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27-01-2023, 09:22 AM
(This post was last modified: 27-01-2023, 09:23 AM by Wildreamz.)
(09-01-2023, 08:01 PM)CY09 Wrote: https://finance.yahoo.com/news/tesla-off...0Singapore.
https://sg.news.yahoo.com/tesla-cuts-pri...03622.html
With the reduction in Tesla car prices, revenue per car is expected to fall. This will have an impact to the margin Tesla earns. Im not sure if EPS in Tesla will grow much from its current $4 EPS. Increase in production and fall in margins may mean flattish growth and will not justify a $100 share price
Most important metric is not "revenue per car" or rather, "profit per car". With multiple Gigafactories ramping up (hence increased operating leverage) and falling commodity price; COGS is expected to decrease. Tesla's expected to be able to maintain above industry average margins while reducing price to expand TAM.
My base case projection is for them to get to 10mil/year car production (circa 16% market share) with >$10k per car profit, and >60% profit share in circa 2030.
imho, 2c.
(vested)
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger
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(27-01-2023, 09:22 AM)Wildreamz Wrote: Most important metric is not "revenue per car" or rather, "profit per car". With multiple Gigafactories ramping up (hence increased operating leverage) and falling commodity price; COGS is expected to decrease. Tesla's expected to be able to maintain above industry average margins while reducing price to expand TAM.
My base case projection is for them to get to 10mil/year car production (circa 16% market share) with >$10k per car profit, and >60% profit share in circa 2030.
imho, 2c.
(vested)
Hi Wildreamz
If you do not mind me asking, how do you structure your portfolio for investments like Tesla, where the upside is significant in your opinion, but there could be significant volatility?
Do you build small stakes, such as just 1 or 2% of the portfolio value, or do you feel confident about Tesla to invest 5 to 10% of your portfolio value?
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28-01-2023, 09:38 PM
(This post was last modified: 28-01-2023, 09:39 PM by Wildreamz.)
(28-01-2023, 12:08 PM)EnSabahNur Wrote: Hi Wildreamz
If you do not mind me asking, how do you structure your portfolio for investments like Tesla, where the upside is significant in your opinion, but there could be significant volatility?
Do you build small stakes, such as just 1 or 2% of the portfolio value, or do you feel confident about Tesla to invest 5 to 10% of your portfolio value?
I have purchased Tesla twice, once in late 2016 and once in 2018. Both times at approximately the same price, to keep it around 3-5% of my portfolio. And when I felt that the market hasn't fully priced in the risk/reward.
After which, I have not touched that position (which has grown quite sizeable). Since I feel that it still has a significant gap between where it currently is and where it could be.
There are times when I did consider selling my position to seek better opportunities (e.g., when it crossed 1 trillion). But it was short-lived, and I could not find anything obvious to switch to in that time period.
Right now, as it has come down a lot, I no longer feel pressured to sell. I just hold my position with a mentality of a long-term silent partner.
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger
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Thanks and congrats on your massive gains!
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29-01-2023, 09:02 AM
Yes, thanks for the update and great catch.
It's very difficult to hold on to a 20 baggers. But that time, this single stock would be at least 50% of your equity portfolio. 
An exceptional valuebuddie!
A great illustration of what WB:
Gratitude.
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(29-01-2023, 09:02 AM)¯|_(ツ)_/¯ Wrote: ..
It's very difficult to hold on to a 20 baggers. But that time, this single stock would be at least 50% of your equity portfolio.
..
Thanks!
Because my portfolio has grown in value as well. At it's peak it's probably 20+%. If it's 50+% I probably would have acted differently.
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger
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(29-01-2023, 01:35 PM)Wildreamz Wrote: Because my portfolio has grown in value as well. At it's peak it's probably 20+%. If it's 50+% I probably would have acted differently.
What would you have done if it went to 50%?
Sell to reduce exposure?
(29-01-2023, 01:35 PM)Wildreamz Wrote: Because my portfolio has grown in value as well. At it's peak it's probably 20+%. If it's 50+% I probably would have acted differently.
(29-01-2023, 01:35 PM)Wildreamz Wrote: Because my portfolio has grown in value as well. At it's peak it's probably 20+%. If it's 50+% I probably would have acted differently.
(29-01-2023, 01:35 PM)Wildreamz Wrote: Because my portfolio has grown in value as well. At it's peak it's probably 20+%. If it's 50+% I probably would have acted differently.
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Hi EnSabahNur,
Yes, perhaps I will be more proactive searching for options.
At 1T valuation at that time, at a 15% hurdle rate, it would need to grow to 4T in 10 years to justify that outsized risk. At a 15-20x PE ratio what would imply 200-300bil net income. Very difficult to envision them achieving that in such a short period of time, outside of a tremendous breakthrough.
For 50% of portfolio to hinge upon this, is very hard to justify, IMHO.
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger
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![[Image: ZLSfoOE.jpg]](https://i.imgur.com/ZLSfoOE.jpg)
Charted: Tesla’s Unrivaled Profit Margins
https://www.visualcapitalist.com/charted...t-margins/
https://www.macrotrends.net/stocks/chart...it-margins
This is a pretty succinct visualization of Tesla's profit margin vs its peers and highlights the long-term investment thesis, and also the main reason why it's valued so highly compared to its peers (among other reasons, such as health of balance sheet).
Conservative investors may want to check this from time to time (can be derived from their quarterly financial statements) to make sure the thesis remains intact.
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger
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(28-01-2023, 09:38 PM)Wildreamz Wrote: (28-01-2023, 12:08 PM)EnSabahNur Wrote: Hi Wildreamz
If you do not mind me asking, how do you structure your portfolio for investments like Tesla, where the upside is significant in your opinion, but there could be significant volatility?
Do you build small stakes, such as just 1 or 2% of the portfolio value, or do you feel confident about Tesla to invest 5 to 10% of your portfolio value?
I have purchased Tesla twice, once in late 2016 and once in 2018. Both times at approximately the same price, to keep it around 3-5% of my portfolio. And when I felt that the market hasn't fully priced in the risk/reward.
After which, I have not touched that position (which has grown quite sizeable). Since I feel that it still has a significant gap between where it currently is and where it could be.
There are times when I did consider selling my position to seek better opportunities (e.g., when it crossed 1 trillion). But it was short-lived, and I could not find anything obvious to switch to in that time period.
Right now, as it has come down a lot, I no longer feel pressured to sell. I just hold my position with a mentality of a long-term silent partner.
Looking at the Tesla share price chart, I think you have easily 10x your investment !!!
Wonder which SG stock(s) can provide that kind of returns in the same timeframe or even from 2013 to 2023 ?
----------------
Why Tesla’s EV charging plugs are becoming industry standard
https://www.businesstimes.com.sg/compani...y-standard
"....2. What does Tesla get out of it?
Money. Piper Sandler & Co estimated that adding Ford and GM drivers to the Supercharger network could boost Tesla’s annual charging revenue by US$3 billion by 2030 and US$5.2 billion by 2032......
...Plus, those non-Tesla drivers will now be exposed to Tesla’s ecosystem of chargers and apps. That gives the company a chance to convert some owners over to Teslas. In addition, Tesla chief executive Elon Musk tweeted in June that he was open to licensing other Tesla technologies to automakers, including its self-driving system. Opening up the Superchargers, in other words, could lead to more deals...."
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