Wired.
Let me see if I can find some good Disney articles.�
Feb 13, 2014
Causalien Notice how I also asked about the percentage to net worth. I know what you are trying to say, which is why I asked both $$$ amount and %. Some people like to use $$$ amount some %. But revealing both is usually a nono since that reveals the net worth. What I wanted to know is his conviction, no matter how tftf expresses it. I have no ulterior motive but to properly categorize tftf into the correct indicator. Is tftf 10% as important as Realist? Or is Realist 10% as important as tftf? I need to know this. Otherwise tftf is just a tease to trade jokes with.
Now we konw tftf is 80% in ETF. It still doesn't say whether or not he is 20% networth short TSLA or 0.01% networth short Tesla. This will also allow me to calculate whether (and at what point) he gets margin called to correlate to his story.�
Feb 13, 2014
DaveT tftf shared earlier that his TSLA short position at $198 was with 0.5% of his portfolio. Since a portfolio is typically smaller than net worth, you might be correct with your 0.01% of net worth guess.
�
Feb 13, 2014
Causalien Missed that.�
Feb 13, 2014
tftf Have you read the link? It's an interview with the author of the book, not a Wired article. If you prefer another source:
How Many of Our Successes and Failures Should Be Attributed to Luck? | Enterprising Investor
As for position size: I also do mirrored portfolios for third parties, so the size of all portfolios is quite substantial. But in percentages of each portfolio size, my short positions are indeed small. I don't want to blow up accounts on short positions, all short positions combined never exceeded 10% of my portfolio (usually only around 5%).
PS: I won't talk about the new Canada fire incident that's making the rounds today ( Tesla Investigating Cause of Toronto Garage Fire With Model S - Bloomberg ). I still think the sample sizes are too small, one should have data sets over many years and with EVs from different brands vs ICE and PHEV cars. But if there are more TSLA incidents in a short period of time (as in late 2013) in the mainstream and financial press this could hit the stock again over the coming weeks.�
Feb 19, 2014
tftf I originally wanted to add the rest of my position (0.5x) after the earnings but will first await the separate giga-factory event (next week?).
PS: Buried in the news: The Model X was delayed into 2015, I always expected a very soft launch in late 2014 so it shouldn't matter. (At least that's how I read the newsletter, there will be no X customer deliveries in 2014).�
Feb 19, 2014
kenliles that's the way I took it as well. Just test cars. Production moved to Spring. About a 1 qtr push out�
Feb 19, 2014
blakegallagher Well it said that volume deliveries will begin in 2015. I bet they still sneak 10 cars through production this year but maybe not. In the end it wont matter one bit one way or another.�
Feb 19, 2014
Citizen-T The truth is they can't even meet demand for the Model S right now. Launching the Model X on time would bring nothing but additional costs. Until they find the limits of Model S demand, there is no point in launching the Model X. That's not to say they should sit on it if it is done. I'm just saying, if there is more that they would like to do to get it just right, go for it. There's no rush.
From an investor standpoint, this delay is good news.�
Feb 20, 2014
Mario Kadastik This was absolutely a non-news event because Elon said as much in Oslo. The #1 reservation holder asked when he'll get his car. And Elon said that they'll probably ship the US signatures first because they want to keep the first cars close to home to be able to react fast and nimble to any unexpected issues, but that he shouldn't receive his car later than ~1-2 months after US launches and that he should expect his car ~2015 Q2. So Elon basically said that the first Model X will be delivered in Q1 2015. This is therefore not news as it was known already 2 weeks ago or so.�
Feb 20, 2014
keithz Oh please. I didn't just lucky on Tesla. I also got lucky on Visa and Lululemon to just two other examples. I'm sure the other folks here also have other winners in their past. And here's what I see: pros just don't get startups. And that's okay. If they did, they'd be VCs not hedge fund managers. Every buddy I have who works on Bay Street (our version of Wall Street in Canada) told me that Tesla was a bad bet when I was getting in in the 20s. They are still telling me that today. It's laughable. And I finally understood why. Finance guys just don't get tech, and particularly startups. And they won't get it until it's reflected on the balance sheets. Of course, at that point, it's far too late to invest in the company as a growth stock.
Now, a finance guy will easier counter this with "Tech bubble 2.0!!!" and he may be right. But he also may be missing forest for the trees, which I suspect a lot of the pros are when it comes to Tesla. They simply cannot imagine a world where a startup can take on the big boys in a capital intensive sector and win. Unfortunately for them, silicon valley has a history of creating disruptive companies. Just look at what Nest is doing to Honeywell in high end thermostats at the moment. And the auto sector is one of the slowest lumbering dinosaurs out there. Want proof? Just look at the state of infotainment systems in cars. It's not going to get better till Apple or Google intervene. Or look at the way they fight fuel efficiency mandates from governments around the world. Or look at how sales and service is executed. In the age of the internet, I still have to spend hours at a dealership negotiating the purchase of a brand new car with the song and dance of "let me take this offer to my manager." And where's the mobile servicing teams of fixed, flat price servicing contracts? The auto sector just can't help being incompetent when it comes to future development. Too many entrenched interests.
