Musk endeavours

[dspp]

I studied in the US and so am in an alumni network where we circulate interesting job vacancies amongst ourselves. A lot of my ex peers are ex Detroit. Quite a few of them are now in Tesla. I can assure you they know how to design automotives, and build them. There is also a lot of interesting hiring going on. Whilst I agree that Musk is very extended he is also very practiced at doing this, and he can access a lot of credit if ever he needs to.

regards, dspp

[odysseus2000]

The mood music around many stocks makes it very difficult to make sensible decisions.

My own approach is to ignore commentators, to look at the price action & study the underlying business in the context of my historical studies of other business.

Every now and then I go into the commentator environment to see what is being put out. Mostly what I read consists of folk who did very well in their English writing at school, but who didn't do well in history, mathematics or science. Often the articles are well crafted using the full range of writing techniques that likely got them good marks when they were students, but which now lead the reader where they want to take him or her. Added to this are the bearish articles one sees when prices are going down & the bullish ones when prices are going up. One never or very rarely get folk accurately calling tops or bottoms.

It is upto everyone to decide what information they rely upon to make investment decisions, but in my experience over 95% of the articles written for investors are greatly misleading & are worse than useless as they will steer investors where the writer wants them to go. The writer likely earns money just from writing & in many cases can't own stocks such that he or she has no skin in the game. The amount of such articles has greatly increased with paid bloggers earning their keep from writing. As always caveat emptor!

Regards,

[dspp]

"Every time a Tesla is sold, we witness a transfer of wealth to a rich hobbyist (most Teslas are their owners’ third or fourth car), while average Americans are on the hook for at least $30,000 in federal and state subsidies. Tesla is more a regulatory arbitrageur than an auto manufacturer," concluded another critic."

etc http://www.theregister.co.uk/2017/11/03 ... y_worries/

[odysseus2000]

dspp
"Every time a Tesla is sold, we witness a transfer of wealth to a rich hobbyist (most Teslas are their owners’ third or fourth car), while average Americans are on the hook for at least $30,000 in federal and state subsidies. Tesla is more a regulatory arbitrageur than an auto manufacturer," concluded another critic."

etc http://www.theregister.co.uk/2017/11/03 ... y_worries/

Kinda amusing. If the authors had bothered yo listen to the conference call they would have much better stuff to bash Tesla with:

Can the highly automated Model 3 production line ever be made to work after contractor apparently pulled the wool over their eyes by writing software so bad that it has all had to be re-done?

Can new robots etc be got, installed & working by years end or earlier.

Why did the super human auto driver get down graded to just human level.

Did Tesla launch model 3 too early?

What has happened to the HGV Tesla?

Etc I could find much more to complain about in the earnings call, the one thing that I wonder about is whether Musk deliberately set up an expected fai: under promise & over deliver?

Next earnings call will be interesting.

Regards,

[odysseus2000]

Tesla bears are very quiet.

Not so long ago a story in this weekends FT that Tesla cars were arriving without vital components would have had them snarling & sharpening their claws.

Kinda wonder if they have become extinct shorting at the wrong time.

Regards,

[odysseus2000]

Musk says Tesla will launch semi-truck on Thursday:

https://twitter.com/elonmusk/status/929823757635481600

Kind of interesting. The launch of the Model 3, didn't produce a pop in price as there are concerns that it is taking too long to get it into large scale production. Will the truck be similar or will there be an announcement of partnerships, licensing deals etc that could bring this to market soon.

Currently the world is falling out of love with Tesla which if there is something positive in the truck launch probably means a big jump in price, but if not the share could tank.

Regards,

[odysseus2000]

https://mobile.twitter.com/tesla/status ... 4452830208

Interesting tweet, MIT rebut FT re cleanliness of ekectric & petrol.

Regards,

[odysseus2000]

Amazing & revealing piece on Musk:

https://mobile.twitter.com/elonmusk/sta ... 0142326784

Regards,

[Howard]

There was a very interesting prediction in the Telegraph today. Written by Ambrose Evans-Pritchard in his usual enthusiastic style.

Predicting that the big oil producing countries are doomed as the USA will undercut their prices for the foreseeable future and will dominate the world in electric vehicle production.

He quoted some interesting sources on the costs of fracking.

http://www.telegraph.co.uk/business/201 ... ed-energy/

I think subscription may be necessary.

Howard

[odysseus2000]

Howard
There was a very interesting prediction in the Telegraph today. Written by Ambrose Evans-Pritchard in his usual enthusiastic style.

Predicting that the big oil producing countries are doomed as the USA will undercut their prices for the foreseeable future and will dominate the world in electric vehicle production.

