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David at Imperial Beach  

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  • Mind-Blowing: China Consumes More Gold Than The World Produces [View article]
    Well, the 300 tonnes mined is obviously not the total supply. Recycling according to WGC numbers is currently producing about 35% of mined supply, or another 103 tonnes in the period under discussion. So total supply during the period according to WGC counting methods would be about 403 tonnes, which obviously exceeds the 315 tonnes of Chinese demand. But I have to question how thoroughly the WGC is counting Chinese supply. I don't think for a minute that China is importing 315 tonnes from the rest of the world, and the Chinese aren't reporting domestic production to the WGC at all, so far as I know. I doubt that any of the 403 tonnes includes anything produced by Chinese mines. What's crucial for the global price of gold is not Chinese withdrawals from Shanghai Gold Exchange, but imports from the rest of the world into the Shanghai Gold Exchange. Until recently China imported almost all of its gold through Hong Kong. That's no longer true, and true Chinese import numbers are deliberately hidden while Hong Kong numbers are falling.

    The Shanghai Gold Exchange gets gold from three sources: domestically mined gold, domestic scrap gold (domestic bars, coins, and jewelry that must be recast in order to be resold on the exchange), and gold imports. It does not, so far as I know, publish figures on its sources. From what I've been able to determine, Chinese mines produce about half of domestic demand, and recycling accounts for another 1/3. So if demand is 315 tonnes in a period, then we can expect domestic mines to supply about 157.5 tonnes, and recyclers to supply about 52 tonnes. This leaves a shortfall of 105.5 tonnes to be imported. Obviously the real percentages can vary from these estimates, but as a rough cut these estimates are much closer than merely assuming that all 315 tonnes of Chinese demand were met by imports.
    Feb 19, 2015. 06:07 PM | Likes Like |Link to Comment
  • Misconceptions About Gold [View article]
    You can't completely understand the gold market without acknowledging that gold is both a commodity and a currency. There is no either/or, it is both/and. At least half of all gold sold every year is fabricated as jewelry. In some years, such as 1995 and 1997, supposedly 100% of all gold sold was fabricated as jewelry, according to your own chart. This is not insignificant demand, and as you yourself admit, except in India jewelry demand is mostly not investment motivated. On the other hand, 2/3 to 3/4 of all gold sold is newly mined gold every year. The majority of the remainder is recycled gold. In other words, 2013 was exceptional in that gold holders only rarely panic and decide to sell tons of gold into the market at whatever price they can get. Most gold holders are content to hold their gold for decades at a time, especially if it is fabricated into jewelry and art pieces and collectible coins that they value above the scrap price of the gold. As I have pointed out before, there is much more gold stockpiled than silver. If the market was dependent to a significant degree upon how big the stockpiles were, gold could easily be priced at parity or even less than silver, but it's not now and never will be priced anywhere close to parity with silver.
    Feb 16, 2015. 07:45 PM | 3 Likes Like |Link to Comment
  • Tesla To Be The Next Apple? Here Are 8 Reasons Why It Won't [View article]
    Your poorly cited study makes no sense. Why would there ever under any circumstances need to be a charging station every half mile if EVs like Teslas have minimum ranges of 200 miles? Even if you've got a really crappy EV that only has 30 miles of range, you should still be able to get by with charging stations spaced every 15 miles apart.

    The electric grid is sized for peak loads. There is a lot of excess capacity that goes unused during off-peak hours. That capacity can be used to charge vehicles at home without increasing grid capacity at all. We only have to worry about increasing the grid when EV charging at night shifts the peak load to nighttime, and that's a long way off.
    Feb 16, 2015. 06:00 PM | 2 Likes Like |Link to Comment
  • Tesla To Be The Next Apple? Here Are 8 Reasons Why It Won't [View article]
    " An IC car or hybrid IC car can go and go and go until you ..." run out of money to feed the beast any more fuel. With supercharging, a Tesla does not have that limitation.
    Feb 16, 2015. 05:50 PM | 3 Likes Like |Link to Comment
  • Tesla To Be The Next Apple? Here Are 8 Reasons Why It Won't [View article]
    Nikola Tesla died alone, he did not die broke. That's pure propaganda. He maintained himself in a two room suite at the New Yorker Hotel until the day he died. He did get into financial trouble when J P Morgan pulled out of the Wardenclyffe project, had to sell it and ended up owing taxes on it that he couldn't pay in 1917. But he died in 1943, some 26 years later. Surely the New Yorker Hotel would not have put up with unpaid bills from one of its guests occupying one of its luxury suites for 26 years! His estate included a full 80 boxes of artifacts that were shipped to Belgrade in 1952. Surely if he had outstanding bills those boxes would have been put up for auction.
    Feb 16, 2015. 05:41 PM | 1 Like Like |Link to Comment
  • Tesla: Key Takeaways From Recent Events [View article]
    Your expectations are completely unrealistic. You complain when the company warns that it will end up delivering 2000 fewer cars than initially projected for 2014, then complain again when it shaves that number to 1400 fewer. That's actually a win of 600 in my book, especially when it actually produced all 35K and only failed to deliver 1400 by the deadline.

    Profitability? Why are you so concerned about profitability when the company's plan is to spend money hand over fist to increase production and sales and service capacities worldwide? You're being completely irrational, and you're trying to hold the company to numbers put forth by equally irrational analysts who fail to understand the company's clearly stated strategy. What you have so far failed to acknowledge is that the analysts' EPS estimates were never within the realm of possibility to start with.

