Since Charlie sang Musk’s praises when recently interviewed by Becky, it made me wonder…
Since Tesla’s retained earnings are very good and Tesla is included in the S&P 500, do you think that it is possible that Berkshire might purchase shares of Tesla?
Little debt, self-funding new factories, etc.
Lol… wanted to do a poll, but couldn’t find thst option on the new software.
Surely, doing a poll is still possible?
;^)
jan
Are Tesla’s retained earnings very good?
Yes it is possible. Click the gear icon (rightmost on top) when you are composing a message. The option to create a poll is the last one on the drop down list.
This was posted on another thread:
Tesla (TSLA) - Earnings (companiesmarketcap.com)
2022 (TTM) $12.60 B +87.67%
Nice increase. Not a value stock by any means.
Sustainable? Well, I’ve never been in the market for a $50k mid-size sedan or a $60k mid-size SUV, but apparently a few of my neighbors were. I’d be interested in a $30k hatchback, but then I already have one that works exceedingly well.
Well according to the balance sheet available on Yahoo Finance for end Sep 2022, the retained earnings for Tesla is approx $9.2B. with 3.16B shares outstanding, that comes to a retained earnings per share of $2.91.
In other words, the sum of all the earnings per share (positive and negative) since the company was formed adds up to $2.91 per share. (This assumes Tesla has never paid a dividend).
For a company with a current share price of $180, I would question that this would be considered “very good”.
I do appreciate that this is quite a simplification for a company that issued shares on numerous occasions but I think it is good enough to draw conclusions.
The current retained earnings are a way to look forward. Stretching the earnings backward toward the beginnings of this company?
I respectfully do not understand looking at a company that way.
Charlie had high praise.
Early days of any company, especially a capital intensive manufacturing company, would be expected to be burning through cash.
But the days of burning cash are over, IMHO.
Charlie and Becky were a hoot!
Well that is what retained earnings are:
Seems there was some blustering chant when ole dealraker said Tesla would get halved…then even more bluster…but then…
Oh my, the dude was correct! Wasn’t a hard call, just takes time sometimes.
But Charlie! I see a clear path for the company to be worth more than Apple and Saudi Aramco combined! And that is just based on the announced products and not even including the secret stuff!
Jan (DaveAnglin) likely meant TTM earnings are “very good”.
I don’t have any idea if the growth will continue at that pace, or for how long. And I don’t think Buffett would, either. Tesla will be in the too hard pile. Definitely not a 1-foot hurdle.
We own an EV and love it, for its intended purpose. Tesla was considered and quickly rejected. Why pay twice as much to get the same utility? Then again, I just don’t understand the luxury car buyer mind-set.
I get where you guys are coming from. At these prices, IMHO it would be a good deal for WEB to buy TSLA.
The retained earnings will fuel the building of new factories, lithium mines and their refineries.
And I get the idea of only looking at the sticker price when buying a new car. That is a long held mental habit that we all have.
But consider fueling your vehicle from a regulated utility and then compare your costs of ownership over say, 5 years?
Then compare the initial cost of the cars and say fueling and maintaining them for a fixed number of miles.
If you use us as an example, we now have 120,000 miles on our 2017 X. If you reduce that to 100,000 for ease of arithmetic, and factor in that by charging at home, our electric bill increased by an average of $600 per year, then that is saying something. (BTW, there is a caveat. Because we were among the earliest adopters, all of our Supercharging visits were free.)
Even if we had paid for Supercharging, the costs would have been much lower than the costs of an internal combustion car.
While you personally may not wish to buy an electric car, be careful not to think that your own preferences are the same as others.
I am not great with Graphic User Interfaces, but the car’s interface is easier than my iPhone.
Sincerely,
:^)
jan
I forgot to say, that the average increase in our regulated utility electric bill since we began fueling in the garage every night has been roughly $600.
Since this is a 5000 pound car, one could compare gasoline fuel costs, oil changes and all other maintenence of a similarly heavy gas or diesel vehicle.
It takes more doing, but you might consider diving deeper?
jan
THAT IS $600.00 per YEAR!
By “at these prices” you mean $540 Billion?
Coincidentally, I was just running some numbers this weekend, curious about this. Here’s a calculator I came across. You can plug in different variables based on the price of a gallon of gas, electricity rate, and current car’s miles per gallon for a comparison:
I found that with my inputs, I would save about $600 every 10,000 miles driven by switching to an electric car, or $6,000 every 100,000 miles. This is the difference between gas costs and electric costs to drive 100K miles.
My understanding is that maintenance costs are thought to be considerably lower on electric cars than ICEs also, so that’s important to take into account (and I haven’t yet) - but purely from a fuel standpoint, when most Teslas are currently selling for $40K+, a $6K savings every 100K miles is not enough to get me too excited.
Especially when I can buy a lower end ICE for $20K, invest that ~$20K difference I would have sunk on the Tesla, and grow it to much more. $20K grown at 7%/yr for 10 years is $40K, or a +$20K gain, which dwarfs the $6K in gas savings. Obviously, this is a simplification, but what I’m seeing so far doesn’t make me think buying a Tesla is a slam dunk from a cost savings standpoint. (at least at today’s prices)
I think if you’re a low mileage user, like myself, Knighted’s arguments are even more salient when analyzing fuel vs electric bills. I bought a beautiful new Honda Accord EX-L Turbo in 2019….was named one of Car and Driver’s top ten cars of the year (Porsche and BMW on the same list). Best car I’ve ever owned. Out the door at about 25k and change. A lot of today’s newer ICE cars are very maintenance free and reliable. Honda is no exception. Have not had one serious issue whatsoever…just a recall or two for trivial things fully covered by Honda. Maintenance? Just 3 annual premium oil changes (per Honda schedule), tire rotation, and a couple cabin air and engine filters easily replaced by moi, in just a couple minutes — and that’s it so far. Grand total maintenance cost in 3 1/2 years and 14,000 in miles? Less than $250! This thing is fun to drive, fast, and extremely reliable in cold New England weather. A quality, decent ICE vehicle today will get you 10 good years of use, and more, without much headache. Using the opportunity costs in savings and investing it as Knighted laid out, and you’re in the money, at least for now until Tesla pricing is more compelling.
Do not forget maintenance like oil changes… and most importantly… time wasted fueling, taking the car in for service, mufflers, radiator flushes… etc.
WEB used to talk about “frictional costs”. In an internal combustion engine there are lots of frictional costs as well as loads of physical friction and wear…
Drive the car…
Tesla’s a buy, strong buy, around $125.
Buffett will come in if it gets to $90 or so.
Nah. Charlie is disconnected from reality. TSLA cannot be part of Berkshire holdings. You have a mercurial CEO, highly competitive industry, the first mover advantage on EV is eroding fast. Why TSLA, why now?