ERICOPOLY

I was going through the 2013 posts on this thread and reading where people are making comparisons between Tesla and DeLorean. Five years later, Tesla is presently selling more sedans in the US than is BMW. It's quite incredible really. I find it surprising that their demise is now considered to be imminent, once again.

Bill Gates stepped down as CEO and became "Chief Software Architect": https://www.forbes.com/2000/01/13/mu7.html#5d41a9975d83 I wonder what role they will come up with for Musk.

He really should have been urged by the board to see a psychiatrist. He sounds to me very much like he went manic brought on by stress. He could then be on medication to manage it -- might go better with the SEC. Musk's description of his behavior and the completely wacky tweet about the Saudi's sounds like bipolar. Somebody as logical as him couldn't think that such a tweet would ever gain him anything which is why I wonder if he was experiencing legitimate psychosis. I wonder if a medical explanation would keep him from getting banned as long as he remained on bipolar medication.

To Grant's point about the relative likelihood of death vs not... I'd say that when Autopilot fails, it's far more likely to be a spectacular crash versus if the driver were not relying on Autopilot. The Tesla driver who died of head injuries after driving under the 18 wheeler's trailer was a case that Autopilot was not designed to handle -- or so it appears from this article. The 18 wheeler truck was pulling out across traffic and that is a situation that Autopilot is not designed to handle, according to this article: https://www.recode.net/2017/9/12/16294510/fatal-tesla-crash-self-driving-elon-musk-autopilot "The system’s cameras and radars also did not detect the semi-truck that was crossing the driver’s path before the fatal collision. However, the system was not designed to detect crossing traffic and is only intended for use on freeways or highways where there is limited access to crossing or entering cars." I don't think the typical Tesla owner understands this. They are warned to still pay attention to the road and such, but I doubt that it is fully explained to them why. The article goes on to say that the NHTSA claims that Autopilot reduces accidents by 40%. That's probably true, because it keeps you from doing things like changing lanes when another car is in your blind spot. But it appears to create some disastrous accidents when it does fail because the driver has been lulled into inattention and the brakes aren't used whatsoever.

I looked up the dump truck accident -- wasn't suspension failure (I had described it incorrectly -- looks like the dump truck drove into the Tesla): https://www.cbc.ca/news/canada/manitoba/man-67-dies-after-car-collides-with-dump-truck-in-winnipeg-1.3375935 The street sweeper incident was in China -- it was reported to be an Autopilot failure where the Tesla rear-ended the street sweeper. The incident with the 18-wheeler also was an Autopilot failure. The Tesla passed under the trailer and the driver died from head injuries: "But then a truck slowly pulled out of a side road onto the highway, and the Tesla smashed into its trailer and passed underneath “in a cloud” of debris, according to the report. The trailer lacked side guards that would have stopped the car from going under and Brown suffered fatal head injuries." https://www.theregister.co.uk/2017/06/20/tesla_death_crash_accident_report_ntsb/ 500 foot plunge over cliff in Malibu: https://insideevs.com/tesla-model-s-plunges-cliff-catches-fire-fatality-reported/ 300 foot plunge over cliff in Jenner: https://electrek.co/2014/12/31/first-tesla-owner-fatality-reported-as-man-drives-off-cliff-in-sonoma-county/ "a stolen Model S that hit a pole at over 100mph and split in half killed the suspect who was then revived and died a few days later in Los Angeles." https://electrek.co/2014/12/31/first-tesla-owner-fatality-reported-as-man-drives-off-cliff-in-sonoma-county/ Model X fatality with Autopilot engaged -- appears to have accelerated from 60 to 70 and then smashed into concrete barrier: https://www.reuters.com/article/us-tesla-crash/tesla-says-crashed-vehicle-had-been-on-autopilot-prior-to-accident-idUSKBN1H7023 "A Tesla Model S involved in a fatal crash in Fort Lauderdale, Fla., on May 8 was being driven 116 mph in a 30 mph zone three seconds before the accident, according to a preliminary report from the National Transportation Safety Board (NTSB)." http://www.foxnews.com/auto/2018/06/26/ntsb-tesla-was-going-116-mph-at-time-fatal-florida-crash-battery-pack-reignited-twice-afterwards.html

