As long as Musk lives, every tech venture he goes into will continue to be bananas. He has proven the ability to execute engineering, production and technological solutions that were thought impossible. Repeatedly.

If anyone gets fully autonomous cars legal and road-going worldwide, it's going to be Elon Musk who acts as the icebreaker ship in the fleet. If anyone makes space flight and exploration commercially viable, it's going to be Elon Musk. If anyone breaks the through the energy kludge we're in today (fucked up infrastructure, a near 100 year global fossil fuel monopoly and nuclear scare tactics), it's going to be Elon Musk.

He is on track to disrupt all three of these industrial behemoths. Even if someone else comes in to mop up, we are talking about 10's of trillions of dollars worldwide, and some of the biggest changes to society since the industrial revolution. Stock markets aren't equipped to deal with these kinds of moonshot opportunities because capitalism generally creates slow-moving progression of markets.

The value of Tesla isn't in the revenue per car. The cars are the literal test environment for proving the technology for, and getting the public educated in how transportation is going to change in a very short period of time. Delivering OTA firmware updates to a car is something that the rest of the world is a decade away from. Google (and maybe Apple) is still a few years from even piloting a commercial self-driving car. Most car companies are 3-5 years out. Tesla is on the market now and has the infrastructure, talent, process and endpoints to accelerate the pace even more.

Autonomous vehicles have so many thousands of positive economic ripple effects, it's staggering to even think about. Millions of lives saved a year worldwide (reducing health care costs), traffic congestion becomes a laughable relic (reducing pollution, lowering stress, making logistics much more predictable), shared transport becomes a simple reality (nearly no need to own a private vehicle or rely on municipal transport), commercial transport becomes significantly cheaper and much more reliable (no more truck drivers or need to limit the size of big rigs), ad infinitum.

But it's also the same reason I won't be investing in any of Musk's ventures. The risk is simply too high. If he kicks the bucket, his empire will collapse. If he hits an unforeseen technological or engineering hurdle that slow pace, his empire will collapse. If we hit another major recession or god forbid enter into another global conflict, he may have the rug pulled out from under him.

10/19/2015 4:31:24 PM

Biggest threat to self driving cars are existing car manufacturers. If they aren't the first to get them to market you can be damned sure that they'll try to forestall letting them actually function on the street for as long as possible until they can force their way into the market or wait until patented technology expires.

It's the same thing that existing industries always do when there is a truly disruptive technological change. It's why most startups get purchased by bigger companies, it's the same reason taxi cartels are trying to shut down uber via legislation and ordinance.

10/19/2015 11:12:55 PM

^^ Musk is operating a financial scam on the stock market no different than what lots of other execs that get decried do. Once the scam falls, it's all pie in the sky bullshit. You'd be amazed at how many companies are out there and say whatever for the sole goal of getting funding. Then when you're an engineer and you ask them for details on what they want, they have no idea or constantly change their minds.

^ That is not the issue. The only companies that have the capability of doing it on a widespread "car for everyone" model are the big manufacturers. Tesla to this day cannot make a "car for everyone", it's too expensive. Their cars are little different from Porsches, Tesla's volume in comparison to the heavy hitters is laughable, they lack the capacity to manufacture enough to be a "car for everyone", hence why it costs so much and is financially the equivalent of buying a Porsche. If you actually want widespread adoption of autonomous vehicles or electric cars in the case of present-day Tesla, it can only come in one of two ways:

1.) a mainstream automaker does it
2.) a mainstream automaker buys out the small-scale carmaker that does it first, and then uses their manufacturing capacity to implement it

Re #2, that's one of in my opinion the 2 Tesla master plans. The other is for them to never be the car for everyone, and instead serve this elitist snob niche, similar to Apple. That way they never have to reduce the price of their cars or optimize costs on small volume while standing behind "we're electric, boogie boogie boogie". Another #2 that is somewhat similar to Tesla, had a discussion over dinner with a Detroit "heavier" hitter a couple years ago that I think worked for Hino, and Lotus' presence was huge at this trade show I was at showcasing their technology, including their electric car. He was saying how Lotus was an incredibly weird company, everyone knows they're broke (Lotus is owned by Malaysian carmaker Proton), and their sole business strategy at this point was to find a buyer. Didn't care who or what terms, but just find a buyer.

