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jimr1

jimr1
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  • Panasonic exec a little shy about Gigafactory project [View news story]
    While the at least 30 percent cheaper is from Musk, it is easy to check. Do a Google search and you can find the generally accepted 0.6 exponent applicable to size increases in process industries. When I had the job of preparing financial justifications for new projects to the board of directors of a major chemical company, we always checked the numbers against this industry standard.
    Mar 29 11:45 AM | Likes Like |Link to Comment
  • Tesla Is A Rock That People Break Themselves Against [View article]
    Last Fall, my daughter had her new GMC Acadia spontaneously catch fire in her driveway-- no accident, it just started to burn. GM and her dealer were horrible. GM did offer her a new car replacement, and verbally told her they would pay for rental car and damage to her driveway. Then they sent her a contract to sign with fine print withdrawing the promised repayment for driveway and rental car. She bought a new Acura MDX instead. GM is on my "do not buy from them" list.
    Mar 29 09:37 AM | 12 Likes Like |Link to Comment
  • Tesla Is A Rock That People Break Themselves Against [View article]
    Okay, wait until you can buy TSLA for a p/e of 20. But, be prepared to pay much more than the current price by the time that happens.
    Mar 29 09:29 AM | 9 Likes Like |Link to Comment
  • Panasonic exec a little shy about Gigafactory project [View news story]
    The battery plant lowers the cost of batteries by at least 30 percent. That lowers the cost for all batteries produced. This kind of cost reduction would make the battery business of all non-partners at risk of being unable to compete. For this reason, as well as an opportunity to be an integral part of the transformational shift from ICE to electric, Panasonic should be anxious to be part of the gigafactory. Tesla is essential for the base load, and Tesla dollars are necessary to reduce the risk. The gigafactory also helps companies like Apple potentially reduce costs by hundreds of millions per year. Think ipad, iPhone, and MacBook Air batteries.
    Mar 27 09:09 AM | 1 Like Like |Link to Comment
  • Panasonic exec a little shy about Gigafactory project [View news story]
    It's called negotiation. Suggests to me Tesla wants the best deal from its partner(s) it can get.
    Mar 27 08:59 AM | 1 Like Like |Link to Comment
  • Return To The Firing Line: Revisiting Tesla [View article]
    Value Horizon, excellent response. I would add that the return on an index find is a diversified cost of equity. The average risk of each individual company in the index is higher than the diversified risk. CAPM theory correctly teaches us that cost of equity is function of diversified risk. So, even if an investment in Tesla is more risky than an investment in index fund (non-diversified, it is more risky), does not mean its cost of equity has to be higher. For most investors who buy Tesla stock, it should be part of a broader portfolio. Therefore, its cost of equity is function of its contribution to portfolio. Tesla's success over next 10 years is much more related to its ability to develop and implement its business plans and less dependent on overall US or World economic conditions than most other large cap companies. Therefore, an investment in Tesla provides exceptionally favorable risk diversification characteristics to a portfolio. Also, sometime over next 10 years, Tesla will likely become a mature enough company to be able to economically get meaningful amounts of capital via straight (non-convertible) debt issuances. This could materially lower its cost of capital below where it is today.
    Mar 26 05:16 AM | 1 Like Like |Link to Comment
  • Japanese automakers take small steps toward fuel cell adoption [View news story]
    Batteries do not "die" after 8 years, it is just that the warranty lasts 8 years. The warranty on ICE engines is up to 4 years, depending on vehicle and mileage limit. If after 8 years battery capacity tapers down too much, deficient cells can be repaired.
    Mar 25 03:56 PM | 1 Like Like |Link to Comment
  • Tesla Motors hires top exec away from Renault-Nissan [View news story]
    If we raced across the US and obeyed all speed limits with me in a Model S and you in a Leaf, by how much would I win. -- a week? Two weeks?
    Mar 12 09:06 PM | 1 Like Like |Link to Comment
  • Tesla: A 600% Yearly Return Is Not An Ordinary Occurrence [View article]
    Nobody knows for sure what the future holds for Tesla, but what is knowable. For sure is that Tesla is priced way way below the "perfection" price. As Tesla gains volume, It has the potential for gaining increasing cost advantages. Increased cost advantages can be split between higher profitability and lower prices. Lower prices give higher volume. IF Tesla can continue to do this, it becomes possible that Tesla could eventually capture huge automotive market share. Back in the 1950's GM had huge market share. It got there because of cost advantages it maintained by being more able than the competition to push through annual styling changes. Tesla's advantage is vastly superior technology. If it can parley that into bigger and bigger cost advantages, it's revenues, profits, cash flow and stock price will all soar way beyond present levels. Since this outcome, while credible, is full of risk and uncertainty, Tesla's stock is now priced significantly below perfection.
