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No. of Recommendations: 18
As a TESLA “S” owner for over 5 yrs and a recent Model 3, I have developed a growing loyalty to the company and an ownership feeling similar to that for my Apple products.
The efficiency,handling,uncluttered minimalistic design,frequent improvement updates of software, & especially the performance are superior to any of my previous cars. When people ask how I like the car, I respond that you have to drive it before forming an opinion & just wish that it was part of the Apple eco-system.

In light of this,I missed this from the earlier interview;


“Buffett, a well-known Apple bull whose fans in the financial press refer to him as the Oracle of Omaha, specifically brought up the speculation that won’t go away about the possibility of Apple scooping up Tesla. Seemingly, the thinking has always gone, such a deal would be a simple way to supercharge Apple’s own ambitions in the auto space. Except, well, no it wouldn’t, Buffett
“In an interview with Fox Business Network on Thursday,” as reported by Business Insider,

“Buffett said buying Tesla ‘would be a very poor idea’ for Apple. He said that building a long-term competitive advantage in the auto industry is much more difficult than in the tech industry, where companies can use speed, scale, and network effects to maintain an edge over competitors.

“‘You can win in autos one year and you lose the next,’ Buffett said.”

I also recall a much earlier talk that Warren Buffett presented at an Allen Co conference but could not track down the reference. I think the essence of the talk is included in the following Fortune article.

http://archive.fortune.com/magazines/fortune/fortune_archive...

“Well, I thought it would be instructive to go back and look at a couple of industries that transformed this country much earlier in this century: automobiles and aviation. Take automobiles first: I have here one page, out of 70 in total, of car and truck manufacturers that have operated in this country. At one time, there was a Berkshire car and an Omaha car. Naturally I noticed those. But there was also a telephone book of others.

All told, there appear to have been at least 2,000 car makes, in an industry that had an incredible impact on people's lives. If you had foreseen in the early days of cars how this industry would develop, you would have said, "Here is the road to riches." So what did we progress to by the 1990s? After corporate carnage that never let up, we came down to three U.S. car companies--themselves no lollapaloozas for investors. So here is an industry that had an enormous impact on America--and also an enormous impact, though not the anticipated one, on investors.”

ciao
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No. of Recommendations: 4
Just saw the Tesla Roadster on TV. Wow. The performance difference between the Tesla and Ferrari is equivalent to a jet verses a prop plane. (0-60 in 1.9, top speed 250 plus, 600 mile range.) This would be a car you could drive every day too. Ferrari's are often driven less than 1k miles per year, in part, because they depreciate so quickly with mileage. Tesla may be doing to the auto industry what Apple did to the computer industry.
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No. of Recommendations: 1
0-60 in 1.9, top speed 250 plus


Wow.What does accelerating like that feel like in an auto. I was once in a car that did 115mph for about ten seconds and it was enough for me, 250? Do you need to air the car out on a racing track from time to time?
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No. of Recommendations: 2
He said that building a long-term competitive advantage in the auto industry is much more difficult than in the tech industry, where companies can use speed, scale, and network effects to maintain an edge over competitors.



Yes yes. Who hasn't heard the famous quote, "as goes Apple, so goes the nation."

I'm not implying that this is 1953 and he should buy General Motors. Just that the tech landscape is littered with even more corpses of former world conquerors. But of course he has brilliant insights into the future of tech companies.
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No. of Recommendations: 3
This would be a car you could drive every day too.

Only if you have your own 8 foot wide parking spot at the destination...

A Ferrari is largely useless as an everyday car in large part because it's so wide.
But a Tesla S is considerably wider. And I gather the new "roadster" is bigger still.
Just buy a Hummer and get it over with : )

Jim
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No. of Recommendations: 1
As Jay screams at the 4 1/2 min mark, “i’ll Buy It”....

https://youtu.be/Sw51nzQiWfw
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No. of Recommendations: 1
Just buy a Hummer and get it over with : )

Unless things have changed since I was last there, to drive in Monaco or Menton or in between in the summertime, you would be better off with an army-surplus tank; you would not even need the cannon. That way you would not need to worry about the width or length of your vehicle. If the available parking space is not large enough, just park there anyway and crunch the neighboring cars to make room.
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No. of Recommendations: 1

Wow.What does accelerating like that feel like in an auto. I was once in a car that did 115mph for about ten seconds and it was enough for me, 250? Do you need to air the car out on a racing track from time to time?


In part that depends where you are. The fastest I’ve driven in the US is ~100mph on the I5 LA to SF. But it can’t be sustained very long due to other cars on the road. 90% of the highways (that I know at least) I wouldn’t dare to go over 90mph for long stretches due to road quality.

But then take the Autobahn... I once stayed with a friend near Cologne. He had a relatively inexpensive BMW. In the morning we would drive from his place into the city in fairly heavy traffic. At one point I looked over at his dashboard, and it said 190kmh (~120mph). And the road was packed, this was default speed. But it felt as easy as my morning commute.

Personally there’s no way I’d drive 250. But whether you can is as much due to the road as it is to the car.

Mark
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No. of Recommendations: 6
Only if you have your own 8 foot wide parking spot at the destination...

It’s an American car. The land where the legal minimum width of a garage is 9 feet. My Model S goes in the parking spots marked ‘compact’.

The roadster is tiny in comparison. I’m not sure why you think the new roadster would be much bigger.

Mark
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No. of Recommendations: 2
‘You can win in autos one year and you lose the next,’ Buffett said.

I am not sure looking at autonomous vehicles in the prism of past car companies is valid. In technology you have to move on to the next thing. This is not coca-cola, just keep advertising, distributing and take the cash to the bank.
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No. of Recommendations: 1
It is not wise to look at Tesla as "yet another automobile company". It was never wise to look at Amazon to look as an online book store like Barnes and Nobles. Most investors don't get this simple fact.
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No. of Recommendations: 3
I’m not sure why you think the new roadster would be much bigger.

Because it is.
I'm not the only one who wondered about this, so several people have scaled it from photos.
The tire size is known, so it's not hard to get a good idea.
It's a big honkin' car.

It looks to be an unusually long wheelbase for a four seat GT car, not in the range you'd consider for a sports car, though it has short overhangs front and rear.
The width may push the legal limits in Europe...perhaps one reason for no mirrors?

There is some speculation it's a slightly enlarged version of the chassis of the S.
There are lots of batteries to stow.
It will certainly weigh more than most trucks. I wouldn't expect nimble cornering, more of a drag strip car.
At which it will, no doubt, be awe inspiring.

Jim
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No. of Recommendations: 2
Because it is.
I'm not the only one who wondered about this, so several people have scaled it from photos.
The tire size is known, so it's not hard to get a good idea.
It's a big honkin' car.


I don’t believe it for one second.

https://www.reddit.com/r/teslamotors/comments/7dvp7g/tesla_r...

It’s more like 20 inches shorter than a Model S. No guess on the width, but the console between the two front seats doesn’t appear particularly wide either.

Mark
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No. of Recommendations: 1
And then there is the Semi market to include in future company value. A close up look at a current vehicle...

https://youtu.be/IP3La6gg9NQ
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No. of Recommendations: 0
Aw Jim.

The new Tesla Roadster is not bigger than the Model S.

Always wanted to ask, “have you ever been short Tesla?”

Jan
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No. of Recommendations: 2
The new Tesla Roadster is not bigger than the Model S.

We'll see when it comes out. There aren't any official figures yet.
Last info I've seen is it's probably about the same long wheelbase, much shorter in length because
of shorter overhangs, and slightly wider than the S, which is wider than a Porsche Cayenne.

Pretty much all existing supercar sportscars have wheelbases in the 96-108 inch range.
A full size car in the US was traditionally defined as a car with a wheelbase over 110 inches.
Scaling from the new Tesla roadster images seem to suggest something roughly in the 118-119in range. Might be as little as 113, though--this is a tricky thing to estimate.
For comparison, a Porsche Cayenne SUV is 114 inches, Range Rover is 115 inches, a Rolls Royce Wraith is 122 inches.

Width is the one to watch, though.
As a rule of thumb, a passably nimble sports car is under 175cm/69 inches wide, and each additional 5cm/2in
of width over that corresponds to 10% of existing roads that you can't drive on.
That cutoff is about the width of 1960s four seat European GT cars, not far from the earliest Corvettes.

In Europe, anything over about 190cm/75in wide is pretty much entirely for posing rather than actual driving.
(Lamborghini Gallardo, Toyota Century Limousine, and Ferrari F355 are just under that, Corvette and more recent Ferraris just over that, Tesla S 196.4 cm).


Always wanted to ask, “have you ever been short Tesla?”

Yup, three times, all profitable.
You have to choose your moment : )
But there are more predictable ways to make money.

Jim
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No. of Recommendations: 0
Another nail in the coffin as Musk lights up!

http://www.latimes.com/business/la-fi-hy-tesla-executives-qu...
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No. of Recommendations: 3
Another nail in the coffin as Musk lights up!

What I find interesting is that the stock is still trading in the >$250 range it has been in for a year and a half.

We could conceivably see some Icahn-style "reflexivity", where things that are supposed to be reactions to economic reality become the drivers of economic reality.
Bad PR, bad perceptions, lower prices across equity and bonds, problems raising money, actual financial difficulties.
Management exodus is in that list somewhere, I suppose.
Not a prediction, just musing that some of those short sellers may one day make some money.

Jim
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No. of Recommendations: 1
“ A long time ago in a valley very ,very close......

Looks like they need to replace the Apple LOGO with a TESLA LOGO

From 1983
At the retreat, Jobs discussed three “sayings” that he wanted his team to focus on: “Real artists ship,” “It’s better to be a pirate than join the Navy,” and “Mac in a book by 1986.”

https://www.google.com/search?q=steve+jobs+,+macintosh,+pira...

ciao
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No. of Recommendations: 4
We could conceivably see some Icahn-style "reflexivity", where things that are supposed to be reactions to economic reality become the drivers of economic reality.
Bad PR, bad perceptions, lower prices across equity and bonds, problems raising money, actual financial difficulties.
Management exodus is in that list somewhere, I suppose.



I think you probably mean Soros, not Icahn, although the concept predates Soros and his teacher, Popper.

But I agree with the idea that this may well be only the beginning of a long fall. $50b (instead of $70b) is still an awfully big market cap for au unprofitable company in an industry with low margins, cut-throat competition, and with the expiry of federal tax credits, the recent emergence of serious competitors with high-quality electric cars, excentric, not to say erratic and distracted management, quality issues, a fairly heavy debt load, etc.

A lot of these were possibilities a year or two ago at a similar market cap, and are now certainties.

Regards, DTB
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No. of Recommendations: 1
I think you probably mean Soros, not Icahn...

Yeah, sorry about that.
I keep getting 'em all mixed up.
A billionaire here, a billionaire there, pretty soon you're talking real money.

Jim
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No. of Recommendations: 1
Another nail in the coffin as Musk lights up!

I saw the video. He didn't inhale.

He is the same guy he was 20 years ago.

Hard to elbow your way into the public discourse with Nike and Trump out there ... but he did.

Publicity translates into sales if you have a good product.

Maybe Ginni Rometty should have Lady Godivad around IBM headquarters?
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No. of Recommendations: 0
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No. of Recommendations: 1
Video caption should be “Up in Smoke”.
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No. of Recommendations: 6
https://youtu.be/ycPr5-27vSI

Without any further comment we can only guess at your intentions for posting this link of course. I like Musk, I think he’s thoughtful and intelligent, but 2h40m is too long for me to watch all of it. But I’m assuming it’s because the video features him smoking pot, as I’ve seen headlined.

