Tesla, the investment

[White.Beard.Doc]

I was a Tesla fan boy back in 2010. I bought the stock back in the day. Not only have I owned the stock for a long time, but I have also owned 4 of their vehicles.

Drivetrain: amazing
Interface: Outstanding
Suspension: variable, quite good on some of the vehicles to not so great on others
HVAC: so, so
Quality control: hit or miss
Autopilot: fantastic only in limited circumstances, clear weather, limited access highways, terrible in many other circumstances

The reality is that the cars are very nice in many ways, the sick torque and acceleration just never gets old. The drivetrain, modulation and regen just keeps getting better and better.

However, these cars are not going to be able to fully drive themselves any time soon without a driver behind the wheel. The vehicle has self driving vision like an octogenarian with bad cataracts. And the self driving computer has the IQ of an imbecile in many circumstances, some quite complex, but also others quite simple. I have doubts that the current technology path they are on (the hardware even more than the software) will ever be good enough to completely get rid of the driver.

Yes, it is wonderful to relax on a long trip on a limited access highway as the car reliably drives itself in clear weather. At the same time, it is frustrating as ************************ that the vehicle cannot pass a parked car on a local street without coming to a stop, not knowing what to do. Yes, the software that controls the car will slowly get incrementally better. But the autopilot vision seems to have limited distance vision, and the software continues to have limited processing power to interpret what it sees. The computer vision is seriously lacking in depth perception and simply cannot figure out what spaces it can fit through.

Tesla stock got way ahead of itself. Too many future upsides baked in, some realistic and others pie in the sky. Yes, Elon is brilliant, but he is also crazy.

The batteries will continue to steadily improve. The autopilot will also slowly improve. But robotaxis that can handle anything with no human input at all? I am skeptical. Perhaps they will iterate to the point where the vehicle can handle 98% of circumstances, and then a remote taxi driver will take over from India via G5 internet to drive the vehicle out of whatever it cannot handle. But robotaxis are not just around the corner. They just aren't. And that theoretical value was already baked into the recent price of the stock.

[CordMcNally]

I could never bring myself to buy a $75 pair of athletic shorts unless it came with $60 in the pockets.

[xraygoggles]

on a side note since I mentioned lululemon, I did buy some pants from there and they are exceptionally comfortable. Probably not worth the price tag, but definitely one of the more comfortable pair of pants I’ve ever owned.

Lululemon attire for men is a well kept secret. I found out about it from my ex a few years ago, who recommended it to me. It's form-fitting, comfortable, and versatile.

Let's make a Lululemon thread for us fanbois, forget Tesla.

[Molar Mechanic]

Stonks go up, stonks go down. Invest in what you know. Don't get emotional. Don't gloat when you're correct, don't over indulge in the schadenfreude when others are wrong.

As for me?

When TSLA went up 24x from when I bought it, I cracked open a beer and went to work the next day.

I just learned from you guys that TSLA went down to 16x, I cracked open a beer and I'm going to work tomorrow.

Life goes on. C'est la vie. Vegas stocks going to do what Vegas stocks do.

[Lordosis]

I think you're thinking of LuLaRoe. Lululemon is still a scam but a different one.

Yes that is what I was thinking of. Lol

[Zaphod]

I just want to clarify first that I don’t expect this to happen any time soon if ever. If Tesla or someone else truly solves autonomy, it will have the ability to 10x again. It has the potential to replace every driver in the world, every truck driver, every taxi/Uber driver, every delivery driver, every commuter. At that point it becomes cost prohibitive to even own a car and cheaper to just ev robotaxi everywhere. How much value does that bring to a company or the world in productivity?

Total market cap keeps going up. Will it slow down or go up faster? Us market cap was 15T in 2011 and 50T in 2020 (I did cherry pick this timeframe). A trillion dollar company used to sound ridiculous but now there’s a few.

Yes I dont disagree which is why I put in the "investing timeline" disclaimer. People that caught this did great, but lots are jumping on thinking it will happen again to them, possible, but much less likely. Trying to find the next possibility likely a better use of that energy.

I think the slow but large growth overall is what most people miss about markets and is difficult to comprehend. Its the most powerful part.

[Nysoz]

Tsla cannot 10x again, and certainly will not repeat its 2010-21 run in a time horizon that fits anyones investing time line (unless death has been ruled out technologically). They were nearly a trillion dollar company, so unless the world grows in that period of time to where tsla having a market cap equal to the whole production of the current world makes sense, it wont happen.

I just want to clarify first that I don’t expect this to happen any time soon if ever. If Tesla or someone else truly solves autonomy, it will have the ability to 10x again. It has the potential to replace every driver in the world, every truck driver, every taxi/Uber driver, every delivery driver, every commuter. At that point it becomes cost prohibitive to even own a car and cheaper to just ev robotaxi everywhere. How much value does that bring to a company or the world in productivity?

Total market cap keeps going up. Will it slow down or go up faster? Us market cap was 15T in 2011 and 50T in 2020 (I did cherry pick this timeframe). A trillion dollar company used to sound ridiculous but now there’s a few.

