Liberty

Of course the battery is key to everything that has to do with EVs. Personally I'd like them to shrink the battery and lower the price of the car. You get other efficiencies by knocking off weight as well. It's the logical things to do, save for rednecks who worry about being left without juice on the one trip they take to Disneyland once every 5 years. But I may just be a logical idiot. The success of Tesla could very well come from the giant batteries providing useless range. They used to offer smaller battery tiers, and almost everybody bought the bigger models, they stopped making them. They even just made the bigger ones and restricted them in software for a while instead of making a whole different lines for those low volumes, iirc. There are downsides to smaller batteries; they go through more cycles over their lives and don't last as long, and can't provide as must peak power for acceleration or supercharge at rates as high. I think Tesla knows its market well and knows that small batteries are a huge psychological barrier to most, even if in practice they'd be mostly fine. Kind of like how people buy way too much car for their real everyday needs ("but what if I ever want to go offroad or carry large furniture from the store!") and instead try to match their peak needs. Gotta sell to real people, not idealized "rational" customers.

That'd be an interesting thing to do. If I had to guess, I'd say it has something to do with Maxwell Tech's dry electrode technology (a company that Tesla acquired a little while ago). Where the puck is going is that battery costs keep falling year after year and we're not close to the physical limits yet, so someday, EVs will cost basically the same as gasoline vehicles for similar range, and there'll then be absolutely no reason to buy ICE for the vast majority of people. A question of "when", not "if".

Mauboussin at Capital Camp 2019 (46 minutes, released Jan 31 2020):

They have new battery announcements coming in April. Wouldn't be surprised to see the S and X get in the 400-425 miles range. Meanwhile, the Porsche is around 200 for more money.

Tesla is reinvesting in growth and new products at hyperspeed, that's where the money that might otherwise show as profit is going (and more, hence the debt and equity issuance). They're also skating to where the puck is going, knowing that manufacturing costs and component costs are going down over time as they go up the learning curve and up in scale (and if they do it faster than the competition, they're building a lead). Where do you see that they are reinvesting in growth and new products at hyperspeed? If I check the 2019 10K, I find $1,3b in capex compared to $2,2b in D&A. Not all investment goes through capex. There's a lot of opex growth investment, obviously. You can see it by the number of products and factories (some of the largest in the world) and complex software that evolves rapidly and designing their own computer hardware, etc. It's a very different pace than other auto companies, and they're doing it from the starting point of a microcap 10 years ago. I think that qualifies.

You do know the difference between unit economics and company economics, right? Now don't say I'm comparing the two, because I'm not, very different industries.. But people also said that Amazon wasn't making profits, people also said that Salesforce and other SaaS companies weren't profitable... Tesla is reinvesting in growth and new products at hyperspeed, that's where the money that might otherwise show as profit is going (and more, hence the debt and equity issuance). They're also skating to where the puck is going, knowing that manufacturing costs and component costs are going down over time as they go up the learning curve and up in scale (and if they do it faster than the competition, they're building a lead). They could've decided to be a niche player and just made the Model S for 10 years without building anything else (factories, other models, other non-car stuff) and I'm pretty sure they'd be very profitable, and also much smaller with a much smaller impact on the industry. It's trade offs. It's very risky for sure, but that's the kind of bets that Musk makes one after the other because he cares more about making EVs mainstream than about profits in the short term.

https://www.reuters.com/article/us-facebook-tax/facebook-faces-tax-court-trial-over-ireland-offshore-deal-idUSKBN20C2CQ

I want to bump this. Since I started running a fund, I work mostly from home. This means that I took out 7,000 steps that I normally would get by walking around in NYC. Over the years, this reduction of 7,000 to 10,000 steps translated into 5-10 pounds of weight gain a year. A friend casually told me about intermittent fasting. Just eat in an 8 hour window. It was tough for 2-3 days, but then my body got used to not eating for 16 hours. It didn't matter what I was eating. It did wonders. I no longer get hangry and I started losing a little bit of weight. Then I started to cut out sugar and carbs. In a year, I lost something like 45 pounds without really exercising. Now I actually crave the fasted state where I am more alert. Try it. Just cut out sugar and all that processed food. This is all very good advice for almost everyone.

More bad news for SDC: https://nationalpost.com/pmn/health-pmn/smiledirectclubs-top-dentist-risks-losing-license-in-california-crackdown https://graphics.reuters.com/USA-SMILE-DENTIST/0100B5EB3L7/AccusationDocument.pdf h/t Javier Acción

Show me a book that you like that has no mistakes in it. Seems to me like the baby shouldn't be thrown out with the bathwater and it's better to use judgement to know what to take and what to leave ¯\_(ツ)_/¯ Have you considered that it's possible that they got the price wrong (now that the incentives have changed), but that their quotes from VW and Toyota interviewees are real?

Presentation on MTCH by Trevor Scott (Tidefall Capital):

No thanks. I won't do your homework for you.

If you stopped reading every time there was a factual error, you wouldn't have read any of TSLAQ's stuff.

GM is trading where it was in 2010 (ok, paid a lot of dividends, but still)... Meanwhile, imagine what someone with vision and talent could do with their engineering base and distribution footprint and free cash flow...