I was also an early adopter to Android. And I remember lots of folks saying Android would never catch on. I saw the brilliance though of an OS that was very similar to the then dominant Symbian, easier to use than Blackberry and cheaper than Apple. Too bad Rubin didn't IPO instead of selling off to Google. And if only Nest had IPO'd, I was salivating at the idea ever since I installed one in my condo, and then another at my folks, and then another at my brother. They all saw mine and wanted their own. A flipping thermostat. If that's what silicon valley can do for a thermostat, I can't wait to see what Tesla does to the dinosaur that is the auto sector. They won't catch on until its too late. And neither will the financial analysts.
Here's one you can watch for in 2015. Stagnating or even falling Porsche Cayenne sales every market where the Model X launches in earnest. It's at that point the analysts will start to realize that Tesla is here to stay. Mark my words.�
Feb 23, 2014
tftf I was long TSLA when it was trading between $20-30 (back in late 2012), I think it's a big difference where the stock was trading back then and now. I never opined TSLA couldn't sell about 50k of each Model S and X over time, plus maybe 2-3 times that in Model E sales per year. However, I don't think that justifies the current valuation as I see new risks and more competition for Model E going forward, see old posts for details.
As for Porsche Cayenne sales: I think the heaviest competition for the Cayenne will be coming from the new Porsche Macan and other ICE competitors in 2015, not the Model X. There's also a Cayenne PHEV version coming in early 2015, probably earlier than the Model X. While some people may prefer a pure EV like the Model X, I see at least some people choosing a PHEV.
There will be many PHEVs in the SUV segment soon (Mitsubishi Outlander, Audi Q7...). I see heavy competition coming in this space soon.�
Feb 23, 2014
kenliles Most of that ICE is melting IMO. While Tesla EV is catching F*** (in a good way!)�
Feb 23, 2014
Krugerrand Model X will outperform them all on every metric, and while a handful of people are negative on the Falcon Wing doors, when they see them work their minds will be changed and they'll wonder why no one ever made them before.�
Feb 25, 2014
keithz I think if Tesla sells 50k Model X and X and another 150k E like you say in 2019, the $200+ price is definitely justified. 250+ today? Probably not. And I think it'll settle back down in the next few days.
As for the Cayenne. It's ripe for disruption. I know some Cayenne owners. What strikes me about all of them is that none of them are uniformly rich or even staunchly upper middle class. They've done well and bought a vehicle they like. But for folks like this, the TCO of such a vehicle has to be hefty. Which is exactly why the Cayenne and its ilk are ripe for disruption. I throw the BMW X5, the Audi Q7, Acura MDX, Lexus RX, etc. The Model X will be robbing sales from all of them. But they won't feel it like Porsche will on the Cayenne. Because nothing else will drive as close to a Cayenne while carrying a quarter or less of the operating cost.�
Feb 28, 2014
tftf With the Giga factory news and financing publicly laid out, here's my summary. I still think batteries (basically all "new" markets for TSLA outside of traditional car sales) and battery manufacturing remain a low-margin business. Details for anyone interested here:
[Moderator: promotional links removed]
That concludes my view over the next few years for TSLA and I have adjusted my position accordingly (see comment in second link, as mods told me it's not ok to post trades here).�
Feb 28, 2014
Zextraterrestrial
1- how can the S be cannibalizing Porsche Panamera sales but the X wont do the same to the Cayenne? It will be quicker, quieter, and carry much more, just like the S
2- what does an SUV PHEV have to do with a Tesla? really�
Feb 28, 2014
Krugerrand It does not matter if battery manufacturing is a low margin business. The purpose of the Giga Factory is to 1) put an affordable mass market BEV on the road for all to enjoy (and force the auto industry to do the same), and 2) provide an affordable energy storage unit so that the world can more readily convert to sustainable energy sources such as solar (allowing individuals to get off the grid if they so choose). Ultimately for the betterment of this planet.
No where has it ever been said, hinted at or suggested by Tesla that they are making the Giga Factory to supply individuals/companies/others with singular batteries. Indeed, the intent (and the profit that you're so concerned about) is in the 'pack of batteries'.
Simply, you still don't get it.�
Feb 28, 2014
tftf I think I just have a different view of Tesla's future margins and its future competition. Nobody knows what the future holds. That said, I will certainly not add more to my short (now blended @$224) position.
