What do you think of the Tesla craziness?

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TheFishGuy99
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What do you think of the Tesla craziness?

Post by TheFishGuy99 » Wed Oct 10, 2018 3:28 am

What do you bogleheads think of the TSLA craziness?

I know there has to be a few daytraders on here short selling it! lol

With the elon musk tweets criticizing the SEC, the stock being overvalued(according to some), some analysts say its going to crash, some say it could go up to $4000 a share. Its just really fun to watch. Its been bouncing all over this past week. High of 310ish and low of around 250.

It is interesting that Tesla obviously has the leading EV product right now, but the question is will they 10 years from now.

I don't plan on buying any and I don't own any, but im just curious, are you buying or selling?

Sinsji
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Re: What do you think of the Tesla craziness?

Post by Sinsji » Wed Oct 10, 2018 3:48 am

TheFishGuy99 wrote:
Wed Oct 10, 2018 3:28 am
I don't plan on buying any and I don't own any, but im just curious, are you buying or selling?
Don't own it. Probably would sell if losing the money matters.

Although I don't make cars myself :happy, I see more downside than upside. For example TSLA has a revenue of 13.68B and Market Cap of 44.83, while BMW has a revenue of 96.7B and Market Cap of 53.46B. Either these expectations are correct and Tesla is going to keep challenging carmakers like BMW despite years of experience in constructing and selling cars. Or expectations are wrong and companies like BMW, Honda, Toyota will survive this challenge.

These car groups have less debt, more revenue, a lot of experience and connections and might be able to arrange there own electric engines in time. As Tesla has experienced, good ideas and technology are on thing, actually building and delivering cars on time is another thing.

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Re: What do you think of the Tesla craziness?

Post by TheFishGuy99 » Wed Oct 10, 2018 4:34 am

Sinsji wrote:
Wed Oct 10, 2018 3:48 am
TheFishGuy99 wrote:
Wed Oct 10, 2018 3:28 am
I don't plan on buying any and I don't own any, but im just curious, are you buying or selling?
Don't own it. Probably would sell if losing the money matters.

Although I don't make cars myself :happy, I see more downside than upside. For example TSLA has a revenue of 13.68B and Market Cap of 44.83, while BMW has a revenue of 96.7B and Market Cap of 53.46B. Either these expectations are correct and Tesla is going to keep challenging carmakers like BMW despite years of experience in constructing and selling cars. Or expectations are wrong and companies like BMW, Honda, Toyota will survive this challenge.

These car groups have less debt, more revenue, a lot of experience and connections and might be able to arrange there own electric engines in time. As Tesla has experienced, good ideas and technology are on thing, actually building and delivering cars on time is another thing.

I agree with you.

In high school I was a lot attendant at Mercedes Benz and even 5+ years ago Mercedes had the self driving technology. It wasn’t fully self drivable, more like you could take your hands off for a bit, but I’m sure it could be. I think it’s more an issue of companies are worried about people dying in the self driving cars and it’ll ruin their brand name so no one wants to be the first to jump in. That’s just my opinion.

I think Mercedes and similar brands that are “tech savvy” will compete with Tesla. They’ll figure out fully electronic cars im sure. I know Mercedes and I think Porsche have ev plans for 2020.

I like Tesla and I hope they make it but I’m not sure they can survive a big economic downturn which in my opinion is coming up on this record long bull market

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Re: What do you think of the Tesla craziness?

Post by mrspock » Wed Oct 10, 2018 5:33 am

TheFishGuy99 wrote:
Wed Oct 10, 2018 4:34 am
Sinsji wrote:
Wed Oct 10, 2018 3:48 am
TheFishGuy99 wrote:
Wed Oct 10, 2018 3:28 am
I don't plan on buying any and I don't own any, but im just curious, are you buying or selling?
Don't own it. Probably would sell if losing the money matters.

Although I don't make cars myself :happy, I see more downside than upside. For example TSLA has a revenue of 13.68B and Market Cap of 44.83, while BMW has a revenue of 96.7B and Market Cap of 53.46B. Either these expectations are correct and Tesla is going to keep challenging carmakers like BMW despite years of experience in constructing and selling cars. Or expectations are wrong and companies like BMW, Honda, Toyota will survive this challenge.

These car groups have less debt, more revenue, a lot of experience and connections and might be able to arrange there own electric engines in time. As Tesla has experienced, good ideas and technology are on thing, actually building and delivering cars on time is another thing.

I agree with you.

