Musk endeavours

[BobbyD]

Interesting comment re electric cars etc by former Ford CEO:

https://youtu.be/0pD3RCcdQ2c

Regards,

So, this is one of the bozos you think has accelerated legacy auto toward a cliff and doomed them to extinction?

[odysseus2000]

Interesting comment re electric cars etc by former Ford CEO:

https://youtu.be/0pD3RCcdQ2c

Regards,

So, this is one of the bozos you think has accelerated legacy auto toward a cliff and doomed them to extinction?

Ha Ha

There is a whole lot of difference between a CEO and a ex-CEO who can say what ever he wants without having anyone able to fire him and take away his pension etc.

I thought he made some good points, but how ever I look at I see big troubles for Ford and most other legacy.

Regards,

[odysseus2000]

Tesla to sell direct in Michigan:

https://seekingalpha.com/news/3533225-t ... email_link

Regards,

[Howard]

I hesitate to post a link to this article given that this successful thread is coming up to 200 pages

Tesla lost market share in the USA in 2019. It lost share to pretty well every premium brand.


Based on the broadly-accepted Insideevs estimates for Tesla’s U.S. unit sales, it grew 0.3% in 2019, to 192,250 units from 191,687 in 2018.

Several other luxury/premium car brands grew faster in the U.S. in 2019, including BMW, Mercedes, Volvo, Audi, Jaguar, Land Rover, Lincoln and Cadillac.

They all grew faster than Tesla both as measured in absolute units and as measured as a percentage.

In other words, even before we adjust for average selling prices - let alone profitability - Tesla lost market share to these competitors in the U.S. market in 2019.

regards

Howard

https://seekingalpha.com/article/431806 ... king_alpha

So a question for you.

Given your analysis of automotive sales, why is Tesla's share price still near all time highs?

Regards,

Tesla's share price is a law unto itself, and I wouldn't presume to explain the factors which drive it. To be totally honest, I can't pretend to understand the valuations of companies. And, whilst there are many more successful investors than me, I wouldn't believe anyone who says they understand what drives share prices in the short term.

Charlie Munger made a good point about the valuation of companies, he wrote: ‘Over the long term, it’s hard for a stock to earn a much better return that the business which underlies it earns. If the business earns six percent on capital over forty years and you hold it for that forty years, you’re not going to make much different than a six percent return — even if you originally buy it at a huge discount. Conversely, if a business earns eighteen percent on capital over twenty or thirty years, even if you pay an expensive looking price, you’ll end up with one hell of a result.’

If one accepts Mr Munger is mathematically correct, then Tesla is going to have to make huge strides to grow into its valuation. Losing market share in its home market doesn't look that positive when it is also loss-making and its competitors are profitable. Mr Munger's partner Warren Buffett might see this as challenging the theory that Tesla has a significant moat.

I do have experience of owning shares with a high PE ratio when markets take a tumble and it was not pleasant. This is a risk for shareholders.

The honest answer to your question must be something like: Tesla's share price is very high because a lot of wealthy investors believe that the company will be very successful over the short and medium term. And ironically also because a lot of short-sellers have had to buy back shares.

By coincidence, this evening one of my friends asked me my opinion on his buying some Tesla shares. I never give advice on investing, but said that the share might be considered a good purchase for a trader who believed that its momentum was still positive, but any holding longer than a week would seem very risky to me.

We both probably agree that BEVs have a very promising future, but it's going to be a very competitive market.

regards

Howard

PS As a a bit of a critic I'm embarrassed to be starting the 200th page of your thread.

[BobbyD]

Interesting comment re electric cars etc by former Ford CEO:

https://youtu.be/0pD3RCcdQ2c

Regards,

So, this is one of the bozos you think has accelerated legacy auto toward a cliff and doomed them to extinction?

Ha Ha

There is a whole lot of difference between a CEO and a ex-CEO who can say what ever he wants without having anyone able to fire him and take away his pension etc.

I thought he made some good points, but how ever I look at I see big troubles for Ford and most other legacy.

Regards,

So he was an incompetent buffoon, but he is now a sage and seer?

[BobbyD]

Tesla's share price is a law unto itself, and I wouldn't presume to explain the factors which drive it.

