Overlords Investment Conclave [OIC] Recruitment Thread

[coopasonic]

Also, I could be wrong (and ironically, I work for a company that has all this data, so I could find out if I wanted to dig), but I doubt there are a significant number of people in both the "Typical Ford clients" and "Typical Tesla clients" sets.

One data point:
http://insideevs.com/study-major-oem-ty ... e-toyotas/

A major automaker conducted a private study, and the results are astounding. The study showed that someone with a Tesla Model 3 reservation is doubly as likely to be a current Toyota owner, than any other brand.

If this is substantiated, then Tesla has succeeded in convincing the “masses” to move to its brand, with the new, less expensive offering. Upwards of 400,000 people have placed a reservation on the vehicle, and its upcoming production and delivery will mark a historic turning point for the adoption of electric vehicles.

Generally, Tesla owners fall in the higher income bracket, and come from the likes of brands such as BMW and Audi. Other brands that were noted in the study, as those owned by soon-to-be Model 3 buyers, were Chevrolet and Ford. Current owners of Nissan, Cadillac, and Lexus vehicles showed little to no interest in Tesla’s much anticipated car.

[LawBeefaroni]

Thankfully (?) my bet on F was call options so the bleeding has ceased. Really bad outlook stated today.

[Zaxxon]

To me, this bolded part is the most important consideration - is F a good investment TODAY (irrespective, IMO, of whether or not they are an EV leader).

Agreed. I think the issue for me is I feel there's going to come a point at which EVs stop slowly growing and suddenly 'grow up.' At that point I don't think it's going to be a slow decline for those not on board, but a sudden drop. I'm probably wrong about this. But that's why I wouldn't want to be left holding the bag of an individual ICE manufacturer stock at that point.

Incidentally this is one of the reasons I asked earlier who has driven a full-on EV. It's really one of those things you have to experience to 'get,' or at least it was for me. Go drive a Tesla (seriously; go do it) and then jump back into an ICE. There's just no comparison, and this holds (for me) for the driving experience even in a more pedestrian EV like my Leaf. The 0-60 ain't spectacular, but the silent drive, instant torque at any speed, 100% charge every morning, no fumes, always heated/cooled to a comfortable level before I get into the car, etc are things that an ICE vehicle can never replicate, because physics. That instant torque is under-rated--even with a relatively tiny 80 kW motor (vs 225-450 kW in a Tesla), the Leaf is far more fun to drive in traffic than our 400 hp Volvo. It's just a different class of experience, irrespective of whether it's a $70k Tesla or a $27k Leaf.

You compare Tesla to Ford as if they are comparable, but they are not really playing in the same space. My comment about ROW was not to say there won't be Tesla (or EV) sales there, but that many MANY MAAAAAAAANY people (India, China, etc.), will be on ICE's for years, if not decades to come, just due to economics and access. Point being, it will likely be Tesla AND F, not Tesla OR F, if you know what I mean? (or substitute GM)

That's true--they're different on many levels. F sells booku more vehicles, while Tesla is in the energy space. I wouldn't pin my hopes and dreams on China and India continuing to ICE things along, though. China in particular looks like they may go far more all-in on EVs than the US does. But your point still stands--there will be places that will buy up cheap ICE vehicles for quite some time to come even if the 'big players' start to transition to EVs.

Also, I could be wrong (and ironically, I work for a company that has all this data, so I could find out if I wanted to dig), but I doubt there are a significant number of people in both the "Typical Ford clients" and "Typical Tesla clients" sets.

This is true, but by the end of this year will be significantly less true. The typical Model 3 reservation holder is a Toyota owner. Tesla's progress thus far has been in the luxury space where there aren't likely a ton of Ford owners, but it's also been the case for quite some time that the typical Model S owner isn't always coming from a 7 series--tons of folks stretching up from a Prius or other 'eco' vehicle.

To answer the question, though...my answer today is: "I'm not sure" I've been holding for a long time, and am certainly in the black just from the healthy dividend, but quarter after quarter after quarter of crappy new sales numbers is not very encouraging to me as an investor. Maybe I shift my F investment dollars into my existing GM...they certainly seem to be fixing their previous issues better than F is, and is being reflected in their stock price.

Fair answer! And somewhat similar to me if for different reasons. I've been holding TSLA since 2013, and will continue to do so at least through the initial stages of the Model 3 ramp as I think the risk/reward ratio is favorable given that I won't lose sleep if it drops a decent amount from here to there. But were I looking at TSLA today from the sidelines, it'd be a much harder sell for me to buy in.