Bezos just launched his $10bn Earth Fund: https://www.instagram.com/p/B8rWKFnnQ5c/

https://asia.nikkei.com/Business/Automobiles/Tesla-teardown-finds-electronics-6-years-ahead-of-Toyota-and-VW2

https://www.wsj.com/articles/dont-discount-visa-11581676213

Good video on EV charging infrastructure: Unrelated, but this channel is pretty cool. Never thought a video on the color brown would be this interesting:

Finally getting around to looking at CSU Q4. Looks decent to me. A little weak on organic growth, but always hard to know if it's weak or if they just bought more distressed assets lately... Big swings in licenses and hardware, which can be lumpy. IFRS 16 accounting makes things less clear for FCFA2S ("using the modified retrospective approach and accordingly the information presented for 2018 has not been restated"), but if you take it into account, looks good. FY19 acquisitions: "$549 million (which includes acquired cash). Deferred payments associated with these acquisitions have an estimated value of $139 million resulting in total consideration of $688 million". And that's with no big acquisitions that year. Public sector revenue increased 18% in Q4, 15% for FY19. Private sector revenue increase 9% in Q4, 12% for FY19. ROIC looking good: Looks like they did over 90 acquisitions this year, versus about 55 last year. In 2014 they did in the 20s acquisitions during the year, so it's been quite a change in the capital deployment capability. And the ROIC doesn't seem (yet?) to have suffered. "The Average Invested Capital for 2019 was $2,260 million"

For a company faced with the uncertainties that Tesla faces, shouldn't shareholders worry that management isn't doing their job if shares rise by 20% (or whatever) and they wouldn't at a minimum consider issuing more shares? I mean, if we're setting the bar that low (a ride of 20-30%), then 80-90% of companies would have had to considering issuing shares in 2013, 2017, and 2019. Instead we got more and more buybacks each year...the exact opposite of what your suggesting here. It's not the only thing that changed. Prospects in China too (and the rest of the world, since it's all connected). So if you're seeing that you might have a large temporary dip in sales which can lower your cashflow at a time when you're growing capex fast, might want to raise money to be on the safe side.

.... Will the real Liberty please stand up? Where the F did this guy go so quickly? Don't know what you're reading into this, but there's nothing incompatible here. I didn't say you can't discuss it or be negative about it or whatever. I'm just pointing out that in life, most things should probably go in the "too hard pile" and we don't have to bet on everything. These things don't have to affect us personally if we don't let them.

Maybe not overnight, but for public issuers, particularly seasoned ones, it can be very, very quick, esp right after earnings. I've not done follow on equity offerings, but having done it on the credit side it's really fast. Not my world, so I don't know, but I would be surprised if it took very long, looking at how certain companies are opportunistic with both debt issuance, refinancing, and equity issuances... In any case, all I'm saying is that you don't know, but we know that things changed a lot pretty quickly, so it's not implausible to say that his thinking could have changed quickly too. Musk certainly has done many questionable things, but his detractors often will interpret everything with the least charitable version. To them, he can't do anything right... To me that sounds like a conclusion looking for a backfilled justification, which is bad faith and dishonest thinking. For a guy that has been accused of selling hot air and being on the verge of bankruptcy and collapse for a decade, I'd say that maybe some people are miscalibrated vs the facts on the ground. Sure, I admitted that it was probably the right move. If I were him, I would have tried to do a BIGGER offering - one meaningful versus the size of the current company. I'm just disappointed that he did it less than two weeks after saying he wouldn't. I don't go out of my way to look for reasons to dislike him - he's given me enough without me having to look. The man is a genius, but also borders on being a charlatan. His detractors have been RIGHT about the financial conditions of his companies, but he has kept them going in no small part by misleading the public at those times. Maybe we're all better of for his success - maybe the end does justify the means. But I could never trust the man with my money and have serious misgivings about trusting him enough to buy a car from him/his companies. Who is to say he's not gonna throttle my speeds after the car turns 10 years old to force me to upgrade so the incremental revenues stave off bankruptcy once again? I can't say he will or won't - only that I don't trust him enough to risk it. The great thing is you don't have to buy the stock, or short it, or buy the products, so you'll be fine.

https://www.cnbc.com/2020/02/13/amazon-gets-restraining-order-to-block-microsoft-work-on-pentagon-jedi.html

Maybe not overnight, but for public issuers, particularly seasoned ones, it can be very, very quick, esp right after earnings. I've not done follow on equity offerings, but having done it on the credit side it's really fast. Not my world, so I don't know, but I would be surprised if it took very long, looking at how certain companies are opportunistic with both debt issuance, refinancing, and equity issuances... In any case, all I'm saying is that you don't know, but we know that things changed a lot pretty quickly, so it's not implausible to say that his thinking could have changed quickly too. Musk certainly has done many questionable things, but his detractors often will interpret everything with the least charitable version. To them, he can't do anything right... To me that sounds like a conclusion looking for a backfilled justification, which is bad faith and dishonest thinking. For a guy that has been accused of selling hot air and being on the verge of bankruptcy and collapse for a decade, I'd say that maybe some people are miscalibrated vs the facts on the ground.