That's all well and good, but the stock could be trading at $100 by then (the point & figure projection is $96); a 50%-plus drop that will require a 100% gain (a double) just to break even which could take a decade to achieve. The buy-and-hold strategy on a non-dividend-paying stock makes no sense to me; I just don't get it.
I desperately hope it hits $100. It would be the best gift I've ever been given. I tend to agree with your assessment of long term hold on a growth stock. Tesla stock is an amusement to me. Tesla has been the most interesting stock I've owned. I've enjoyed owning it and following it. I'm a happy long but, even when it was the best performing stock in my portfolio, it wasn't the best by a lot and I knew the candle would burn out. It went from 183 to 389 in 8 months. It was a rocket and the hysteria was out of control. Back when Tesla was 389, it was a story with no value. Now, it has a ton of value and a far lower valuation. There is a big difference. My thought is to hold the stock until about 2025~2030. I've literally built my early retirement on the idea both the media and most of the major rating services lie and manipulates the public. There are several stocks for which I follow Goldman Sachs ratings; when they boost the rating, I sell. When they cut the rating, I buy. It's like magic. Tesla is one of those stocks and Goldman has recently cut their price target on Tesla. By the way, I bought a couple of REITs in 2011 when REITs were hated by nearly everybody. The books looked really good. My concern was the books may have been altered, as they were too good to be true. The more negative coverage REITs received, the more I bought. They are the core of my portfolio, now. Suffice to say, we haven't lost money on them. lol! Once again, my prediction is a general uptrend until shortly after the delivery report, a relentless onslaught of hit articles pushing the price down, and then a sustained upward trend until about the start of November. * Timeline * Things that will push the price up: Q2 delivery report - end of this week or early next Tesla pickup reveal - approx August 2019 Model Y production - September 2019 Model S/X redesign reveal - September - October 2019 Tesla in-house battery announcement - November 2019 Iteration of the semi design reveal and announcement of production - December 2019 Full self driving feature complete - December 2020 Tesla in-house battery production - February 2020 Ultra efficient air conditioner announcement - February 2020 Roadster production - March 2020 Next generation PowerWall and PowerPack - March 2020 Things that will push the price down: Onslaught of smear campaign after Q2 report (looks like it will be continued demand based FUD) Q2 financials - media coverage will be full-on attack after another non-profitable quarter Q3 delivery report - I expect it will be approximately flat from the Q2 numbers Things that will have little/no effect: Announcement of gen 3 solar roof
@TomB16, I think what @Onepoint272 is saying is that there's nothing wrong with tracking tesla with the detail you do. Nobody knows the manipulation in Tesla like you do, nobody follows the company with the same level of detail that you do. What he's saying is WHY hold it when you've studied it so much and can predict where the stock is going so well? Let's say you dumped the 100 (example) shares you have right now at $228/share. If it drops to $100, you could buy over twice that many shares and gain all that profit back up to the $228 it's at now. Just to get back where it is now, you'll have gained over 100% instead of being break-even with the less shares you have now. Maybe hold a certain investment in Tesla (let's say $10K for this example), and swing trade the rest ($40K more in $10K increments) or something like that. That's how I've handled AMD because I've watched this stock for close to 3 years now. I've held what I bought at $4/share, and have been swing trading a lot more of it and caught dips and sold after 10-30% gains. I've seen what has become support, and what has become resistance and traded it accordingly. It's confusing to me to buy and hold it all when you know and post regularly you're expecting it to go down (because of manipulation). Why hold it all through the dip you're expecting? Seems like a lot of wasted profit on the way back up. Good luck however you handle it though. Really hope it does work out for you. I want everyone in this community to be successful, no matter the trading/investing strategy.