[Zaxxon]

Ha, and coop beat me to posting the Toyota thing. Nice.

LB, congrats on ceasing the bleeding. I'm expecting some possible bleeding myself on TSLA come the first week of April when 1Q deliveries are stated. There was a multi-week factory retooling in Feb, and then an unexpectedly long EPA hold on the new 100D model that just cleared a few days ago, so I'm not sure they're going to have an impressive #. Of course the focus right now is on Model 3 timeline, but Wall Street gonna Wall Street anyway.

[LordMortis]

Agreed. I think the issue for me is I feel there's going to come a point at which EVs stop slowly growing and suddenly 'grow up.' At that point I don't think it's going to be a slow decline for those not on board, but a sudden drop. I'm probably wrong about this. But that's why I wouldn't want to be left holding the bag of an individual ICE manufacturer stock at that point.

I don't think you are wrong. I just think your timeline is even more aggressive the Musk's which is more aggressive than the contemporary supply chain of complex things works. I do think it's realistic to believe Musk will hit a million vehicles a year by 2020. I do think that is real hit (over 5%) on domestic markets. But I also think the other OEMs are re-aligning as TESLA ramps up and the re-alinmment to ramp up ratio will be less extreme. I also think the TESLA will continue to zero out its funding and look for additional funding to his a million vehicles. Through leveraging or through releasing more and more stock. Cars are not the digital world. Supplying a million people cars over 50,000 people is a totally different game than building an ap to supply 50,000 people and then scaling that ap to a million people and TESLA is realizing that in the same hard to re-align way that the traditional OEMs are realizing the 20th century automobile is a thing of legacy.

But again, this can all change tomorrow. Robots and batteries... Better Robots could alter the supply chain like that. And better batteries could turn the auto world on it's head in a single model year. And there are literally billions of dollars being thrown at both technologies.

[Zaxxon]

Agreed, ramping vehicle production is hard. My hope is they learned their lessons as they claim to have done--with the S they had supplier issues (they were so small they got B-tier suppliers, and the ones they had didn't believe their ramp-up would happen as projected). With the X they made some terrible design decisions (falcon wing doors, etc). With the 3 they say they have designed it from the ground up for ease of manufacturing. They also have A-tier suppliers who have a visible 400,000 person paid waiting list to provide evidence that the market is there.

And they supposedly have the cash they need to get from here to reasonably high production of the 3. They will need a ton more over time as you mention. But I think the gears are greased a lot better for the 2017-2020 time frame than they were for 2012-2017.

I wouldn't view 'better battery' as a holy grail as you seem to be. If a way better battery was developed tomorrow, it *might* hit a production vehicle in late 2020. That's extremely aggressive. Any step change in batteries will need to be reviewed for power, energy density, C-rate, and longevity and will have to prove out as something that will survive hundreds of full charge cycles or thousands of partial cycles over the course of a decade in adverse conditions without losing more than a token amount of capacity. No manufacturer is going to jump to a brand-new battery in less than a few years, and no minor change to battery chemistry will have the immediate impact you describe.

[LordMortis]

falcon wing doors

[malchior]

Ha, and coop beat me to posting the Toyota thing. Nice.

LB, congrats on ceasing the bleeding. I'm expecting some possible bleeding myself on TSLA come the first week of April when 1Q deliveries are stated. There was a multi-week factory retooling in Feb, and then an unexpectedly long EPA hold on the new 100D model that just cleared a few days ago, so I'm not sure they're going to have an impressive #. Of course the focus right now is on Model 3 timeline, but Wall Street gonna Wall Street anyway.

The Solar city integration is a big unknown too. I do think the cash flow coming from their residential solar projdcts made this a long-term genius deal. It will allow them to scale since it'll prop up its EBITDA nicely on an increasing ramp over the next 2 to 3 years. All mostly priced in so it is probably more downside risk if they stumble on it. Also obviously Model 3 availability slipping into the future wouldn't be great either.

Better battery is always far off. I was working on Lithium ion batteries at Lucent in the mid-90s. They didn't come to market for almost 15 years. They are good enough as is but will improve slowly.

