ERICOPOLY

No surprise you timed it so well. I think fondly of your kind and hyper-rationale comments back in May 2006 that gave many of us including me the confidence to buy FFH options and make incredible gains. Thank you again. What a contrast to the quality of this board today when I post at the end of October my conviction that the shorts were failing to consider the disruption entailed in the recent series of positive developments and Tesla was likely entering into an exponential phase. Instead of support and discussion what I got in response was "ok Boomer". Perhaps in the future we all can realize that if we support and aid each other we will all be rewarded. I've got $600 in unrealized gains at the close today. Woohoo! More gains tomorrow? Losses tomorrow? This is fun stuff.

I shorted it at $935 today. It is a tiny position.

State Farm was $60/mo higher.

I switched to Tesla Insurance for my Model S. Only $104.52/mo for $100k/$300k coverage and 22k miles annually.

That's proof that a trillion dollars doesn't go as far these days as it used to.

This article instead makes the claim that the Chinese Supreme Court believes that rumors are good because they encourage people to wear their masks and take other precautions: https://www.japantimes.co.jp/news/2020/01/30/asia-pacific/science-health-asia-pacific/chinas-top-court-rebukes-police-virus-rumor-crackdown/#.XjhzWCSIYlQ

Hypothetically, if you have 100 infected and the number of infected grows by 30% per day, you'll have 4,000 cases in 14 days. And none of the new cases will tally as deaths (yet) if the incubation period is 14 days. The reports that I've seen haven't broken down the number of asymptomatic cases included in their reporting.

I asked the Tesla service center about battery replacement again this morning. He said my 85 kWh battery could either be replaced with a 75kWh battery for $12k, or with a 90kWh battery for $20k.

I was talking about replacement battery prices. And why would you phrase things like that anyway? Seems needlessly confrontational. A lot of the price cuts were going from the premium models, which they made first, to less premium models (dual motors vs single, smaller batteries, different finishes and interiors, different self-driving packages, etc). The fully loaded S is now about $10,000 less than it was in 2013. Now it comes with 100 kWh battery instead of of 85 kWH, dual motor AWD, autopilot, parking sensors, 2.4 sec 0-60 instead of 4.2 sec.

In California anyway, a person driving a Model S (vs a Porsche 911) has likely saved $32k+ in gas money and servicing costs by the time the battery goes off warranty. So when you think of that cash as part of the "residual value", things look a lot better. Tesla could probably resolve the lumpiness by just offering to lease the batteries to the car owners. The monthly lease payments plus electric bills would likely be much more similar to gas costs for an ICE. Anyone with a fancy ICE car (don't compare a Model S to a Corolla) knows that it's also false that they're sure to last a long time and not cost much... repairs and maintenance on a BMW or Mercedes can add up to a lot in later years. Also, shouldn't assume that by the time you'd want a new battery (I think for most EVs, the battery will last the life of the car, it just won't have as much range at the end, but for the majority of people, that's fine since you so rarely drive to maximum range in a day) that replacement batteries will cost what they cost now. Battery prices are still coming down as the industry is scaling up and automating and new denser chemistries are being rolled out. It's not Moore's Law, but after 10-15 years, improvements of mid single digits compound into something pretty significant. It isn't clear that the battery price will come down though at the service center. Last year, I think it was Straubel who was excitedly saying that they had the cost of the battery pack down to just $7,000 at Gigafactory 1. Six months later, they were quoting me an $18,000 markup when they quoted $25,000 (I know it's not much in labor cost because they previously said that a battery could be swapped in minutes). Markup isn't fixed by innovations in battery costs. They just need to not rape the customer.

In California anyway, a person driving a Model S (vs a Porsche 911) has likely saved $32k+ in gas money and servicing costs by the time the battery goes off warranty. So when you think of that cash as part of the "residual value", things look a lot better. Tesla could probably resolve the lumpiness by just offering to lease the batteries to the car owners. The monthly lease payments plus electric bills would likely be much more similar to gas costs for an ICE.

Consider? You don't have a S or X yet? That's surprising. Do you still live in Cali?Tesla cars are as common as Honda or Toyota here. Last I've heard, Eric had a S. I think he means it in if he was buying a new EV now, the S would still be the only choice for him. I own an S. The vehicle is very good. What potential is there in the energy storage business (what value does it have if you ignore the automotive business)? Longer term, I worry about having to replace my car's battery when it comes off warranty. I spoke to a Tesla service employee last year who said that a new Model S battery replacement would cost $25k and a refurbished one would run me $20k (but they aren't always available). Considering that last year the company told us that it only costs $7,000 to produce a battery pack at the Gigafactory in Nevada (similar to replacing an ICE engine). The point at which I may sour on the company is if the battery suffers catastrophic failure and requires replacement. It's a question when buying an early Model S where there is little warranty remaining, are you paying $30k today for a used car that could suddenly become $55k?