Was the share price correct as an absolute guide to Tesla's value yesterday, or the day before it's 7% rise, or 6 months ago before it's recent surge? Or is it at all possible that share prices are the result of a trading mechanism whose outcome may have some, little, or no predictive power over the future returns the company will provide? You'd need to be a psychologist not an analyst to explain them, and you'd probably get distracted by interesting things like herd behaviour, the cause of equity bubbles, and myriad other irrationalities to which the human brain is prone. Look at the share price is a ridiculous argument, and it is a very strange argument for somebody so proud of their superior trading skills to make to us humble investors.

[PeterGray]

Given your analysis of automotive sales, why is Tesla's share price still near all time highs?

Well, clearly Tesla is a very sentiment driven stock, but I expect bit of extra (non refundable) cash income they are bringing in from their (deliberately?) appallingly designed app - that is leading people like Nassim Taleb to buy $1000s worth of "upgrades" unintentionally - helps with the cash flow! It's the sort of thing that is going to do them no favours in terms of customer perception if they want to move outside their niche and become a real major car manufacturer.

[odysseus2000]

Hi Howard,

The difference between us is that I consider not only the fundamentals of the company as measured in sales etc, but also the stock and these are two related but weakly coupled variables.

Sales etc are backward looking while the stock is forward looking and is influenced by many factors outside of the company.

We now have the ingredients for a strong bull market in US equities: Strong business friendly President, ongoing collapse of the anti growth EU and an end to its military ambitions, a strong and growing China now taking its seat at the table of advanced and powerful nations, secular growth in major components of the industrial economy and in Musk a visionary who has ignited the dream of human exploration towards its manifest destiny of colonising the solar system. To get all of these things together is a remarkably powerful force that although now strong and vibrant will as in all things human eventually lose its potency, but before then there is a tremendous opportunity for great wealth. We saw such a time begin in the unlikely environment of post war Britain when we went from bombed out and bankrupt in 1945 to the swinging 60’s in 15 years. In the early 20th century we had the great rise of the motor car and in the 60’s we had the consolidation of US power in the Apollo program. In all of these events there were great rises in the equity markets and very powerful individual stocks.

These times, which come but rarely in history, need vehicles to carry the human emotion forwards and one of those vehicles is the potential of Tesla stock. The current price of Tesla stock reflects the hopes and aspirations of people who believe in a better future both in performance, comfort and convenience and in doing so in a cleaner and more environmentally friendly way. In Tesla they have a company that has made the BEV the future, not like GM who had the future with their own EV1 but then strangled their own baby. Moreover with Tesla there is far more than just the BEV with storage, solar, better batteries and robotic driving as known possibilities but with Musk there is also, as Munroe recently noted, genius and that can be a tide of extraordinary power that lifts very many boats in ways that are currently unknown to most of humanity.

It is impossible to predict equity price from company fundamentals, one can certainly know when a stock is price cheaply compared to its earnings, but even then we do not know if the price can get cheaper or how long it will take for the market to correct the price to a more sensible correlation with the business. For business in strong growth it is very much more difficult and for a stock like Tesla which has grown to near cult status the difficulties are compounded many times. Attempts to value high growth stocks are always pointless if measured on p/e, better on peg valuations but their one depends upon forecasts which can be wrong. Since these two valuation methods, at least to me, can’t be used then I have instead to rely on watching the price and using it to tell me which way is the most probable. This type of approach is now well developed but requires, imho, some serious training and it is not something i would suggest that anyone does without that training, but people will and some will make great fortunes, others will lose a lot of money and that applies to both long and short.

So in one sentence:

The price of Tesla stock is at all times highs because there are more buyers than sellers.

My comments give the reasons why i believe this is happening.

Regards,

PS I value all opinions as they help me formulate my ideas: As iron sharpens iron, so one person sharpens another.

[odysseus2000]

So, this is one of the bozos you think has accelerated legacy auto toward a cliff and doomed them to extinction?

Ha Ha

There is a whole lot of difference between a CEO and a ex-CEO who can say what ever he wants without having anyone able to fire him and take away his pension etc.

I thought he made some good points, but how ever I look at I see big troubles for Ford and most other legacy.

Regards,

So he was an incompetent buffoon, but he is now a sage and seer?

Maybe you should take a course on corporate ego and how they effect employees.