PS: As for "betterment of this planet": In 2020, even if 500k TSLA cars are sold: With 100 million new cars/year sold (about 30 million more than today!) we will have more people in the middle class consuming more goods and resources, eating more meat, using more energy and exploiting more raw materials etc. So neither the Toyota Prius sold in the 90s nor the TSLA cars sold in 2020 will make a big difference in the grand scheme of things. It will be a drop in the bucket with billions of people entering the middle class (just my opinion). But that discussion tangent goes beyond investing in a single stock.�
Feb 28, 2014
Krugerrand Certainly you do have a different view. Myopic.
It's entirely fortunate that not everyone feels as you do, or we'd all be too depressed to get out of bed in the morning. You may view 500k Gen III's in 2020 as only a pebble tossed into the lake, but we all know what happens after that. Or if you prefer, the snowball being pushed over the edge of a long, steep hill.�
Feb 28, 2014
rcc Batteries are indeed low margin, especially commodity cells.
A safe battery pack built from commodity cells could be a mid or even high-margin item, depending on the amount of proprietary IP required to build such a pack and proprietary software running outside the pack to use the pack safely. With any pack that uses commodity cells, the answer seems to be high and high. That won't change unless by some miracle, some next-gen commodity cell chemistry is inherently much safer. But I think that will take a great deal of luck because commodity pressures will drive the engineers to optimize for best capacity/cost with reasonable safety and issues like auto-quality safety are secondary. Unless we get lucky, we will need that extra IP to make commodity cells usable in environments like auto or solar where safety requirements are much higher.
Volumes will depend on how easy it is to integrate with different power-draining and power charging systems. If Tesla puts the software onto h/w that is bundled with the pack and non-Tesla users see a simple well-defined interface, integration could be very easy which means high sales volumes are realistic.
The 500K per year number is a small step in and of itself. However, that 500K number represents the snowball rolling downhill that becomes an avalanche. Once *anyone* sells 500K EVs a year at a reasonable profit, it will be clear that EV's are a viable mass-market product that are here to stay and other auto companies will have no choice but to join the trend or see their markets cannibalized by those who do.
Having owned an S for a year now, I think that if you can deliver an EV with a 500 mile range at a cost equivalent to an otherwise comparably equipped ICE, no one in their right mind will buy the ICE. And I'm speaking as someone who loves to drive high quality, comfortable, high performance cars.�
Feb 28, 2014
keithz The battery pack will supply commodity batteries. That's the point! The gigafactory is not there to product profit by selling battery packs. It's there to lower costs on the major cost component of a Tesla car and SolarCity backup system.
If Tesla's battery packs are 30% cheaper than the competition that creates a natural cost moat. For anybody else to compete, they will have to put forward a similar investment and build similar partnership. And most importantly, they'll have to start lining all that up this year.
If trends hold, batteries will simply continue their 7% per year natural price decline. Add that to the 30% promised by the gigafactory and you are talking a 60% reduction by 2018. What would that do for Tesla's profitability and pricing flexibility?
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As for the Cayenne and the rest.
Here's the thing, the X is even more competitive with its ICE competition than the S was with its competition. Thanks to all those past truck loopholes in fuel economy standards, SUVs are horrible on fuel consumption. The operating cost difference between gas and electric will be very much amplified in the SUV category.
Next, think of who the X is aimed at: women. Or more precisely upper middle-class suburban moms. How many ladies you know like talking to a mechanic about problems with their vehicle? That job is usually labelled a "man" task. But what if you were to give them a vehicle as easy to understand as their iPhone? This will be the standard going forward for every upper middle-class suburban soccer mom. Just watch. The X is going to be bigger than the S.�
Feb 28, 2014
Robert.Boston Even more fundamentally, it's there to ensure sufficient supply (regardless of cost). Someone has to step up to the plate and build that capacity. Tesla has an amazingly low cost of capital, and it doesn't have to be convinced that the demand for Model E packs will justify building the plant.�
Feb 28, 2014
bareyb Elon is smart enough to see that the Batteries are the wild card here. Some less the scrupulous corporation could construct barriers to getting the batteries he needs and that would be that. The more you can do in house, the less likely it is that outside forces can manipulate the materials you need and hold them hostage. I don't blame him one bit. He's a very savvy businessman.�
Feb 28, 2014
NigelM No. You said you wanted to post all your trades here because you couldn't do that at SA; you were told that TMC shouldn't be used as a trading diary.
The promotional links were edited out of your post. Trying to drive people to click on your own articles isn't cool.�
Mar 1, 2014
tftf Ok.
But just to note: I don't receive a cent for that article (SA has two different article types, mine is without compensation) or the Instablog post in the two links. My only intention to post these two articles was so I didn't have to retype everything that sums up my outlook for TSLA (concerning new TSLA markets outside of traditional car sales and integrated battery production).
