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If I want to invest in Tesla or any other company (another ex: Boeing), I'd ask myself this q: Is this something temporary problem that smart people would easil

If I want to invest in Tesla or any other company (another ex: Boeing), I'd ask myself this q: Is this something temporary problem that smart people would easily able to overcome? Or is this something fundamental or structural issue that's gonna be there long-term. I don't see this delivery issue for Tesla dragging on beyond this quarter. Lately, I have seen specifically with Tesla that short-term concerns have been dragging down the stock way too much.

jressey 8y ago
And then I would just shrug my shoulders and buy more index funds. Investing in individual companies, no matter what you think you know, is always unwise compared to index investing.
- jumbopapa 8y ago
  If anyone would like to know more about this please visit the Bogleheads Wiki [1] and join the forums [2]. I have found this community to be an invaluable resource in pursuing financial independence. [1] - https://www.bogleheads.org/wiki/Main_Page https://www.bogleheads.org/wiki/Main_Page [2] - https://www.bogleheads.org/forum/index.php https://www.bogleheads.org/forum/index.php
  - weaklearner 8y ago
    or read a random walk down wallstreet
    - jumbopapa 8y ago
      Great recommendation! Also read The Millionaire Next Door if you want to get into the right mindset.
      - weaklearner 8y ago
        Thanks this book also looks good!
- mythz 8y ago
  My first foray into US shares was in a managed funds which saw me lose 25% of my net worth and they still took their 1.5% fee for their service. I decided I'd rather lose money due to my own decisions and loaded up on AAPL instead which ended up being recouping my losses and then some. I basically limit myself to major tech co's since that's where I see the consolidation of wealth ending up which has proven to be a smart bet so far. As long as I have good convictions about a company I'm happy to invest directly, maybe in retirement when I stop caring enough to follow companies closely I may consider a managed fund with a proven track record to diversify the risk.
  - minikites 8y ago
    >in a managed fund That's different from an index fund.
  - jressey 8y ago
    Managed funds are a ripoff, and not index funds. There is nearly infinite data showing that S&P 500 index funds outperform every single investment strategy. I would be focusing on bonds indexes right now though, that's just me. Good luck with the lifetime win/loss if you keep this up.
    - brianpgordon 8y ago
      Bond funds are the one place where active management actually does make sense...
  - SEJeff 8y ago
    Index funds track the market index, and aren't managed like a mutual fund. The fees are massively lower. You're comparing apples to lawnmowers here. They aren't the same thing.
- tardo99 8y ago
  This advice is almost always right. It's wrong when you're on the precipice of a massive market bubble. Your job is to decide whether or not that is the case right now....
- breakyerself 8y ago
  I have mostly index funds, but I bought a share of Tesla and a couple of other companies because I want them to succeed. Not because I expect them to. Its amazing what they've accomplished so far, but it's still a rocky road ahead
  - jressey 8y ago
    When you buy a share, you are not contributing to the company. Their shares were sold at IPO and they've already collected all the proceeds from them. You are just gambling.
    - breakyerself 8y ago
      It does help them a little. If their market cap is higher it's cheaper for them to raise capital. It's also kind of a moral support thing. I bought a second share since I posted that. I am also gambling, but it's like .01% or less of my retirement so I don't think I'm being too risky. I also bought a model 3. Which actually does help them a little. They need sales more than they need people to buy shares on the secondary market. That's not why I bought it though. I bought it because it was the first BEV with a useful range I could afford.
dmix 8y ago
Stocks always seem overreact to any negative earnings news reports. I wonder how much of it is automated.
mikeash 8y ago
The flip side to this is that they always seem to have some sort of short-term problem going on. One quarter it’s trouble ramping up production, then it’s quality issues, pissing off regulators, inadequate transportation, what have you. You can see this as “they are good at overcoming problems” or as “there’s always something going wrong.” I tend to see it more as the former but seeing it as the latter may be a sensible explanation for the stock movements.
- adt2bt 8y ago
  To some extent, that sense you have that 'they always seems to have some sort of short-term problem going on' could be driven by the unnatural level of media coverage Tesla receives. Perhaps my intuition is wrong, but I feel like other companies are also constantly tackling small problems, they just don't receive the wild eyed media coverage over those problems.