Quote :

"it's the same reason taxi cartels are trying to shut down uber via legislation and ordinance."

I have no issue with Uber. But Uber is a taxi service and should be under the same regulations as any other taxi company.

[Edited on October 20, 2015 at 8:03 AM. Reason : /]

10/20/2015 7:34:51 AM

I dont believe we will ever see autonomous cars out on the actual roads at least not anytime in the even moderate future. There are way too many hurdles and human emotions to get over that it will never stick. I know I damn sure am not gonna let my car drive me around with how many fucking idiots are out on the roads I have to avoid every single day. First time one malfunctions and kills someone the lawsuits will bankrupt companies. Sure you may see these rolling around on big tech companies campuses fairly soon, but actually out on the open road its just not gonna happen on any sort of large scale.

10/20/2015 8:20:22 AM

^ we're way off topic but I think you're crazy and we'll see autonomous cars whizzing around at least in urban areas definitely by 2025 and likely by 2020.

anyone getting in on RACE this week?

10/20/2015 8:38:39 AM

Quote :

"Re #2, that's one of in my opinion the 2 Tesla master plans. The other is for them to never be the car for everyone, and instead serve this elitist snob niche, similar to Apple. That way they never have to reduce the price of their cars or optimize costs on small volume while standing behind "we're electric, boogie boogie boogie". Another #2 that is somewhat similar to Tesla, had a discussion over dinner with a Detroit "heavier" hitter a couple years ago that I think worked for Hino, and Lotus' presence was huge at this trade show I was at showcasing their technology, including their electric car. He was saying how Lotus was an incredibly weird company, everyone knows they're broke (Lotus is owned by Malaysian carmaker Proton), and their sole business strategy at this point was to find a buyer. Didn't care who or what terms, but just find a buyer."

LOL Apple is extremely mainstream, plebeian brand, not anything remotely like Tesla.

Tesla's primary goal isn't to make a car for everyone, and they don't operate this way. Their goal is to prove that electric vehicles can be awesome and can meet the needs of being a daily driver, which they have done, to push other companies in this same direction, which they are doing. Tesla's autopilot is behind the curve in a lot of ways compared to other driver assistance features, but clearly the average consumer doesn't know these features are possible. Tesla is bringing them to the forefront, forcing other companies to market, sell, and develop these features.

Tesla's creating the "Mindshare" for electric and autonomous vehicles that's pushing the rest of the car industry forward.

None of this justifies their stock price really, but it should be clear why certain tech geeks are so big on Tesla. But stock prices have been decoupled from objective metrics for a LOONNGGG time now.

10/20/2015 11:55:02 AM

Quote :

"^^ Musk is operating a financial scam on the stock market no different than what lots of other execs that get decried do. Once the scam falls, it's all pie in the sky bullshit. You'd be amazed at how many companies are out there and say whatever for the sole goal of getting funding. Then when you're an engineer and you ask them for details on what they want, they have no idea or constantly change their minds."

See, you've made a false assumption at the outset that screws up your entire line of thinking. Unlike "lots of other execs", Elon Musk doesn't give two shits about amassing a personal fortune nor does he have the egocentric narcissism so common among chief executives.

He is a fucking NERD who wants to fundamentally move the world forward, and he has shown the ability to do so. And I know exactly what you're talking about, I work with startups and large engineering companies. I've seen the vaporware funding schemes, I've personally witnessed the disconnect between engineering and marketing. This does not happen with Musk's companies. They prove the technology and then talk about it, not the other way around.