[CordMcNally]

Isn't that one of those multi level marketing deals? Maybe I am thinking of something else but I thought we had a nurse selling everyone expensive pants.

I think you're thinking of LuLaRoe. Lululemon is still a scam but a different one.

[Zaphod]

What would you all make of the statement that Tesla’s future trajectory and profits are already priced in to its current valuation? The run up was so massive, do they have any where else to go except tread water and try to live up to expectations in the years to come?

It is basically true. Look at say microsoft after 2000, etc...which wasnt all pe but also market sentiment and rerating. Not saying they cant go up some or anything, but they literally cannot do whats been done, kind of like bitcoin although it has a much further runway.

Tsla cannot 10x again, and certainly will not repeat its 2010-21 run in a time horizon that fits anyones investing time line (unless death has been ruled out technologically). They were nearly a trillion dollar company, so unless the world grows in that period of time to where tsla having a market cap equal to the whole production of the current world makes sense, it wont happen.

It can still fluctuate wildly and have good years, but overall the absolute base case has to be overall price stagnation, with the high likelihood of PE compression in the future. Its even too big for rampant speculation to do anything crazy anymore.

Try not to take this the wrong way, its the martin skhreli of companies (one of the rare people to have traded his way out of a ponzi like scheme and make it profitable), they have won the game and summited the beast.

Although hyped otherwise, almost every sector tsla is involved in is in the end a commodity business, and those arent usually great businesses. Though cyclically might be decent now for commoditites, thats an input cost for tsla.

Doesnt mean they cant find some new path to find growth of course, but theres nothing right now in the business that makes buying here at these prices a good EV (expected value) play. You'll likely have chances to get in at prices that offer better returns however in the future.

[Nysoz]

What would you all make of the statement that Tesla’s future trajectory and profits are already priced in to its current valuation? The run up was so massive, do they have any where else to go except tread water and try to live up to expectations in the years to come?

That’s a complicated question with a complicated answer. I think the current share price has priced in a lot of future growth but of mainly the car production side.

With their fsd software/autonomy side, there’s a little of it priced in but not fully. I think people are both underestimating and overestimating this value. Safe or not, Tesla is trudging forward with fsd beta with wider release in the US. This part is widely variable. How many people will buy the full option? How many people will subscribe to the monthly fee? Will other countries get on board? Chinas take rate was very minimal with the limited features there. As Tesla Ramps up production will the take rate be similar/more/less? Tesla doesn’t have to have a fully automated taxi fleet to make money from their software, just good enough or promise enough that people buy it and they can take in that high margin revenue.

Tesla daily is a Tesla bull, so take it with a grain of salt, but here’s a YouTube video explaining possible valuation of car production and fsd revenue over the next 10 years. Now he says conservative a lot but I think he’s making some conservative assumptions and also some not so conservative assumptions.

https://m.youtube.com/watch?v=i9eWmAkTTTw

The thing I like about investing in Tesla over other evs or clean energy plays is because they have their fingers in so many potentially disruptive fields with room to grow. Evs, autonomy, ai, solar, energy storage, battery production.

From here the upside is limited compared to previously after the run up and market cap, but we're still very early in the clean energy revolution.

As for my lululemon pants, I got regular looking slacks and not male yoga pants.

[billy]

Isn't that one of those multi level marketing deals? Maybe I am thinking of something else but I thought we had a nurse selling everyone expensive pants.

scammers were selling fake lululemons on instagram... maybe thats what youre thinking of?

[Tim]

no it's a popular high end athletic clothes store basically, like 100 dollar yoga pants. the stuff is nice and well made but it's pricy.

I have a SIL that bought a pair. Never exercises but wears them to the Dollar Store. Go figure. I think she wears them while she watches HSN and scouts for bargains. Really big on collectible dolls.

[Panscan]

Isn't that one of those multi level marketing deals? Maybe I am thinking of something else but I thought we had a nurse selling everyone expensive pants.

no it's a popular high end athletic clothes store basically, like 100 dollar yoga pants. the stuff is nice and well made but it's pricy.

[Lordosis]

It’s hard because there’s some cult follower companies out there like peloton or lululemon previously but not as fervent as Tesla. GameStop has a fan base for a different reason.

as for ev companies, nio and cciv (lucid motors) have decent followings but they’re priced like they’re the next Tesla when they’re not. Ultimately their evs may compare to a Tesla but Tesla is more than just a ev company even though that’s where they get the majority of their obvious revenue for now.

I invested in Tesla because I love the product (car) and I believe in a clean renewable future. It might take years to get there, but it’ll get there either through necessity, government mandate, economics or some combination.

on a side note since I mentioned lululemon, I did buy some pants from there and they are exceptionally comfortable. Probably not worth the price tag, but definitely one of the more comfortable pair of pants I’ve ever owned.

Isn't that one of those multi level marketing deals? Maybe I am thinking of something else but I thought we had a nurse selling everyone expensive pants.

[TheDangerZone]

What would you all make of the statement that Tesla’s future trajectory and profits are already priced in to its current valuation? The run up was so massive, do they have any where else to go except tread water and try to live up to expectations in the years to come?