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You make good points about Model X and SUV sales potential, the women you cite are indeed important buyer segments for "traditional" SUVs. On the other hand, I doubt if many people really buy an SUV (even if it's a full EV) for ecological reasons. I saw sales for X at 50k/year as well, maybe more in a short spike in year two after its introduction.
As for PHEV vs EV. I'm aware of the differences, but many people just want the savings and drive short distances 90% of the time.
The sales success of the Outlander PHEV outside of Japan shows (even more so because Mitsubishi was really struggling as a brand in recent years) the potential for PHEV SUVs.
In general, I see competitors even react faster in this category: Since there is more floor/body space in SUVs, large competitors can introduce SUVs shared on production lines (the approach VW uses already with the e-up and e-Golf for smaller EVs) and with the same design as their existing ICE or PHEVs SUVs.
We will see how many customers prefer special design elements like the Falcon doors etc. on the X. It's the same challenge BMW is facing vs VW (traditional design for EVs) with the i3, i8 and future i-cars.
My main concerns never were the S and X, Tesla has a good niche there (and again I don't mean this in a disparaging way, see what Porsche achieved in a similar niche in ICE cars over the years). My concern is the Model E and the competition and margins in that mass-market segment longer term.
Without E, TSLA wouldn't need the gigafactory (or at least it would only need a much smaller factory or maybe a JV with a battery producer with lower cap ex/less risk). See my earlier posts for details.
TSLA is going all in again to use a poker analogy. It may succeed or not. I don't know. Noone knows. I just don't like the risk/reward with shares trading well above $200 and have positioned myself accordingly.�
Mar 1, 2014
tftf My understanding was the 30-40% numbers already are the total cost reduction targets for the gigafactory. I can't repeat my articles in detail here but as a summary I fail to see why large (mostly Asian) competitors couldn't match these price reductions over time, many of them have decades of experience in battery manufacturing and extensive supply chain ties (Asian conglomerates with direct stakes in mining/raw material logistics).
I see Asian companies (many of them new entrants or existing battery suppliers) dominate the EV mass-market segment over time.
On the R&D side of things, many smart people worldwide are working on better battery tech all the time. The major tech disruptions are still to come (nanowires, Li-Air, Li-Sulfur, supercapacitors...).
Market and technology leadership may change many times until EVs as a category mature within 1-2 decades.
Anyway, that's my summary.�
Mar 1, 2014
Zythryn You go ahead and invest based on ifs and maybes.
I'll invest in someone that is actually doing something.�
Mar 1, 2014
30seconds I agree that other companies should be able to match the gigafactory in terms of cost once 1. They commit billions to the scale of the factory 2. Locate the factory so that inputs and outputs are cheap to transport and 3. Locate and build the factory so it can rely on the long term cost advantage of wind/ solar or other inexpensive source.
And of course get an agreement in place with a few customers to buy 80%+ of the output before the factory is up and running
its not like it can't be done, but in what timeframe is it likely?�
Mar 1, 2014
kenliles Are any of them doubling the worlds supply with a single plant that produces raw-to-pack using the latest tech? If so, then you have a good point. Until that's announced it's speculative vs Tesla's now 1/2 cash in hand to accomplish a specific plan. Agree major disruptions in chemistry level still to come (and S Capacitors maybe more than any as Elon might know given his graduate work). I think given the integration of battery pack (for cars) design success coupled with mfg of same (starting at cell level), I have trouble finding another company to form a superior investment confidence profile for my money- always looking though�
Mar 7, 2014
tftf And the same thing happens on the long side again, see this recent SA article:
...
etc.
Tesla Motors Inc (TSLA) news: Tesla: An Investment Based On Optionality And The Genius Of Elon Musk - Seeking Alpha
I wrote in a comment:
Before that, I waited for 48 hours (errors can happen; I thought it would be corrected quickly after publication) and then left the comment above since there was no change.
What's even more interesting: There are dozens of comments congratulating this bullish article (I guess some from professional investors) but no comment pointing out the error. This is not a minor mistake or typo, the wrong definition and the wrong numbers are used several times in the article.
Similar for many sell-side analyst reports (and the possible affiliations of the company preparing these reports), most people glance at the new price target without looking or verifying the assumptions/estimates these price targets are based on.
I didn't bring this up to pan people who make mistakes (everyone does) but to show the bias by not checking the facts and numbers (applies to both sides).