AW, thanks for sharing! Investmentacct. i agree crash safety for Tesla's is very good. Just note to clarify my safety comment, Tesla's deaths/miles driver are much worse than the cars in their class (new, expensive/luxury cars)... vs. the average US fleet car (10+ years old) I'm sure Tesla is safer... but vs. a new Audi/Lexus/BMW, it is, statistically speaking based on deaths, much more dangerous. IIHS has data back to '14 model year cars (where Tesla didn't have enough volume to compare), but you can make some estimates if you like. Obviously, many shorts highlight anecdotes of Tesla deaths because they are haters, but speaking non-emotionally, it's clearly worse than other luxury cars. I immediately wanted to know why (luxury cars are safer than houses I've read). None of the deaths were ordinary "car hits car" type of traffic accidents. I don't know if Model S owners have had trouble containing their impulses to slam on the accelerator or what, but here's how they died through 2016: We've got: drove into pool (presumably he drowned) a couple drove off of cliffs hit by a dump truck on driver's side door drove into an 18 wheeler drove into street sweeper drove into a ravine drove into utility poles and caught fire (not clear if they were killed by the impact or the fire) curb+tree+fire+explosion ditch+rollover+fence culvert https://medium.com/@MidwesternHedgi/teslas-driver-fatality-rate-is-more-than-triple-that-of-luxury-cars-and-likely-even-higher-433670ddde17 Here is a picture of the dumptruck accident -- looks like it completely caved in the area where the driver sat: https://www.cbc.ca/news/canada/manitoba/man-67-dies-after-car-collides-with-dump-truck-in-winnipeg-1.3375935

They saw the move to "browser based apps" and "software as a service" quite early on -- I had to sit through a lot of presentations. I was with the Internet Explorer product team (I took my job in 1997) and Microsoft had a hard time designing it's products the way it wanted to without the government getting involved and threatening to split the company in two. I feel as though the competitors utilized the government to distract Microsoft and their complaints were disingenuous. Seriously, can you imagine an iPhone or Chromebook today shipping without a web browser already configured and ready to go? That lawsuit was asinine. Microsoft was only behaving in a manner that made sense at the time and still makes sense today. Just ask Apple and Google as their browsers are both the defaults configured on their systems today and they now have the dominant share (on the smartphones).

I saw that too. Deepak is the guy that someone recently said was meant to be resigning right before it implodes to keep the bankruptcy off of his resume. So which is it?

His comments about not sleeping and working around the clock and his bizarre comments. He made a comment that the chargers IOnity is developing are "toys for children" for example... He's got some kind of mental health issue it looks like, perhaps it's bipolar and he is hypomanic or manic when he goes into these tweets. It would be consistent with his grandiosity and energy level and lack of sleep. And delusions. There were some comments about bipolar and Musk a year or so ago. Regardless, one has to believe that they can't figure out how to run a production line smoothly if given some time to work out what's gone wrong and fix it. He probably created the mess by not listening to advice and that's likely led to executive departures. It doesn't mean necessarily that consistently lying is in his DNA if it is a bipolar issue. So he really may be serious that they are fixing the issues and that Q3 and Q4 are going to be better. I have also hear something about "stress induced psychosis" -- the guy put himself under a lot of pressure and got no sleep for a long period of time. Then he starts tweeting about Saudi takeovers at $420 a share. Just saying... There are alternative explanations that fit the circumstances rather than him simply being a liar.

True, however I don't think Tesla is capable of producing all of the EVs that will be desired in the future. Porsche and others should be growing the market for luxury EVs -- they are talking about adding 400 fast-charging stations in the US before their roll-out. Through their partnership with IOnity they are adding another 400 in Europe. My understanding is that a Tesla can utilize those chargers, but the reverse is not true. A Porsche Panamera Turbo S starts at $185,000 and has the same 0-60 time as the upcoming all-electric Porsche Taycan which I believe will be offered for $100,000 less. They can't be enjoying this. The way things look presently, a Tesla owner will have the broadest network of charging options. So I wonder if Tesla's sales drop off, or if it merely speeds adoption of electric cars. The Model 3 Performance has the same 0-60 times as the Porsche Taycan. Personally, I like the interior of the Porsche Taycan better.

The 2nd quarter conference call was on August 1st, a month into the current quarter. I read it last night From the call: They were doing 7,000 cars a week (including the S & X models) and they said they expected to be profitable and cash flow positive in Q3. They said it took a lot of cap ex to grow their model 3 line to handle 0-5,000 cars per week and will take minimal additional capex to grow the line from 5,000 to 10,000 cars. They expect margins on the Model 3 to be 15% in Q3 and 25% in Q4 They are getting a lot of orders for the all wheel drive dual motor model 3 so the profitability improves They don't want to raise money because they expect to be self-funded from here on out. They don't believe that funding themselves out of cash flow will be a constraint on their growth as it would have been in the past. They feel that now they've reached scale, the free cash flow will materialize. He also wasn't blaming other people on the call for they enormous costs in the Model 3 line. They were blaming themselves for the problems they had. My take: it would be pretty bold to lie like this when you're already 1/3 of the way into the quarter, so write calls or short at your own risk. At least option decay will make it less painful for you if you choose to write the calls instead of making a straight short bet. I have never invested in Tesla but the entire time I have cautioned people that there has got to be a smarter way to make money shorting than to do it on a company with a hugely popular product that people love and want and where the company is led by a guy with a history of executing on some pretty large ideas (just look at Space X). All he has to do here is just learn to build the Model 3 as efficiently as every other automaker manages their lines. The shorts are essentially betting that he cannot do that.

