A post from Stock Advisor by Smorgasbord1, this captures a LOT of what we’re looking for with investments. Not ALL investments, certainly, but for the investments that will be the portfolio transformers… and the business icons of the future:
Partial slide deck (video has more): http://www.catc.ca.gov/meetings/Forums/Disruption_of_Transpo…
If you don’t believe Tesla’s energy business is going to be big, you should spend an hour and watch Tony Seba’s presentation.
Seba starts off with the well-known to this board example of cars replacing horse & carriage in only 13 years, and how Kodak went from having its best year ever in 2000 to filing for bankruptcy in 2012. He brings up an example of AT&T in 1985 asking McKinsey what the adoption for cell phones would be in 2000. McKinsey’s answer was 900K phones. It actually was 109Million - so they were wrong by 2 orders of magnitude. His point? That experts and insiders not only don’t get the future right, they miss it by a large margin.
I won’t go into the TaaS (Transportation as a Service) aspect, since we’ve discussed that in other threads here, but it’s also interesting to point out some of the other disruptive changes that have happened. For instance, in 2000 the world’s first TeraFlop computer (ASCI Red) was built at a cost of $46Million. Today, you can buy an 8 TeraFlop board from Nvidia for $600, intended for use in Autonomous Cars (Tesla has a stripped down version in Model 3, btw).
On the energy side, Seba gets into solar energy and battery storage costs, and predicts big changes there as well, pointing out that for islands solar is already cheaper than the current most used generation technology - diesel generators - and so the shift is already happening there.
I think best argument that Tesla Energy bears have is that Tesla will have serious competition fighting for these energy dollars, and that the competition won’t be a lame as the entrenched automakers have been thus far. And that’s a fair argument. But, to me that doesn’t rise to the level of Tesla’s Energy business not being worth anything at all, which is the view of some Tesla bears today.
He is no fool who gives what he cannot keep to gain what he cannot lose.