In high school I was a lot attendant at Mercedes Benz and even 5+ years ago Mercedes had the self driving technology. It wasn’t fully self drivable, more like you could take your hands off for a bit, but I’m sure it could be. I think it’s more an issue of companies are worried about people dying in the self driving cars and it’ll ruin their brand name so no one wants to be the first to jump in. That’s just my opinion.

I think Mercedes and similar brands that are “tech savvy” will compete with Tesla. They’ll figure out fully electronic cars im sure. I know Mercedes and I think Porsche have ev plans for 2020.

I like Tesla and I hope they make it but I’m not sure they can survive a big economic downturn which in my opinion is coming up on this record long bull market
I'll be the contrarian here. I predict Tesla will be making cars in in the factories of fallen car makers (hint: they already are in Fremont CA). It's entirely possible we are looking at a big transition in a very stale, complacent industry much like we've seen before in other industries. Investors are badly mistaken if they think the incumbents can just throw some batteries in existing platforms and they are safe from Tesla. They are a _tech_ company, with tech company like growth, industry disruption (challenging ideas like "JIT" is a tired, old, flawed concept, "face lifts", automation & innovating in areas like assisted driving), high margins and the work ethic of their employees.

It's laughable to me to consider BMW and Mercedes "tech savvy", it's a bit like calling IBM innovative... OK...maybe once it was, but not really anymore compared to the likes of Google, Apple or Amazon. These are companies that still charge $1500 for Navigation systems which are laughable compared to CarPlay, con their own customers as apart of the business model (financing, "face lifts", option pricing, "planned obsolescence", say nothing of the sleazy sales process) and never gave EV's & driverless cars a second thought before being faced with pressure from Silicon Valley.

Also to put things in perspective, Tesla went from making 0 to having the #1 car in the US in what? 10 years? It's completely unheard of in the auto industry. Are they getting everything perfect (e.g. fit and finish?), absolutely not, but they are learning at a very rapid rate. The arrogance of the legacy car companies reminds me of the mistake BlackBerry (and Nokia & Motorola) made in the early 2000s when Apple launched the iPhone, they hung the hats on their keyboard & security while Apple & Google ate their lunch. By the time they reacted it was too late, BlackBerry is now on life support and Nokia was bought by Microsoft, and Motorola by Google.... see a pattern here?

My money is on Tesla.
Last edited by mrspock on Wed Oct 10, 2018 9:59 am, edited 1 time in total.

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Re: What do you think of the Tesla craziness?

Post by nisiprius » Wed Oct 10, 2018 5:48 am

The same thing I think of the Seahawks' chances on Sunday. 1) I don't know, 2) somebody is going to make a lot of money betting on it, and 3) it won't be me.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: What do you think of the Tesla craziness?

Post by Valuethinker » Wed Oct 10, 2018 5:53 am

TheFishGuy99 wrote:
Wed Oct 10, 2018 3:28 am
What do you bogleheads think of the TSLA craziness?

I know there has to be a few daytraders on here short selling it! lol

With the elon musk tweets criticizing the SEC, the stock being overvalued(according to some), some analysts say its going to crash, some say it could go up to $4000 a share. Its just really fun to watch. Its been bouncing all over this past week. High of 310ish and low of around 250.

It is interesting that Tesla obviously has the leading EV product right now, but the question is will they 10 years from now.

I don't plan on buying any and I don't own any, but im just curious, are you buying or selling?
1. it is the most heavily shorted stock in the market, I believe - this is hedge funds, not individual punters doing this. Given limited liquidity this gives rise to "short squeezes" where short positions have to be covered when the stock price blips up

2. it is cash flow negative and has a large amount of debt it will need to refinance. A slip could wipe out the equity

3. CEO seems increasingly manic and out of control. Turnover of senior management has been phenomenal -- this is a serious concern

4. valuation seems high compared to other car companies although there is a perfectly reasonable argument that EVs are a disruptive technology and it should have a valuation closer to a tech stock. Balanced against this, fast growing tech stocks usually have a lot better cash flow

5. I hope for its success because it has staged a "break through" into mass luxury market cars (if not mass cars) for EVs and probably therefore advanced the move to EVs by 5-10 years

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Re: What do you think of the Tesla craziness?

Post by MossySF » Wed Oct 10, 2018 6:03 am

As a company, I'm not interested in investing in individual Tesla stock positions either for or against.

As a consumer, these cars are amazing. Given the choice between a Model 3 and a similarly-priced BMW 340, Tesla all the way.

mgensler
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Re: What do you think of the Tesla craziness?