I say “so what”. They also drink whiskey. Both are perfectly legal in California. So I don’t get the whole hoopla, except people want to use it to confirm their bias towards him.

I wouldn’t advise my kids to smoke pot, but if he does it once in a while to relax, there’s really not that much harm in it. If he did it every day I’d be more concerned. But no more than any other executive downing a substantial amount of liquor every day. Not to mention the number of execs doing coke regularly. Not publicly of course. We would be shocked, shocked to find out they did...

Mark
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No. of Recommendations: 4
I did watch it and it was very good. Musk is an interesting thinker and worth listening to. I think Tesla is a terrible investment but I hope he succeeds and proves me wrong.

As for the marijuana use, it’s a total non-starter as far as I am concerned. He took one puff from a big spliff, in a 2h+ interview, said he’s not a user in general and hardly ever smokes. There are so many other things for Tesla shareholders to worry about, but this should not be one of them.

Regards, DTB
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No. of Recommendations: 2
Hey there !

The news media needs something to draw readers and/or listeners. They'll use anyone and anything that makes for sensation (so called "news"). I think the Tesla stories and Musk in particular are the "garbage de-jour". It could be any company and any CEO if they can dig up enough juice to make a story to sell their products. How come they don't use any other company and CEO/founder? Why don't they write about John Deere and Co? Now there's a company that turns up a lot of dirt !! <pun> Maybe farm and industrial equipment just isn't nasty enough to sell papers. That's why I don't have a TV or listen to news radio - it's mostly crap to get attention and that spills over into discussions like here on the Fool. I agree with Mark (previous post) "so what". Leave the man and his company alone to do their job and make us share holders some money slow/steady/sure. I own <ADM> here in farm country and they are making me money without all the "CEO garbage" in the news.

Off soapbox !!

Rich (haywool) long companies without sensation
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No. of Recommendations: 1
<<There are so many other things for Tesla shareholders to worry about, but this should not be one of them.>>


If I was a Tesla shareholder three words would have me very concerned Audi - Porsche - Mercedes.


All three have electric cars that will be coming out in the very near future and they all
have very deep pockets.
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No. of Recommendations: 1
because the video features him smoking pot

Look at the video again. He takes a puff, holds it in his mouth a little while, then blows the smoke back out. Didn't inhale. He only pretended to smoke pot.
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No. of Recommendations: 2
"I say “so what”. They also drink whiskey. Both are perfectly legal in California. So I don’t get the whole hoopla, except people want to use it to confirm their bias towards him."

I don't think it matters to Tesla all that much. I do think it matters to SpaceX since the executives at SpaceX are required to have special security clearances for their government work with top secret satellites. Part of the security clearance involves not smoking weed, even in California where it is legal.
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No. of Recommendations: 3
Part of the security clearance involves not smoking weed, even in California where it is legal.


Its stupid when people render an opinion on something they don't understand.
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Part of the security clearance involves not smoking weed, even in California where it is legal.


Its stupid when people render an opinion on something they don't understand.



I don't understand your point. I'm subject to security clearance criteria and I am regularly reminded that consuming cannabis is forbidden, even in regions where it is legal.
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I don't understand your point. I'm subject to security clearance criteria and I am regularly reminded that consuming cannabis is forbidden, even in regions where it is legal.


I also look forward to being enlightened.

Strictly speaking, is non-medical use legal anywhere in the US? I am aware that many states have so legislated, but federal law applies everywhere, right, even if it’s not always enforced?

dtb
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No. of Recommendations: 2
Here is the language from DOD guidelines:
========================================

Department of Defense guidelines for security clearances (Specifically, Security Executive Agent Directive 4 (“SEAD 4”), Guideline H; Drug Involvement and Substance Misuse), the “illegal use of controlled substances … can raise questions about an individual’s reliability and trustworthiness.” This is because (a) drug use demonstrates an inability to comply with the laws of the United States and (b) drug use often leads to “physical or psychological impairment”


One-Time Marijuana Use at Reunion Not Disqualifying
===================================================

In the second case, a 32-year-old project management specialist for a defense contractor was denied a security clearance for two reasons, one of which related to marijuana use. Specifically, the applicant admitted that while attending a high school reunion in 2014, she smoked marijuana at a hookah bar. She said she had never smoked marijuana before or since, and her usage that night was “spontaneous” and merely a function of her curiosity. She further maintained she had no ongoing contact with her high school classmates.

The DOHA judge agreed the applicant’s one-time marijuana use did not justify denying her a security clearance. The incident “occurred sufficiently long ago and under such unusual circumstances that it is likely to occur.” The judge also acknowledged the applicant signed a statement agreeing to automatic revocation of her clearance if she is found to use illegal drugs at any point in the future.

I think Musk security clearance will certainly go through review and possible be revoked because of ambien use along with the pot use. It is not a one time, recreational, spontaneous, but repeat use of drugs.
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No. of Recommendations: 9
three words would have me very concerned Audi - Porsche - Mercedes.


I completely agree, and you might add Jaguar to the list, since they already have a good competitive product on the market. Audi should be any day now, Mercedes in the first months of 2019 I understand.

Tesla has not been able to make money so far with the market all to themselves, and now all of a sudden they will have competition from all the other companies that all know perfectly well that they have to win this fight. And that will just be the beginning, you can be pretty sure that all the other carmakers will be there in the next year or two.

In addition, Tesla can't rely on foreign plants if the trade wars keep heating up. They are completely reliant on one plant and one battery technology. Their CEO is brilliant but I think even the most enthusiastic fan would have to admit that he is behaving erraticly. There may be quality issues that their shortened development timeline has made more likely than it is for their experience, cautious and methodical competitors. And in the USA, they will all have credits that will be disappearing for Tesla.

I don't think Tesla's share price is accounting for the very real possibility that Tesla will not be able to survive.

dtb
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No. of Recommendations: 0
“three words would have me very concerned Audi - Porsche - Mercedes.”


Tesla’s Mission Statement,


“Our goal when we created Tesla a decade ago was the same as it is today: to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.”

Mission nearly accomplished?

ciao
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No. of Recommendations: 1
I posted the link because the conversation was so interesting.

I’m not a fan of Trump, but he has a point about the media, not being kinda unreliable.

They may have been commanded to be “neutral” in reporting, rather than searching out the truth.

There is a difference.

Did anyone here read, The Divide, by Matt Taibbi?

His chapters on Fairfax Holdings were something else. Dang Jim Chanos.

.......
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No. of Recommendations: 3
Three words would have me very concerned Audi - Porsche - Mercedes.


I completely agree, and you might add Jaguar to the list, since they already have a good competitive product on the market. Audi should be any day now, Mercedes in the first months of 2019 I understand.


The Jag does look nice... I’m not a Tesla shareholder, but I think you guys are writing off Tesla a little too easily. For one thing, the Bay Area is swarming with Tesla cars. I swear I can notice their numbers increasing every week. I read the Model 3 is outselling the Prius in the US. And they basically only just got started.

But there’s another thing that I think people don’t quite appreciate unless they’ve owned a Tesla. And that is it takes me pretty much anywhere I want to go in about the same time as a gasoline car. I could get a Jag instead of a Tesla. Similar price. But it would hardly ever leave the 100 mile radius where I live, simply because it takes all night to charge.

The difference is of course the SuperCharger stations. Of all the car-makers with plans for a glitzy new EV, AFAIK only Porsche is planning a fast charging network. But it’s not going to be compatible with a Tesla. So they’ll be 5 more years behind than they already are. Without a fast charging network, they’ll all be selling commuter-only vehicles.

I think long term these charging locations are going to be very valuable. Just like the concessions of the little stores at gas stations, these could bring in some nice dough once they become really busy with people who have nothing to do for 20-30 min. while their car is charging.

Mark
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No. of Recommendations: 0
The Jag does look nice... I’m not a Tesla shareholder, but I think you guys are writing off Tesla a little too easily. For one thing, the Bay Area is swarming with Tesla cars. I swear I can notice their numbers increasing every week. I read the Model 3 is outselling the Prius in the US. And they basically only just got started.

Having owned two British-made cars (the Lotus model 26), and having known the owners of several others, I would never own another. They all suffered from "the British car disease," they never would stay together. Their electrical systems were hopeless. The quality control was horrible, the materials and workmanship were pathetic, and they wore out extremely quickly.

I now live in what I would call suburban New Jersey. I do not believe I have ever seen a Tesla. The car I see in ever-increasing numbers and colors (so it is not the same car over and over again) is the Maserati. And I see Prius cars I have one) in such large numbers that I sometimes cannot easily find mine in a parking lot because there are so many that there is often one the same color and model as mine parked right next to mine. I assume where I live is automotively different in a cultural sense from The Bay Area as one can get.
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No. of Recommendations: 1
Last mo ,TESLA sold approx 18,000 Mod3 & the Prius family 8,000.
Here in the Bay Area , they are multiplying like rabbits!


Here are the top 5 cars Tesla Model 3 buyers are trading in
Toyota Prius.
BMW 3-Series.
Honda Accord.
Honda Civic.
Nissan Leaf.

ciao
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No. of Recommendations: 0
Last mo ,TESLA sold approx 18,000 Mod3 & the Prius family 8,000.
Here in the Bay Area , they are multiplying like rabbits!


It shows me that urban areas in California are way different from suburban areas in New Jersey. That does not surprise me at all.
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No. of Recommendations: 6
The Jag does look nice...

You mean this one I trust?
https://www.jaguar.com/about-jaguar/jaguar-classic/authentic...

: )
Jim
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No. of Recommendations: 1
In 1961 Enzo Ferrari called the Jaguar E-Type "the most beautiful
car ever made."

That wood dash and those toggle switches … Wow!

The only problem was sometimes they would not start and If you went
over a bump the headlights might go out.
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No. of Recommendations: 2
“In 1961 Enzo Ferrari called the Jaguar E-Type "the most beautiful
car ever made."

“Elon Musk has an Jaguar E-Type that he says is like a bad girlfriend.”


Looks like you found Elon Musk’s First Love


s://www.cnbc.com/2017/10/12/tesla-ceo-elon-musk-reveals-he-owns-...

ciao
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No. of Recommendations: 1
...not going to be compatible with a Tesla. So they’ll be 5 more years behind than they already are. Without a fast charging network, they’ll all be selling commuter-only vehicles.


In the short term this might help Tesla, but ultimately, the others (who all use a different standard) are likelier to prevail, don’t you think? Teslas are quite likely to be a small minority of long-distance cars sold, so if you are a service station adding electric charging, which standard would you choose?
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<<In the short term this might help Tesla, but ultimately, the others (who all use a different standard) are likelier to prevail, don’t you think? Teslas are quite likely to be a small minority of long-distance cars sold, so if you are a service station adding electric charging, which standard would you choose>>


Those of us of a certain age can remember the Sony Betamax vs. VHS controversy. Sony
always claimed that there Betamax was vastly superior to VHS and as the unquestioned
leader in consumer electronics in the 1980's (remember the Sony Trinitron TV) who could
argue with them?

Of course we know that VHS became the standard and Sony as a company kind of fell by the
wayside.
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Of course we know that VHS became the standard and Sony as a company kind of fell by the
wayside.


