A Real Vision interview with Peter Atwater on Tesla as a Psychological Marker - published May 29, 2019 Grant Williams: So look I've done, I think, a fantastic job of leaving this question till we got to this, but you started us down the automaker thing so I have to bring the conversation around to Tesla because so much of what you talk about is wrapped up in this stock and I get criticized all the time for being fixated with it and I make no apologies for that. I am utterly fixated with this story because I think it is way bigger than Tesla. Its not about making a few dollars off a short position, its nothing to do with that to me. This is the crystallization of everything you speak about, of everything Ben Hunt speaks about, of everything I've watched build up over the years, its mal-investment, it is low cost of capital, it is reaching for yield, it is dreaming, its ecoculture, its the cult of celebrities, everything wrapped up into one stock and you can now finally see this thing unravelling in real time it seems. So I mean, broad question, how important is Tesla to the whole market narrative and then from there what's your take on it, because I'm fascinated? Peter Atwater: Its hugely important and its hugely important because of the personality type that is Elon Musk. I joke often, you know, he like others who are out there is often analogized to Harrold Hill, the music man, promising boldly, and I think of that in the context of more specifically sort of the circus barker and people will be offended by the analogy, but if you think about a circus barker, the first time the circus comes to town the lady has two heads and everybody goes, and then the next year when the circus comes back she's got to have three heads...and then the three heads have to become 5, become 8, but eventually when you get to 10 heads the crowd is like, no...no I just...it just becomes so extremist to be disbelieved and you know I believe that that's the nature of the con, they become self asphyxiating in order to perpetuate it. You have to go to such great lengths that it finally collapses on its weight and I think that you've seen that with Musk with all of the pivots...this weeks its cars, next week its cars with solar panels on the top, and its cars with this, and now were talking about insurance and so to me Tesla is now the 10-headed lady and its become so extreme so as to be disbelieved. Now having said that I think in the last week you've seen a capitulation that we no longer believe that, we accept that its a 10-headed lady and so you've got these calls of $30, $10, you know how low can you go. So its the same thing you see at the top where a $100 target becomes $200, becomes $500, so we're seeing that in a very short run so I would say anyone listening to this in late May, early June, this is not the time that I would be eager to get in on Tesla. I think Tesla is a goose egg at the end but too many people have bought into the narrative, that its suspicious. So the potential is for some sort of bounce, somebody makes noises of being interested in it, almost anything at this point could levitate it some meaningful percentage but its significant because its far more substantial than Theranos was. Theranos to me...Elizabeth Holmes stands out to me as the subprime of circus barkers. She was too extreme... the veneer wasn't deep at all. Tesla makes real cars so that gives him something to show people, 'this is what we do', and at the same time you have something like Space-X which is demonstrating tremendous confidence in what it does. So there's some substantial form to Tesla ignoring the financial condition so that adds psychologically some strength to its viability but we've moved from Theranos and Shkreli to something that is more real so I think of Tesla as the sort of the alt-A of this cycle that there is still nothing there and it will be eviscerated as confidence falls. The broader danger are companies that have perceived real business models, Uber, Air B&B, Amazon and I think that the challenge for all of them is as scrutiny intensifies...what are they? They're logistics companies. So how do you value a highly leveraged, highly growing logistics company that in many ways has no real assets? Its balance sheet is good will, intangible, its balance sheet is network effect...same thing with Facebook.
GF3 update: The windows just started going in this morning. I don't see a single overhead door installed. The skylights are probably 75% in place, and pretty much totally installed in the main section where I would imagine the equipment is being installed. The concrete floor is mostly done inside but I can see one section that isn't done and some concrete loading docks which are formed with steel but not poured. Overall, the exterior has progressed extremely slowly. I speculate 90% of the workforce is focused on the interior. The site is reasonably dry. I expected it to be a mud bog from the rainy season by now. I speculate that freshly minted Model 3s will be rolling out of that building in September 2019. Demand will consume 100% of GF3 production for the foreseeable future. The real question is: How is Tesla making out with productizing the dry electrode technology they acquired from Maxwell. I wonder if Tesla will build their first batteries at GF3, since Panasonic does not have a presence there. The Chinese GF3 could be the first cars with Tesla batteries instead of Panasonic. Imagine how badly the stock price will collapse when Tesla releases their own cells. lol!
Now Ichimoku indicator shows a downtrend. All this lines are lined up according to the seniority of the periods. Oscillators are oversold. Therefore, I think that there will be a correction up to the Tenkan line at 230.00. And then the downtrend may continue. But I do not know, the correction can go higher.
My focus is on the corporate value but I find the current upswing in price interesting. It's currently at 214.70. I don't see any announcements from Tesla or anything that might change the value of the corporation. Perhaps an announcement, like the truck, is about to drop and there is a small leak. I doubt it, though. I think the price increase can be attributed to a brief cessation in anti-Tesla news. The news Nazis will return shortly.
Apparently, a couple of the big investment houses changed TSLA to a buy rating. That could be causing some upward pressure.
I just read an article about the Tesla Roth Capital rating which was just upgraded to a buy. Does anyone have enough of an attention span to recall last week when Tesla was "going down the tubes"? lol! Check this out from April 11 when Roth downgraded Tesla: "The analyst believes the direct read on Panasonic (PCRFY)/Tesla suspending plans for Gigafactory expansion is the partners probably do not see Tesla achieving projected sales volumes, and therefore necessary battery demand. The analyst thinks Tesla's battery costs are too high, with METI data pointing to Tesla's cell costs at around $240/kWh, while his checks show VW (VWAGY)/Porsche paying $250/kWh, indicating Tesla has no advantage here. Overall, Irwin believes Tesla's vehicle sales are slow because costs are simply too high for consumers." I'm staggered by how many incorrect ratings, based on ignorance, analysts can publish and still be taken seriously. I don't work at Tesla or have any association with them and I always knew there was no supply problem. Look at Tesla's mineral contracts. Look at the images of the clearing lot activity being published on Redit. Look at the serial numbers being discussed in the forums. What did Roth do to research the "demand problem"? The key to successful investing is independent thought. Few to none of the people who explain how much smarter they are than us are as smart as us. Fundamentals. Objectivity. Independent thought.