To answer Onepoint272's last question: I haven't lost a cent on Tesla, nor do I expect to. But, here's the thing..... when I bought my first tranche of Tesla at $183 in 2016, and it subsequently skyrocketed to $389 over the course of 7 months, I did not make a single cent. I really appreciate this question. Until you asked it, I had forgotten we live in two different universes. Sure. I can understand that, now that I've been informed by your question. I'm not a trader. I'm an investor. I don't own stocks. I own companies. Stocks are just a mechanism with which to buy companies. My system has two major components: I Look for companies that are run by honest, hard working, smart people. When I find one, I track it. I call this, "Scouting". From my list of a few dozen companies which are run by honest, hard working, smart people, I look for value. Valuing companies is the secret sauce of my style of investing. I've never owned a railroad. I want to. I follow two railroads but they have never shown value to me. If either of my railway companies should fall to a price point which I feel has value, I will buy them but I doubt they ever will. Like the railroad example, there are a lot of companies I like a lot, and have followed for years, that I will never buy. When Tesla first IPOed, I assumed they would go bankrupt in an extremely short period of time. Over the course of a few years, they worked hard and made it obvious they were honest, hard working, smart people who were in it for the long haul. That got them into my list of desirable companies but I didn't see value, at the time. By late 2016, Tesla's trajectory was clear. I was so-so on the cars but I loved where they were going with energy. I did some crude valuation projections and I could see value so I moved on it. That is still how I feel. I do like where their transport program is going but I expect Tesla Energy to make more money than Tesla Motors, even when Tesla gets their transport as a service operating lucratively. More detail on the motors vs energy dynamic in the next post. As a small business owner, I wouldn't sell my business when someone offers more than it cost me to get it to the current state of operations. When I do sell it one day, I wouldn't buy it back if it went back below what I feel it's worth. I'm an investor. I'm not a trader. Investing is the process of finding companies that will produce wealth and partner with them. Trading is a redistribution of wealth. To a very minor extent, trading is a game of skill but it's a rigged game. The markets are manipulated heavily. The house always wins. How do you think the major brokerages have gotten so big? Tesla is a very minor holding for me. I know it's risky, I'm retired, and I still hold it. None of this is to say I wouldn't buy a lot more Tesla if the price were to hit $100 again with the company executing on their strategy as good as they are now.
Tesla Motors vs Tesla Energy. Everybody appears to be caught up in a Model S/3/X demand narrative. That narrative is a work of fiction. Tesla cannot produce cars fast enough. They desperately need GF3. Has anyone stopped to think what would happen if there actually was more capacity than demand in the auto division? The extra cell capacity would be diverted to the Energy division. Cells in the energy storage products are not identical to cells designed for cars. They are almost identical, though. The point being, they can slightly change the formula and re-purpose battery production lines to produce energy storage cells with relative ease. Has anyone considered how much fatter the margins are in energy storage? Tesla needs more cells desperately. Both Tesla Motors and Tesla Energy are cell constrained. Any cells not used in cars will make the company more money in the Energy sector. There is a multi-year wait list for Tesla Energy storage and that list is getting longer by the month. At this point, Tesla is buying cells from anyone who will sell them. There were no Panasonic cells in Tesla Energy products in 2018. Generic cells were purchased to keep the lights on at Tesla Energy while all eyes were focused on the Model 3 ramp. Meanwhile, Tesla has had general assembly production lines operating over 7K per week of capacity for about a year. They do burst production testing to benchmark GA capacity. At the end of the burst, they go back to operating well under capacity while they wait for cell production to catch back up. All eyes should be on cell production but, of course, they are not. When Tesla bought Maxwell, I bought more Tesla. A lot more. Dry anodes are going to change the world. The talking heads on TV may start to get it by late 2020. Meanwhile, people with intellect should start to figure it out by 20Q2.
To this point, I haven't mentioned the Tesla Semi. I believe the Semi program is currently waiting on two things: - a minor redesign (I believe a new iteration is complete but not yet revealed to the public) - Tesla batteries Production will probably happen at GF1 or Lathrop.
Q2 deliveries are 95,200. Production was 87,048. Lets have a few laughs...... How many people recall the Q1 numbers: Production: 77,100 Deliveries: 63,000 The media generally presented the delivery number and ignored the production number. When the production number was cited, it was cited as an indicator of poor demand. 2.5 weeks of production was not delivered, for some reason. It was the start of European deliveries of the Model 3. Cars were just starting to ship to Europe and China. Shipping is a pipeline. It takes a few weeks to get cars across the ocean and through customs. For some reason, the transportation pipeline idea was beyond the comprehension of analysts. Tesla pointed out that a glut of cars just missed the Q1 numbers and would be counted in Q2 but I did not find this information anywhere other than the Q1 earnings call. Now we have Q2 numbers, we can see this production being delivered in Q2. I predict the major media outlets will report production and ignore deliveries. Anything to crap on Tesla. For those who think the media has a clue, consider analyzing their behavior. If you feel they have competence and integrity, well.... that's great. lol!
