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The Smartest Guys in the Room Eerily Describes Tesla

50 points by camjohnson26 7y ago

socalnate1 7y ago
Only tangentially related; but if you want to understand the Enron scandal; Kurt Eichenwald's Conspiracy of Fools is a better treatment of the topic.
- logicx24 7y ago
  Agreed, that book was fantastic. Detailed but also very entertaining.
- rchaud 7y ago
  I have that book, but I only got through the first couple of chapters. Is it factually sound? The narration of conversations between Enron people is so descriptive (down to what they were wearing), that I kinda got the feeling that this is a "dramatic re-telling" as opposed to a more investigative review. I actually found the storytelling style pretty gripping, but again, I wasn't sure how much of it was fact vs. embellishment for narrative purposes.
- 420codebro 7y ago
  Sorry, I don't read stuff by people who watch tentacle porn with their family. Fun fact about ol Kurt: He had an internet troll arrested over a flashing tweet because Kurt is too fucking stupid to turn off auto-play and gets seizures from flashing lights. Sorry Kurt, you're SUS.
himeexcelanta 7y ago
I was expecting an actual analysis in the Reddit post. Perhaps something along the lines of a quantitative analysis with market data. Seems like many companies could “eerily” be described by the collection of passages outlined in the post (Uber? Snapchat? Theranos?). Would be nice if there was a corresponding anecdote from Tesla’s company history alongside each quote from the book.
bwanab 7y ago
Except - Tesla has a real product that has a real demand. Enron's smart guys transformed the company from a traditional energy company which met that criterion to a financial engineering company that didn't know enough about financial engineering to survive.
- wjnc 7y ago
  I like to remind myself how many firms are financial engineering firms first and customer facing firms second. Banks, insurers, (at one time) Porsche, Tesla (imho for this one).
  - cosmie 7y ago
    You can add airlines to that list. Here's[1] an article that goes into it a bit. American Airlines actually loses money on their whole "flying people around" business. All of their profit last year was derived via selling points/miles for their frequent flyer program. And it's not limited just to American - I'm not sure about foreign carriers, but it's really common for US legacy carriers to derive substantially all of their profit from marketing revenue related to their loyalty program. [1] https://viewfromthewing.boardingarea.com/2019/01/24/earnings-release-american-airlines-lost-money-flying-passengers-last-quarter/ https://viewfromthewing.boardingarea.com/2019/01/24/earnings...
  - BubRoss 7y ago
    Sony apparently makes most of its profit from its insurance business.
- Traster 7y ago
  Tesla is a car company valued like a tech company right now. Unless they solve the problem of self-driving their stock is overvalued. Let's check-in shall we? Uber - self-driving is dead, BMW self-driving is years away, Alphabet - self-driving is in its very early stages, Tesla - We'll have it by the end of the year or I'll eat my hat!
  - miemo 7y ago
camjohnson26 7y ago
Unrelated to Tesla, but WeWork recently set up a holding company to buy stakes in buildings it rents from. The name is ARK, which the CEO said in an interview stands for Adam, Rebekah, and kids. The company quickly said his answer was a joke and gave a real definition. This is interesting because at Enron The LJM company set up by Andy Fastow was created to let Enron move assets off their balance sheet, even though Fastow kept his CFO job and control of LJM. Over time this allowed Enron to hide losses and was one of the main reasons the company fell. The funny part is that LJM stood for Lea, Jeffrey, and Matthew, who were Fastow’s wife and kids. You seriously can’t make this up. https://www.bloomberg.com/news/features/2019-05-15/wework-wants-to-be-its-own-landlord-it-also-wants-2-8-billion https://www.bloomberg.com/news/features/2019-05-15/wework-wa...
- jdsully 7y ago
  Yes this was the core of the Enron fraud. I was a bit disappointed this was never touched on as everything else feels superficial.
forgottenpass 7y ago
Don't worry guys, reddit OP is just a short seller. Buy the dip!
TimTheTinker 7y ago
If you look a little further down in the thread, there are (purported) former Tesla employees talking about what sounds like a really horrible experience working there -- being treated terribly, all the really experienced people leaving, etc. To me, if those are real former employees telling the truth, that's a lot more meaningful than the comparison to Enron.
- dmode 7y ago
  You can say the same thing about Amazon employees, yet Amazon is not really comparable to Tesla
Traster 7y ago
I've got to say, I don't find this analysis compelling. I'm not a fan of Tesla, but this analysis doesn't add much new.