Post by mgensler » Wed Oct 10, 2018 6:33 am

We've owned Tesla cars since 2013. Two S and an X. The first S we thought was great. The 2nd S even better. The X is an early build and has had issues similar to the early S. It's typically quality issues with 3rd party components and tire wear.

The big moat which many don't talk about is the charging network. With a Tesla you can drive around town and take a vacation. The network has been 100% reliable which is an issue for the 3rd party chargers.

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Re: What do you think of the Tesla craziness?

Post by arcticpineapplecorp. » Wed Oct 10, 2018 6:46 am

I hold Tesla...in the Vanguard Total Stock Market Index Fund:

https://www.investopedia.com/articles/i ... -stock.asp

See what I did there? Basically, so practically any stock you want to own is likely to be included in the total stock market index fund. So go ahead and buy the total stock market so you can brag to your friends that you own some Tesla or whatever other stock is in the news.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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Re: What do you think of the Tesla craziness?

Post by Stormbringer » Wed Oct 10, 2018 6:53 am

Tesla cars are cool. TSLA stock is uninvestable as far as I'm concerned. The stock is priced for perfection, yet the company has production issues, delivery issues, financial issues, and a brilliant but erratic CEO who can move the stock price by 10% with one dumb tweet.
"Compound interest is the most powerful force in the universe." - Albert Einstein

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Re: What do you think of the Tesla craziness?

Post by Strayshot » Wed Oct 10, 2018 7:10 am

Another one of these threads? Someone please merge this with one of the other billion Tesla posts on here.

ImUrHuckleberry
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Re: What do you think of the Tesla craziness?

Post by ImUrHuckleberry » Wed Oct 10, 2018 7:16 am

i can't decide what to think about Tesla. If I read a well written bear argument, I always end up believing they will be bankrupt by the end of 2019. If I read a good bull argument, I start itching to invest because I'm sure it's going to the moon.

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Carlos Danger
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Re: What do you think of the Tesla craziness?

Post by Carlos Danger » Wed Oct 10, 2018 8:18 am

It's certainly entertaining, and I'm rooting for Tesla and Musk with my heart even though my mind thinks I'm watching a slow-motion train wreck.

I have no financial stake in Tesla in any way so I can just enjoy the show.

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Re: What do you think of the Tesla craziness?

Post by harvestbook » Wed Oct 10, 2018 8:24 am

Your first mistake is thinking it's a car company instead of a technology company. That's like comparing Barnes & Noble to Amazon.

That said, who knows what's going to happen to the company itself, but the technology is already game-changing. I submit that only a crazy person could've built it.
I'm not smart enough to know, and I can't afford to guess.

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Re: What do you think of the Tesla craziness?

Post by misterno » Wed Oct 10, 2018 9:18 am

TESLA is a rich guy's toy. It will never manufacture cars that will appeal to mid income populace which is where the huge potential is.

Even though Tesla 3 is advertised as $35K, average price that is sold is close to $50K.

Rich people dispose their Audis and Mercedes or BMW to get Tesla but how many people in the US have that kind of income.

You might say TESLA will export as well. But Chinese car manufacturers have models with similar range, 50% less cost and smaller cars that appeal to mid income population.

I think TESLA is a hype not because TESLA cars but driverless technology and other technologies that people love to hear. This hype will end and TESLA stock will crash someday.

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Re: What do you think of the Tesla craziness?

Post by missingdonut » Wed Oct 10, 2018 9:23 am

Valuethinker wrote:
Wed Oct 10, 2018 5:53 am
3. CEO seems increasingly manic and out of control. Turnover of senior management has been phenomenal -- this is a serious concern
These were two of the big signals in Enron, even without 20/20 hindsight. It was news when Jeff Skilling referred to an investment analyst as a certain body part in the spring of 2001, and it was news when he abruptly resigned in the summer... and of course we know what happened by the end of 2001.

It makes me wonder how Enron would have unfolded in a universe that included Twitter.

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Re: What do you think of the Tesla craziness?

Post by DanMahowny » Wed Oct 10, 2018 9:27 am

The Tesla "bull vs bear" debate is fascinating. Both side are convinced they are on the winning side.

IMO, the bulls are financially illiterate, and perfectly illustrate why there is a huge gap between the rich vs the poor.

I have a massive short position (with substantial paper profits at the current price of $252).