I continue to believe there is a lot of exuberance in parts of the stock market (especially tech sector) and TSLA is among those stocks. As I pointed out many times, the FED exit strategy will pose many risks and this bull market (since March 2009 in US stocks) could soon be over. Yellen can create an encore in 2014 but she can't do this forever (or the world will get the Japanese malaise).�
Mar 7, 2014
Robert.Boston @tftf: I too am worried about how long this bull market will run; while I think the Fed can pull off the proverbial "soft landing," it's not without risk. There are far more challenges on the fiscal side of Washington, however, than on the monetary side. But that's a discussion for another forum...
In my view, however, Tesla's growth and success is largely unlinked from the overall market. Tesla's target customers are those least affected by risks of long-term unemployment, etc. The vast majority of the risk in TSLA is the execution of the company, and there I have a high degree of confidence in management. And that, in the end, is really why I stay bullish on Tesla.�
Mar 7, 2014
tftf I agree with you largely about Tesla the company (but not TSLA the stock) in this scenario. I think for TSLA the company a change in incentives in key countries such as Norway could have a more direct impact on revenues/units sold (the tiny population of Norway buys about 50% of all electric cars in Europe at the moment).
But I think TSLA the stock (along with all cyclical stocks and tech stocks) could be hit hard in case there's a more concrete FED exit or a new economic downturn further down the road - even if they hit their estimates and unit sales (same even happened with many blue-chip unscathed in 2008 in terms of margins/revenue, AAPL is a good example, their stock took a nosedive along with the market).�
Mar 7, 2014
Robert.Boston I disagree that Tesla is a cyclical stock. Take a look at how luxury brands fared during the last recession -- Tiffany, for example, did extremely well.�
Mar 7, 2014
tftf I should have been more specific: I largely agree with you until "day X"
Where "day X" is the future date TSLA starts selling the Gen III car at the promised $30-35k base price. I think this will be a different client demographic (and I continue to think TSLA could be better off/lower risks as a Porsche equivalent of the EV world and never do a Gen III and maybe even a lower-priced Gen IV after that - but that's beating a dead horse; anyone interested can see the older comments).�
Mar 7, 2014
Discoducky Everything else being equal I'm investing based on the gigafactory reducing the price Tesla pays all-up for completed cells from supplier(S) currently by at least 30%. The other reduction in costs associated with cells remains. Tesla is, in fact, greatly accelerating their reductions. Whether other companies benefit is really up to them. I expect they will be left behind until it is too late. Just like supercharging.�
Mar 7, 2014
Krugerrand And yet you just keep talking about it and several other irrelevant horses.�
Mar 7, 2014
tftf I can't respond to that other than my previous answer above about future competitors. TSLA can
pro
+ integrate even more, add more recycling (*)
+ add additional economies of scale due to size of factory (**)
+ lower input energy costs with wind etc.
con
- most wages are lower (ex-Japan) in Asia than in the US (*)
- large Asian conglomerates (Korea/Japan) often have direct raw material access to mining and logistics within their groups (lithium etc.)
- stricter environmental laws/higher legal costs in the US
Along with changing battery technology until 2020 (VW for example talks about new battery tech: Volkswagen Development Chief: Expect 50% More Electric Range by 2016 - 300% More by 2020 | Inside EVs ) I honestly don't know how the 30-40% cost reductions of the giga factory will net out agains the battery competition - also because they will add newer battery plants soon.
_______
* I assume most battery competitors will be located in Asia, but some may operate additional plants near EV manufacturing bases in Europa/US like Nissan did.
** Samsung SDI and LG Chem are both talking about two new EV battery plants in China (SDI already greenlighted the project, LG is still planning it: http://www.reuters.com/article/2014/03/02/us-lg-china-idUSBREA2100720140302 ). Again I honestly can't say how big of an impact the size has on lower costs, i.e. the additional economies of scale per kWh for TSLA's larger plant in relation to all the other pros and cons listed above. Battery packs are heavy, so shipping costs play a role too.
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Was that needed ? Did you read my post above regarding gross margins vs operating margins, is that also a dead horse or irrelevant ?
I really have no time for personal attacks. Bye.�
Mar 7, 2014
SteveG3 TFTF, I think it would take a global economic crisis as bad or worse than the one in 2008 for Tesla to have substantial risk of falling short of 130K sales each in the U.S., E.U., and Asia for the Gen III due to macro issues.
1. of course, it's possible we might see such a crisis... you have to ask yourself how probable it is... probable enough that you take all your money out of the stock market and earn 1%?
2. even with another event like 2008, I'd say substantial risk to targeted volumes... but not necessarily failing to reach targeted volumes. I sense that if all vehicle sales were cut in half, as happened roughly in 2008, I'd say perhaps we'd see a fall to 100K Gen III in each U.S., E.U., and Asia, Model S/X down to 70K globally, so 370K vehicles total globally... pretty much what the bullish analysts are projecting anyway.