Regards,

[Howard]

Interesting comment re electric cars etc by former Ford CEO:

https://youtu.be/0pD3RCcdQ2c

Regards,

I have only now had a look at this video. And, yes, this is an interesting comment. It stands out as an intelligent analysis of the BEV market and Tesla's strengths and weaknesses. For an ex Ford guy he is very positive on Tesla but makes a rational comment on their profitability. He seems much more sane than some of the fantasists in these types of interviews.

If he is right, the manufacturers who are feeling their way on how to sell higher volumes of electric cars to consumers may yet be seen to have the right strategy. His point about the importance of software supports your often stated view. As someone who likes to see hard evidence to back up forecasts, in my view, VW's headlong launch of BEVs is going to be very telling. Will their undoubted mastery of car manufacturing be matched by quality software development? We will soon find out.

(I know this will get you going, but as a driver of a VW and a BMW, the touchscreen driving controls of the Golf are woefully lacking compared with the software in my BMW and it's PHEV predecessor. I don't know if this is significant, but VW will have to show consumers that they have mastered battery control software to be really successful. BMW are feeling their way - watch the German market to see how all this pans out!)

regards

Howard

[odysseus2000]

Tesla's share price is a law unto itself, and I wouldn't presume to explain the factors which drive it.

Was the share price correct as an absolute guide to Tesla's value yesterday, or the day before it's 7% rise, or 6 months ago before it's recent surge? Or is it at all possible that share prices are the result of a trading mechanism whose outcome may have some, little, or no predictive power over the future returns the company will provide? You'd need to be a psychologist not an analyst to explain them, and you'd probably get distracted by interesting things like herd behaviour, the cause of equity bubbles, and myriad other irrationalities to which the human brain is prone. Look at the share price is a ridiculous argument, and it is a very strange argument for somebody so proud of their superior trading skills to make to us humble investors.

Studying share prices gave me nearly 40% pre tax gains last year (I was disappointed I didn't do better) and I am near half of what I made last year with only 22 days of the New Year used.

Still perhaps if I didn't study share prices I would make a lot more, although my previous experience of relying on fundamentals was so bad that I abandoned that approach.

Regards,

[BobbyD]

Ha Ha

There is a whole lot of difference between a CEO and a ex-CEO who can say what ever he wants without having anyone able to fire him and take away his pension etc.

I thought he made some good points, but how ever I look at I see big troubles for Ford and most other legacy.

Regards,

So he was an incompetent buffoon, but he is now a sage and seer?

Maybe you should take a course on corporate ego and how they effect employees.

Regards,

Perhaps you should look in to appeal to authority, and consistency....

[odysseus2000]

President Trump on Tesla:

https://twitter.com/rkraus19/status/121 ... 17633?s=20

Regards,

[redsturgeon]

President Trump on Tesla:

https://twitter.com/rkraus19/status/121 ... 17633?s=20

Regards,

I feel it's a bit like Leonardo Da Vinci getting the thumbs up from an Orangutang.

John

[BobbyD]

President Trump on Tesla:

https://twitter.com/rkraus19/status/121 ... 17633?s=20

Regards,

I feel it's a bit like Leonardo Da Vinci getting the thumbs up from an Orangutang.

John

Leo is now at war with the Orangs about who is most offended.


Some projections on BEV uptake over the next 8 years:

Meanwhile, an analysis released last week by the respected consultancy Wood Mackenzie projects that VW will reach a cumulative 14 million electric vehicles by 2028, which will make it the world’s largest maker of EVs by the end of the decade.

That projection is far below VW’s own electric-vehicle goals, which last year were revised upward from 22 million to 28 million (and 70 different EVs) by 2028—across the full Volkswagen Group, with more than half of them in China.

...Wood Mackenzie says that to sell 22 million EVs by 2028, VW would need to take a 53% share of the global EV market and 57% of all EV battery production—”something that would prove to be extremely challenging,” the firm notes.

The estimate of 14 million EVs would equate to 27% of global EVs and 30% of the world’s EV battery supply, according to the firm.

https://www.greencarreports.com/news/11 ... t-of-reach

[Howard]

Hi Howard,

The difference between us is that I consider not only the fundamentals of the company as measured in sales etc, but also the stock and these are two related but weakly coupled variables.

Sales etc are backward looking while the stock is forward looking and is influenced by many factors outside of the company.

