Liberty

I've been using it for a few weeks and it's very promising.

December 1999 Paine Webber-Gallup survey of investors: average expected returns over the next decade was 19%. (Do they still do those surveys?) I can't think of a systematic survey recently, but most of what I've seen since about 2011 was the mid-single-digits "new normal" stuff, with investors mostly getting surprised to the upside during that period.

You may be right, but I find it pretty hilarious that something equivalent to this has been written ever quarter since IPO and here we still are... Have you driven one, though?

https://drive.google.com/file/d/1oYQy8AEF0f-3nDk5VV1O8HogxnIJCGy1/view Via

Clearly it's both, I don't even know why it's a debate among some people. I am not so sure. For example, Boeing uses a lot of software to support its products but I would not categorize it as a software company. To me software is a support function for its main product which is planes. Similarly today's Compugen https://en.wikipedia.org/wiki/Compugen_(Israeli_company) is a drug development company even though it probably uses software / computational biology heavily to guide the process. In the past Compugen was a software company because it sold software/computational biology software tools to pharma / biotech but was not in the business of developing and selling drugs. The economics and success / failure of these companies above only indirectly depends on software (e.g. Boeing Max 737 issues and its attempt to fix those using software updates). Just like it also depends on properly functioning sensors, even though Boeing is not a sensor / electronics manufacturer. They are primarily a car (tesla) / plane (boeing) / drug (compugen) company. Everybody uses software, many manufacturers write it too (or have suppliers who do). But I think Tesla does more than what most other automakers do, they put a large emphasis on it and don't just do it to support normal functioning of their products in the same ways that others do but rather to try to create primary differentiating features (ie. every automakers might write some software that does X, and all cars do X -- Tesla is writing stuff like Autopilot that was quite ahead of others and that no other vehicle on the road did at the time when they came out it with. Similarly for their app, the large touchscreen that does a bunch of stuff, etc). They also built in house their own computer for self-driving and have a lot of custom software for that, including a very large machine learning effort tied to the autopilot. To me that's a huge enough part of the business to be worth saying that they are both. But there's no objective metric out there, so it's a subjective call on my part.

Clearly it's both, I don't even know why it's a debate among some people.

Write-up at ScuttleBlurb (subscription required): https://www.scuttleblurb.com/ttd/

TSS acquisition in France: https://www.totalspecificsolutions.com/about-us/transaction-updates H/t @pearnick

Happy 4th to all my American friends, have a good one! And happy birthday Parsad. You are no older than 35 at heart, I can testify to that. cheers!

Better late than never, I suppose (though hardware cycles are longer than people expect, not easy to turn on a dime...): https://9to5mac.com/2019/07/04/kuo-new-keyboard-macbook-air-pro/

One at Jonas: https://www.jonassoftware.com/About_Us/Latest_News/Jonas_Software_Announces_the_Acquisition_of_CORVID H/t @pearnick

To be clear: When talking about developing countries and EVs, I wasn't thinking particularly about Tesla but about EVs in general. It certainly won't be premium EVs that pop up there first. But if in 10-20 years the price per kWh of batteries is $50 or $25, there'll be plenty of affordable options.

Totally missing the forest for the trees, as well as putting words in my mouth (did I say they'd have EVs soon in the poorest countries? No, just that the trend was for EVs to get cheaper over time, while ICEs aren't.. so it's fairly predictable what will happen). And yes, it's comparable to cell phones: Poor countries without existing infrastructure didn't replicate the tech tree of richer countries, they went straight to the newest thing. The same will happen with cars at some point in the future when EVs are no brainers vs ICEs (lower upfront cost as well as lower maintenance cost as well as lower "fuel" costs). I don't know if it's in 10 or 20 years, depends on many factors, but that's pretty short in the grand scheme of things. And yes, if marginal demand for oil melts over time rather than go up over time as it has, prices will be pressured down. Over long periods, inflation-adjusted prices of most commodities have already been going down over time because of productivity improvements. There are exceptions like the China cycle of the 2000s, but the longer term trends are clear.

The link I put there works for me, but just in case I de-linked it.

Ah, yes. There's a bunch of stupid, messy psychology involved for sure. Kind of like how it'll make a huge difference to many markat participants whether we're "10 years in a bull market" or whether the recent 20% correction reset things and we're now "in the early innings!". Whatever, it's all the same data, however you label it, but it'll make a difference to psychology because people use these labels as shortcuts to avoid having to think.

That's not how the world works. EVs are on a trajectory to become cheaper than ICE vehicles. If EVs take over in the richer countries, it'll make oil cheaper for poorer countries. It's easier to build an electricity distribution network (because you need it anyway for residential, commercial, and industrial purposes) than to build a gasoline distribution network. Poor countries tend to leapfrog richer countries because they are starting from zero and can go directly to the new thing, they don't have huge sunk costs in the old technology (see mobile phones, micro-payments, etc).