Very true.

If the moat is so weak why haven't we seen lot of of electric cars from other brands - existing automakers have more resources than Tesla had. What happened? Perhaps they were waiting for Tesla to outsell them on their home turf in Europe. The following article says that this happened in 2017: http://europe.autonews.com/article/20180220/ANE/180219831/tesla-model-s-outsells-german-luxury-flagships-in-europe "Sales of the Model S in Europe jumped 30 percent to 16,132 last year, according to JATO. Mercedes S class sales grew 3 percent to 13,359. BMW 7 series had sales of 11,735, down 13 percent." "Tesla is competing strongly in Europe's large premium SUV market with the Model X. Its sales in the region last year were 12,000, about the same as the Porsche Cayenne and nearly 2,000 more than the BMW X6, according to JATO data."

I drove, with my girlfriend, from Sacramento to Los Altos Hills (near Palo Alto) and back this past weekend. On the road, we tried to look for Teslas versus newer Porches, Mercedes, and BMWs. There were more Teslas versus the others: it appeared as though there were more Teslas than all of the others put together. Teslas were extremely common. It was very hard to spot a new Porsche. I think we only saw one new Porsche. Several times, we saw two Teslas at once. We passed a car carrier loaded with new Teslas, probably headed for Rocklin. It would be difficult for someone living in the Bay Area environment to believe that Tesla is struggling.

Ben, I read an article about "productive narcissism" and it sound like what you wrote: "This is a firm that is great at viral / carnival style marketing, and great at design. In all other areas they have shown limited capability, and even less self reflection of their failures (blame car shops for their slow ability to supply parts, blame short sellers, blame the media, blame governments, etc etc)."

Is there a model out there showing that the "hemorrhaging cash" at Tesla will stop once they attain a certain scale? Are they growing at a speed that will take them there? Some quotes from a year 2000 article about Amazon: "At the tightly orchestrated Q&A, a lone reporter from TheStreet.com dared to raise the profit question, gently inquiring when shareholders might expect dollars going in to outnumber those rapidly flowing out. Not only did Bezos refuse to answer, he looked genuinely hurt, betrayed that any philistine wouldn't share his conviction that Amazon was destined to sell everything to everyone." "No one's still awed that Amazon's peak market cap eclipsed that of Kmart, Sears, and Barnes & Noble combined, despite the fact that its sales are a fraction of any of those and it's never earned a cent. " https://www.esquire.com/lifestyle/money/a1859/green-crazy-amazon-0101/

"Huge" . "Bigly" . There is a subtype of narcissist with histrionic features. Pathological lying, affairs with exotic partners... Amorous narcissist Including histrionicfeatures. Sexually seductive, enticing, beguiling, tantalizing; glib and clever; disinclined to real intimacy; indulges hedonistic desires; bewitches and inveigles others; pathological lying and swindling. Tends to have many affairs, often with exotic partners. https://en.wikipedia.org/wiki/Narcissism

So according to you, he should simply "put an outrageously large one time payment together" (that likely represents a lifetime of saving+patience+discipline+foresight+risk taking+luck, that may or may not be repeated in the future) without thinking it through...just because...he's crazy smart and figure out to make money back in the future? And also because "kids are more important" ? Okay, I should just mind my goddamned business, but... The short answer to your question, is yes. My rough memory is that Eric had $15-ish mil a few years back, which should still be mostly intact. So, what does a divorced guy truly need? If he can get by on 33% of the family wealth and still has the talent to grow it, then maybe Dazel's viewpoint is not Bat-shit crazy. If offering her $10-ish mil makes the child custody thing go away, why would a guy not keep $5-ish mil and joint custody of the kids? When you get right down to it, what else do you have other than family? I'd say that Dazel has a legit viewpoint, even if the lawyers would shit a brick by even thinking about it. The other bat-shit extreme approach would be to threaten the wife that Eric could go for full custody and then move the kids back to Australia. It's the old Clint Eastwood question for the wife. "You've got to ask yourself one question: "Do I feel lucky?" Well, do ya, punk?" Wishing all the best to Eric in a shitty situation. SJ I spoke to my attorney earlier about making financial deals and she said it doesn't work that way. You can't buy your way into custody -- you can make a deal and they can come back again later and file a motion for change of custody. She already asked me if I'd give up 50% of my separate property claims in exchange for 50% of the kids. I later found this ploy on a "Dirty Divorce Tricks" website.