We now have the ingredients for a strong bull market in US equities: Strong business friendly President, ongoing collapse of the anti growth EU and an end to its military ambitions, a strong and growing China now taking its seat at the table of advanced and powerful nations, secular growth in major components of the industrial economy and in Musk a visionary who has ignited the dream of human exploration towards its manifest destiny of colonising the solar system. To get all of these things together is a remarkably powerful force that although now strong and vibrant will as in all things human eventually lose its potency, but before then there is a tremendous opportunity for great wealth. We saw such a time begin in the unlikely environment of post war Britain when we went from bombed out and bankrupt in 1945 to the swinging 60’s in 15 years. In the early 20th century we had the great rise of the motor car and in the 60’s we had the consolidation of US power in the Apollo program. In all of these events there were great rises in the equity markets and very powerful individual stocks.

These times, which come but rarely in history, need vehicles to carry the human emotion forwards and one of those vehicles is the potential of Tesla stock. The current price of Tesla stock reflects the hopes and aspirations of people who believe in a better future both in performance, comfort and convenience and in doing so in a cleaner and more environmentally friendly way. In Tesla they have a company that has made the BEV the future, not like GM who had the future with their own EV1 but then strangled their own baby. Moreover with Tesla there is far more than just the BEV with storage, solar, better batteries and robotic driving as known possibilities but with Musk there is also, as Munroe recently noted, genius and that can be a tide of extraordinary power that lifts very many boats in ways that are currently unknown to most of humanity.

It is impossible to predict equity price from company fundamentals, one can certainly know when a stock is price cheaply compared to its earnings, but even then we do not know if the price can get cheaper or how long it will take for the market to correct the price to a more sensible correlation with the business. For business in strong growth it is very much more difficult and for a stock like Tesla which has grown to near cult status the difficulties are compounded many times. Attempts to value high growth stocks are always pointless if measured on p/e, better on peg valuations but their one depends upon forecasts which can be wrong. Since these two valuation methods, at least to me, can’t be used then I have instead to rely on watching the price and using it to tell me which way is the most probable. This type of approach is now well developed but requires, imho, some serious training and it is not something i would suggest that anyone does without that training, but people will and some will make great fortunes, others will lose a lot of money and that applies to both long and short.

So in one sentence:

The price of Tesla stock is at all times highs because there are more buyers than sellers.

My comments give the reasons why i believe this is happening.

Regards,

PS I value all opinions as they help me formulate my ideas: As iron sharpens iron, so one person sharpens another.

It is interesting to read your forecasts of wonderful times to come. I too am an optimist but, as an investor am wary of putting a ruler on a graph and convincing myself that trees will grow to the sky. No-one knows whether you will be right or not. We could see a major problem occurring with the growth in China and sadly, the current health crisis could be an indicator of a major setback, or not?

I personally think the valuation of Tesla is insane. But what do I know? Your forecasts of their huge successes over the last five years or more, may come true. Anyone investing in them over the last six months has certainly made a killing. As a cautious investor, I'd be tempted to top slice as the price may come down.

In the real world, Tesla's performance is going to be reflected in their earnings report due out in the next week. We can assume that, on past form, this will present the rosiest possible view of their current financial situation. And presumably Tesla shareholders will be delighted to transfer a major part of their wealth to Elon Musk as a reward for his performance.

regards

Howard

[odysseus2000]

Mercedes forced to cut output estimates due to battery shortage:

https://twitter.com/Reuters/status/1220 ... 63587?s=20

[odysseus2000]

Intéresting graphic:

https://twitter.com/skorusark/status/12 ... 91808?s=21

Regards,

[Howard]

Mercedes forced to cut output estimates due to battery shortage:

https://twitter.com/Reuters/status/1220 ... 63587?s=20

You will like this bit of the article, Ody, surprised you didn't post it!

"Daimler’s works council chief Michael Brecht told Manager Magazin that one of the reasons the company is struggling to meet battery demand is because Tesla bought Grohmann Engineering, a battery automation specialist hired by Mercedes-Benz to build up its own battery manufacturing capacity."

And I see that if Mercedes don't reduce the average CO2 emissions for their fleet by next year (or buy CO2 credits from a competitor), they could face EU fines of up to nearly a billion Euros. I know I'm repeating myself, but as I've previously posted, the German car market is one to watch over the next year or two.

regards

Howard

[BobbyD]

Intéresting graphic:

https://twitter.com/skorusark/status/12 ... 91808?s=21

Regards,

Do they have rates for any other small population of cars considerably younger and considerably more expensive than the average car on American roads?