[Zaxxon]

I agree on the SolarCity buy, if things go to plan. If they get the integrated solar roof down, and at a cost where it's at or below the cost and at or above the energy production of a traditional roof + panels, then that's a veritable gold mine. A few years in the future, I can see lots of folks going to Tesla and buying a car, roof/panels, and home storage batteries all. Lots of risk and uncertainty in this, but between that and the obvious potential for commercial energy storage/generation, it could be a long-term boon that's larger than the vehicle business for Tesla.

And if it goes poorly, then something something.

[stessier]

The solar roof has me very intrigued - I would love it if it meets a standard panel's output! Although we did just have an incredible hail storm here on Tuesday that made me question how something like that would survive.

[Zaxxon]

Solar panels are more resilient to hail than roofing material, not less. It's like armor.

[LordMortis]

I don't think "good enough" is good enough to displace gasoline or hybrid engines. Compete with? yes. Displace, not by a long shot. The technology is too much voodoo for "good enough" to be good enough. You will say 300 miles and a typical winter driver will rush to a place like here

http://www.teslarati.com/tesla-battery- ... onditions/

And now you have an uphill battle to convince them 300 doesn't really mean 120 miles and that their commute takes longer than an hour (even if it's well less than 60 miles) so how can they rely on getting back and forth to work in the winter?

But now I'm getting off the topic of investing and wiggling.

I agree on the SolarCity buy, if things go to plan. If they get the integrated solar roof down, and at a cost where it's at or below the cost and at or above the energy production of a traditional roof + panels, then that's a veritable gold mine. A few years in the future, I can see lots of folks going to Tesla and buying a car, roof/panels, and home storage batteries all. Lots of risk and uncertainty in this, but between that and the obvious potential for commercial energy storage/generation, it could be a long-term boon that's larger than the vehicle business for Tesla.

And if it goes poorly, then something something.

I don't think Musk wants to limit himself to "Tesla is a car company" I think Musk wants to solve the world's energy problems. Which goes back to he's not afraid to fail and he's not afraid to fail with his or your money. He is a visionary more than he is an entrepreneur or business man. The name Tesla becomes him.

[malchior]

The solar roof has me very intrigued - I would love it if it meets a standard panel's output! Although we did just have an incredible hail storm here on Tuesday that made me question how something like that would survive.

Certain climates definitely wouldn't be conducive. My climate is great for it in NJ but we just did a new roof in 2014 so wah wah...

[Isgrimnur]

Solar panels are more resilient to hail than roofing material, not less. It's like armor.

[citation needed]

[Zaxxon]

I thought that was your job, but OK.

(Tweet of video showing Tesla test of kettlebell impact on terra cotta / clay / slate / Tesla glass tile)

For traditional panels, like my SolarWorld model, they're tested against 1.1-lb 1" steel balls from a height of 13 feet 20 times each on 11+ points of impact.

And on the anecdotal side, we had a hailstorm last year which damaged our cement tile roof in a few places. All 15 of our panels are spotless.

[Isgrimnur]

Oh, who am I kidding? Here.

[Zaxxon]

Do I win a prize for out-Isg-ing Isg at Isg's request?

[Zaxxon]

That video in your link wins the day, though.

[Carpet_pissr]

Forbes:

Tesla will make a fraction of the company's published initial Model 3 production targets. And that $35,000 starting price? Not realistic. That's according to Morgan Stanley analyst Adam Jonas speaking to Bloomberg on Monday.

In a Bloomberg video posted Monday afternoon, Jonas spoke about his forecast, which is at odds with what Tesla management is saying.

"Our forecasts are much more conservative than the company’s forecast both this year and next. We expect this vehicle to go into a kind of soft launch mode into the fourth quarter this year and our forecast is for 2,000. Not 20,000. Not tens of thousands…delivered at the end of this year. The point of this is just to have those initial deliveries done to get the data and the initial feedback from the community. Next year, we’re at about 80,000 units. Yes, they’ve talked about 400,000…that kind of pace of production. We are nowhere near that. Even if you go out a few more years to 2020, our numbers are less than half, maybe a third of what management is implying that they can do. In spite of that, we are constructive on the investment."

In contrast, Tesla stated in its most recent "Tesla Fourth Quarter & Full Year 2016 Update" released in February that "Our Model 3 program is on track to start limited vehicle production in July and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018."

Interesting, now do we believe one analyst, or the company?

[Zaxxon]

My answer's neither. Tesla tends to slightly overpromise on #s and timeline (Model X launch excepted) while Jonas has a multi-year track record of being all over the board wrt TSLA.

