Seeking Alpha
View as an RSS Feed

Logical Thought  

View Logical Thought's Comments BY TICKER:
Latest  |  Highest rated
  • The Fed's Fischer And Asset Bubbles [View article]

    Yes, I agree with that 100% and am sadly disappointed that so few politicians are trying to get a groundswell of popular support behind this concept and instead just fling a few useless (and soon forgotten) puffball complaints at Yellen (and Bernanke before her) during their semi-annual "show trial" Congressional testimony. Of course, the flip side of even SLIGHTLY positive real rates would be far fewer sub-prime car & truck loans to unqualified buyers (and thus fewer auto industry jobs) as well as fewer mortgages to unqualified individuals (and thus fewer real estate-related jobs) and politicians thus clearly feel there are more votes in keeping money free than charging for it, never mind that once they're out of office the whole shebang will blow to shit all over again... But they don't really care because it won't be on THEIR watch.
    Oct 4, 2015. 12:45 PM | 1 Like Like |Link to Comment
  • The Fed's Fischer And Asset Bubbles [View article]
    >>But hedge funds are not. Money managers and RIAs are not.<<

    Sure they are. I haven't used (long) margin for years, but I just checked and Interactive Brokers (my prime) is charging 0.77% and Apple (and similar companies) were recently borrowing 5-year money (to fuel stock-buybacks) at nominal yields of slightly over 1%, and they can borrow shorter-term at less than that. It's thus no coincidence that the biggest bubble is in financial assets and things bought by people profiting from those assets. And of course insolvent governments around the world are getting paid in real terms to borrow, although I haven't thought through the direct bubble implications of that other than that those bond prices themselves are a bubble.
    Oct 4, 2015. 10:49 AM | 1 Like Like |Link to Comment
  • The Fed's Fischer And Asset Bubbles [View article]
    >>To argue that an asset bubble is forming, therefore, one must show that the market's implied expectations of future cash flows are incorrect.<<

    There's a much easier way: for the last six years we've had REAL (i.e., ex-inflation) short-term interest rates of approximately NEGATIVE 1.5%. In other words, the Fed is PAYING people to use a scarce resource. It's the very definition of human nature that if you PAY people to use something it will be wasted in really stupid ways; i.e., if water meters ran backwards everyone's lawn would look like the 18th green at the Masters. So anyone who understands human nature (which may include NO ONE on the Fed) should understand that money (or any resource) should always cost SOMETHING (at least 25bp over the rate of inflation even in a horrible recession) or you KNOW it's going to be misallocated. This won't guarantee that you won't get bubbles, but not doing it guarantees that you WILL. It's really that simple.
    Oct 4, 2015. 09:16 AM | 5 Likes Like |Link to Comment
  • Tesla: The Model X Is Made For Rare Women [View article]
    It's simply laughable that a complicated gull-wing door with all its practical drawbacks is a better solution for women (or anyone) than a sliding door. No, Musk simply built the Minivan that a 13-year old boy would think is really cool... Now he just needs to find 50,000 licensed 13 year-old boys a year (or 63 year-olds who think like 13 year-olds) with $100k+ each to spend on one of them. Good luck.
    Oct 3, 2015. 05:32 PM | 29 Likes Like |Link to Comment
  • Tesla's Q3 Delivery Number Was Disappointing [View article]
    >>LT, so 30,000 $100k Model X's by next September, and then the backlog of 70D demand hit for a total of 20k in the last 4 months...<<

    Wait 'till you see how many X cancellations there are due to its high price, general ugliness (especially that nose!) and impracticality (the doors). My prediction for total 2016 X sales (including the non-cancelled backlog fulfillment and a possible "75" introduced in Q3) is 30,000, along with 30,000 "S". And then I predict that 2017 will be a DOWN year.

    As for those who mock my delivery predictions, forecasting is certainly difficult (especially about the future!) but I was close to right in early '14 about how much they'd miss the '14 expectations and I'll be CLOSE to right for '15 with my early '15 prediction of-- I believe-- 42,000 (it'll certainly be closer to 42,000 than Musk's "conservative" prediction of 55,000), both of which were resoundingly mocked by DoubleE at the time. In fact, someone on here (I forget the guy's name) was willing to do a $1000 over-under bet with me on-- I believe-- 50,000 but we could never agree on a good way to escrow the money. I'd be happy to do the same for 2016 @ 70,000 (halfway between my prediction of 60,000 and street guidance of 80,000) (even @ $5000) if doubleE (or anyone else) would care to take me on and we can figure out an escrow methodology. (No, I will not do it based on "trust" with anyone I don't know personally.) In other words, not only am I "putting up" by being heavily short the stock (I did more last night in the $248s and early Thursday morning in the $251s, although I always reserve the right to trade around my core position depending on the stock's technical strength), but I'm willing to make a personal side-bet about how poorly this company will do vs. delivery expectations. If anyone out there wants to take the other side of that, please do let me know.

    As it becomes clear that an increasing number of entrants are quite serious about making EVs while premium gas is averaging in the $2s nationwide, time is NOT on the side of this bubble-stock.