That's true, but is that what they're doing? Don't confuse unit economics with company-wide economics. Could they be profitable if they weren't building many gigantic factories around the world at the same time as developing multiple new models at the same time as having thousands of engineers build self-driving software at the same time as building a worldwide network of 200kW+ charger at the same time as building giant commercial grid-scale battery storage at the same time as investing in fancy solar roofs and home batteries, semi trucks, exotic supercars, expanding internationally, etc? What if they had ramped up Model 3 over 2 more years than they're current plan before introducing the Y and such? What if they had milked the S for longer before even introducing the 3? What if they had stuck to just the US a while longer and had been content to be a premium niche manufacturer? They are sacrificing profitability for growth. I'd say they're probably doing it recklessly, but that's very different from saying that they're selling dollars for 70 cents or whatever. They're acting like their goal is to have the transition to EVs happen as fast as possible, which is Musk's stated mission. Doesn't mean he'll succeed, but he's giving it the ol' college try, that's for sure. I just wish he had a competent CFO and COO to reign in the business and operations side...

Where are you getting 15% ROE from? Book value/share has barely moved in a decade, from what I see at a glance. It hasn't been a compounder, against the hopes of many (including me at one point). Maybe someday it will be, who knows. The market is inefficient, but not *that* inefficient. When a stock price isn't moving in a decade where the market is going up double-digits/year, the underlying business probably isn't compounding value at 15% (or higher)... It might have trouble earning its cost of capital. A decade at 15% is a four-bagger. I'm being generous with the 15%. It could've been 10%. I don't remember the number but I remember once I saw the number I decided to look at something else although I remember seeing the number was not terrible but not great. I obviously don't think its much of a compounder but didn't want to stir anything. I looked at this a while back so my memory is foggy, but basically what I did was take some deals and calculate the return on the deals, adjust for cash and leverage. Keep in mind there is a dividend and the argument is the market will turn up while ALS is investing, so intrinsic value is higher than what the market is giving it credit for. I think that's the crux of the thesis but I'm not buying it. I'm curious if some of the bulls have better arguments. Book value/share went up rapidly in their early years when they grew up from a tiny nothingcap into a microcap while riding the China-led commodity super-bubble, but after about 2008, book value/share stabilized and has been hovering around the same range (6.5-9.5). The dividend only showed up in 2011, and it's too small to make much of a difference in this case. It's also worth nothing that they spent a fair bit of money buying back shares and they haven't yet really gotten any return on that money. This was during a time when many said there was blood in the streets in their area, and yet they apparently couldn't find elsewhere to deploy that capital at better returns.

It's called the "horse race". The same happens in politics where it's all about who's polling how and how people looked at a certain moment, rather than anything substantive. The media has to fill 24 hours in a day, so rather than talk about the few things that really matter, they fill time by talking about minutiae. On the other hand, growth stocks with high valuations can move a lot on relatively small differences in growth rates and terminal value expectations. If you're used to low growth deep value stuff, this might seem weird, but it's actually rational for the market to care and adjust on these inputs.

3 acquisitions (Ecuador, Brazil and Australia -- truly scouring the globe): https://www.fisagrp.com/noticias/fisa-group-ahora-forma-parte-de-constellation-software-inc.html https://www.nsctotal.com.br/colunistas/estela-benetti/vela-do-grupo-canadense-constellation-adquire-a-catarinense-aurum surefiresystems . com/news/ h/t @Pearnick

Where are you getting 15% ROE from? Book value/share has barely moved in a decade, from what I see at a glance. It hasn't been a compounder, against the hopes of many (including me at one point). Maybe someday it will be, who knows. The market is inefficient, but not *that* inefficient. When a stock price isn't moving in a decade where the market is going up double-digits/year, the underlying business probably isn't compounding value at 15% (or higher)... It might have trouble earning its cost of capital. A decade at 15% is a four-bagger.

Yes, that's a big part of the bear case. The Q1 numbers provided some evidence of this in the US, and I think it's reasonable to expect something similar to happen abroad over the next few quarters. The infrastructure problem I think will get better over time but the problem for Tesla is that they will likely face tougher competition over time as well. The Prius, in its early years, is a car that attracted a niche audience because it felt compromised and weird, and people overlooked that because of other benefits. Teslas aren't in that category. They are perceived to be premium and they perform better than gasoline vehicles. Not the same dynamic at all, IMO. There are certainly a lot of problems with the company, but having products that only EV early adopters and environmentalists are interested in certainly isn't high on the list.

How many cars did GM sell in 2009? How many did Tesla sell in 2009?

https://www.vox.com/recode/2019/7/3/18716431/walmart-jet-marc-lore-modcloth-amazon-ecommerce-losses-online-sales

I might have a PDF copy of that book around somewhere. I will look for it if you want. I have a paper copy. It's not that great a book, it's not all about Singleton and Teledyne strategy... lots about the author and stuff that might be less interesting to the investor-reader.