I'll wait until the stock hits $0. Tick. Tick. Tick.
Funding secured

ImUrHuckleberry
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Re: What do you think of the Tesla craziness?

Post by ImUrHuckleberry » Wed Oct 10, 2018 6:38 pm

misterno wrote:
Wed Oct 10, 2018 9:18 am
TESLA is a rich guy's toy. It will never manufacture cars that will appeal to mid income populace which is where the huge potential is.

Even though Tesla 3 is advertised as $35K, average price that is sold is close to $50K.

Rich people dispose their Audis and Mercedes or BMW to get Tesla but how many people in the US have that kind of income.

You might say TESLA will export as well. But Chinese car manufacturers have models with similar range, 50% less cost and smaller cars that appeal to mid income population.

I think TESLA is a hype not because TESLA cars but driverless technology and other technologies that people love to hear. This hype will end and TESLA stock will crash someday.
Seems about half the people commuting into Boston with me every morning are driving Audies, Mercedes, BMW, and now Tesla. So I think a lot...

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Re: What do you think of the Tesla craziness?

Post by 4cefedgst » Wed Oct 10, 2018 7:07 pm

mrspock wrote:
Wed Oct 10, 2018 5:33 am

I'll be the contrarian here. I predict Tesla will be making cars in in the factories of fallen car makers (hint: they already are in Fremont CA). It's entirely possible we are looking at a big transition in a very stale, complacent industry much like we've seen before in other industries. Investors are badly mistaken if they think the incumbents can just throw some batteries in existing platforms and they are safe from Tesla. They are a _tech_ company, with tech company like growth, industry disruption (challenging ideas like "JIT" is a tired, old, flawed concept, "face lifts", automation & innovating in areas like assisted driving), high margins and the work ethic of their employees.

It's laughable to me to consider BMW and Mercedes "tech savvy", it's a bit like calling IBM innovative... OK...maybe once it was, but not really anymore compared to the likes of Google, Apple or Amazon. These are companies that still charge $1500 for Navigation systems which are laughable compared to CarPlay, con their own customers as apart of the business model (financing, "face lifts", option pricing, "planned obsolescence", say nothing of the sleazy sales process) and never gave EV's & driverless cars a second thought before being faced with pressure from Silicon Valley.

Also to put things in perspective, Tesla went from making 0 to having the #1 car in the US in what? 10 years? It's completely unheard of in the auto industry. Are they getting everything perfect (e.g. fit and finish?), absolutely not, but they are learning at a very rapid rate. The arrogance of the legacy car companies reminds me of the mistake BlackBerry (and Nokia & Motorola) made in the early 2000s when Apple launched the iPhone, they hung the hats on their keyboard & security while Apple & Google ate their lunch. By the time they reacted it was too late, BlackBerry is now on life support and Nokia was bought by Microsoft, and Motorola by Google.... see a pattern here?

My money is on Tesla.
Didn’t know Elon was on this board. Must be taking a break from Twitter.

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Re: What do you think of the Tesla craziness?

Post by Nate79 » Wed Oct 10, 2018 7:15 pm

Has this site turned into reddit?

TheAccountant
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Re: What do you think of the Tesla craziness?

Post by TheAccountant » Wed Oct 10, 2018 7:55 pm

Let’s be honest - you don’t buy a $ 35,000 electric car to save money.

They are niche products, always have been and always will be. What do you do in 5-8 years when these are all rusted out and components need to be replaced? Closest dealer is two hours away and is backlogged for months with repair work. Who has the time for that?

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Re: What do you think of the Tesla craziness?

Post by Valuethinker » Thu Oct 11, 2018 5:28 am

TheAccountant wrote:
Wed Oct 10, 2018 7:55 pm
Let’s be honest - you don’t buy a $ 35,000 electric car to save money.

They are niche products, always have been and always will be. What do you do in 5-8 years when these are all rusted out and components need to be replaced? Closest dealer is two hours away and is backlogged for months with repair work. Who has the time for that?
People generally don't buy cars to save money. A car is a consumption good and we engage in the same status games that all primate species (especially Chimpanzees) engage in. We live in a world of very similar suburban homes we cannot simply signal by the size or amenities of our house (where we park in front of our houses, or share the same parking garages in a condo complex) so we display our material and social success and preferences by our vehicle choice. In Berkeley CA that translated as a very high percentage of Prius's (see South Park's episode about dying of smug pollution) and no doubt in some places that translates as bigger and bigger trucks (see Simpsons re The Canyonero)*. In Silicon Valley that happened to be the Tesla.