- dexen 8y ago
  >[or you can see this as] “there’s always something going wrong.” Which is literally the truth in any business, in any industry: there is always a major problem, and a plethora of smaller ones to boot. Whether it's the competitors gaining up, the market undergoing a fundamental shift, the economy slowing down or the costs of materials and labor going up, there's always flux. Just as well there is always some waste that could and should be improved upon. The key difference is that some companies burn through (squander?) capital and resources to paper over the problems - to signal "good health" - while other companies cut close to the wire and allocate the capital and resources to where they will the most effective, dealing with problems when and where they become pressing.
  - brianpgordon 8y ago
    This seems like a view so charitable as to nearly strain credulity. Firstly, many of Tesla's problems are self-inflicted. How much time and capital was wasted on the alien dreadnought? How much damage has been caused by the constant turnover in management, or the whipsaw changes in price structure and product offerings, or the likely ill-fated decision to double down on computer vision rather than use LIDAR? One mistake we can quantify is the disastrous $2.6 billion related-party acquisition of SolarCity. And even problems which are not necessarily self-inflicted wounds, like their cashflow problems or quality issues which possibly any upstart time-constrained car manufacturer might face, are not any less problematic for that fact. As an investor it doesn't matter whether quality issues would happen to another electric car startup; they're happening to Tesla. Their competition actually does know how to build cars to spec, and they're coming out with their own electric models. And their stock comes free of childish bickering with the SEC or critically risky solvency status or desperate and deceptive PR stunts like solar roofs or underground tunnels.
x2f10 8y ago
I'm long on $TSLA and agree with the opinion. However, I think critics have the opinion that $TSLA is over-inflated and the corrective action is the marketing coming to terms with the logistical / systematic challenges ahead.
mrdoops 8y ago
Long term I'd like to see what sort of an effect using their own Semi's for delivery would bring. Self driving or not having a fully consolidated supply chain you can tune and rollout for your own needs is a lot of leverage. Logistics is hard, but also a known problem that Tesla should have plenty of tools to deal with.
dragontamer 8y ago
> I don't see this delivery issue for Tesla dragging on beyond this quarter. My perspective is that these issues will continue. 1. Tesla closed a severe number of their stores. All sales-staff thought they were going to be fired, but then Elon Musk reversed his decision. In effect: Tesla's sale staff has low morale due to boneheaded moves by Tesla leadership. 2. Tesla's future sales strategy is still a big question. Will Tesla push "online only"? If so, all of these salespeople should be looking for a new job, before the next round of layoffs. Tesla has done nothing to satisfy its sales staff. Rumor is that the commissions program was also severely cut during the whole process. 3. Tesla has had dramatic price cuts throughout Q1. We all knew they needed to do this as they lost the Tax Credit, but I think most people hoped that the price cuts would have worked. $2000 off of all vehicles in January, the "release" of the $35k Model 3 (except none have been delivered yet), etc. etc. 4. Tesla changed their sales policies to be far more forgiving to customers in Q1. Customers can return a vehicle as long as its under 1000 miles and before a week is up (allegedly anyway. I dunno how the process works). In any case, the price drops + very forgiving sales policies are trying to court more buyers. But... all of this resulted in 30% fewer sales in the Quarter (compared to last quarter). So Tesla was unable to counteract the drop in demand. 5. The $3750 US Tax Credit runs out in June, and is halved again to only $1375. Other cars, like Honda Clarity, still have the full $7500 tax credit, and are available at $33,000 (under the $35k Model 3, which isn't even being delivered yet). The competition is picking up, and the competition still has all of the tax credits available.
deleted 8y ago
[deleted]
microtherion 8y ago
Conversely, I'm seeing a lot of faith in Tesla's ability to execute that does not really seem backed by the actual facts on the ground.
navigatesol 8y ago
>I don't see this delivery issue for Tesla dragging on beyond this quarter. The mistake in your analysis is believing this is a delivery issue, not one of demand. >Lately, I have seen specifically with Tesla that short-term concerns have been dragging down the stock way too much. Wait, what? This company was at one time bigger than Ford and GM based entirely on future expectations. Yet you think the share price is driven by short-term concerns???