Intel fought for HD DVD but finally threw in the towel and joined the Blu-Ray camp.
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No. of Recommendations: 1
“Betamax vs VHS”

Or what we are more likely to do is follow Brit’s & Shell in England , charge appropriately for the fill & provide many standards.

https://www.shell.co.uk/service/search.html#q=Electric%20cha...

ciao
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“Betamax vs VHS”

Who knows. But VHS came out only a year after Betamax. Six years after the first SuperCharger stations, I haven’t seen a real competitor yet.

And maybe you don’t see Tesla cars in New Jersey, but if there are plenty of Prius cars today, it’s probably just a matter of time.

Mark
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No. of Recommendations: 2
And maybe you don’t see Tesla cars in New Jersey, but if there are plenty of Prius cars today, it’s probably just a matter of time.

Notice that that is all that I said: I have not seen Tesla cars in my part of New Jersey and that is different from what the O.P. observes in the Bay Area of California. I did not dispute what he said about where he is. Neither of us claims that what he has observed is representative the entire United States, or the whole world.

The only interesting parts of our observations to me is that they are different, posing the possibilities of there being a cultural difference significant enough that Maseratis are more common here and Teslas are more common there. Perhaps it is just because there is a Maserati dealer near me (I do not know of one) and a Tesla dealer near the O.P. (I have no idea).
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Intel fought for HD DVD but finally threw in the towel and joined the Blu-Ray camp.

A bit of a Pyrrhic victory for Team Blu?
The war having dragged on for so long, it seems to have been a rather short lived format crown.
Sales of movies on Blu-ray peaked around 2013.

Not a bad format, as long as you don't mind a disc that takes longer to boot and load than an Apple II.

Jim
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No. of Recommendations: 4
Another recent “conversion”, and this from a respected Detroit expert.
He address many of the discussion points covered in this thread & comes to this conclusion,

“Tesla soon will face formidable competition from the German juggernauts, Mercedes, Porsche, BMW and Audi. Technically they will be able to match everything Tesla has done. But will they be able to capture the fun, whimsical and sassy attitude that Tesla has created? Time will tell, but I don’t think it’s in their DNA.“

I think this quote could have been written about Apple many yrs ago and the competition names replaced with the recent also-rans.

https://www.wardsauto.com/ideaxchange/how-i-drank-tesla-kool...


Not to beat a dead horse in this Apple & TESLA thread but I do believe there is a sea change taking place and trying to figure out how it might progress.
There will be winners & losers and those picking the winners early will be rewarded.

I hope Todd & Ted can figure it out however it will probably take some strong convincing to get their boss to sign up.

ciao
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No. of Recommendations: 1
The only interesting parts of our observations to me is that they are different, posing the possibilities of there being a cultural difference significant enough that Maseratis are more common here and Teslas are more common there.

It is a very bullish sign for Tesla. There is still a lot of untapped market. California first, then the rest of the country. Won't be the first time.
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<<“Tesla soon will face formidable competition from the German juggernauts, Mercedes, Porsche, BMW and Audi. Technically they will be able to match everything Tesla has done. But will they be able to capture the fun, whimsical and sassy attitude that Tesla has created? Time will tell, but I don’t think it’s in their DNA.“>>


Really funny!!!


These companies are German so it is NOT in their DNA to be fun, whimsical and sassy.


What IS in their DNA is to build world class, high quality products and to execute
well. German engineering is coming to the Electric Vehicle market. To the three
words that I said Tesla shareholders should be concerned about I now want to add a
fourth BMW.
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“What IS in their DNA is to build world class, high quality products and to execute
well. German engineering is coming to the Electric Vehicle market”

You are absolutely correct,
I have owned several German automobiles and kept an old 1995 MBZ-S Class because I never thought of it as being “Old” & the fit&finish were the best I have ever had and far superior to the 23 yr newer Model3 I recently purchased.
That said, the differences expressed by the author are what the competition must overcome and the rebellious nature of a company can be an attribute and hard to replicate as evidenced by Apple in the early years.

ciao
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“I have owned several German automobiles and kept an old 1995 MBZ-S Class because I never thought of it as being “Old” & the fit&finish were the best I have ever had and far superior to the 23 yr newer Model3 I recently purchased.”

After posting this, I wondered what my cost was for these 2 cars;

Answer,
1995 MBZ-S class , $62K
2013 TESLA Mod 3 , $57K

Wow, no wonder the fit&finish was so good 23 years ago!

ciao
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Correction ; 2018 Mod 3
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No. of Recommendations: 43
I don't know what it is about Tesla that makes so much bullish commentary around it sound like mindless OTC penny stock pumping, but something certainly does seem to do that. :) I guess that's one of the (many) reasons grumpy bears are always trolling around like me at DTB.

Long time without commenting on BRK board, and somewhat unsurprisingly TSLA is still a common topic.... since I have a position now, I feel compelled to speak.

As a bear on the shares (but not an EV hater, or an oil industry shill :) ), I have to provide some counter commentary, as Tesla has so many red flags, it feels like the flag stores will be raising prices.

1) Demand -- The bullish arguments here are always very interesting... monthly deliveries, weekly "production", sales numbers with or without lease accounting adjusted, and EV credit boosting as the needs fits. Bottom line is this: Tesla has claimed very recently to have 420k reservations for Model 3. But if you buy a AWD version, you are getting a delivery quote of ~1 month (after a few days wait, it drops from 2-4). RWD models are being sold in make shift dealerships off the back of trucks, and are available on the website now for immediately delivery. But M3 product is running <5k / week (<20k / month)... Where is the demand? Where is the backlog? Why isn't Tesla updating this reservation number and it's composition to investors? Are there really 300k+ $35k and/or other non-deliverable reservation holders that aren't configuring (I know many Tesla owners and reservation holders... none have not configured now)? What are the non-$35k reservation holders waiting for? Do they exist... how do you know?

2) Non-truths -- $35k car ready in 2018? Removed from website until later. Tesla Semi? Solar Roof (they have openings today for engineering positions to build the solar roof... widely reported immediately after the solar reveal that it was vapor ware). SolarCity merger... it's the future, but now they are shuttering much of SCTY business, massive layoffs. SCTY bonds selling off implying credit gap/risk vs. Tesla Corp which already trades at CC/CCC levels. Full Self Driving feature can summon your car from across the country in 2018? Nope, Tesla has "Level 2.5" self driving that has clearly legitimate issues with crashing into fire trucks, many reports of the car crashing into folks garages just parking. Perhaps Tesla has overpromised about what can be delivered w/o LIDAR on the car? M3 volume of 20k in the 2H of 2017... nope. What about Q3 / Q4 profitably? (on the last one, take a listen to how Musk talks about "cash flow positive" and profitability on earnings calls and in other venues... I don't think he means "GAAP" or perhaps he doesn't really understand what the investment community means when we say "cash flow positive" (hint: it's not that your cash balance increased during the quarter). Or how about the "$420 buyout" Funding Secured? Only thing left is a shareholder vote... and then "I guess not"...

3) Balance Sheet -- Although Tesla's secret business plan was to build a performance car to pay for the luxury car to pay for the mass market car... the problem is that none of these cars paid for anything. Tesla has now $10B+ in debt / obligations, has vaporized $5B in operating losses, and raised $9B+ in equity from employees/shareholders. Profits haven't (and in my opinion, are unlikely to) fund any of this. I think Tesla's balance sheet is very weak, terrible Current Ratio, exposed to supplier credit (DSOs keep expanding, until when?), customer credit (deposits, subject to immediate call by customers), and inventory is of questionable value (see below) both due to to overstated gross margin, but also due to seemingly production units which seem to not be fully completed and now await rework (or worse) -- See business insider citation of Tesla internal documents showing their end of Q2 production need 85% rework (not production in my book).

4) Profitability -- Whistleblower and internal leads suggesting Tesla billing things to customer Goodwill (op Ex) which are really part of product cost. This is done because the story of Tesla is that if their GM (already overstated vs. their competition because they don't net out dealer cost in the calc, and don't include R&D) is high, than it's just about making up their losses in volume... but if you look at their financials, their operating losses have scaled with volume... they don't appear to be approaching less operating margin loss. Now certainly, as they kill SolarCity and cut back on their other business R&D, I would guess they can lower than operating loss, but the amount of volume they need to make up their losses is very much more than most believe who look at their quoted GM number. And this isn't to forget that Tesla already has an EV of $60B, which suggests a lot of future profit is needed to make the business make sense.

5) Manufacturing / Logistics -- Probably the most under-appreciated thing about Tesla is that folks take their excellence in design and Elon's success in Space-X and they project that onto all his other ventures to give him the benefit of the doubt. shareholders have subsidized Elon in the ways of manufacturing by sending him to a $10B school in how to build cars... and he's still learning. Clearly the cars (especially the S) are fun to drive and quite nice to look at, and that is very impressive, but the continued logistics challenges of delivering (less cars then they supposedly were planning for), manufacturing, and servicing cars seems beyond this company (and servicing by the way is very important as these are some of the most unreliable cars on the road). Many current owners seem fine with this, but this isn't some start up software company releasing beta apps... this is a 15 year old company with 40k employees, and a $60B valuation... and these are cars that cost $100k and can kill people or leave them stranded if things aren't done just right.

6) Executive Departures -- This is probably a reason to short Tesla all by itself. Executive departures have been stunning. If you aren't paying attention, you can just Google around. My favorite example of this is that after a series of very high profile names left the company in the first 5 months of the year, a TSLA "independent" news outlet (aka, 3rd party PR / stock pumping site) put out a list of execs which are the "real" execs and they have a deep bench, yada yada. Well since May, 40% of that list of executives have departed... that we know about. The most concerning to me of this years' departures are VP Treasury, Worldwide Finance Head, CAO, and replacement CAO who left after being with the company less than 1 month, Head of Self driving, head of manufacturing, and head of service.

7) Elon Himself -- I used to think Elon was a genius who had overzealous supporters. After listening to more of his interviews and reading more and more about his back story and what parts of that story are commonly under-reported, I have come to a different conclusion. I do hope his push for the world toward more electrified transport is successful, but I worry when this all comes down and the PR machines runs out of reasons and money to make up favorable stories about Elon and Tesla, and the truth is finally realized, I worry that he will end up doing more harm for the movement so many of his supporters are backing him for. But hopefully I'm wrong.

--

Good luck to anyone long this stock. There are many challenges and red flags at this company, and the task they are undertaking is not simple. There are 1,000 ways to fail and only a thin path to succeed... and if they do, you own a car company with limited patents/intellectual property with a captured Board and and eccentric CEO who has different goals than making you money.

Cheers,

Ben
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Tesla has claimed very recently to have 420k reservations for Model 3.
...
Or how about the "$420 buyout" Funding Secured?


Musk is fond of 420?

(... back to making meaningful contributions to the board, except for some irresistible potshots.)
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Musk is fond of 420?

I'll allow the joke. ;-)

But seriously, there is an aspect about Tesla's numbers that feel... pulled out of thin air...

here --> https://ftalphaville.ft.com/2018/07/12/1531368000000/A-brief...

Some things are coincidences of course.
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The Jag does look nice...

You mean this one I trust?
https://www.jaguar.com/about-jaguar/jaguar-classic/authentic......


Yes! :)
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Full Self Driving feature can summon your car from across the country in 2018? Nope, Tesla has "Level 2.5" self driving that has clearly legitimate issues with crashing into fire trucks, many reports of the car crashing into folks garages just parking. Perhaps Tesla has overpromised about what can be delivered w/o LIDAR on the car?