Let's have a look at production. Production 2018Q1: 34,494 <- 9,766 model 3 produced during the quarter (early production ramp) 2018Q2: 53,339 2018Q3: 80,142 2018Q4: 86,555 2019Q1: 77,100 <- S/X production halted for re-tool of new interior and motor, reduction of federal tax credit at start of quarter 2019Q2: 87,048 Deliveries 2018Q1: 29,980 2018Q2: 40,740 2018Q3: 83,500 2018Q4: 90,700 2019Q1: 63,000 Here it is in graphical form. Blue is production. Tan is deliveries. Does anyone see a demand problem in these numbers? What company wouldn't envy this production/sales ramp? Tesla reports an increased order backlog this quarter. As well as various shut-downs for retooling, Q1 was soft domestically due to reduction of the federal tax credit. It was also a quarter in which some battery production was vectored to storage products and we can see that directly in the production numbers. It was announced today that three executives have recently departed. This is a concern to a long, like me. I worry that working conditions could be too severe to retain staff. I don't think the departures will directly hurt the company, including Peter Hochholdinger. No doubt, Mr. Hochholdinger is an outstanding resource and he will be missed but Tesla has many great, young, engineers who can step up. My concern is long term retention of a core staff.
Price moved up to $241 in after hours trading on strong delivery report. If I was a trader, I'd short Tesla right now. A cacophony of smears and lies is about to wash down the Internet pipes like the head stack of a marine barrack the morning after a two day drinking binge.
My last post for a while. I'm brutalizing server space on Stockaholics. The last I heard, burst production rate of battery module lines is over 10K batteries per week. I think the burst rate of the GA lines is still just under 8K per week (but I haven't heard an update on this in a couple of months) so they have spare battery module capacity. The spare battery module capacity will be consumed by Model Y production. I expect they will add another module production line, as well. I keep watching GF1 for the start of new construction but it hasn't happened. I'm expecting it within the next three months.
Thanks for the constant updates on the operations and everything Tesla @TomB16. Some people may give you a hard time about your investment in them (including myself at times - most of the time just to understand it better though), but no matter what, having someone as in tune with everything going on with the company is very valuable to everyone interested. So again, thanks.
More prattling..... So, it turns out the dry anode technology that I believe will literally change the world does not work on small format, cylindrical, cells. Tesla is built on 18650 and 20700 cells. When people realize this, it's going to cause a massive negativity storm in the media. It will probably be presented as a terrible technology purchase and a complete waste of money. Here is how I believe it will play out: - They will probably end up migrating to pouch cells. Tesla cathode formulations will work just fine with the new anode; the only problem is the tightly wound spiral cell format. - There is some chance they can use giant spiral cells, about 3 inch in diameter with hollow core, but I think it's going to end up pouch cells. - Tesla will likely migrate the PowerWall and PowerPack to the new cells first. This will free up 20700 cells for automotive products. - The Tesla semi will almost surely ship, form the very beginning, with the new cells. - The Model S/X redesign will likely continue to use 20700 cells. - The Model Y will almost certainly use 20700 cells. - The new Roadster will likely use 20700 cells but it's hard to say. It would reduce weight to use the new cells, as the energy density is higher, and the Roadster is a niche product so it would be a good candidate for a new cell format but it is currently running with spiral cells so it would be a bit of a redesign to use a new format. - I don't know about a Tesla truck. It will probably use the new format but it's a wildcard to me. By migrating energy storage to the new battery platform, that will free up desperately needed 20700 cells for automotive use. This will get Tesla to a production capability over 400K cars per year. This is what Elon has promised, although he has hinted at 500K cars per year production rate at the end of the year is possible. By using Tesla batteries on the semi, Tesla will not impact general automotive capacity with the new transport platform. How do you suppose the market will react when Tesla buys a mining company? lol!