50 points by camjohnson26 7y ago

Only tangentially related; but if you want to understand the Enron scandal; Kurt Eichenwald's Conspiracy of Fools is a better treatment of the topic.

logicx24 7y ago
Agreed, that book was fantastic. Detailed but also very entertaining.
rchaud 7y ago
I have that book, but I only got through the first couple of chapters. Is it factually sound? The narration of conversations between Enron people is so descriptive (down to what they were wearing), that I kinda got the feeling that this is a "dramatic re-telling" as opposed to a more investigative review. I actually found the storytelling style pretty gripping, but again, I wasn't sure how much of it was fact vs. embellishment for narrative purposes.
420codebro 7y ago
Sorry, I don't read stuff by people who watch tentacle porn with their family. Fun fact about ol Kurt: He had an internet troll arrested over a flashing tweet because Kurt is too fucking stupid to turn off auto-play and gets seizures from flashing lights. Sorry Kurt, you're SUS.

himeexcelanta 7y ago

I was expecting an actual analysis in the Reddit post. Perhaps something along the lines of a quantitative analysis with market data. Seems like many companies could “eerily” be described by the collection of passages outlined in the post (Uber? Snapchat? Theranos?). Would be nice if there was a corresponding anecdote from Tesla’s company history alongside each quote from the book.

bwanab 7y ago

Except - Tesla has a real product that has a real demand. Enron's smart guys transformed the company from a traditional energy company which met that criterion to a financial engineering company that didn't know enough about financial engineering to survive.

wjnc 7y ago
I like to remind myself how many firms are financial engineering firms first and customer facing firms second. Banks, insurers, (at one time) Porsche, Tesla (imho for this one).
- cosmie 7y ago
  You can add airlines to that list. Here's[1] an article that goes into it a bit. American Airlines actually loses money on their whole "flying people around" business. All of their profit last year was derived via selling points/miles for their frequent flyer program. And it's not limited just to American - I'm not sure about foreign carriers, but it's really common for US legacy carriers to derive substantially all of their profit from marketing revenue related to their loyalty program. [1] https://viewfromthewing.boardingarea.com/2019/01/24/earnings-release-american-airlines-lost-money-flying-passengers-last-quarter/ https://viewfromthewing.boardingarea.com/2019/01/24/earnings...
- BubRoss 7y ago
  Sony apparently makes most of its profit from its insurance business.
Traster 7y ago
Tesla is a car company valued like a tech company right now. Unless they solve the problem of self-driving their stock is overvalued. Let's check-in shall we? Uber - self-driving is dead, BMW self-driving is years away, Alphabet - self-driving is in its very early stages, Tesla - We'll have it by the end of the year or I'll eat my hat!
- miemo 7y ago

camjohnson26 7y ago

Unrelated to Tesla, but WeWork recently set up a holding company to buy stakes in buildings it rents from. The name is ARK, which the CEO said in an interview stands for Adam, Rebekah, and kids. The company quickly said his answer was a joke and gave a real definition. This is interesting because at Enron The LJM company set up by Andy Fastow was created to let Enron move assets off their balance sheet, even though Fastow kept his CFO job and control of LJM. Over time this allowed Enron to hide losses and was one of the main reasons the company fell. The funny part is that LJM stood for Lea, Jeffrey, and Matthew, who were Fastow’s wife and kids. You seriously can’t make this up. https://www.bloomberg.com/news/features/2019-05-15/wework-wants-to-be-its-own-landlord-it-also-wants-2-8-billion https://www.bloomberg.com/news/features/2019-05-15/wework-wa...

jdsully 7y ago
Yes this was the core of the Enron fraud. I was a bit disappointed this was never touched on as everything else feels superficial.

forgottenpass 7y ago

Don't worry guys, reddit OP is just a short seller. Buy the dip!

TimTheTinker 7y ago

If you look a little further down in the thread, there are (purported) former Tesla employees talking about what sounds like a really horrible experience working there -- being treated terribly, all the really experienced people leaving, etc. To me, if those are real former employees telling the truth, that's a lot more meaningful than the comparison to Enron.

dmode 7y ago
You can say the same thing about Amazon employees, yet Amazon is not really comparable to Tesla

Traster 7y ago

I've got to say, I don't find this analysis compelling. I'm not a fan of Tesla, but this analysis doesn't add much new.