My Tesla (model x) autopilot works very well. When I bought it a year ago, the autopilot worked well on freeway but did not work well on inside roads. After 6 months, they pushed a software update. Now the autopilot works very well on inside roads without any issue.
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No. of Recommendations: 4
I feel compelled to speak.

Sigh. It would be wonderful if those who felt they must speak actually had something to say. Most of what you posted reads like a laundry list of discredited bear fantasies.

1) Demand Absolutely crazy. My evidence is that I've visited showrooms and delivery centers. People are stacked up getting their cars. Not enough hours in the day. Pretty much all the complaints sound like "I can't get my car soon enough." No other auto manufacturer has a problem anything like this. Pretending there are demand issues is crazy. But it's a craziness that has persisted for years now, despite conclusive evidence to the contrary. Growing revenues at 50% YoY is good evidence as well.

2) Non-truths Most of the items you list come from Elon saying when it might be possible to deliver something and it turning out that it's later than that. Of course he still delivers in inhumanly rapid time. These are non-truths only in the sense that the man is optimistic. The rest is speculation and deliberate misinterpretation.

3) Balance sheet Lots of vague insinuations. I think we'll know all we need to know after this quarter's results. Independent tear-downs of Model 3 show it should be making a serious profit given the current ASP of around $60K.

4) Profitability Again, lots of vague insinuations. Again, I think we'll know all we need to know after this quarter.

5) Manufacturing / Logistics Tesla is a Silicon Valley company -- they move fast and break things. This leads to them making mistakes, but getting better fast. By the time any major ICE manufacturer is building EVs at scale, Tesla will have way more experience and way better results. You already see everybody else backing off their predictions: we'll take it slow (Mercedes), it's going to be more expensive than we thought (VW), etc. While Tesla has already solved most of the hard problems, sometimes in innovative ways.

6) Executive Departures Not excessive given the size of the company and the high stress environment. I'll worry if I see JB Straubel leave. I think you are confusing "media hyperventilation about executive departures" with something to worry about.

7) Elon Himself Yeah, there's an area of worry. He's getting seriously tired of dealing with jerks who make up lies to try to destroy him and his companies. For some reason he doesn't understand why some people are so nasty. But his drive and tenacity are phenomenal, so I'm reasonably confident he'll pull through. Especially after a couple of profitable quarters when it becomes apparent to everybody that he can tell Wall St. to go fustulate.

-IGU-
(way long TSLA; Model S and 3 owner)
(It's National Drive Electric Week (https://driveelectricweek.org)! Go drive one.)
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eccentric CEO who has different goals than making you money.

This fact can't be asserted strongly enough!
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"Sigh. It would be wonderful if those who felt they must speak actually had something to say. Most of what you posted reads like a laundry list of discredited bear fantasies."

Then why can't you actually discredit them? All you seem to do it wave your hands and sigh.

Calling a counter argument vague insinuation doesn't actually discredit it. Especially when the counter argument points to something quite concrete, like profitability.
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eccentric CEO who has different goals than making you money.

This fact can't be asserted strongly enough!

Yeah, just like Steve Jobs. Terrible what that's done to Apple (and AAPL). Wall St. has never understood the power of not caring about money per se. SJ was demonized by "analysts" his entire career over this. If what drives you is making great products that delight people and using that process to change the world, then massive profits can follow. Of course there are far more ways to do it wrong than to do it right, but as SJ conclusively demonstrated there's a way to do it right. Elon Musk has that example to follow, and he has lots of ex-Apple people working at Tesla to clue him in to how it works (if he needs that, which is unlikely).

But yes, I absolutely agree that Elon Musk cares about making money no more than Steve Jobs ever did. That's why I'm heavily invested in Tesla. It's not a bug, it's a feature.

-IGU-
(worked for Apple, and retired early on profits on from AAPL)
(own two Tesla vehicles and am as delighted with them as much as any Apple product)
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Calling a counter argument vague insinuation doesn't actually discredit it. Especially when the counter argument points to something quite concrete, like profitability.

Agreed in principle. I might spend the time rigorously discrediting various allegations if they were actually supported by anything. They're not, so what's the point? People can fling utter nonsense way faster than facts can be gathered and careful arguments made to debunk it. And this is the Berkshire Hathaway board so I doubt people really care at that level.

I will grant you that Tesla is currently about eight months behind where I would like them to be with respect to cars. For roofs and power storage they are about a year behind. Sad, but they are behind only with respect to their own insanely optimistic schedules. And as they continue to sell everything they can build, and their customers are as satisfied as Apple customers, my conclusion is that they are doing something very right. Profitability will follow, likely this quarter and every quarter thereafter.

-IGU-
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eccentric CEO who has different goals than making you money.

This fact can't be asserted strongly enough!



Bezo's says we buy lot of small companies, when I meet with the CEO's, I can figure out whether he is missionary or mercenary. He goes on to say, it is the missionary CEO's who actually make more money than mercenary, our focus is customer, taking care of them. A missionary CEO is one who is passionate, focused on their customers...

For folks who are going to point that Amazon is not profitable... he addressed that too.

We always had positive gross margin.
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"Yeah, just like Steve Jobs."

Uh, I hate to burst your bubble, but Steven Jobs actually made money for his investors. A lot of it. Elon Musk has yet to do that. So as usual you are wrong. It isn't just like Steven Jobs.
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" I might spend the time rigorously discrediting various allegations if they were actually supported by anything. They're not, so what's the point? People can fling utter nonsense way faster than facts can be gathered and careful arguments made to debunk it."

Doubling down on your hand waving isn't very credible. People still recognize that it is nothing more than hand waving.

Besides, you are wrong (yet again). It is supported by something. The allegations of not being profitable are supported by reality. Tesla is not a very profitable company. Spin, hand-wave and twist all you like. That is an actual concrete fact. Ignoring that fact or waving your hands does not make that fact go away. It just shows you are willing to ignore the obvious that is right in front of your face.

Willful ignorance doesn't seem to be a very good way to go through life.
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Uh, I hate to burst your bubble, but Steven Jobs actually made money for his investors. A lot of it.

Sure. And I went to work for Apple back in the early 2000s, when the general consensus was that it was doomed. The stock was under $1 at times (today's split levels). It's easy to look at Apple now and say its approach worked. Musk now is analogous to Jobs then.

Speaking of wild hand-waving, there's nothing I'm wrong about other than in your mind.

-IGU-
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Doubling down on your hand waving isn't very credible. People still recognize that it is nothing more than hand waving.

And you're just repeating yourself with no support other than misreading the present and the future. Nobody cares that Tesla isn't profitable today as a company. The Model S is hugely profitable. The Model X is hugely profitable. The Model 3 is scaling to huge profitability, but isn't there yet. The money is rapidly disappearing into growth for the future, building (among other things) an energy business that will become hugely profitable. Hmm, sort of looks like Amazon did.

The fact that the company is unprofitable is irrelevant. What matters is whether it can become profitable. As I wrote, let's see what happens this quarter. We'll know lots more in a few weeks. You could try that or, as you say, live in willful ignorance.

Mistaking the hyperventilating of Tesla naysayers for facts is a rookie mistake. Elon Musk has it right when he always goes back to first principles.

Keep in mind: fastest growth in the auto industry ever, surpassing Henry Ford; highest revenue producing car in the US in July and August; fifth best selling car by units in the US in August; September deliveries will be about double August's. Try as they might to wish it away, this is massive disruption of the auto industry, and at least a few of the big players of today will die.

-IGU-
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No. of Recommendations: 8
Nobody cares that Tesla isn't profitable today as a company. The Model S is hugely profitable. The Model X is hugely profitable.

I think the first statement is entirely true and reasonable. It takes scale.

But as far as I know, there is no useful definition of "profitable" which works to leave the second two statements true.
Though those products have high gross margin, that monthly gross margin contribution is not [yet] enough to cover the depreciation costs of the plant needed to build them, let alone SG&A burn.

So, same comment: losses are perfectly understandable until they reach scale, but it takes volume to achieve a profit.
Not to belabour the obvious too much, it is a car company.
As a crude rule of thumb, it is a rare vehicle model that can make a profit at under 100,000 units a year.
When (if) they get their production doing what they keep saying they will be doing, it should happen soon.

The main issue with the delays in ramping production, other than the huge increase in unit cost and decrease in credibility, is that it delays the golden day of not burning cash.
Their next capital raising will be interesting. I expect them to (a) need it quite soon, (b) find it very expensive, yet (c) pull it off OK.
If they get that away and then get to the point they aren't burning cash every month, I imagine they will be fine at least until their backlog is gone.

Jim
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Can somebody direct me to the Berkshire Hathaway board?
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Hey Prof !

Can somebody direct me to the Berkshire Hathaway board?

Yeah ... even this one has gone the way of all of the other boards here at the Fool ... they "discuss" everything except the board subject. I, too, think we need to get back on track ... on all boards.

Rich (haywool)
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Ben,

Among the young crowd, Tesla just seems to be a do no wrong company. They seem to be fascinated by Tesla and electric cars. They seem to ignore the fact it doesn't produce profits (or even many cars) and seems destined to either go bankrupt, or get bought out by someone down the road when the economy tanks and the money starts running out.

Rich
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No. of Recommendations: 11
<< Can someone direct me to the Berkshire Hathaway board? >>

I know what you are saying but I would suggest that this thread
is a lot more on topic with Berkshire than you might think.

Berkshire Hathaway Automotive is one of the largest automotive
dealership groups in the US.

Berkshire Hathaway Energy is one of the largest providers of
electricity in the US.


Pilot Flying J has over 750 truck stops in both the US and Canada
perhaps we could some day see charging locations at these truck stops?

Electrification of Autos could be transformational not only for the US but
for Berkshire Hathaway as well.
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No. of Recommendations: 13
<< Can someone direct me to the Berkshire Hathaway board? >>
...
I know what you are saying but I would suggest that this thread
is a lot more on topic with Berkshire than you might think.


I'm also OK with the excuse that a fondness for Berkshire is consistent with learning more about valuing hard-to-value companies.


Arguably one of the most important thing for any Berkshire investment is the longevity of the business model and its earnings stream.
It has taken me many years to realize how important this is for *any* investment.
Most of the value of almost any firm's stock is well over five years in the future.
So here's a mind stretching thought or two.
Everybody expects weird ramblings at the end of a too long thread, right?


I'm not exactly an Amazon bull.
But I think that the earnings stream at Amazon, though modest in magnitude, may have greater longevity than the one at Apple.
If somebody from the future told me that Apple became fairly irrelevant within 25 years but Amazon managed over 75, I wouldn't be shocked.
Not that I would argue the case strongly at all, but it seems reasonably plausible.
No matter how you categorize Apple, as luxury brand or tech firm or cult or lifestyle service, there aren't many historical analogies that lasted into great old age.
Sure it could happen, but I don't see it as the sure thing that many people do.
Retail, on the other hand, is an interesting business as it doesn't change much.
Other than the huge one-time upheaval from moving on line which is top of mind for everybody these days, that may be the only big change this millenium.

As an aside I've always wondered why Berkshire didn't get into beer. Big beer firms can run for centuries.
It seems like a natural fit.
Maybe they didn't think of it until after Ambev did the Great Roll Up?