I think Tesla has approximately a 100% chance of beating Jonas' estimates, and about a 0% chance of hitting their own target of a 500k run rate exiting 2018 (note that's not the same as 500k produced in 2018 which I see reported too often).

[LordMortis]

Can we accept both of them and put a wide ass target somewhere in the middle.

TESLA still don't have a handle on the costs and timing of producing complex things but analysts have shown with almost 100% certainty that they will grossly under estimate a popular (pop culture?) 21st century technology company's ability to adapt and grow.

[LordMortis]

Hot on the heels of your news, China investors make Zaxxon rich on paper.

http://www.reuters.com/article/us-tesla ... SKBN16Z1FJ

China's Tencent takes 5 percent stake in electric-car maker Tesla

[Zaxxon]

Nah, we're not even at ATH. Although it does make things interesting should the stock start to take off as Model 3 launches. Something like 19% of TSLA is sold short. Non-institutional, non-Musk, non-Tencent investors hold something like 12%. If there is a quick or sustained, significant rise, short-sellers will have some difficulty covering.

[Pyperkub]

In a related note, I find it very fascinating that the Energy Sector is down this year.

While the energy earnings drag is evaporating, the sector is still lagging this year.

For example, the Energy Select Sector SPDR ETF (XLE Sel Sct En Shs XLE 69.93 +0.04%), the largest equity-based energy exchange-traded fund (ETF) by assets, is lower by 6.6 percent year to date.

This is somewhat contrary to what I've come to expect from the Energy Sector - gas prices are up since December, and most projections have gas and natural gas prices rising even further this year. I also thought that the Trump Admin's friendliness to the Oil sector would lead to a rise as well.

However, we haven't seen it through the first quarter of 2017, and I'm curious as to the why. Any thoughts?

[Zaxxon]

Nah, we're not even at ATH. Although it does make things interesting should the stock start to take off as Model 3 launches. Something like 19% of TSLA is sold short. Non-institutional, non-Musk, non-Tencent investors hold something like 12%. If there is a quick or sustained, significant rise, short-sellers will have some difficulty covering.

Interesting day for Tesla. Up $20/share (7.2%) to a new all-time high of $298.52 on solid Q1 deliveries reported this weekend (25k vehicles, on guidance for 1H17 of 47k-50k). All shorts are now underwater, and some may receive margin calls tonight. Fun times. I really wanted to sell a call or two late in the day expecting a bounce downward tomorrow, but that's risky after a big up day resulting in a new ATH...

[Pyperkub]

Back to Amazon. Thoughts on this article?

The thoughts on Amazon here sound about right though I think it is focusing on stuff that is just too far over the horizon right now. Could Alexa be huge for them? Sure but Amazon is firing on multiple cylinders and showing outstanding success now. On the cloud side AWS is a major profit center that keeps on giving. On the retail side they've used free cash (a large share from AWS) to build out infrastructure. They are at a point that they are now doing delivery using their own fleets with some USPS/Lasership supplementation. I haven't seen an Amazon package come via UPS/Fedex in about 6 months now. They are truly poised to dominate multiple sectors. That they haven't settled for success in retail or cloud computing is commendable. They aren't sitting still - and they generally succeed. I can't see anyone seeing anything but upside there now.

I missed it, but Amazon broke through the $900/share mark last week.

[Carpet_pissr]

My Amazon shares are officially in "let it ride" mode for the foreseeable future.

The only company in my stable with no upper limit indicated for me to consider selling.

[Pyperkub]

My Amazon shares are officially in "let it ride" mode for the foreseeable future.

The only company in my stable with no upper limit indicated for me to consider selling.

good idea:

Amazon.com Inc. AMZN posted year-over-year increases in both earnings and sales after the market closed Thursday, beating analyst expectations and sending its stock to record levels in late trading

$955/share last I checked in after hours trading...

[Carpet_pissr]

Woot.

I saw where they came out with a camera version of the Echo.

The Alexa API (if you can call it that?) is definitely here to stay. It's in everything now, and the growing list is hard to keep up with.

[noxiousdog]

My Amazon shares are officially in "let it ride" mode for the foreseeable future.

The only company in my stable with no upper limit indicated for me to consider selling.

good idea:

Amazon.com Inc. AMZN posted year-over-year increases in both earnings and sales after the market closed Thursday, beating analyst expectations and sending its stock to record levels in late trading

$955/share last I checked in after hours trading...