He quoted some interesting sources on the costs of fracking.

http://www.telegraph.co.uk/business/201 ... ed-energy/

I think subscription may be necessary.

Yes, but its not just in energy where the US has a huge and accelerating lead.

US military budget exceeds all others.

US information technology and associated practices, including media streaming, far exceed anyone else.

US renewable energy harvesting and use far bigger than others.

US AI research largest in the world

US re-useable orbital rockers only supplier

... in almost all areas the US is number 1 and getting further ahead by the day.

As long as the US stays friendly all is well, but if anyone gets at loggerheads with them it is hard to see the US having to back down. From a world balance perspective it would be nice if Europe, China & India could become much stronger, but for now there is no sign of that, more the reverse especially in Europe.

Regards,

PS, yes Telegraph wanted me to register to read, but didn't as I have seen several similar stories.

[GoSeigen]

There was a very interesting prediction in the Telegraph today. Written by Ambrose Evans-Pritchard in his usual enthusiastic style.

[...]

I think subscription may be necessary.

I think skepticism may be necessary.



GS

[PeterGray]

Did Evans-Pritchard address the issue that US shale remains cash negative? Most shale projects continue to lose money. How long will investors continue to support new projects - and given the rates of depletion standing still is not an option.

Shale is a significant part of the global oil story, and will probably remain so, but there's an awful lot of misinformed nonsense written about it by some journalists.

Peter

[odysseus2000]

Peter Gray
Did Evans-Pritchard address the issue that US shale remains cash negative? Most shale projects continue to lose money. How long will investors continue to support new projects - and given the rates of depletion standing still is not an option.

Shale is a significant part of the global oil story, and will probably remain so, but there's an awful lot of misinformed nonsense written about it by some journalists.

Given the performance figures of the Tesla semi truck announced last night, the biggest trouble for oil & gaseous hydro carbons are their rapid obsolescence as a transport fuel. The economics of shale oil are difficult to determine & there are many conflicting claims, but the secular decline in oil for road transport is imho, now unstoppable with consequent negative impact on many hydrocarbon producers and business that have been heavy users of oil.

Assuming Musk's figures are right, the entire rail industry now looks obsolete. Trucks that can deliver door to door having been in road convoys for the greater part of their journey are cheaper than trains with the added plus of avoiding the rail to truck transfer that is currently needed. Add in the decline of oil for transportation & one has a major sector of the rail cargo business declining & even with Trump, the market for coal, another big rail cargo is also in secular decline.

Meanwhile there are a number of prominent US investors & Evil Knievil over hear adamant that Tesla is a massive over priced fraud & that the only sensible option is to short Tesla. I am reminded of all the folk who said the same about Amazon & the folk who relentlessly shorted it only to be broken in the parabolic run of 1999, even though from its heights Amazon did then pull back, many shorters were already bust.

There is currently, at least in my inbox, a large number of folk suggesting that Tesla is a short & a huge number of false stories being created to support this belief. Although it is not for me to tell investors what to do I would strongly suggest that anyone short/long or thinking of going short/long Tesla look at all the facts & not be guided by the propaganda of either longs or shorts. More importantly any investor/trader also needs to know timescales & know how to react to price action. This is a skill set that imho is far beyond most investor/traders with a high beta stock like Tesla & that trying to play these types of trades with out guidance & help from seasoned folk experience in the tactics of such things should not be attempted, especially with any significant amounts of the persons resources. Yes, large amounts of money can be made, but large amounts can also be lost to the highly skilled folk who make a living from this & who are very unlikely to be the ones sending trade ideas to your inbox.

Regards,

[Howard]

Yes Evans-Pritchard did quote some figures on shale production in the US. His main quote was that break even costs in West Texas for the most advanced operators are now down to $25 a barrel and the time to drill a well is down from 40 weeks to 20 weeks. I have no idea whether or not his sources are right, but the implication is that shale production costs are coming down and oil at more than $55 a barrel supports more investment.

Ody, your points above could have been taken from the article. It wasn’t just about energy. It made the point that the USA and China are leading a revolution on transport technology and energy usage. A E-P predicted that the artificial intelligence needed for driverless vehicles played to American technological strengths.

I’m no expert on these matters but this and other similar articles and trends are convincing me not to sell the US orientated portion of my portfolio at the moment!

regards

Howard

[odysseus2000]

Howard
I’m no expert on these matters but this and other similar articles and trends are convincing me not to sell the US orientated portion of my portfolio at the moment!

The other positive about the US, is that they have the most business friendly President since Ronnie, perhaps most business friendly ever.