Anybody interesting in buying 100 year Argentine US dollar bonds? They're a year old, so 99 years to go.
On the surface of it, this is a crazy pick. They have defaulted eight times since independence in 1816, the most recent two in 2001 and 2014.
But, they're trading at around 65 cents on the dollar so the current yield is something like 10.2%.
They only have to make it a decade before defaulting and you have all your capital back and you're in a profit position!
Anything after that is gravy : )
And of course it's rare for defaulted sovereign bonds to have zero value.
Whatever price they trade at at the extreme of the current crisis, it may actually turn out to be a good buy!

Jim
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But as far as I know, there is no useful definition of "profitable" which works to leave the second two statements true.

How about "marginally profitable"? Every additional car they make leaves them richer? They sell it for far more than the cost of production.

Not to belabour the obvious too much, it is a car company.

A common error. Tesla is an energy company. And even as a car company they are highly non-traditional, as they also encompass dealerships, service stations, fueling, and insurance. They also have a relatively small supply chain, as they manufacture many of their own parts. Highly integrated and vertical, so hard to compare.

I recently went on a Tesla factory tour in Fremont. They emphasized these facts even on the tour in the middle of their car factory. Tesla builds cars only because it is the best way to attack the energy usage problem. They are also attacking the energy production (roofs and solar panels) and energy storage (Powerwalls and Powerpacks) issues, albeit at a somewhat earlier stage. But they are clear that they expect their energy production and storage business to equal or exceed their car business in revenue within a few years. And profits should come more easily as it's a simpler business in many respects.

Their next capital raising will be interesting. I expect them to (a) need it quite soon, (b) find it very expensive, yet (c) pull it off OK.

They have repeatedly said they won't need a capital raise, they don't want a capital raise, and they certainly won't do a capital raise this calendar year. They have said that they'll be paying off their bonds from cash flow (retiring debt, not issuing new bonds). You think they're lying?

I expect that if they decide to raise capital they will avoid Wall St. entirely and go with some sort of private placement. And it will be cheap because they can play all sorts of games. As a trivial example: "if you put a pile of money in Tesla we'll let you own a little SpaceX too". Many serious investors would give a lot for that opportunity.

I imagine they will be fine at least until their backlog is gone.

Why would you imagine that the most desired cars in the US would suddenly stop being purchased? Somehow every car company there is has managed to survive on no backlog and many months of inventory sitting on lots. But I do agree that if nobody wants their cars any more they're in big trouble. Same as Apple with iPhones.

Anyway, it certainly seems to me that this discussion is somewhat OT for this board. Happy to stop if requested.

-IGU-
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No. of Recommendations: 8
IGU,

Aren't you concerned about Tesla's competition? I am in the market for an electric car. I've decided to go with the Jaguar I-Pace instead of the Tesla S or X. I am a pretty educated consumer.

The days where there was no practical competition (the bolt and the ionic aren't really competition) are drawing to a close. The Tesla designs feel a little dated from a styling standpoint. The Model 3 seems pretty basic in the interior. There seems to be quite a bit of quality issues. Can they really refresh while continuing to grow while releasing new models? And become profitable and not require a capital raise? Seems difficult to me.

A whole lot of new models are hitting the market over the next 3 years. By a lot, I mean like 25. I would think that would give Tesla investors some concerns about pricing?

As to the whole energy company versus car company thing, look, a company is what it is. You really think solar generation and power wall will be bigger than car sales in a few years? Really? That would be quite surprising I think.

And Musk not telling the truth?!? Are you serious??? To put it gently, he does have a bit of a history of stretching things a bit?!?

Rob
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No. of Recommendations: 22
Not to belabour the obvious too much, it is a car company.
...
A common error. Tesla is an energy company.


That's the hype. I see you've bought it. Which is fine.
But no, they're a car company.
They make and sell cars. Seems pretty clear, no?
Energy production and storage makes up under 6.5% of the gross profit of automotive, and that number is falling, not rising.

Yes, of course they emphasize being an "energy" company and other stuff on the factory tours.
They are building every narrative they can to keep from being *valued* as the car company they are.
I'd do the same thing in their shoes, but don't look where the magician wants you to look.

The non-car stuff is just a side show in terms of the firm's value and, unless the car stuff flops way short of their plans that will remain true for a very long time.
Unless you count a big negative number penalty for corporate governance and legal liabilities from the Solar fiasco : )
Powerwalls are cute and cool, but they don't make financial sense for many people.
The roofing is a fabulous product, but disappears in the rounding.
Sure, this could change. But lots of things could change.


Their next capital raising will be interesting. I expect them to (a) need it quite soon, (b) find it very expensive, yet (c) pull it off OK.
...
They have repeatedly said they won't need a capital raise, they don't want a capital raise, and
they certainly won't do a capital raise this calendar year. They have said that they'll be paying
off their bonds from cash flow (retiring debt, not issuing new bonds). You think they're lying?


Absolutely! I know they said all that stuff. That's exactly why I said it would be so interesting.
It's like a candidate denying they're running for president. Until suddenly they are. It's what companies do.

As far as I (or anyone else) can tell, the numbers don't add up.
The maturing debt and capex simply don't seem to match achievable revenues from the real world production and sales numbers.
The first number that pops to mind is the $230m convertible due in November. Then $157m term loan in December. And so on.
Another $930m in convertibles due March 1st which seems unpayable without fresh capital unless the market price is above $360.
(even if the price is that high and they are converted, it means in effect they will have raised new capital by selling shares below market price instead of selling bonds)
And of course, debt isn't free. Around $170/m per quarter in interest has to be found.
The solar panels have to be bought and paid for so they can be leased out. More capital.
They need cash flow from operations to improve by something like $350m/month to stanch the current burn, without those future plans and without covering maturing debt.
Most investment bankers are tossing around numbers like their needing to raise another $10bn total in the next 2.5 years.
As consensuses go, that's a whole lot more than zero.

Some observers think that Tesla's public statements can only be taken with a straight face if we assume they're inventing
a new definition of "not needing to raise new capital" by introducing the notion that rolling maturing debt doesn't count (!).
But it still requires selling new paper into a willing capital market...to raise capital.
The other reason for the denial is that to admit they need the capital is admitting their production
targets (and therefore revenue and cash flow targets) are still not realistic, which they can't do.

Hey, I'm no expert, just a back of the envelope guy. There's no way I'm going to buy shares, so I don't spend a lot of time reading their filings.
Maybe production will actually reach lift off, as will cash flow, and they can get by without tapping markets for a while.
But even so, I suspect they'd then have to cancel a whole lot of already announced product capex plans to do so.
Big capital plans require big capital.

Jim
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No. of Recommendations: 2
Tesla is an energy company.
-----
That's the hype. I see you've bought it. Which is fine.
But no, they're a car company.
They make and sell cars. Seems pretty clear, no?

No.

I suggest that the challenge most companies face is that they don't understand what business they are actually in. My favorite example is the the Big 8 accounting firms (prior to Enron).
Most people would have suggested that they were professional services firms, offering a mix of accounting and consulting. In truth they were manufacturing firms. Their product was corporate managers. They had well-tuned pipelines for creating these (far in surplus to their actual needs) and moving them into Fortune 1000 companies.

Xerox thought it was in the copier business. Had it had understood otherwise, Apple and perhaps Google would be divisions in a capitalist behemoth, the first multi-trillion dollar entity. It would dwarf AT&T and Standard Oil combined. The anti-trust suit would be the trial of the century. Careers would be built around the case study.

I do wonder at what point Bezos decided that Amazon would be the internet version of Sears/Wards. I'll bet it was Day 1.

I'll suggest that Musk doesn't see Tesla as a stand-alone entity but rather as one of many tools to achieve his vision of the future.
I will further suggest that Tesla's sole purpose is as a marketing tool to help Musk create demand for that future. How many income statements list marketing as a profit center? And yet without marketing there are rarely any profits.

Tesla is part of a broader ecosystem.
The investment argument depends largely on how one views that ecosystem and how one expects the legal and financial components of that ecosystem to be devolved.
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No. of Recommendations: 9
We're at an inflection point. Internal combustion engines are FAR inferior to battery powered vehicles starting now. Plants that produce engines, radiators, transmissions, alternators, car batteries, instrument clusters and all their instruments, fuel tanks, fuel pumps, fuel injection systems, water pumps, oil pumps, belts, key fobs, spark plugs and ignition systems are worth zero. Assembly lines that produce these vehicles are worth zero. Companies that make these cars are worth zero. Their dealerships are worth zero. Whatever assets they have now will be lost in a hopeless attempt to catch up with the competition.

Look at the reviews on the Model 3. The only complaint on these cars is that they cost 55K. The price will soon be 35K and if you figure in the savings in fuel, maintenance and depreciation it could be the equivalent of 20-25K. (The batteries are now expected to last 25 years and maintain 90% plus of their capacity for ten years.) If you still think these cars are just for early adopters and hobbyists I think you're mistaken. I miss flying behind the old radial P&W engines but things change. The jet age in cars has begun.

Regarding the issue of this being the BRK board and Tesla being off topic ... what BRK issue hasn't been analyzed to death? I don't really need another discussion on the value of float or BRK's dividend policy. What issue over the last 20 years has been more important than the choice between Graham/Buffett and Jobs/Bezos/Musk etc? Are there no new lessons to be learned?
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No. of Recommendations: 1
Car dealerships and truck fueling. Maybe the previous owners knew something?

The Tesla Semi and Roadster launch party:


https://www.youtube.com/watch?v=5RRmepp7i5g
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No. of Recommendations: 1
Aren't you concerned about Tesla's competition?
No, Tesla has no competition. And they won't have any time soon. The Bolt was the unbeatable competition coming for a long time. Now you say it's "not really competition". That's how the next round will go too. Tesla will sell everything it can make. The "competition" will eat the market of its own gas cars.

I've decided to go with the Jaguar I-Pace
Okay. Why? Do you really think it will be better or cheaper for your purposes? You do realize you aren't getting one of those today, right?

The Tesla designs feel a little dated from a styling standpoint. The Model 3 seems pretty basic in the interior. There seems to be quite a bit of quality issues. Can they really refresh while continuing to grow while releasing new models? And become profitable and not require a capital raise? Seems difficult to me.

Dated? Okay, matter of taste. Basic? Yes, that's the style. I talk to lots of Model 3 owners. It tends to grow on them. Quality issues? No. I don't hear about any real quality issues from owners, although I do read lots of lies in the media. Where do you get your information? Refresh and grow and profit? We'll see. They are on a solid trajectory for that. Of course if you rely on what the media reports you won't hear any facts. Fastest growing production and revenue in the car business ever. That's a fact. And growing. That too is a fact.

You really think solar generation and power wall will be bigger than car sales in a few years? Really? That would be quite surprising I think.
I think solar generation and storage will be as big as Tesla's production capabilities allow. It's a wide open business. It won't grow as fast as the car business so long as batteries constrain it. Yes, this will surprise many people who don't pay attention to Tesla management's guidance.

And Musk not telling the truth?!? Are you serious??? To put it gently, he does have a bit of a history of stretching things a bit?!?
Yes, Musk always tells the truth as he sees it, although often with optimistic timelines. He has a history of being vilified in the press, but if you read what he says it's always truthful.

If I didn't trust in Tesla and its management I'd be an idiot to drive their cars. My safety and that of my family is totally reliant upon the good judgment and solid engineering of Tesla management and engineers. So yeah, I trust them.

-IGU-
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Powerwalls are cute and cool, but they don't make financial sense for many people.
Model 3s are cute and cool, but they don't make financial sense for many people.
iPhones are cute and cool, but they don't make financial sense for many people.
Such is true for myriad great products. What does it have to do with anything?