Further... I believe the contract with Panasonic is for 10 years at 35GWh production level. That contract was cut 18 months ago. Even if the new Tesla batteries are the best EV batteries known to man, and they might be, Tesla will need Panasonic for 8.5 more years. It's going to take years for Tesla to redesign their cars to use a new form factor. 8.5 years from now, Tesla will probably have figured out how to make tightly wound cylindrical cells which don't fracture the anode away from the cathode during formation. I doubt they will go that way, however, because pouch cells seem to be more efficient. The advantage of 18650 batteries was they were a standard package that was widely available. Laptops drove EVs, in the early days. That efficiency is no longer of any significance since BEVs consume the majority of lithium batteries the planet uses.
I don't understand the Ford/Rivian relationship. Why would Ford invest $0.5B into Rivian and then partner with VW for a pickup truck platform? There are rumors that Ford and VW have other EV projects, as well. Meanwhile, Ford is pouring money into Argo AI to develop self driving technology. Apparently, FSD is a huge investment for Ford and they are trying to mitigate their risk. Meanwhile, over at the startup Tesla, FSD is marching toward being a full retail product. I think it's a race for survival now, among non-Tesla auto makers.
Sunday GF3 update: Lots of progress inside, more floor poured, mechanical systems being installed, some windows, the final wall that was left open to bring in large equipment is now being sheathed. I have no view into the factory production gear so I cannot report on that. Meanwhile, they are pouring the walls of the substation. There was a concrete pump at the substation all day, yesterday. I expect the walls of the substation will be allowed to cure for 2~3 weeks and then the roof will be poured. Did I mention I think it will have a concrete roof?
Speaking of the demand problem... Here are the global EV sales in for 2019 until June 1 (first 5 months). Thank you, Tesla Stock Channel. Tesla started shipping globally a couple of weeks into January so it has taken a while for them to ramp. Also, there was a minor re-tooling the factory in February. Here are the global EV sales for May. Notice Tesla is ahead of even the largest Chinese manufacturer. By May, Tesla was dominating and the lead is getting wider. Here is the global EV sales by model for May. The model 3 is absolutely dominating. At this point, we know Tesla has 40% extra battery module capacity and perhaps 30% extra model 3 production capacity. The production ramp can be 100% attributed to increased cell production. It's clear, Panasonic is improving their game. The numbers are in a weird spot. It appeared there were problems in January but there were not. It was just a matter of a few weeks to fill the shipping pipeline. The second quarter looks unreal, but some of the delivery numbers came from the 1st quarter pipeline. The third quarter will be another nice, but small, bump. The fourth quarter will feature production from GF3. Even if Tesla only manages to produce 5000 cars at GF3 the entire quarter, that will push them over 100K cars shipped for the quarter. Meanwhile, we can see solar and storage shipments are ramping like Bo Duke running from Rosco P. Coltrane. I'm not sure about Q2 earnings. It will be tight. I expect a tiny loss. I expect income in Q3 and Q4. From here, Tesla should be able to build GF4 and maintain positive cash flow. Perhaps the best move a trader could make is to start thinking of shorting some traditional automakers later in 2019.
Take it with a grain of salt, but one of our Summer interns has a friend who had a Summer internship last Summer and this Summer at Tesla in Las Vegas (I believe that was the plant he's in). He said that all the workers in that place are extremely miserable and angry, management is always pissed off, every interaction with anybody there's always someone yelling. He also said their FTC (first time capability) coming off the line is like 10% - in other words, only 10% of the vehicles they build come off the line and ship immediately. 90% need to go to repair, or somewhere else before going out the door. Obviously it's word of mouth, but it's one of our interns who's in the same field as his college friend who's an intern in that same field, so I'm sure they share stories and info with each other about the field. One of my coworkers just retired and is now working at Rivian, speaking of them. If I hear anything from him I'll pass it on. They took over an old Mitsubishi plant and are re-purposing it for their launch. Still getting set up as far as I know.