3. that said, everything I wrote above is based on a key future event, that, of course, is not "certain"... that is, Tesla executing and delivering a Gen III range with suggested specs, $35K, 200+ miles range, BMW series level performance. I have very high confidence in this, and so I don't particular worry about the global economy. could it get so bad that Tesla's sales fall well below the numbers I suggested in point 2? sure, that's possible... but if things got to that point I think the value of TSLA would be among the smallest of my concerns (think Great Depression II... to be clear, I see as very improbable).
fwiw, going back to point 1, TFTF, do you think we are heading to something as bad or worse than 2008? if so, do you think it's over 50% likely in a year, 3 years, 5 years? have you taken all of your money out of the stock market? if you don't mind sharing, where do you invest your money?
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I read the article... I don't see anything that suggests any competitive improvement compared to Tesla in terms of cost. All it suggests is that they are looking at building a BEV with 120 miles range circa 2016, and 320 miles range circa 2020. again, no indication whatsoever as to what reductions in cost they see themselves achieving.�
Mar 7, 2014
tftf Steve, here's maybe a better link from another source:
The battery tech that could change electric cars - Telegraph
I agree, these are just plans. We will have to see what kind of cost reductions this will bring. VW for example just assembled 1300-2000 people in a central new campus ("Elektrocampus" *) at its HQ working on EVs and related technologies.
I see a few car companies investing a lot in EVs (especially Nissan-Renault, BMW, VW and two unnamed Asian companies). That's my summary for the competition (have no interest in posting further because of unfortunate continued personal attacks from a few people).
______
* Viel Beton für das „elektrifizierte Herz" von VW | VW - Das Werk | Wolfsburger Nachrichten (under construction report in German from 2012)�
Mar 7, 2014
SteveG3 @tftf, this new article you are offering as a better source is implying the new technology would be metal air.
if VW is hinting about metal air, as I'm sure you are well aware, Tesla is exploring a lithium-ion/metal air hybrid battery as well (the metal air basically serving as a range extender). I'm also sure you are aware of the impracticalities of using metal air as a stand alone battery rather than as a range extender.
if they are hinting about something else, and if the suggestion is a BEV with quadruple the range at the cost of a current 80 mile range... I don't think it's Tesla with a problem, I think the entire ICE industry would melt as fast as production capability for such a hypothetical $30K 320 mile range EV could ramp up.
... just another stab at your global economic concerns... do you have any specific probabilities you've estimated for such a major crisis event occurring (as bad or worse than '08?)? specific probability over what specific time frame? do you have any specific strategy you've deployed based on such a scenario; that is, are you completely out of stocks now? have you found a safe haven with better returns than money markets/bonds?�
Mar 7, 2014
Krugerrand Wages vary greatly in the United States and what the wages would be at the GigaFactory will likely be affected in part to the state chosen. There's plenty of evidence that suggests that Tesla doesn't pay top wage. I don't think one executive makes nearly as much in salary as they would most anywhere else, paid instead with company shares and the chance to work at a company trying to revolutionize an industry or two, and change the world.
Additionally, happy employees are more productive employees, so giving an employee a few bucks more so that he can more easily put a roof over his/her head and feed his/her family, and providing a work environment that encourages advancements, thusly shows a paradox that nullifies what you perceive to be a con.
From what I understand looking at the GigaFactory pdf file, Tesla plans to be directly linked to their raw materials. That's another con off your list.
This has always been the cost of doing big business and yet...there's Tesla successfully producing cars in California. Seems to me, where there's a will, there's a way.
I think you do, but it doesn't fit your thesis.
It's a matter of opinion if stating the obvious is needed or not.
I've read every comment you've made here and on SA. You've pulverized that poor dead horse on most matters, such as the $15-$20B needed to build the GigaFactory and how Tesla wasn't going to be able to get that kind of money together, etc... You were on that horse for weeks and when it became clear you were wrong, you tried to say it was the longs who said the factory couldn't be done and that you were the one saying it could.
But back to your GM vs OM - so both the bears and the bulls get their facts mixed up, distorted, flipped, or totally wrong sometimes. That required you to come here, to a predominantly Tesla fan base, to specifically tell us that a bull author got a fact wrong? Okay, thanks for letting us know. We'll likely all want to change our TSLA investment approach now. You've saved us all from ourselves.
It wasn't a personal attack, but I apologize for calling a spade, a spade. I've always had a problem embracing my inner passive aggressiveness, but I'm working on it.
Ciao.�
Mar 7, 2014
tftf You made me come back to clear this because you have misquoted me. I always wrote $5-10 billion in total investments (not just TSLA's part, the whole bill) and my number included the Gen III tooling and development for up to 500k cars/year back in 2013:
(can't link this but apparently links to 99%-probability fraudulent projects like the Quant car are allowed...)