She forced me into a vocational evaluation and I rresponded in kind. She has already had hers and has looked beyond upset lately. Yesterday I had mine. It has been 10+ years of retirement so my skills are considered 100% obsolete. I have a math degree with a specialization in business and there are primarily government jobs where I now live. She said it looks like 5 years of studying for a PhD in economics and then an entry level job making $50k-$70k. She told me that my wife can work right away as she was previously a realtor. Hah! Hah! Hah! It is always darkest before the dawn.

She is specifically stating to the court that I asked her if I could leave Microsoft to focus full-time on managing our investments. She says that I worked 40 hours a week at it and that she made this possible by taking care of the children while I worked. We have only lived on the west coast in Washington and California. There is no need for help from her because the markets open way before the kids get up from school and close before they come home -- it only takes a few minutes to make the trades before they rise and they can't be executed after school. Her only possible case would be if she can convince the judge that I was buried in fundamental research. Perhaps those of you who manage portfolios professionally can comment on how much time it would take you per week to watch over a portfolio primarily composed of just 1, 2, or 3 companies at a time. Would you need a nanny or a wife to manage the kids for you? Most of you do that in addition to your full time jobs.

Forgot to add: She is saying that I 'always' represent myself as 'working' I'm pretty sure I told this board that I am retired, and represented myself as "retiring" when I left Microsoft.

Hi, I have been going through a divorce since early 2016. She is trying to take primary custody of my children and wants spousal support arguing that I retired from Microsoft in early 2008 only so that I could busy myself full-time with researching investments. Sanjeev and Mohnish should remember that I contacted them around the time that I retired telling them that I was hoping that they would manage my money. I dragged my feet for years until 2014 but my contacting them should be evidence that I had no plan to make investing a full time "job". It was a hobby that made tons of money, but I repeatedly stated over and over again that I'm just a copycat that can't do fundamental research -- that's not a professional investor. I spent my time socializing on the board. My posts to the old MSN Berkshire Hathaway Shareholders board in early 2008 were all lost. Those posts explained how I retired in order to prioritize my life around focusing on spending time with my children while they are still young. That's exactly what I did until the day I separated from her in August 2016. Since then she has said "I did everything and he only focused on financial matters". Please write me an email explaining what I was posting to the board on this matter if you were on the board all this time. I also have said repeatedly that I just copy from other people and I don't do actual security analysis. I typically kept "bet it all" highly concentrated "portfolios" that require little time to maintain. I needed adult stimulation as being around kids all day can do to a man, so I would comment from time to time during the day on various topics. This board was a social water-cooler outlet for my daycare job. Investing was my hobby and I liked discussing it. I also made lots of off topic comments. Now is the time if you'd like to tell me that I didn't really contribute with any serious fundamental research that would have taken all day long alone in a room to produce. It's the truth and I need that truth to be told by other witnesses. She is also taking me to trial in July for primary custody. We are currently in a custody evaluation with a forensic psychologist and it matters who took care of the children day to day. The sooner the better if you can write me an email. Thanks old friends. I hope to be involved again when this is over. Eric

Do you mind sharing the details of that event? Been looking into something like it the past few weeks. Which event? Do you mean the WaMu calls? It was in 2008 when general volatility was very... Volatile. Volatility was more volatile than the stock on that day. They were at-the-money calls where the volatility level was likely the greatest driving force given that there was no intrinsic value in the call valuation.

For the amount of time people argue about performance and whatnot... I totally get that. The only point of hiring an active manager is to make relatively more money than just by passive indexing. I'm actually interested in this idea of whether or not some value managers are making their money from buying below intrinsic value, or skillful trading. I'm not going to call myself a "value investor", one because I'm more of a speculator than an investor, and two because I'm not temperamentally suited to investing, but rather to speculating. In my experience, I have made a ton of money speculating on swings. Had I held MBI instead of selling it, well... my returns would have suffered! Did I make money because it rose to intrinsic value? Probably not. I once made money on WaMu call options on a day when the stock dropped!!! I'm not fucking kidding either... I bought the calls a day or so before the drop, and sold them the day of the drop. Volatility exploded so I somehow made money even though the underlying fell in value. What is a value investor if not someone who buys below intrinsic value? So to separate out performance/returns from valuation ability/skills, we should be asking some of these longer-term portfolio managers to produce a measure of what their returns would be if they had held each investment they ever bought until the present. But nobody does that. It is actually my "burning question".

I remember an interview Prem gave in 2009 where he was favorably saying QE/stimulus had been working and he claimed he would be watching carefully for signs of protectionism, because trade wars made the Depression deeper/worse. Now we get the candidate that has all but promised protectionism and Prem gets bullish. Just an observation.