$500 really makes no sense to me, but the Model S is still the only electric car I that would consider owning.

What I was referring to is after disclosing that I am eating only whole plant based foods, the next two posts were about ‘freaks’ and ‘hysteria’. The hysteria has driven down my blood pressure to 105/58, knocked 2 inches off my waist, eliminated my snoring and sleep apnea, and I have not needed to reach for a Tums in 3 months which had become a nightly routine. I started the diet three months ago.

There is no cause to be hostile to those who live a different lifestyle. I am curious what is driving the putdowns — do you feel challenged or something?

I switched to a whole-foods, plant-based diet. No processed oils (not even olive oil). No meat, no dairy. This diet is becoming more popular and Beyond Meat doesn't produce a product that meets criteria. However, there are so few options on the road when traveling that exceptions need to be made at times. I do not think this is a fad. Cardiologists who put their patients on this diet are seeing a reversal in coronary artery disease. (the 13:15 minute mark has the data for this doctor). I believe he is the doctor that put Bill Clinton on this diet after his heart surgery.

Meatless substitutes make sense because the alternatives generate more greenhouse gas than the entirety of the transportation sector and require far too much land and water.

The teacher asks, "Flora, what part of the human body increases ten times when excited?" Flora blushes and says, "That's disgusting, I won't even answer that question." The teacher calls on Johnny: "What part of the human body increases ten times when excited?" "That's easy," says Johnny. "It's the pupil of the eye." "Very good, Johnny," responds the teacher. "That's correct." She then turns to Flora and says, "First, you didn't do your homework. Second, you have a dirty mind. And third, you're in for a BIG disappointment."

As I recall the hedges required them to post cash collateral on a regular basis. So they weren’t required to sell these holdings particularly, but they chose to. Again I may be wrong but I remember a lot of debate on the board at that time as to whether these sales had been motivated by the cash calls and it seems they were. And here is what they said in the 2013 letter -- no mention of a 'requirement' to sell. It has migrated from 'concern' to 'required': Given our concern about financial markets and the excellent returns we achieved on our long term investments, we reluctantly decided to sell our long term holdings of Wells Fargo (a gain of 125%), Johnson & Johnson (a gain of 47%) and U.S. Bancorp (a gain of 135%).

They said they were 'required' to sell these holdings --why required to sell these holdings?: Another cost of our hedging, and why it is extremely unlikely that we will repeat this in the future, is that it required us to sell some wonderful long term common stock holdings, as shown below: EDIT: Were these holdings in particular posted as collateral for the hedging?

In summary, I feel like they are sending mixed signals.

Do you think they have a lot of capacity to add equity exposure? I fear they’re close to their practical limit. The selloff they need is in corporate and long dated bonds. That wasn’t the point I was making. They said that they will try not to repeat the costly mistake. How else can they avoid further opportunity cost than to buy them back? They bought these equities initially and then stated something about how they had learned to hold high quality shares for the long term. Then they sold soon afterwards and now they say they have learned a lot about how much the sale has cost the shareholders. So if they don’t buy them back, what am I then to think? I understand your point. Mine is that to buy them now they’d likely have to sell something else they like. It’d be a two-part decision, not a one-part decision. Which makes it harder to make inferences and for you to decide what to think. The comment in the 2017 letter is somewhat bizarre if they both regret selling, and yet are at the same time believing that their current holding are more appropriate going forward. Why not just say they made the right choice? A year ago, one might have read their comments and wondered if the valuations were simply too rich for them. I'm feeling rather confident that valuation won't be the reason if they decide not to go back into USB and WFC at this point. Anything can be sold to reinstate those positions. It's either the right thing to do or it isn't. If if isn't, then what's up with their comments about regrets?

Do you think they have a lot of capacity to add equity exposure? I fear they’re close to their practical limit. The selloff they need is in corporate and long dated bonds. That wasn’t the point I was making. They said that they will try not to repeat the costly mistake. How else can they avoid further opportunity cost than to buy them back? They bought these equities initially and then stated something about how they had learned to hold high quality shares for the long term. Then they sold soon afterwards and now they say they have learned a lot about how much the sale has cost the shareholders. So if they don’t buy them back, what am I then to think?

Some of these holdings are attractively priced now... if they don't repurchase them, what will I be led to believe? This is written in the 2017 letter: While we realized $1.0 billion on the sale of these long term common stock holdings, these compound growth machines resulted in us leaving $1.4 billion on the table. A costly mistake we will try not to repeat!

Further... it's not the 3rd biggest anymore! It slipped! MSFT, GOOG, and AMZN all have larger market capitalizations today! AAPL's 8 yr returns were the worst among this group.