    P.S. Keep in mind that in addition to what will be almost $4 billion of net debt by mid-2016, there are now already around 151 million fully diluted shares outstanding including issued options and the recent follow-on offering. By mid-2016 (after yet another capital raise and more option issuance) that number is likely to be close to 160 million.
    Oct 3, 2015. 03:07 PM | 6 Likes Like |Link to Comment
  • Tesla's Q3 Delivery Number Was Disappointing [View article]
    In fact, the cheapest X may be almost $98,000 because third row seats are a $3000 option on the S and Musk said the X would cost $5000 more than a "comparably equipped" S.
    Oct 3, 2015. 09:58 AM | 5 Likes Like |Link to Comment
  • Tesla's Q3 Delivery Number Was Disappointing [View article]
    Did anyone catch Musk's Tweet last night that there won't be a smaller-battery Model X until a year from now? That makes the cheapest X at least $94,200 ($89,200 for the S90D + $5000 for the X premium), and that assumes the X isn't even more expensive due to "required options" that aren't required on the S.

    Expectations are for Tesla to sell 80,000+ cars in 2016-- that figure was ALREADY ridiculous, but with the cheapest X starting over $94,000 they'll be lucky to sell combined S & X in the low-60,000s.
    Oct 3, 2015. 09:18 AM | 5 Likes Like |Link to Comment
  • Tesla delivers 11,580 vehicles in Q3 [View news story]
    REAL growth companies are evaluated on sequentials... But then, nothing about this company's "evaluations" have yet been real.
    Oct 2, 2015. 04:40 PM | 11 Likes Like |Link to Comment
  • Tesla delivers 11,580 vehicles in Q3 [View news story]
    So with a fully diluted enterprise value of 11x run-rate revenue and double-digit negative operating margins, the quarterly sequential growth was... 0.7%.

    (There are a lot of confusing numbers in that sentence, Teslarians, so feel free to read it slowly.)
    Oct 2, 2015. 04:35 PM | 16 Likes Like |Link to Comment
  • A Feeling I Get When I Roam The Tesla Boards [View instapost]
    >>... I don't think it will be a zero on the way down because someone (Apple? Google?) will end up buying it...<<

    No, it will be a zero unless the stock price collapses into the low double-digits really fast before they have a chance to add to their nearly $4 billion of debt. Here's the "buy vs. build" scenario for Apple or Google or anyone else:

    Choice A: Assuming a collapse to even $50/share today and 151 current fully diluted shares, spend $11 billion up front (including current debt) to buy Tesla and then burn $800 million a year (just in operating losses-- ignoring the negative cash flow for cap ex) for the next four years until MAYBE it's profitable, or...

    Choice B: Keep that $11B and instead pay 1000 engineers $180,000/year each ($180 million/year total) and in four years come out with your own car.

    So either way, in four years you've got a car, except that one way costs you $14.4 billion (albeit, with around $1.5 billion of capital equipment included) and the other way costs you $720 million. If you're Tim Cook, how would you rather spend the next four years? After all, neither Apple nor Google needs the Tesla "brand."
    Oct 2, 2015. 11:06 AM | 2 Likes Like |Link to Comment
  • A Bit Of Caution On Hooker Furniture [View article]
    >>A Bit Of Caution On Hooker Furniture<<

    Check it for stains?
    Oct 1, 2015. 09:00 AM | 1 Like Like |Link to Comment
  • Tesla's Model X Non-Launch Points To Financial Shortfall [View article]
    Okay, here's something positive: I think those slow-motion doors ( ) could win the Model X the "SUV of the Year Award"... from the American Carjacking Association.
    Sep 30, 2015. 10:25 AM | 14 Likes Like |Link to Comment
  • Tesla's Model X Non-Launch Points To Financial Shortfall [View article]
    Yes, Musk CLEARLY designed this SUV for "a woman"... lol, a Silicon Valley geek's FANTASY woman!

    Seriously, those slow-motion doors ( ) might win the "SUV of the Year Award"... from the American Carjackers Association.
    Sep 30, 2015. 10:16 AM | 27 Likes Like |Link to Comment
  • It's Game Over, Tesla Wins [View article]
    Thanks, Siddharth-- I knew I could rely on a Teslarian shareholder of a company burning $2 billion a year with double-digit negative operating margins to imply that Bosch is some kind of a fly-by-night operation.
    Sep 28, 2015. 04:07 PM | 31 Likes Like |Link to Comment
  • It's Game Over, Tesla Wins [View article]
    Funny, I searched through this whole speculative article and not once did I find a reference to "solid-state batteries"-- you know, the kind that Bosch recently said it would be making in commercial quantities by 2020 with twice the energy density of the Li-Ion cells that will supposedly be produced by Tesla's by then obsolete Gigafactory. (And Bosch is far from the only player in solid-state batteries, as a bit of Googling can show you.)

    Meanwhile, it's interesting how Panasonic has still only committed to investing around $200 million in equipment for this factory, some of which it will undoubtedly be using to produce batteries in direct competition with Tesla's at-- presumably, as a Tesla supplier-- a lower price.
    Sep 28, 2015. 12:15 PM | 47 Likes Like |Link to Comment