It's important to remember that analysts are not putting a rating on a stock based on their true thoughts on the company. They're putting a rating on a stock to push the price the way that they/their boss/their rich friends/etc. want the price to go. In some cases, their thoughts and the way they want the price to go might align, but in many cases they do not. If they had TSLA marked as a sell, someone wanted the price to go down. In your view, everyone thinks the company is going to fail, that's why the news has all been bad. I'd almost argue that all the analysts probably have some belief in TSLA. They're all trying to drive the price down so they/their friends/etc. can get in cheap. Once you start seeing positive news, you'll know they drove the price down enough that they (or their friends) were able to get in at the price they wanted. At that point, it's time to release the positive news to push the price up. When the news turns negative again, you'll know it's time for the big guys to get back in.
Whoa! That's pretty cynical. I wish I could disagree. Annual shareholder meeting today. FUD will be served in the media lounge following the meeting. [Edit: meeting scheduled to start at 2:30pm PST. Audio stream is available.]
Here is a link for those interested in the livestream of the ASM. This works from Canada but probably doesn't from other countries. Like all Tesla events and production targets, I expect it to be late. https://www.tesla.com/en_CA/shareholdermeeting I expect this link to work from all countries: https://livestream.com/tesla/events/8697799 Note: Tesla has a semi, roadster, and model Y parked out front of the event. I expect a bit of a dog and pony show.
Here is an overview of the new product offerings, as speculated by me..... Model S refresh -> presented in Q3 for production in Q4 or 1Q20 (425 mile range, over 100KWh battery, minimalist interior, more angular body [looks worse than current to me but still attractive]) Model X refresh -> probably presented and produced in tandem with Model S refresh Model Y -> small scale production (perhaps 2000 total cars) in Q3 with ramp beginning in Q4Pickup Truck -> presentation in Q3 for production in 3Q20 or even 4Q20 (I expect it to be extremely late) Semi -> small scale production in Q4 with ramp beginning in 2Q20 Tesla batteries -> to be announced in 3Q or 4Q of this year with production in 1Q19 of this year
425mile range? Amazing. Its getting up there, the only thing left is the recharge time and there is no stopping electric cars.
Recharge time with SuperCharger v3 will be about 20 minutes for the new big battery, assuming it is 120KWh. 11 minutes with a standard range model 3, from dead flat (towed in), to 80% (max supercharge), including 6% heat loss. I doubt it could take current that fast but it will probably come close. The model 3 long range can charge in 15 minutes, even if it is pretty much flat. The thing iceholes go out of their way to not consider is that charging an EV takes way less time than filling the tank of a car that burns dead dinosaurs. The only time you pull into a supercharger is when you're travelling away from home. The rest of the time, you plug it in when you get home and it's freshly charged every day when you leave. How would you like to have a full tank every morning? How would you like to never have to stand in the cold to fill your tank? The only problem with EVs is that people don't understand them and run wild with zenophobia.
Perhaps this will explain my interest in Tesla. I own a lot of stoogy, old-guy, companies. I live off distributions (mostly) and also R-E cashflow. It is easily possible that I am the most conservative investor in here. Owning Tesla is a hobby for me. It's fun to follow. I believe in EVs. I believe in self driving. I believe in energy storage. I believe in the company. Watching my other stocks is like having a conversation with a corpse. Hey... my REIT just bought a new building.. I think I'll add another half teaspoon of relish to my hotdog. That is why I'm here.
Well clearly Wyckoff would only be playing the short side. The tide is down, it fell out of a trading (TR) range that began at a buying climax in June 2017. The P&F projection for that long TR is below zero. Shorter term it fell out of a TR that dates back to January 2019 and printed a Last Point of Supply in April and has been in mark down ever since. The P&F projection for that Base TR is $96. It has recently hit a stepping stone target of 180 and bounced into a short-covering rally. I expect it will build cause here. Out of respect for the trend I'd have to assume the ensuing TR will be re-distribution and it will continue to the base count objective of 96. It would need to show a sign of strength in the right-hand side of this ensuing TR to reverse the trend. The last couple days, Thursday and Friday, it has been trying to test the top of the bounce. A failure to break higher or a break with increased effort on lower result would be a good spot to initiate or add short positions I would think. Point & Figure using 65-minute data with a $3 box and a 3-box reversal:
Drove through the area outside the local mall here yesterday that has tesla charging stations and there were 4 Tesla's charging there. All 4 were black, 1 was an SUV, the other 3 were compact cars. Was too far away to see which models.
GF3 update (I will try to provide an update every Sunday) Skylights done. Roof insulation and membrane almost done (it has developed a tear that requires repair and a small strip remains (the small strip is probably too moist to seal in with a membrane). The section of floor that wasn't poured last time is still not poured. I only see a couple more windows than last time. Almost all windows and doors are not installed Steel flooring for the upper level of the tall section has been installed. It is clear most of the work taking place is internal to the building. Suffice to say, I cannot see this work. The central areas that are being fitted with manufacturing equipment now have a weather tight roof but still open door and window apertures to the side.