As far as I (or anyone else) can tell, the numbers don't add up.
If you say so. I think I'll believe Tesla instead.

Hey, I'm no expert, just a back of the envelope guy.
Okay, so why are you making predictions? Tesla has left open that they may raise more money next year. We'll see what we see.

Big capital plans require big capital.
Yup. Tesla will definitely have to slow down its plans if it raises no additional capital in any way. The indications are right now that they intend to borrow money from the Chinese to build a Shanghai factory. So, a capital raise in China? Maybe? But no dilution for shareholders. How do we count that?

-IGU-
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No. of Recommendations: 14
Plants that produce engines, radiators, transmissions, alternators, car batteries, instrument clusters and all their instruments, fuel tanks, fuel pumps, fuel injection systems, water pumps, oil pumps, belts, key fobs, spark plugs and ignition systems are worth zero. Assembly lines that produce these vehicles are worth zero. Companies that make these cars are worth zero. Their dealerships are worth zero.

If that’s true, then you should be able to pick up a huge collection of assets for “zero.” I will give you a million dollars if you bring me all the plants that produce “engines, radiators, transmissions, alternators, car batteries, instrument clusters and all their instruments, fuel tanks, fuel pumps, fuel injection systems, water pumps, oil pumps, belts, key fobs, spark plugs and ignition systems, Assembly lines that produce these vehicles.” Please be sure to include General Motors, Ford, Chrysler, and all other “Companies that make these cars” I’d also appreciate if you’d throw in the 10,000 dealerships that “are worth zero.”

This is a can’t lose opportunity for you. Let me know when you have my package assembled. If, on going about collecting these assets “worth zero” you find your assumption has been wrong I hope you’ll come back and tell us so.

Your friend in profit,
Goofyhoofy
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Local Reporting on the Buffalo facility, $750 million

Local News
Tesla watch: where's the transparency?
Aug 28, 2018 06:28 PM EDT

“The vast majority of the facility is not being used,” said Ray Walter, a Republican assemblyman from Amherst.
Walter, and Assemblyman Sean Ryan, a Democrat representing Buffalo, participated in separate tours of the plant this spring.

But even Tesla’s quarterly reports are focused on production of the vehicles, not solar panels and solar roofs.
“If we’re going to go borrow $750 million for some capital purpose it should be for things like roads and bridges, not for a factory for some profit-making or hope-to-be-profit-making company,” he said.
https://www.wivb.com/news/local-news/tesla-watch-where-s-the...

Another government disaster in the making, taxpayers on the hook.

....Still, when red flags continued to crop up, the Obama administration didn’t abandon its signature project. After a March 2010 audit noted Solyndra’s "recurring losses from operations, negative cash flows since inception” and “a net stockholders' deficit,” President Obama still toured the plant and touted its success at job creation and innovation.
“The true engine of economic growth will always be companies like Solyndra, will always be America’s businesses,” he said...


I hope I live long enough to one day see one of these projects that isn't just another scam.
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No. of Recommendations: 2
I don't know the subject well so I probably shouldn't comment. But my rationale has always been there are so many cars/trucks made per year that it would be very hard to produce all those cars/trucks without most of big car companies pitching in.

Some quick Google foo:
About 1 in 79 cars sold in 2017 was electric.

More than 79 million cars were sold in 2017. ~1m of those being electric. 1/2 of those in China where 28M total cars were sold. So China was at about 1.7% electric.

I think global sales jumps to 90 million vehicles if you count trucks and I'm guessing there is a lower percentage of electric trucks.

Cost still wins. The average car price in 2017 was about $33k so $55k is pretty steep. A lot of sedans (model 3)sell for less than 35k which is where you think the model 3 will be someday -- maybe. Revolution is tough in infrastructure. Cost will probably start favoring electric cars someday but I don't see how production can change to 50% electric in 10 years. And then there is the fueling infrastructure.

Can we get to 90 million electric vehicles per year WITHOUT Ford and GM and Mercedes and BMW and VW and Audi and Toyota and Honda and their plants and workforce? To suggest those companies are worth zero might be a stretch.

Is Tesla going to ramp up to take 100% market share -- can they replace 8-9 big car companies? How long would it take them to design and produce every niche car that is sold today? Tesla has made less than 400,000 cars in its life and is on pace to produce about 120,000 per year if I understand it correctly.

Let's double it every year.

120,000
240,000
480,000
960,000
1.9M
3.8M
7.6M
15M
30M
61M
122M

10 years. That seems "reasonable". Musk will probably leave Tesla and create a flying rocket car powered by the sun and moon by then and be the demise of his own Tesla legacy.
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Yup, three times, all profitable.
You have to choose your moment : )

And announced in advance, here or elsewhere.

Market Summary > Alibaba Group Holding Ltd
NYSE: BABA
164.74
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No. of Recommendations: 9
So, a capital raise in China? Maybe? But no dilution for shareholders. How do we count that?

As a capital raise.
i.e., the opposite of what management has stated.

Tesla has left open that they may raise more money next year.
...
Tesla will definitely have to slow down its plans if it raises no additional capital in any way.


It seems we agree, in a way.
They have said as emphatically as they could that they have absolutely no need and, separately, absolutely no desire to raise more money.
So, in effect we're both choosing not to believe them.
We're not alone, I guess...it's hard to find anybody not named Musk who believes they won't need to raise money.

I don't know what's going to happen.
I guess we could ask their VP worldwide finance, but we'll have to be quick, his last day is October 7.
Sample math:
The March 1 notes alone will go into default if they don't have $1.3bn in unrestricted cash at year end.
I gather they had just a bit less than that at June 30. (2.24bn cash - 900m customer deposits), and a guess of maybe $750m at mid August.
On the cash flow front, things would have to turn around harder and faster than a Tesla Roadster can manage.
It might happen.
The latest word from Tesla is that Q3 will be profitable, cash flow positive, and "building and
delivering more than twice as many cars as we did last quarter", which was 53,339.

I did find one article that was consistent with that view thinks they won't raise money, simply because they can't.
There are (unfounded) speculations that maybe they've received a Wells notice from the SEC.

If you think they'll be fine, buy the bonds.
The 2025 tranche have been trading under 83 cents on the dollar.
Not a good sign, as they were always high yield, but if they're money good then it's a nice return.

As mentioned, either way it should be interesting to watch.

Jim
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If that’s true, then you should be able to pick up a huge collection of assets for “zero.” I will give you a million dollars if you bring me all the plants that produce “engines, radiators, transmissions, alternators, car batteries, instrument clusters and all their instruments, fuel tanks, fuel pumps, fuel injection systems, water pumps, oil pumps, belts, key fobs, spark plugs and ignition systems, Assembly lines that produce these vehicles.” Please be sure to include General Motors, Ford, Chrysler, and all other “Companies that make these cars” I’d also appreciate if you’d throw in the 10,000 dealerships that “are worth zero.”

I plead guilty to using hyperbole. But at the same time I think most of these companies are doomed. Ford and Chevy ... toast. People think a car is a car. To build an electric car just put a battery in where the engine was. They do look the same, but if you peel away the skin they have surprisingly little in common. Don't look at Tesla as a small percentage of the car market. Look at it as a large percentage of the electric car market. Now within that market look at network effect, scale, brand loyalty and technology along with the quality of their product. Nothing is for certain, but Tesla is starting to look like another Google, Apple or Amazon.
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The best example is nokia; Nokia was not able to convert their dominance in cellphone into smart phone market. But Tesla has execution issues, and they need serious capital to scale and it is not clear where they are going to get the funding.
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No. of Recommendations: 8
IGU,

RE: Tesla has no competition... you can't be serious. You are massively drinking the cool aide. They have a ton of competitors. Have you ever read their 10k? They list some of them right there. There are few large industries with as much competition as the car business.

RE: Jaguar I-Pace not available... you are right. Mine is being delivered on Nov 21. It was indeed demonstrably cheaper than the other car I was considering, a model-X. Also the interior is much nicer (Tesla's have rather cheap interiors for being 75-120k cars).

RE: Dated design. Yes, the basic styling hasn't changed much since introduction. Its already 4 years old from a design standpoint. Model X and 3 inherited the original (dated) design. They need to revamp it, in my opinion, to retain interest in the face of lots of other options coming. Just one more thing to do along with cost optimization, quality improvements, factory throughput, entering china, making auto-pilot robust enough, developing new models that are already promised, turning around the solar business, etc, etc.

RE: Quality issues. I get my reports from about 10 friends that have one as well as one of them who works for Tesla in the factory. Her exact words: "Don't buy one of the first 100k model-3s". Thats enough data points for me.

RE: Musk telling the truth as he sees it, and always truthful. So he really had financing lined up to take the company private, but just "changed his mind"?

I get it, you are a fan and they can do no wrong in your eyes. Glad to see that level of passion. But I also hope you are diversified.

Rob
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No. of Recommendations: 0
captkerosene, why don't you think Chevy (GM) is going to be able to compete? They have some of the most far-along EV teams which produced the volt and the bolt. They have cruise automation which seems capable/competitive. They've got a pretty strong balance sheet and they have a ton of cash flow. They have massive scale and diversified operations. Their CEO has a Product background/orientation. Why do you consider them dead-man walking?

Ford I kind of understand your thinking. They are far behind in just about everything and they've got some real problems on the scale side. They've showed little initiative to catch up on any of their deficits....

Appreciate your views!

Rob
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No. of Recommendations: 1
captkerosene, why don't you think Chevy (GM) is going to be able to compete? They have some of the most far-along EV teams which produced the volt and the bolt.

You can buy a Bolt today. They're having a big sale trying to clear out their inventory. Remember when United Airlines tried to start up a competitor to NetJets? Inefficient company with strong unions trying to be nimble ... not gonna happen. They never signed up even one customer. Brands have value. In electric cars Tesla is the brand. Look at the video of the semi truck launch. These people love this brand and are totally invested in it. When I was young, I liked the Corvette. Recently saw a video of what may be the new mid-engine model racing around a track. It looked foolish to me. Engine screaming, gears shifting, big air vents for cooling. I want a Tesla.
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No. of Recommendations: 3
RE: Tesla has no competition... you can't be serious. You are massively drinking the cool aide. They have a ton of competitors.

Name me anybody who has taken a sale away from Tesla. You can't. They sell every car they can make. No so-called competitor will change that in the next few years.

Jaguar I-Pace not available... you are right. Mine is being delivered on Nov 21.

Cool! Hope you like it.

Dated design. Yes, the basic styling hasn't changed much since introduction. Its already 4 years old from a design standpoint.

The Model S design is at least six years old, although it has been tweaked a bit since its introduction. The design has been classic from the beginning, so it's hard to get "dated". Anyway, matter of taste. It looks to me like Jaguar went out of its way to make the I-Pace the ugliest Jaguar car of recent times (Jaguars are usually gorgeous), but it hardly matters.

I get my reports from about 10 friends that have one as well as one of them who works for Tesla in the factory. Her exact words: "Don't buy one of the first 100k model-3s".

Interesting. I get my reports from personal experience, dozens of acquaintances, and lots of Tesla forums. What I hear is that is that there are no concerns about Tesla build quality at this time. There were some early problems. Don't buy one of the first 100K xxx is standard auto industry advice, isn't it? It minimizes your chances of running into early problems. Me, I bought a Model 3 well within the first few thousand and haven't had problems at all.

So he really had financing lined up to take the company private, but just "changed his mind"?