jressey 8y ago

And then I would just shrug my shoulders and buy more index funds. Investing in individual companies, no matter what you think you know, is always unwise compared to index investing.

jumbopapa 8y ago
If anyone would like to know more about this please visit the Bogleheads Wiki [1] and join the forums [2]. I have found this community to be an invaluable resource in pursuing financial independence. [1] - https://www.bogleheads.org/wiki/Main_Page https://www.bogleheads.org/wiki/Main_Page [2] - https://www.bogleheads.org/forum/index.php https://www.bogleheads.org/forum/index.php
- weaklearner 8y ago
  or read a random walk down wallstreet
  - jumbopapa 8y ago
    Great recommendation! Also read The Millionaire Next Door if you want to get into the right mindset.
    - weaklearner 8y ago
      Thanks this book also looks good!
mythz 8y ago
My first foray into US shares was in a managed funds which saw me lose 25% of my net worth and they still took their 1.5% fee for their service. I decided I'd rather lose money due to my own decisions and loaded up on AAPL instead which ended up being recouping my losses and then some. I basically limit myself to major tech co's since that's where I see the consolidation of wealth ending up which has proven to be a smart bet so far. As long as I have good convictions about a company I'm happy to invest directly, maybe in retirement when I stop caring enough to follow companies closely I may consider a managed fund with a proven track record to diversify the risk.
- minikites 8y ago
  >in a managed fund That's different from an index fund.
- jressey 8y ago
  Managed funds are a ripoff, and not index funds. There is nearly infinite data showing that S&P 500 index funds outperform every single investment strategy. I would be focusing on bonds indexes right now though, that's just me. Good luck with the lifetime win/loss if you keep this up.
  - brianpgordon 8y ago
    Bond funds are the one place where active management actually does make sense...
- SEJeff 8y ago
  Index funds track the market index, and aren't managed like a mutual fund. The fees are massively lower. You're comparing apples to lawnmowers here. They aren't the same thing.
tardo99 8y ago
This advice is almost always right. It's wrong when you're on the precipice of a massive market bubble. Your job is to decide whether or not that is the case right now....
breakyerself 8y ago
I have mostly index funds, but I bought a share of Tesla and a couple of other companies because I want them to succeed. Not because I expect them to. Its amazing what they've accomplished so far, but it's still a rocky road ahead
- jressey 8y ago
  When you buy a share, you are not contributing to the company. Their shares were sold at IPO and they've already collected all the proceeds from them. You are just gambling.
  - breakyerself 8y ago
    It does help them a little. If their market cap is higher it's cheaper for them to raise capital. It's also kind of a moral support thing. I bought a second share since I posted that. I am also gambling, but it's like .01% or less of my retirement so I don't think I'm being too risky. I also bought a model 3. Which actually does help them a little. They need sales more than they need people to buy shares on the secondary market. That's not why I bought it though. I bought it because it was the first BEV with a useful range I could afford.

dmix 8y ago

Stocks always seem overreact to any negative earnings news reports. I wonder how much of it is automated.

mikeash 8y ago

The flip side to this is that they always seem to have some sort of short-term problem going on. One quarter it’s trouble ramping up production, then it’s quality issues, pissing off regulators, inadequate transportation, what have you. You can see this as “they are good at overcoming problems” or as “there’s always something going wrong.” I tend to see it more as the former but seeing it as the latter may be a sensible explanation for the stock movements.

