Investing 102

[GregWeld]

I'm writing this in the vane of "WHAT TO THINK ABOUT" --- not a discussion on whether or not to buy or sell a particular name etc.



I'm sure you guys are all following Tesla (TSLA) - even if you don't own it - and it's relevant here because we're a car forum.

I see this morning that people have plunked down $1,000 per to simply "reserve" a car... a car that's not even in production yet -- and there were near 300,000 "reservations"! ELEVEN BILLION in future sales if all those folks take the cars. That's a big number.... and in anyones eyes - would be considered a huge success. We'll see if they can produce - and produce at a PROFIT. After all - making money is what drives any business.

So to me... what is this saying to the other manufacturers? Shouldn't they be waking up this morning and asking themselves where they are in this market? 300,000 people plunking cash down and waiting a year and a half for something they're not even sure will be produced! If I was an auto manufacturer - I'd be having a board meeting this morning and I'd be pounding the table for getting on this bandwagon! That's what worries me on TSLA.... while they're the known leader. What happens to the stock IF - big IF - someone else comes up with a winning design - or that goes further on a charge etc. That's the gamble. In the meantime - Tesla is killin' it. Are they the Apple of the auto industry?

[96z28ss]

Originally Posted by GregWeld

I'm writing this in the vane of "WHAT TO THINK ABOUT" --- not a discussion on whether or not to buy or sell a particular name etc.



I'm sure you guys are all following Tesla (TSLA) - even if you don't own it - and it's relevant here because we're a car forum.

I see this morning that people have plunked down $1,000 per to simply "reserve" a car... a car that's not even in production yet -- and there were near 300,000 "reservations"! ELEVEN BILLION in future sales if all those folks take the cars. That's a big number.... and in anyones eyes - would be considered a huge success. We'll see if they can produce - and produce at a PROFIT. After all - making money is what drives any business.

So to me... what is this saying to the other manufacturers? Shouldn't they be waking up this morning and asking themselves where they are in this market? 300,000 people plunking cash down and waiting a year and a half for something they're not even sure will be produced! If I was an auto manufacturer - I'd be having a board meeting this morning and I'd be pounding the table for getting on this bandwagon! That's what worries me on TSLA.... while they're the known leader. What happens to the stock IF - big IF - someone else comes up with a winning design - or that goes further on a charge etc. That's the gamble. In the meantime - Tesla is killin' it. Are they the Apple of the auto industry?

It will never happen with the Big 5 automakers. It works for Tesla just like it did for Apple. They were the underdog and they came out with something out of the box, and tons on innovation, that the Big Guys won't do cause they are to blinded by their size.

[68Cuda]

Originally Posted by GregWeld

In the meantime - Tesla is killin' it. Are they the Apple of the auto industry?

Tesla is the only electric vehicle manufacturer of scale to actually make an electric car we would want to drive. The big automakers must be convinced that the buyers of electric cars want something ugly. How else can you possibly explain the Leaf?

[DBasher]

Not to stray too far off topic but...I watched the Preston Tucker movie the other night and I've got to wonder if the big 3 or 5 aren't trying to backdoor Tesla. I know early on lawsuits were filed against Tesla because of the way they were selling their cars, without dealerships. Do the giant manufactures strangle Tesla with lawsuits or do they buy them out?

Tesla are everywhere here in the NW.....everywhere! I've done work in one of their buildings in downtown Seattle and it's definatly a complete buying experience. Small, full access to the cars, display model chassis's with the drive components...a different way of doing things for sure.

[GregWeld]

Originally Posted by 68Cuda

Tesla is the only electric vehicle manufacturer of scale to actually make an electric car we would want to drive. The big automakers must be convinced that the buyers of electric cars want something ugly. How else can you possibly explain the Leaf?

Originally Posted by DBasher

Not to stray too far off topic but...I watched the Preston Tucker movie the other night and I've got to wonder if the big 3 or 5 aren't trying to backdoor Tesla. I know early on lawsuits were filed against Tesla because of the way they were selling their cars, without dealerships. Do the giant manufactures strangle Tesla with lawsuits or do they buy them out?

Tesla are everywhere here in the NW.....everywhere! I've done work in one of their buildings in downtown Seattle and it's definatly a complete buying experience. Small, full access to the cars, display model chassis's with the drive components...a different way of doing things for sure.

I agree with both these thoughts. ALL of the other hybrids and electrics are just flat ass ugly or boring to the max. The big 3 or 5 think the market is just the ultra tree hugger crowd.... and not at all about the "driver experience" - whereas TESLA continues to make cars that DRIVERS actually want to be seen in and experience.

Having said all of that - and being in complete agreement..... You MUST ask yourself how long a company can continue losing huge money every quarter - while still trying to build new models etc. Of course - a large part of their losses are because they are "investing" in new plant and equipment etc. So perhaps like AMAZON (AMZN) losing money - it's not really losses as much as it is supporting growth and expansion. I'm not that smart - and don't care to pour thru their financial statements to figure it all out!


Again - not discussing this with a you should or shouldn't own "X" -- but more - it's an interesting CASE STUDY.... of investing in "growth" or gambling on the future in hopes (because that's all you've got to hang your hat on) they grow in to the stock price.

[68Cuda]

Originally Posted by GregWeld

Having said all of that - and being in complete agreement..... You MUST ask yourself how long a company can continue losing huge money every quarter - while still trying to build new models etc. Of course - a large part of their losses are because they are "investing" in new plant and equipment etc. So perhaps like AMAZON (AMZN) losing money - it's not really losses as much as it is supporting growth and expansion. I'm not that smart - and don't care to pour thru their financial statements to figure it all out!

They have a decent gross profit per model, just not producing the volume they need to outrun the spending on development and growth. They are selling their powerwall home battery systems faster than they can produce them, and they have 276,000+ pre orders for the car they are releasing next year. Now 2016 Q1 they delivered 14,820 cars. They fell short of their Q1 estimate because of parts shortages. The logistics of expanding from 5,000 cars per month to 50,000 cars per month is staggering. The $276,000,000 their customers fronted them will not do it. They need real cash and logistics experts. Someone like a big 3, or maybe a company like Boeing that is accustomed to large scale short timeline projects. The way Tesla has run the company from the beginning I have always had the impression they were fishing for a buyer.

[glassman]

I'm sorry, I dont "tweet". I had heard a fewdays back that Mr. Musk had tweeted "hmmm, might have to rethink production"....wtf, 300k deposits ?????

Great product imo, but can they deliver? that is the 25000 question....

Now, if somebody could come out with a light duty pick up hybrid...not sure if it would sell, but i'd be in....

not sure if i'm in to buy the stock or not, just not sure.....

[GregWeld]

Since we're all tool and car guys - I think some of you own Snap-On (SNA). It's been a little poopie for the last several months. Year to date it's down 8.58%... and it's not a huge dividend payer to begin with...

So while I was just poking around - as usual I stretched the chart out just for a look see.

Only reason I'm writing this post....


Think about where you were in 1986..... and think if you'd just have put $1,000 in to Snap-On stock..... that was 30 years ago. What would you have today had you never put another dime into this??



You'd have a 916% GAIN..... Yep.... your math is right... you'd have damn near a million bucks to retire on.