There's always that tug of war between conforming with the social norms of your 'hood and the office car park (which we do quite unconsciously - studies show) and seeking to define ourselves from our fellow apes. Hence the appeal of the BMW.

But generally:

1. an EV is radically less complex mechanically than an ICE car (engine and drivetrain), so that's less of an issue

2. do ordinary cars really rust out in 8 years these days? I mean they did 30 years ago, certainly (I grew up in the home of road salt). But now?

3. it is possible the parts won't be around, but I don't know of too many 10 year old cars of any make where you cannot get the parts. Except, perhaps, where the car company has gone broke?

Tesla buys its parts from the same places as everyone else (except the drivetrain) -- so those parts should be around?

A more serious problem might be the onboard computers are obsolete or software updates no longer available. That's the usual problem with old electronics.

There are going to be whole countries that by the 2030s will be 100% EVs for new cars - several have announced bans on new ICE cars by the 2040s. This is not just a niche market -- although Tesla may be a niche car.

It's impossible to dismiss Tesla as a car, now. They've sold too many. It's not a Delorean or a Bricklin. And the other manufacturers are in too much of a hurry to catch up.

However Tesla as a stock is a very different matter. A lot of dot com-ish warning signs.

* studies showed that different types of vehicle buyers had different tendencies in terms of external v. internal orientation. SUV buyers (this was in the late 1990s) were a quite distinct group. By contrast, New England college professors and their neighbours used to have a marked preference for Saabs and Volvos - another type of signalling.

I moved from a "Range Rover hood" to a "Hyundai hood" (from a £70k car to a £20k car). Aka from a private school neighbourhood to a state (public) school one - it matters what you pull up at the school gate with.

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Re: What do you think of the Tesla craziness?

Post by MossySF » Thu Oct 11, 2018 6:06 am

misterno wrote:
Wed Oct 10, 2018 9:18 am
Even though Tesla 3 is advertised as $35K, average price that is sold is close to $50K.

Rich people dispose their Audis and Mercedes or BMW to get Tesla but how many people in the US have that kind of income.
Hahaha ... people go into debt and mess up their finances ALL THE TIME to drive MB/BMW/Audi.

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Re: What do you think of the Tesla craziness?

Post by 4nursebee » Thu Oct 11, 2018 6:52 am

DanMahowny wrote:
Wed Oct 10, 2018 9:27 am
The Tesla "bull vs bear" debate is fascinating. Both side are convinced they are on the winning side.

IMO, the bulls are financially illiterate, and perfectly illustrate why there is a huge gap between the rich vs the poor.

I have a massive short position (with substantial paper profits at the current price of $252).

I'll wait until the stock hits $0. Tick. Tick. Tick.
How do you think of the growth this quarter compared to last year?
What do you think of 83,000 car sales in a quarter?

I read the figures as 1B profit this last quarter if margins as were as they aimed.
4nursebee

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Re: What do you think of the Tesla craziness?

Post by McGilicutty » Thu Oct 11, 2018 7:07 am

I used to own some Tesla (100 shares), but sold it after Musk made his 'funding secured' tweet. Musk may be the next Jobs, but the market cap of Tesla is pretty high ($43B) for a car company.

I'm not sure what Tesla the stock is going to do in the future, but I'm on the sidelines for now.

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Re: What do you think of the Tesla craziness?

Post by Jags4186 » Thu Oct 11, 2018 7:16 am

TheAccountant wrote:
Wed Oct 10, 2018 7:55 pm
Let’s be honest - you don’t buy a $ 35,000 electric car to save money.

They are niche products, always have been and always will be. What do you do in 5-8 years when these are all rusted out and components need to be replaced? Closest dealer is two hours away and is backlogged for months with repair work. Who has the time for that?
You don’t buy a $35,000 electric car in 2018 to save money. But in 2040 your only option may be to buy an electric card and the cheapest one may be $35,000 after inflation. While electric cars are a niche product today, there is no doubt in my mind that they will the only option in the future. The question is whether or not Tesla will be the king of electric car companies—or even a player in the electric car arena—25 years from now. It is my understanding that Tesla’s tech is far beyond what the other manufacturers have. But other manufacturers will catch up. Then it’s a matter of execution, design, and marketing.

I don’t invest directly in Tesla and while Musk is a visionary he’s too erratic to put money behind IMO. That said, it’s nice to see an American car company being the envy of others. It hasn’t been that way for probably 40 years.

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