adt2bt 8y ago
To some extent, that sense you have that 'they always seems to have some sort of short-term problem going on' could be driven by the unnatural level of media coverage Tesla receives. Perhaps my intuition is wrong, but I feel like other companies are also constantly tackling small problems, they just don't receive the wild eyed media coverage over those problems.
dexen 8y ago
>[or you can see this as] “there’s always something going wrong.” Which is literally the truth in any business, in any industry: there is always a major problem, and a plethora of smaller ones to boot. Whether it's the competitors gaining up, the market undergoing a fundamental shift, the economy slowing down or the costs of materials and labor going up, there's always flux. Just as well there is always some waste that could and should be improved upon. The key difference is that some companies burn through (squander?) capital and resources to paper over the problems - to signal "good health" - while other companies cut close to the wire and allocate the capital and resources to where they will the most effective, dealing with problems when and where they become pressing.
- brianpgordon 8y ago
  This seems like a view so charitable as to nearly strain credulity. Firstly, many of Tesla's problems are self-inflicted. How much time and capital was wasted on the alien dreadnought? How much damage has been caused by the constant turnover in management, or the whipsaw changes in price structure and product offerings, or the likely ill-fated decision to double down on computer vision rather than use LIDAR? One mistake we can quantify is the disastrous $2.6 billion related-party acquisition of SolarCity. And even problems which are not necessarily self-inflicted wounds, like their cashflow problems or quality issues which possibly any upstart time-constrained car manufacturer might face, are not any less problematic for that fact. As an investor it doesn't matter whether quality issues would happen to another electric car startup; they're happening to Tesla. Their competition actually does know how to build cars to spec, and they're coming out with their own electric models. And their stock comes free of childish bickering with the SEC or critically risky solvency status or desperate and deceptive PR stunts like solar roofs or underground tunnels.

x2f10 8y ago

I'm long on $TSLA and agree with the opinion. However, I think critics have the opinion that $TSLA is over-inflated and the corrective action is the marketing coming to terms with the logistical / systematic challenges ahead.

mrdoops 8y ago

Long term I'd like to see what sort of an effect using their own Semi's for delivery would bring. Self driving or not having a fully consolidated supply chain you can tune and rollout for your own needs is a lot of leverage. Logistics is hard, but also a known problem that Tesla should have plenty of tools to deal with.

dragontamer 8y ago

> I don't see this delivery issue for Tesla dragging on beyond this quarter. My perspective is that these issues will continue. 1. Tesla closed a severe number of their stores. All sales-staff thought they were going to be fired, but then Elon Musk reversed his decision. In effect: Tesla's sale staff has low morale due to boneheaded moves by Tesla leadership. 2. Tesla's future sales strategy is still a big question. Will Tesla push "online only"? If so, all of these salespeople should be looking for a new job, before the next round of layoffs. Tesla has done nothing to satisfy its sales staff. Rumor is that the commissions program was also severely cut during the whole process. 3. Tesla has had dramatic price cuts throughout Q1. We all knew they needed to do this as they lost the Tax Credit, but I think most people hoped that the price cuts would have worked. $2000 off of all vehicles in January, the "release" of the $35k Model 3 (except none have been delivered yet), etc. etc. 4. Tesla changed their sales policies to be far more forgiving to customers in Q1. Customers can return a vehicle as long as its under 1000 miles and before a week is up (allegedly anyway. I dunno how the process works). In any case, the price drops + very forgiving sales policies are trying to court more buyers. But... all of this resulted in 30% fewer sales in the Quarter (compared to last quarter). So Tesla was unable to counteract the drop in demand. 5. The $3750 US Tax Credit runs out in June, and is halved again to only $1375. Other cars, like Honda Clarity, still have the full $7500 tax credit, and are available at $33,000 (under the $35k Model 3, which isn't even being delivered yet). The competition is picking up, and the competition still has all of the tax credits available.

deleted 8y ago

[deleted]

microtherion 8y ago

Conversely, I'm seeing a lot of faith in Tesla's ability to execute that does not really seem backed by the actual facts on the ground.

navigatesol 8y ago

>I don't see this delivery issue for Tesla dragging on beyond this quarter. The mistake in your analysis is believing this is a delivery issue, not one of demand. >Lately, I have seen specifically with Tesla that short-term concerns have been dragging down the stock way too much. Wait, what? This company was at one time bigger than Ford and GM based entirely on future expectations. Yet you think the share price is driven by short-term concerns???