    Of course the company's ultimate purpose is to make money. But in capital-intensive industries like automobiles you have to raise and spend capital to make money. Tesla from the start has stated that the money earned on the Roadster gets spent on the Model S, and the Model S money gets spent on the Model 3. How can any sane person read such statements and conclude that there must be lots of leftover profit along the way to satisfy the greed of investors such as yourself? Talk about people who need a reality check!
    Feb 16, 2015. 04:36 PM | 7 Likes Like |Link to Comment
  • Tesla Motors' (TSLA) CEO Elon Musk on Q4 2014 Results - Earnings Call Transcript [View article]
    Elon Musk often requires two or three tries to phrase his sentences so listeners have to piece together many incomplete thoughts to make coherent sentences. Reading an inaccurate transcription adds its own level of difficulty. So, no, it's not just you. It's best to read the transcription while listening to the conference call so you can use one to help you decode the other.
    Feb 16, 2015. 03:10 PM | 1 Like Like |Link to Comment
  • Tesla Motors' (TSLA) CEO Elon Musk on Q4 2014 Results - Earnings Call Transcript [View article]
    Pronouncements of Tesla's death are premature. They seem to be executing pretty much according to plan. Castigating them for not executing according to your own timetable and expectations that they have never committed to is completely unreasonable.
    Feb 16, 2015. 03:00 PM | 2 Likes Like |Link to Comment
  • Tesla Motors' (TSLA) CEO Elon Musk on Q4 2014 Results - Earnings Call Transcript [View article]
    I have no idea what you're responding to. I can't see where Deepak or anybody else other than you ever made any remark about $500 million. The closest on-topic remark I can find is:

    Andrea James - Dougherty & Company LLC
    So maybe about $1 billion is that about inline of cash burn?

    Deepak Ahuja - Chief Financial Officer
    Should be less than that.
    Feb 16, 2015. 02:56 PM | Likes Like |Link to Comment
  • Tesla Motors' (TSLA) CEO Elon Musk on Q4 2014 Results - Earnings Call Transcript [View article]
    Somehow you talked yourself into believing that Tesla would be immediately profitable as soon as they started selling cars, just like a software company. It doesn't work that way in the automotive business. Your expectations were way out of line and your disappointment is well-deserved. Tesla is still a minnow swimming in a pool of sharks and whales. It needs years to grow to a sustainable size, and that takes capex.
    Feb 16, 2015. 02:32 PM | 1 Like Like |Link to Comment
  • Tesla Motors' (TSLA) CEO Elon Musk on Q4 2014 Results - Earnings Call Transcript [View article]
    The transcript, even after update, still leaves plenty of room for improvements. Some of the remarks are attributed to to the wrong person. At least a third of the [indiscernible]s actually are discernible, and some of the words and phrases are wrong, in some cases stating or implying the exact opposite of the speaker's intent.

    I recommend that people read the transcript in conjunction with listening to the actual earnings call recording available at
    Feb 16, 2015. 01:51 PM | 2 Likes Like |Link to Comment
  • Did Tesla's Actions In Detroit Put Its Patents In The Public Domain? Why Investors Should Worry [View article]
    In 1999 people were blindly throwing money by the shovelful at anybody and his dog that said they were in any way related to the internet or had .com in their name. Red Hat would have fallen from grace no matter if they had had valuable IP or not. What happened is that the dot com bubble burst, there was no reassessment of Red Hat IP or lack thereof because there was never any such assessment to begin with.
    Feb 16, 2015. 11:24 AM | 3 Likes Like |Link to Comment
  • Did Tesla's Actions In Detroit Put Its Patents In The Public Domain? Why Investors Should Worry [View article]
    Open source is not the same as public domain. Tesla still maintains the protection of those patents: other companies cannot patent those same mechanisms and then sue Tesla. Open source is a category wherein an individual or company asserts ownership but lets you use their IP for free. Public domain is nobody owns it. Open source comes in two flavors: with license restrictions or without (aka Artistic License). Tesla is making its patents available under Artistic License.

    Until another auto company actually makes use of a Tesla patent, the true value of what Tesla is giving away is zero dollars and zero cents. This valuation is likely to remain true for some time to come, since other auto makers clearly prefer their own battery technologies to Tesla's.

    On the other hand, Tesla gains valuable good will among consumers and employees for being generous and open and attempting to advance the state of the art. This is particularly important for attracting new employees who want to be part of a movement to overturn an established industry.

    Should Tesla at some future time patent a mechanism that they feel should not be made freely available to others, they remain free to make an exception for that patent. They are volunteering to open source their patents. Nobody is forcing them to do it.
    Feb 16, 2015. 11:16 AM | 7 Likes Like |Link to Comment
  • How The Tesla Investment Case Had To Suddenly Change [View article]
    So why do you choose to ignore it? Your thesis only makes sense if GM changes their language.
    Feb 9, 2015. 04:34 PM | Likes Like |Link to Comment
  • Tesla's Cost Advantage Destined To Disappear [View article]
    Tesla obviously sees advantage in the small format beyond merely the commoditization of 18650 cells. They get better heat control by using small cells, therefore they are planning to continue to use a relatively small cell size even when the GF goes into production. They have carefully weighed the alternatives and know that they are bucking the industry trend.
    Feb 5, 2015. 02:50 PM | 25 Likes Like |Link to Comment