I made these estimates when many people talked about 1-2 billion for the battery factory and most analysts didn't mention the factory cap ex at all. I also never wrote they could never bring the money together.
Why did you misquote me?
As we now know, TSLA (just the factory, without the Gen III car) estimates the total gigafactory costs at $4-5 billion. If you add the Gen III car and cost overruns that often happen in such huge projects my estimate was not that far off. I could well see the total costs (including then Gen III car cap ex) of the factory in the $7 billion range when it's all said and done - so right in the middle of my original estimate.
You didn't read my comment to the end then: I wrote errors happen, no issue with that. What is interesting was dozens of positive comments congratulating the author with noone mentioning the error (which results in billions/year in margin differences). That's confirmation bias.
But from now on I won't disturb this confirmation bias any longer. Bye.
PS: Edit: SteveG3, I will gladly answer your unanswered questions via PM later, thanks for understanding.�
Mar 7, 2014
neroden Extremely likely IMO. But there are still companies which will weather such a crisis; some investors made a lot of money during the Great Depression. Actually, I think there's a secular growth story for electric cars, which should leave them pulling ahead in sales even during busts.
Bingo.
I don't have such high confidence, but I also don't think Tesla actually needs to hit that target. Currently the S85 starts at $81,070 (not counting tax credits). If Tesla produces a Gen III with a similar range which actually starts at $50K I think it'll sell like gangbusters -- even though that's a huge miss on the price target.�
Mar 7, 2014
SteveG3 neroden, I actually basically agree with you on this. to clarify, the execution they need is for the Gen III to be delivered in keeping with what Tesla has come mean... class leading product, including several desirable elements that only an EV executed as Tesla has can offer. I agree that if they have to charge more than $35K it wont matter... though, to fine tune a bit, if we are in a major economic collapse, I suspect $50K might reduce demand below supply... $40-45K I don't think will matter.
and thanks for the reply... it seems tftf prefers to look away from discussion that reveals questionable assumptions in his thesis, ironic that he mentions confirmation bias to Krugerrand.�
Mar 7, 2014
Krugerrand What caliber of gun was it?
No worries. When I come across your comments I'll keep track of them and put together a compilation.
Yes, I did read your comment to the end and I note you spent the majority of the words supporting your thesis (which does not coincide with the majority here, and you know it) and then decided to mention as an afterthought that the 'other side' has also made errors. Did I miss the part where we asked for an example of confirmation bias? Or that we were unaware that it was occurring somewhere, out there, on the WWW? Did I miss the part where you then went on to site an equally blatant error made by the 'other side' and the slew of comments that showed that opposite confirmation bias? Or did you just focus on that one error, by that one author, presenting a highly favorable slant to your side?
Nobody here had anything to do with the comments you've taken exception to on SA. So again, you've come here with this, why? Do you wish us to go over to SA and comment on your behalf?
Is this where I ask, 'why the personal attack' (via a passive aggressive approach)? :wink:
I understand you don't think Tesla will succeed or can succeed to the extent they are aiming for going forward, and for a multitude of reasons you've fully explained. You are not on that island alone, sir, but you're confused if you think this place is your island. The dissection you've done is no more complete than the dissection done by many others here. But as I demonstrated with your con list, people can arrive at different conclusions based on how they interpret the data, it doesn't make them biased or you not biased. As TippyDog and Paulo like to flog the 'demand has peaked' horse, others have come to an entirely different conclusion.
Reasons why the SA longs didn't point out that author's flaw, in no particular order; 1)because they didn't feel it was relevant, 2)because they didn't catch it, 3)because they are biased. I certainly know which one you've picked.�
Mar 8, 2014
tftf For a last time: Because you misquoted me, see above. 15-20 billion USD is clearly not the same as my 5-10 billion USD (wich included the Gen III car, not just the battery factory) and I never said TSLA couldn't raise the money. I wrote that dilution or more debt would be inevitable because the huge battery project is intimately linked to the Gen III (I also wrote the Gen III won't go on sale in numbers before the battery plant is finished) and it takes 2+ years to construct the plant so TSLA would need to start the project soon.
@SteveG3. I responded to your questions in a PM.�
Mar 8, 2014
Causalien Not siding with the shorts, but I believe that The Great Recession type market crisis is likely in 2016. I think Elon mentioned this year 2016 in one of his interview. Not sure where.
2016 because of two things. It is the last term of Obama admin and the problems in the last recession never got resolved, but rather pushed onto the government's balance sheet. S&P propped up by QE and private debt financing shifted to student loans. The crisis only shifted to a different type of asset and the market is a confidence game.�
Mar 8, 2014
Krugerrand And I assured you that as I came across your many comments on SA that I'd catalogue them and put together a compilation (to remind you). That's tens of thousands of comments to go through, so a little patience.