Yes, he really had financing lined up. The sticking point was finding a legal corporate structure so that existing shareholders who wished to stay invested could do so. Turned out to be too hard to do.

I get it, you are a fan

Yes, I am a fan. No, you don't get it.

-IGU-
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Aren't you concerned about Tesla's competition? I am in the market for an electric car. I've decided to go with the Jaguar I-Pace instead of the Tesla S or X. I am a pretty educated consumer.

Just curious, as you seem to have given the purchase some thought, are you planning to make long trips with it? And have you investigated the charging options?

I’m sure I’m biased, owning a Model S, but I love the fact I was able to make trips (from the Bay Area) to Lake Tahoe, week long vacation to Yosemite and to L.A. and I’m not sure how that would work with any other EV without exorbitant charging delays.

If you have a different persective, please share.

Mark
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Hi Itsgoingup,

Was looking at @elonmusk (twitter for those of us who may not know), and Rationalwalk was posting on Musk’s reply to a customer.

Small world, huh?

Jan

Warren needs to drive an X like ours. But unlike KO giving him a garage full of cokes or Tim Cook giving him an iPad and free lessons, unfortunately Elon would never give a free X to anyone.

Even his mother paid for her 3 and is waiting in the queue like everyone.

Elon’s family price and special treatment is the same price and treatment that I get.

Smart and fair way to run a start up. He is fair to a fault.

That appeals to me.

jan
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No. of Recommendations: 1
I will give you a million dollars if you bring me all the plants that produce “engines, radiators, transmissions, alternators, car batteries, instrument clusters and all their instruments, fuel tanks, fuel pumps, fuel injection systems, water pumps, oil pumps, belts, key fobs, spark plugs and ignition systems, Assembly lines that produce these vehicles.” Please be sure to include General Motors, Ford, Chrysler, and all other “Companies that make these cars” I’d also appreciate if you’d throw in the 10,000 dealerships that “are worth zero.”

Ah, beating the point to a pulp by taking it to the letter. From someone not beyond a bit of hyperbole themselves from time to time.

You understand of course that even if you offered a billion, it would still be a rounding error to zero of the original worth.

Mark
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No. of Recommendations: 14
Smart and fair way to run a start up. He is fair to a fault.

Well, that's nice.

But he's not exactly known for his statements being worth taking as reliable guides to reality, which would also be nice.
Sure, the confident assertion that 500,000 cars would be produced in 2018 might be put down to youthful exuberance,
but the "funding secured" twaddle seems more like a radioactive time bomb.
I doubt very much the Tesla brand is worth as much as it was a month ago.

Jim
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Hey Mark,

Yes, I have spent quite a bit of time looking at all the EV options and exploring those that are under development. The issue of long road trips isn't that much of a concern for me, since my wife has a large SUV (its the primary family car) and we would just use that for any long trip.

Generalizing, I think this situation will be the early majority market for EV...as one of a two car household. As infrastructure further develops eventually it should be a non-issue at some point.

That said, I'm not afraid of using 3rd party EV charging stations today. You just have to be strategic (and have patience) when it comes to charging times. If I had to charge more frequently than once every two years I'd be surprised (based upon my situation).

I also have solar and EV hookups at work, so I am in a good position from a commute standpoint (also in the Bay Area...can't wait for that commuter lane access!!).

Rob
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No. of Recommendations: 1
Love my Tesla Model X. Cannot imagine wanting any other electric car... it’s simply pure joy.

Am going to get the French Slate glass solar roof for my house, to return it to slate-look and power generation after previous owners took slate off and put on junky composition shingles. (Wish I had a larger roof). :(

Am thinking about an getting an electric induction cooker like the one my friends have in Sweden.

Can’t imagine leaving this brand.

I’m not the only owner to feel that way. Surveys show huge brand loyalty...

Brand loyalty creates moat....

One of you guys with deep pockets give Warren an “X” or leans him one for a month and he will be better informed.

Yay!

jan
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Jim,

I totally disagree with you about the TESLA brand being worth less.

It’s way stronger now than one year ago.

Shorting this company is not wise.

Honestly...

Take care,

jan
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Auto correct sucks...

Lend him (Warren) a Tesla

Not “leans”...

In 5 years, Tesla shares will be much much higher.

WEB does not short, not at all, nor does he do many of the options and mechanical analysts Jim likes to talk about on this board.

WEB suggests “buy and hold” as if you had only so many transactions allotted for your life time.

It’s ok to drift from BRK topics as long as positions are disclosed in real time, so that everything is always on the up and up. Otherwise, what’s the point?

Long BRK & TSLA

jan
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No. of Recommendations: 1
IGU,

RE: they sell every car they can make

Yes by definition, when you can't scale manufacturing, you are going to sell everything you make. I can only say in my case, they did lose a sale. I thought seriously about it, they were in the top-2. I do like the X. Maybe they sold the car to someone else, maybe not. I don't think they are capacity bound on the X and they just scale production to meet demand (quote delivery as November currently).

RE: financing lined up.... we will have to see the results of lawsuits and investigations to come. I personally very much doubt it was lined up. But maybe he talked to a couple of Saudi princes and they said "yes" which was good enough for him. I don't know.

Even if he did, its a little irresponsible for the CEO of a publicly traded company to float a take-private buyout, especially at a premium to current share price, without fully thinking through all the challenges involved.

I bet a price will be paid. We will see what comes of it....

Rob
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Analysis... not analysts

:(
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Analysis... not analysts

I heard a cute thing a long time ago.

Q: What is an analyst?
A: The opposite of a catalyst. Someone who, without taking part in a process, nevertheless effectively impedes its progress.
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I doubt very much the Tesla brand is worth as much as it was a month ago

The funding secured is a tempest in wall-street tea cup. I doubt that general public perception of the brand is impaired. So is the cannabis episode. Anywhere between 20 to 25 million people suffer with addiction in America. Roughly 75K people are dying of overdose. I think drug use, a recreational one is accepted by people like divorce. Sad but true.
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Yes by definition, when you can't scale manufacturing, you are going to sell everything you make.

You do realize this statement is nonsensical, right?

In any case, Tesla production is currently about 100,000/yr for Model S and X combined. It's stuck at that because they are busy scaling Model 3 and have run out of factory space. And they sell all they make, despite nobody predicting there would be anywhere near this size market for their cars given the price.

So no, they have no competition. Even the skeptical Wall St. analysts are beginning to see this:
https://www.marketwatch.com/story/tesla-has-no-credible-comp...

“But let’s make this clear: there is no actual flood of competition coming,” the analysts, led by Toni Sacconaghi, said. “We tallied up every announced electric vehicle arriving in the U.S. between now and 2022, and the results were stark.”

-IGU-
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No. of Recommendations: 23
I totally disagree with you about the TESLA brand being worth less.
It’s way stronger now than one year ago.


Well, with respect, you already had a very lofty view at the far right end of the bell curve.
More normal people take all new input into consideration.
Like it or not, Mr Musk is the figurehead for the Tesla brand for most of the world, and it appears more and more clear he's a world class jerk.
A visionary jerk, true, but not just a personal-life jerk like Mr Jobs.
More of an all-around, loose cannon jerk.

From the recent lawsuit by the cave diver:
"Musk's False and Defamatory Accusations falsely accused Mr. Unsworth of being a (1) a pedophile,
(2) a child rapist, (3) a child sex-trafficker, (4) the husband of a 12-year old child bride, and (5) a liar..."


I gather he did say all those things, and there doesn't seem to be any non-jerk conclusion to be drawn. That's Shkreli level jerkiness.
(I tried to quote Mr Musk's message to BuzzFeed, but the Fool's censors won't allow it)

And that's just the loose cannon work on one front, in one month.
The Solar bailout smells like three day old fish. It's hard to find a way to see the "funding secured" thing as having been lawful.
Blowing off serious and relevant questions on an earnings call. "Alternative facts" on production. And so forth.
The revolving door of top management, especially financial management, is a worrying omen in that context, but might not otherwise have been so.
Put it this way: I certainly wouldn't do a hand shake deal with the fellow, knowing what I now know.
And I'd want a money back guarantee on any car I bought from the current production line free-for-all.

The thing is, I too am on the fan side of the bell curve for the actual vehicles. My first enthusiastic drive in a Tesla was over a decade ago.
But for anybody not already a fanboy, the Tesla brand reputation falls along with Mr Musk's, at whatever speed the press cycle decrees.
Until maybe a year or two after he is defenestrated, anyway.

Jim
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No. of Recommendations: 10
It's hard to find a way to see the "funding secured" thing as having been lawful.

FWIW, ungood news for the Tesla team:
"Tesla Inc. is under investigation by the Justice Department over public statements made by the
company and Chief Executive Officer Elon Musk, according to two people familiar with the matter.
The criminal probe is running alongside a previously reported civil inquiry by securities regulators.
Federal prosecutors opened a fraud investigation after Musk tweeted last month that he was
contemplating taking Tesla private and had “funding secured” for the deal for the deal, said the
people, who were granted anonymity to discuss a confidential criminal probe.
...
SEC enforcement attorneys in the San Francisco office were already investigating Tesla before Musk
sent his tweet on taking the company private, Bloomberg reported Aug. 9. The existing probe focuses
on whether Tesla had issued misleading pronouncements on manufacturing goals and sales targets..."


(Reuters)

Hey, could be worse.
This is only the Feds. Could have been the NY attorney general.

There is no doubt that Mr Musk is a real go getter, but he is probably the person second most in need of having his Twitter taken away from him.

None of this takes away from my huuuge admiration for the Starman stunt.

Jim
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You seem to believe everything you read in the media. Most of it is untruths. Using BS to define your world view leads to poor decisions.

Elon is as honest as they come. So was Steve Jobs by the way.

Whether or not you think Elon is a jerk depends on how you view honesty. That SJ was a jerk in many respects is without question.

-IGU-
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No. of Recommendations: 14
You seem to believe everything you read in the media. Most of it is untruths. Using BS to define your world view leads to poor decisions.

So, just to be clear, you think it's simply a lie that Mr Musk called the cave diver a "pedo" (pedophile)?
Man, that lügenpresse cult meme has gone further than I thought.

I presume you would therefore assume that Mr Musk's admission of having said it was also a lie made up by the press?
He said he had “spoken in anger” and that “the fault is mine and mine alone.”
That message is still there at twitter, so I presume you figure somebody at Twitter inserted it into his account without his knowledge?

Jim
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So, just to be clear, you think it's simply a lie that Mr Musk called the cave diver a "pedo" (pedophile)?

No, he made the tweet. I saw it. What is BS is all the reports about it.

He said he had “spoken in anger” and that “the fault is mine and mine alone.”

Yes, he apologized for having made that tweet. Good for him. It was rudeness in response to rudeness, usually a bad idea.

However, I have no position on whether the accusation was true. I can't say I've seen any of the mighty press looking into the matter, and I have no idea where Musk got that idea (or if he was just being nasty). He certainly had ample provocation for being nasty.

It can get pretty ridiculous to be putting in serious effort, money, and time into doing good and then getting attacked for doing so. I imagine he has enough of that sort of thing in his day job.

If you spend your time reading and believing the press sensationalism then you come away with a completely wrong idea of what happened. Not that any of it has anything to do with Tesla.

-IGU-
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IGU states regarding Musk's "pedo" tweet: "It was rudeness in response to rudeness"

If the "pedo" comment is not true, the it was libel in response to rudeness. That's not just a "bad idea," it's an actionable tort for which the target of the tweet can collect damages, possibly significant damages. That is well beyond the realm of a "bad idea."
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Buy
the electric jaguar...
Driving it around will only make electric cars seem more cool...