I think you are mostly correct about your #2 assumption. I believe the long term plan for Tesla Motors is to act as a technology generator, much in the same way that USAA's primary business is technology incubation and licensing to other institutions. No automaker has the cash to buy out Tesla. Tesla won't sell anyway.

But even then, not quite, since Musk already opened their patent portfolio for commercial use: http://www.teslamotors.com/blog/all-our-patent-are-belong-you

Tesla is going down a proven track for technology adoption. Prove the technology in the high end, then use economies of scale to drive down cost to bring it to the mass market. Keep in mind that you don't need an electric vehicle to have autonomous driving.

On the Electric front, there's no one who can create an electric "car for everyone" at any scale today. The cost is in the batteries, and the only companies on earth working to actually scale battery production are Tesla Energy and Toyota.

10/20/2015 1:39:52 PM

VMW

10/21/2015 11:06:06 AM

^What happened? I have them on a watch list and saw the drop this morning. They were a bit over on earnings, and revenue is up...Some analysts did downgrade them, but I can't find any news that justifies a +20% hit.

10/21/2015 1:39:05 PM

http://www.bidnessetc.com/55607-vmware-inc-vmw-why-the-stock-is-tanking-today/

10/21/2015 2:03:20 PM

Still seems like a stretch for an almost 1/4 reduction in market cap...unless some big institutional players just don't trust dell to manage it correctly.

Very tempted to dip a toe in at 50 shares or so...even the most pessimistic targets still have a ~25% upside from the current price.

10/21/2015 2:20:58 PM

Agreed. Did you dip your toe in the water?

10/22/2015 9:40:57 AM

not yet...i'm keeping a close eye on it though. Looks like company management expects a squeeze in margins over the next few quarters from the temporary increase in costs associated with the joint venture with EMC, so that might drive it down a bit more in the near term.

10/22/2015 10:16:46 AM

Damn, how bout that Microsoft stock today

10/23/2015 12:52:01 PM

One share of Apple stock now is about $34 of cash on hand. Insane

10/27/2015 10:25:23 PM

Yeah, it kind of makes me want to sell. Apple needs to make some use of that cash, it's been one of my biggest complaints/worries about them as a company.

10/29/2015 2:22:38 AM

They have to do that though, because of their business model. If they miss ONE cycle with hardware due to a shit product, production issue, or end of a technology curve, they need billions to stay afloat long enough to try and bridge the gap to the next big thing.

10/29/2015 3:20:38 PM

Or they could, you know, use it for acquisitions or expanding into new fields.

I've been hoping and hoping that they'll start acquiring content providers and start having apple.tv exclusives like netflix does or hopign they'll actually get into a new hardware field like an actual television or doing more to get into things like the smart home but so far they just aren't. Either Tim Cook lacks the creativity to do it or they're just not willing to take the risk.

I'm sure tax concerns are part of it too, but eventually they'll have to do something with that cash other than hedge against a bad product cycle. Let's face it, if they do shit the bed on an iPhone release and Samsung or Google does something revolutionary and the iPhone looks like dogshit by comparison to the Galaxy 9s, they're screwed no matter how much cash reserve they have if they don't have another product or service that they can fall back on until they catch up.

11/1/2015 7:51:57 PM

I messed up the calculation it is actually only $7.53 cash per share per yahoo finance. Much better of a number to me.

11/1/2015 8:02:00 PM

Quote :

"As the FT reported in September, [the Saudi Arabian Monetary Agency, which manages their foreign exchange reserves] has pulled up to $70bn from global asset managers over the last six months. It’s unclear how such a capital drawdown from the international financial system may have impacted global liquidity availability, especially once the multiplier effect is factored in."

11/6/2015 9:44:28 AM

Picked up some NRZ for the dividend. Been following it off and on the past few months.
Also got some more AAPL.

1/13/2016 1:48:26 PM

Bought a few put contracts on AMZN strike of 620 for for $6 a piece expiring Friday about a week ago. 369% up in one day.

1/13/2016 2:36:27 PM