In the meantime, you still get to be quite wrong about how much the GigaFactory will cost Tesla (and TSLA) (even including all costs of Gen III). :wink:�
Mar 9, 2014
tftf You make me come back again to correct this because that's again wrong or even confusing me with other people:
1. "Tens of thousands"? This comment number may be of JP (he has a comment count of over 27k on the SA site as I type this). I have about 90% fewer comments than him and many are on other stocks (from AAPL to ZNGA). You must probably be confusing me with him or other people commenting on TSLA over at SA.
2. My cost estimate was a blog title, not just a comment. It's obvious: If TSLA has multiple partners their slice of the total cap ex will go down. The $5-10 billion was my total cost estimate (for all partners) and including development and tooling of the Gen III car (I wrote the two projects were closely linked: No mass sales of Gen III cars without a finished battery factory and that it made sense to finance the plant using joint-ventures or similar structures).
If you look at other projects of this size (a current example is the new Apple HQ in Cupertino: Apple's new headquarters could cost $2 billion more than planned, report says - San Jose Mercury News ) there are often cost overruns, so even the battery plant cost may be higher than the current $4-5 billion estimated by Tesla. We will only know this in 2017-2020. In my experience it is very rare that the final costs of such huge projects are lower than the original estimate.
3. It's obvious you will find errors in some of my old comments especially as they relate to future estimates (for example, my TSLA unit sales estimate for 2014 is probably too high). But I stand by my main thesis and I really don't like when people misquote my numbers or articles.
I will not come back and correct further misquotes. I work hard and take pride in my estimates and therefore hope that my numbers/estimates and comments are used/quoted correctly from now on. Everyone can confirm by looking at the original sources over at SA. Thank you.�
Mar 9, 2014
ggr This is not at all a reasonable comparison. Apple set out to create an artistic masterpiece using techniques that had never been done before, requiring precision that had never been done before, and demanding perfection. It's also on very expensive real estate in a place where costs (including building) are high and variable.
The Gigafactory, on the other hand, is going to be concrete in the middle of a desert somewhere, and people are going to want the job so they'll compete on price and get fixed contracts. There won't be anything particularly special about the building itself. The equipment inside it will be straightforward evolutions of stuff that is already in other factories. So I don't believe it will be either as expensive in the first place, nor likely to have the cost overruns.
Now if you want something to compare it to, how about the NSA's new data center in Utah. Which (the building part) was completed on time and budget, and it was even a government project. There were problems with power supply and software, but I don't think those were relevant.�
Mar 9, 2014
Krugerrand *le sigh* There are tens of thousands of comments on SA. Wasn't referring to *you* having made tens of thousands of comments.
It was both a blog title and commentS made.
Yes, that is obvious. What was never obvious to you (when you began your dissection) was that Tesla would have a partner/s in the endeavor or come up with some clever, creative way to execute, even after many who know a lot more than you about Tesla said as much to you.
Siting Apple's HQ now is why you got the numbers wrong in the first place, and why you'll continue to be wrong. As a further example, on SA you've sited battery mfgs and how battery mfging is a low margin business, and therefore arrived at conclusions about what Tesla mfging their own batteries will be and the resultant outcome. You'll be wrong on that aspect as well.
What you should be doing is looking at SpaceX and Solar City, and seeing what those companies have done to achieve more with less. What you should be doing is looking at what Tesla has done to date, how much they've achieved for a fraction of the money. As it stands, it's going to cost Tesla roughly a mere $2B (give or take a few million) to get their Giga Factory up and running. If we generously (and I really think it's quite generous) allot another $1B from Model S and X sales for all other things Gen III related (R&D, additional line equipment, hiring and training of more people etc...) we come to a grand total of $3B. Heck, let's pretend they blow the budget, someone high up makes a critical error, while Elon is on a Hawaiian vacation with his family, that costs Tesla a whole bunch of money (they get fired over it, of course) and we add another $1B; now we're at $4B, still short quite a lot from your $5-10B. I'm not even sure how someone's 'hard work and pride in their estimates' can have them coming up with a $5B range in the first place. *shrug*
We all have things we don't like others to do. For instance, I don't like it when people put in qualifiers after the fact. I consider that something you do and believe this most recent post of yours is an example. I don't like it when people take credit for something they never said, did, or identified. Like when you said the longs on SA claimed the Giga Factory would never happen, but that you'd been touting it as a reality all along. And I don't like it when people go out of their way to stir the pot, such as you bringing the whole 'confirmation bias' thing to this forum and then acting coy about your motives for doing such a thing.
For the sake of not making you come back again, I sincerely apologize if I've misquoted your original Giga Factory et al... estimate numbers.�
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