Go Jaguar...
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Too funny...

By the way... when we got our car over a year ago, people often asked me "who made it?" (Like which car company built it.... Toyota? GM? Ford?)

Now, people often start the conversation with, "wow, cool that's a Tesla right?" I love them! I want one etc. look at that! They get really excited. It happens all the time!

The brand name recognition is simply stronger. Please don't buy the shares! They are not for everyone.

And listen to Charlie... Don't choose to short, anything. Remember when he said something like "don't trade pain for money?"

You guys are too funny. :)

And by all means buy any electric Jag... Jags are sweet.

Buy any Tesla.

Buy a Bolt.

Buy electric vehicles!
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If the "pedo" comment is not true, the it was libel in response to rudeness.

Yeah, if Twitter posts can be libelous. I don't know if they're too casual a thing. Can texts be libelous? Is that established law now? Not something I've been paying any attention to.

Anyway, what if it is true? Or if Musk believed it to be true? I have no knowledge either way. And I don't know who does. So assuming it to be libel seems to be a bit premature to me.

And it still has nothing to do with Tesla. Or Apple. Or Berkshire Hathaway.

-IGU-
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IGU says: "And it still has nothing to do with Tesla"

It (Musk's "pedo" tweet) has everything to do with Tesla. Musk is the CEO of Tesla and was tweeting in response to target's comments rejecting the submarine and support team Musk had built and sent to Thailand to assist in the rescue. That support team included personnel from both Tesla and Musk's rocket company. Thus, Musk was acting on behalf of both Tesla and the rocket company, and Tesla is thereby exposed to libel liability for Musk's actions. Regardless of whether Musk's tweet is accurate, now that the tweet's target has filed a libel action, Musk and Tesla will have to devote time and resources defending the suit. Tesla and Musk hardly need any other distractions given the production and financial issues facing Tesla.
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“Buy electric vehicles”
———

Dear TESLA Killers,

Please step it up & “JUST DO IT”

https://teslanomics.co/dear-tesla-killers/?mc_cid=a5757c3cfe...

ciao
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Re Most of what you posted reads like a laundry list of discredited bear fantasies.

I'm dubious that the word "discredited" is appropriate for at least some of these. Here are a few excerpts from a September 17 Institutional Investor article about Kynikos Associates' Jim Chanos, a noted short seller:

The current stock price of about $299 per share (above Chanos’s average cost of $250) is based on ambitious plans for the future. But what most people are missing, says Chanos, is that Tesla has quit making the capital investments required to realize those ambitions. It can no longer afford to do so....

“This is the first instance where I think we are seeing a possible fraud unspool itself in real time, with social media commentary,” he says....

Unlike several other short-sellers, Chanos is cautious about calling Tesla a fraud. “There’s a lot of questionable activities, questionable accounting. But fraud needs intent,” he explains.


https://www.institutionalinvestor.com/article/b1b00ynrgtn05r...
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Here are a few excerpts from a September 17 Institutional Investor article about Kynikos Associates' Jim Chanos, a noted short seller:
https://www.institutionalinvestor.com/article/b1b00ynrgtn05r...


Thanks for posting that, a very interesting read.

A particularly interesting snippet:
"Kynikos Capital Partners is 190 percent long and 90 percent short, making it net long.
Unlike most long/short hedge funds, however, the longs are primarily passive, using such instruments
as exchange-traded funds, as the intellectual effort goes into the short side.
...
Through the end of 2017, Kynikos Capital Partners has a net annualized gain of 28.6 percent since launch in October 1985, more than double the S&P 500.
That has happened even though the short book — as represented by Ursus — has lost 0.7 percent annually during the same time frame
...
“It’s one of the greatest records ever,” says one fellow hedge fund manager, initially skeptical of the results.
“No one has made a 28 percent annual return since 1985.” "


(I gather that's in admiration, not doubt)

Jim
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... 190 percent long and 90 percent short ...

... the short book ... has lost 0.7 percent annually ...


That is an interesting business model. The goal of the short portfolio would be to lose as little as possible - it's not intended to make money. You make money on the long side. The short position is there simply to provide funds for the long positions.

So the short book is effectively a cheap source of leverage. Borrowing at a 0.7% rate is a great deal!

Kind of like insurance float, I suppose. ;)



--Peter
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I'm dubious that the word "discredited" is appropriate for at least some of these. Here are a few excerpts from a September 17 Institutional Investor article about Kynikos Associates' Jim Chanos, a noted short seller.

Chanos? Chanos? That disgusting excuse for a human being? Read Taibbi's "The Divide" (https://www.amazon.com/Divide-American-Injustice-Age-Wealth/...) where it is described what he and his fellow hyenas did to Fairfax Financial and their people. Believing anything that comes out of his mouth is extreme foolishness. The man should be publicly flogged as a lesson to others, on a daily basis, for a year or more.

-IGU-
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Chanos? Chanos? That disgusting excuse for a human being? Read Taibbi's "The Divide" (https://www.amazon.com/Divide-American-Injustice-Age-Wealth/...) where it is described what he and his fellow hyenas did to Fairfax Financial and their people. Believing anything that comes out of his mouth is extreme foolishness. The man should be publicly flogged as a lesson to others, on a daily basis, for a year or more.

Thanks for the book recommendation. I'd like to pick up a copy and read it, but I'm now staring at the stack of unread books that I already own and am dying to get to, so it may be a while.

If you don't mind, please whet my appetite. What exactly did Chanos do (according to the book) that deserves a public flogging? Is there nothing he says that can be trusted? Did he commit felonies? Did he knowingly tell lies? Did he commit fraud? Thanks.
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What exactly did Chanos do (according to the book) that deserves a public flogging?

I haven't read the book

I gather the *general* theme of this story is that Chanos and others had a short thesis for Fairfax, which they publicized loudly.
Some subset of their claims had some merit, to varying degrees.
An "analyst" was hired by some subset of them to investigate further and/or find dirt and/or make some up, and publicize all of the above.
Oaktree (Chanos) claims that they severed ties with the guy as soon as they found out he was a twerp.
In any case, Fairfax's suit against Chanos' group was ultimately dismissed, largely on jurisdiction grounds and lack of evidence of racketeering.

I don't defend any of the bad behaviour.
And I'm sure those who have read the book can fill in more colour. I hear it is shrill in stance but impressively researched.


However, I have philosophical thoughts about the saga.
It impresses me that the reverse, on the bullish side, happens all the time and nobody ever raises an eyebrow.
Assuming for the moment no skullduggery, is a damning press report an evil thing because it creates circumstances for a firm's downfall?
Bullish people pump the prospects of capital-hungry or overleveraged firms and are never accused of manipulating the capital markets to keep the capital flowing towards an ever-larger eventual denouement.
But a short publicizing the implicit fragility of a firm's reliance on the good will of markets is seen as culpable in creating the circumstances of their downfall.
Does the press view help determine whether the capital markets are supportive? Sure. In both directions.
If one is a messenger to be shot, then so is the other. (aside, as noted, from criminal behaviour on either side)
In both cases, it's really the firm's overleverage and vulnerability to open or closed easy capital that ultimately determines the outcome.
An overdependence on willing capital markets is dangerous not because it leads to failure, but because it leads to failure if anyone points it out.
The failure isn't caused by the person pointing it out, but by the management that put their firm in that position.
To overpump the prospects of such a fragile firm, tempting ever more capital into it, is at least as damnable.

These are general comments and don't apply specifically to the case at hand.
Many in the financial industry break laws, bulls and bears.
But aside from that, short sellers are probably the people in the world who do the greatest public good for the highest level of opprobrium.

The tide has been in for a long time.
A lot of people are swimming underclothed.
Many of those who are hiring divers to identify missing bathing suits deserve to be praised.

Jim
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<<However, I have philosophical thoughts about the saga.
It impresses me that the reverse, on the bullish side, happens all the time and nobody ever raises an eyebrow.
Assuming for the moment no skullduggery, is a damning press report an evil thing because it creates circumstances for a firm's downfall?
Bullish people pump the prospects of capital-hungry or overleveraged firms and are never accused of manipulating the capital markets to keep the capital flowing towards an ever-larger eventual denouement.
But a short publicizing the implicit fragility of a firm's reliance on the good will of markets is seen as culpable in creating the circumstances of their downfall.
Does the press view help determine whether the capital markets are supportive? Sure. In both directions.
If one is a messenger to be shot, then so is the other. (aside, as noted, from criminal behaviour on either side)
In both cases, it's really the firm's overleverage and vulnerability to open or closed easy capital that ultimately determines the outcome.
An overdependence on willing capital markets is dangerous not because it leads to failure, but because it leads to failure if anyone points it out.
The failure isn't caused by the person pointing it out, but by the management that put their firm in that position.
To overpump the prospects of such a fragile firm, tempting ever more capital into it, is at least as damnable.>>


Wow!!! When I read this I thought of one of the best business books I have ever
read The Smartest Guys In The Room by Bethany McLean about the fall of Enron. Ch. 19
Titled "Ask Why, A**hole" talks about Jim Chanos's role in first telling the world
that The Emperor Has No Clothes. Jim everything that you talk about in the above comments
is covered in spades.
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If you don't mind, please whet my appetite.

You could listen to this snippet from an NPR Taibbi interview (3min21s):
https://www.npr.org/2014/04/06/297857886/in-books-trial-of-u...

But you really need to read the chapter of the book to get the full force of the depths to which Chanos and his uber-scum friends were happy to sink. Anything whatsoever to drive the company out of business.

The essence of the book is that there's a monstrous divide between rich man's justice and poor man's justice in the US. The fact that the crimes of Chanos and his ilk are difficult to prosecute is a fundamental part of the system.

Whatever you may think of Tesla, reading this book will make you angry and ashamed (unless you are a psychopath).

-IGU-
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...you really need to read the chapter of the book to get the full force of the depths to which Chanos and his uber-scum friends were happy to sink.

Thanks, I guess I will need to read that chapter to see what Taibbi actually says about Chanos. Because I heard nothing about Chanos nor Kynikos in the NPR snippet, nor did I see those names mentioned anywhere in the NPR-embedded link to the March 6, 2007, Bethany McLean article, "The inside story of a Wall Street battle royal:"
https://money.cnn.com/magazines/fortune/fortune_archive/2007...

However, I did see the following in the Institutional Investor article I previously posted:
Chanos concedes that the critics had one good argument. The short-sellers had hired a third-party researcher, Spyro Contogouris, who turned out to be a “bad guy” who engaged in unsavory behavior that confirmed the public’s worst suspicions of short-sellers. “As soon as we found that out,” Chanos says, “we fired him.”
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“As soon as we found that out,” Chanos says, “we fired him.”

This is called "preserving deniability". The grotesque behavior was desired and demanded and savored by Chanos and co-conspirators. The evidence is all there in spades.

-IGU-
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This is called "preserving deniability". The grotesque behavior was desired and demanded and savored by Chanos and co-conspirators. The evidence is all there in spades.

Maybe he's lying. It's certainly what I'd say in his shoes if I were culpable. But I don't have reason to know he's lying.

I'm not being argumentative, but is that evidence in the book?
i.e., was Mr Chanos or his firm demonstrably proven to still be paying Contogouris well after it was clear Contogouris was crossing the line?

Jim
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