That is an extrairdinarily bullish alignment, very different to the UK & Europe. Should Trump deliver on some of his promises like tax cuts, repatriation, better trade deals etc, the US boom will imho accelerate. By contrast if he gets into a protracted war with rocket man or similar one could see a big fall in US markets.

Personally I am well over weight the US, but I can & do react fast if I see a need.

Regards,

[PeterGray]

the biggest trouble for oil & gaseous hydro carbons are their rapid obsolescence as a transport fuel

HCs are beginning to be phased out as transport fuel. But there is a very long way to go, even in advanced economies. There is also rapid growth of use of cars in the developing world, where the options for EVs are even less developed that they are in the advanced economies. I will be very surprised if overall oil and gas demand is below it's current level in 2030 - or more likely 2040.

Peter

[odysseus2000]

Peter Gray
HCs are beginning to be phased out as transport fuel. But there is a very long way to go, even in advanced economies. There is also rapid growth of use of cars in the developing world, where the options for EVs are even less developed that they are in the advanced economies. I will be very surprised if overall oil and gas demand is below it's current level in 2030 - or more likely 2040.

An interesting question.

Looking at super-market like/like fuel sales there is a clear and steady decline over the last few years, even before electric cars are anything more than a small niche part of the market, but where hybrids achieve very high equivalent mpg figures, often well over 100.

The main positives of electric traction are: much better performance, much cheaper components, emission free at point of use and can be powered by renewables with out needing to maintain the refining and fuel networks we now have and isolating the consumer from the geopolitics of far away places.

Meanwhile there is now the beginning of a concerted attack to reduce plastic usage. The 5p per bag charge shut down a local factory near me that made plastic bags and more and more folk are using alternative bags (alas not as many of my cotton locally printed ones I manufacture as I would like!) but overall the market for plastic bags is in a steep secular decline.

Meanwhile the politicians have decided that plastic is bad and rightly so as why should we pollute the oceans with plastic waste, causing damage to vital eco-systems. It seems likely that the next UK budget will introduce taxes on plastic products.

The largest of the developing nations (China) has the largest electric vehicle market on the planet and they are keen to flog their motors to all the other developing nations.

Given how fast cars rose in the time of Ford with out all the computer aided manufacture of today it seems likely to me that there will be a very rapid take up of electric road transport and soon electric air transport too.

Given my view of the revolution in the powering of transportation I expect overall oil and gas demand to be below current levels by 2025 and I think I am being a bit pessimistic.

Regards,

[PeterGray]

Looking at super-market like/like fuel sales there is a clear and steady decline over the last few years

What are you looking at there? Cash value or quantity? Remember fuel costs are substantially down over 4 years or so. UK fuel duty raised was up 1.1% y on y from 15/16 to 16/17 (with no change in duty) so it's a direct measure of quantity.

Given my view of the revolution in the powering of transportation I expect overall oil and gas demand to be below current levels by 2025 and I think I am being a bit pessimistic.

Not a chance in my view - but we'll see no doubt!

Peter

[odysseus2000]

Peter Gray

What are you looking at there? Cash value or quantity? Remember fuel costs are substantially down over 4 years or so. UK fuel duty raised was up 1.1% y on y from 15/16 to 16/17 (with no change in duty) so it's a direct measure of quantity.

I was looking at volume & the closure of many of the non super market garages as well plus the mpg figures that various local retailers mention in their adds, although price & features seems more heavily advertised than economy.

As far as I can tell there is very little likelihood of UK road transport hydro carbon fuels increasing in volume, especially as many you of the young folk I know don't even have a license & most seem happy & don't want one. I have tried to encourage them by noting that driving is a useful life skill, but they cite costs & are happy to Uber if needed or public transport. From an economic angle their position makes sense, even if I think it a little boring.

It will certainly be interesting to see how fast this revolution develops. Watching the latest Tesla truck video, it felt like a 21st century machine, whereas existing trucks look very 20th century & if the Tesls running cost figures are anything like right, it will place anyone using diesel at a substantial disadvantage. Not to mention the one million mile guarantee, the inability to jack knife, dramatically reduced driver training etc.

Regards,

[PeterGray]

I was looking at volume & the closure of many of the non super market garages as well plus the mpg figures that various local retailers mention in their adds, although price & features seems more heavily advertised than economy.

Fair enough, but the overall reality is, as the figures I quoted show, that in the UK transport fuel demand continues to rise, at a bit over 1% over the last tax year. That's in line with the global trend over the past decade or so,and forecasts for oil demand. And I would be surprised if it isn't rising faster in developing countries where car use is rising.

Peter