I'm still in on AMZN, but I wonder what a fair price is. Mature companies trade about 15 times earnings. At $955 that means they need to be making $63 per share. While that's possible, how long do we have to wait? 2025? 2030?

[pr0ner]

My Amazon shares are officially in "let it ride" mode for the foreseeable future.

The only company in my stable with no upper limit indicated for me to consider selling.

good idea:

Amazon.com Inc. AMZN posted year-over-year increases in both earnings and sales after the market closed Thursday, beating analyst expectations and sending its stock to record levels in late trading

$955/share last I checked in after hours trading...

I'm still in on AMZN, but I wonder what a fair price is. Mature companies trade about 15 times earnings. At $955 that means they need to be making $63 per share. While that's possible, how long do we have to wait? 2025? 2030?

I'm sure AMZN will go the AAPL route and do a stock split at some point in the not too distant future.

[noxiousdog]

I'm still in on AMZN, but I wonder what a fair price is. Mature companies trade about 15 times earnings. At $955 that means they need to be making $63 per share. While that's possible, how long do we have to wait? 2025? 2030?

I'm sure AMZN will go the AAPL route and do a stock split at some point in the not too distant future.

Maybe, but that doesn't change anything. Cutting a pie into 16 slices instead of 8 doesn't change the size of the pie.

[pr0ner]

I'm still in on AMZN, but I wonder what a fair price is. Mature companies trade about 15 times earnings. At $955 that means they need to be making $63 per share. While that's possible, how long do we have to wait? 2025? 2030?

I'm sure AMZN will go the AAPL route and do a stock split at some point in the not too distant future.

Maybe, but that doesn't change anything. Cutting a pie into 16 slices instead of 8 doesn't change the size of the pie.

No, but it makes more shares available, which would drop the earnings per share number. And open up AMZN to more investors (which is part of why AAPL split).

[stessier]

It drops the value of the number, but it doesn't do anything in determining whether it is a good buy. So if they have to make $65/share and are earning $60/share before the split, or they need to earn $12 and are only earning $10, the result is the same as is the difficulty in getting up to the desired performance.

[noxiousdog]

No, but it makes more shares available, which would drop the earnings per share number. And open up AMZN to more investors (which is part of why AAPL split).

I find it extremely unlikely that anyone has ever gone to buy AMZN shares and there were none available.

[Carpet_pissr]

I'm still in on AMZN, but I wonder what a fair price is.

$1156

[noxiousdog]

I'm still in on AMZN, but I wonder what a fair price is.

$1156

Why?

[noxiousdog]

First, I discount all of Amazon's retail. In twenty years, they've barely made anything off of it. I know that the idea is that one of these days, they'll stop "reinvesting" and all of the sudden it will make money. I don't believe that, or at least it's too far off in the future to contemplate. We would already be seeing signs.

However, AWS is a big deal. 90% of their operating profits are coming from there and that's growing nicely at just under a 50% clip. What is concerning though, is Gartner is predicting slower growth in the cloud market over the next few years. 18% in 2017 down to 15% in 2020. A nice number, but it means that Amazon can't grow AWS at 50% forever.

Assuming Amazon grows earnings at 50% per year (an astounding number, but certainly within the realm of possibility), That puts them at earnings of 24.81 per share in 2020. Trading at a 50x earnings that would be a price of 1240. That would be a reasonable number if they are continuing to grow earnings at 50% per year. I see this as the most likely scenario. They get a few years to continue the crazy growth, but the earnings multiple comes down to a reasonable number.

The non-50% growth rates are scary for investors. If you slow it down to 40%, you're looking at 23.15 of earnings and a 40 multiple in 2020 putting the price at $926/share. Effectively zero price appreciation for four years. If the multiple contracted further, you're looking at serious losses.

Or we can just pretend valuation doesn't matter, which it hasn't so far. That's often true right up until the point where it does matter.

[LordMortis]

NBR reported last night that Amazon is showing signs of entering the pharmacy marketplace. My "longterm" pick in CVS just gets worse and worse. The funny thing is CVS are already in the delivered meds business but I don't think it's going to matter.

[LawBeefaroni]

NBR reported last night that Amazon is showing signs of entering the pharmacy marketplace. My "longterm" pick in CVS just gets worse and worse. The funny thing is CVS are already in the delivered meds business but I don't think it's going to matter.

There's more to it than just warehouses and a delivery network. That's not too say Amazon can't do it but they'll have to get into care management, deal with regulatory requirements, and forge relationships with insurers and employers.