    Mar 9 12:05 PM | 2 Likes Like |Link to Comment
  • Tesla: A 600% Yearly Return Is Not An Ordinary Occurrence [View article]
    LT: To infer that the margins earned by the World's only battery gigafactory that will have a 30 to 40 percent cost advantage over its competitors would only be 1percent is --- well, illogical.

    The huge cost advantage from the gigabattery factory is what will make it possible for Tesla to bring out the Model E at a very attractive price point while still earning nice gross margins on its sales. Oh, and it will also permit a further improvement to gross margins on the Model S and Model X.
    Mar 9 08:20 AM | 7 Likes Like |Link to Comment
  • Tesla Is Fully Priced, With More Risk Than Opportunity [View article]
    The cost of energy is trending up. The cost of batteries is trending down. This helps Tesla in a big way because electric cars save about 60 to 80% of the energy cost. The Model S and Model X compete with luxury car segment because they are superior luxury cars. The Model E, with the projected cheaper batteries, will compete in the mass market. Look out 5 to 10 years, plug in what could be some very large sales for Model E and whatever other models Tesla might eventually add, and today's stock price quickly looks very cheap. Ignore this, and you don't get it.
    Mar 5 01:24 PM | 3 Likes Like |Link to Comment
  • Just How Profitable Can Tesla's Supercharging Be? [View article]
    I agree that the planned size of the battery factory provides important additional insight into the expected future car sales volume, once you get out as far as 2020 it becomes possible that even more battery capacity will be available. The facility could be expanded, or perhaps another gigafactory would be built somewhere else. Also, a real possibility exists that sometime over the next few years, range will increase because the kWh size of the batteries is tne S and the X will increase. So many opportunities, so many moving targets.
    Mar 2 09:25 AM | 3 Likes Like |Link to Comment
  • When Is Tesla Going To $1000? [View article]
    Suggest that a better way to consider the present value of a $1000 price in 7 years is to first discount at a more typical equity risk stock and then consider the probability of success. In the current low interest rate low inflation rate environment, I would use an 8 percent discount rate for something like an S&P 500 portfolio. 8 percent discounted for 7 years makes the $1,000 worth $583 today. Therefore, to justify the current Tesla price of $252, one would have to believe that there is a 43 percent chance of your scenario happening (252/583) and a 57 percent chance of the stock being zero. Based on this, my opinion is the stock is cheap because in reality it is not all or nothing. Say, for example there is a 40 something percent chance of $1,000 in 7 years, there is also a possibility of prices anywhere between 0 and $1,000 and there is also some probability the price will be more than $1,000. Sorry if my structure does not provide a precise valuation, but there is just too much unknown about the future to be able to nail down the proper current fundamental price. But, based on this, I do think the Morgan Stanley current vauation of $320 is well within the reasonable range.
    Feb 27 07:51 PM | 2 Likes Like |Link to Comment
  • Deciding When To Short Tesla - Part 4 [View article]
    Tesla's track record of accomplishing its goals has been amazing. If, as planned by the company, there is a time in the next few years when they are selling a total of 100,000 per year of high ticket model S and model X and another 400,000 model E's with expectations of doubling, and the gross margin is anywhere near the forecast 28 percent, then at that time the stock could be somewhere near $1,000. Rational, based on the gross margin dollars that could be earned. No doubt, as in the past, there will be some periods of market price decline. Maybe now, maybe 50 points higher. The road to that high stock price will have to be long, risky and uncertain. While progress on achieving the business plan remains, the risk/reward ratio makes shorting challenging, very risky and to me downright foolish. Continued progress on accomplishing the business plan puts the wind on the back of longs.
    Feb 27 05:58 PM | 4 Likes Like |Link to Comment
  • Morgan Stanley's Tesla Thesis Is As Flawed As They Come [View article]
    You are making the horrible mistake of confusing demand with supply. Musk explained that deliveries outside the US were increased because waiting topi mets outside the US had become extreme. CAUTION: if you use analyses that make sense in a demand constrained environment when it is really a supply constrained environment, your conclusions will be nonsense every time.
    In case you missed it, post quarterly earnings report, us outside investors learned that the annual worldwide DEMAND for the high ticket Model S and Model X will be about 100,000 per year. We also learned that gross margins will be 28% instead of 25%, and that the cheaper Model E could eventually reach sales way more than the 500,000 vehicle per year capacity of the Fremont plant. Add to that a roughly 40% per kWh drop in battery costs and it is easy to see why highly rational investors correctly perceive a significant increase in Trsla's valuation.
    Feb 26 02:15 PM | 3 Likes Like |Link to Comment
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