IGU,
About 87% of my portfolio is currently in TSLA and derivatives, fairly leveraged (not Saul style).
My portfolio is currently up 349% in this calendar year, mostly due to Tesla.
WOW, you’ve got some guts, good luck, I hope you don’t end up needing it.
But the bigger point is that NVDA has been derisked a lot while TLSA still has plenty of risk.
Looking at the risk/reward ratios, I see TSLA as preferable over NVDA. I own both, have for years, and recently added to both.
Financial risk: TLSA has been and continues to need to raise capital.
First, let’s be clear about the capital raises have been for: Growth. Tesla won’t need raise capital any more. It may, however, want to raise capital. With a quadruple in revenue expected next year, there will be billions of dollars of profit available to reinvest in the business. Still, Musk thinks big and so there may be some ginormous new opportunity for Tesla in which they want to invest that will take more than $4 Billion or so. But, I see that as a positive, expanding Tesla’s TAM and diversity of offerings.
NVidia doesn’t need that because they basically just make one thing - a chip, and don’t plan to do much beyond that (OK, they make boards with the chip, too).
What you see as a risk for TSLA, I see as positioning themselves to take advantage of future growth opportunities.
Market risk: NVDA dominates its markets with 90%+ market share.
Yeah, and for me, that limits the potential reward. It certainly expands the time in which the reward may happen. It’s not like there are ready and willing to buy customers lined up - the TAM has to expand and Nvidia has to be positioned to grow along with it, which could be tricky if where the market goes isn’t where Nvidia is best.
TLSA has a tiny share and must take share from competitors that fight hard.
That Tesla has a tiny share is an advantage. They don’t have to convince 15 million people to switch to EVs, they only need 400K next to switch next year (and maybe some of those are upgrading from lesser EVs, so not really switching).
I’ve already quoted Aswath Damodaran’s view of Tesla’s competition, which he views as a blessing for the company. OTOH, Nvidia’s competition is smart, savvy, and well financed. I’d much rather go up against GM or Fiat/Chrysler than against Google or Intel or even AMD. Tesla’s competition is being disrupted, Nvidia’s competition is already properly aligned.
It is still unclear what will happen while with NVDA we already know what has happened.
The future for Tesla is much more clear to me. They will sell 500K cars next year, and probably 700K or more the following year. They’ll start on Model Y, which many believe is a much more popular form factor (mid-size SUV versus 4-door sedan), and so will be selling over 1 million of them a year within 5 years. Tesla’s solar tile roof will be very popular and the waiting list will be continue (in other words, being production constrained, not demand constrained). Tesla will continue with wins in big storage projects. Who knows what the Tesla semi will bring to the table? And Tesla has a big moat with its worldwide SuperCharging network, making their products the only EVs suitable for long distance trips.
As for Nvidia, they have to fight off smart competition, with a pretty small moat (Cuda programming language). They have to keep their current business (chips for PC boards) growing while the new businesses, which are very small today, grow (servers, Automotive and AI). This is certainly do-able, but it’s not the slam dunk that I see in Tesla. Tesla only has some relatively mundane assembly line scale up tasks before it (and they have automotive experts with experience in place), while NVidia has a more challenging keep the current business ticking along while hoping the new markets grow at a good pace and in the direction they need them to.
It’s probable that both will succeed. However, I’m not only more sure about Tesla’s success, I believe the potential reward is much larger.
Think what TLSA would be worth if it made F150"s. (Just kidding)
I know from the perspective of gains over the last few years I have totally missed this one. Before I invest I tend to look at macro issues before I get into the projected financials. Regardless of how its product is powered, it is still a car company. Large capital requirements, intense competition, labor and associated cost. I do not see it discussed nor do I get how TLSA is building out a service infrastructure to support these cars once they are on the road. Over the lng term how they will address the next wave of environmental extremist who will eventually put the EV cars in their sights because of battery disposal.
The fact is that the only thing that counts is stock price. If you were a bear and the stock went up ,you were wrong, if you were a bull and the stock went down, you were wrong
Expect to be wrong a lot if you want to be a successful investor.
Re Tesla, so far the bulls have been right. A factual statement, the future is a speculation.
I don’t understand spending lots of effort posting about a stock where you guessed wrong in the past and don’t want to own now.
I also see Tesla as a bit less risky than NVDA.
Because auto companies are more conservative less risk taking than AMD or Intel.
While the central chip of computers tends to be a winner take almost all, the car market has room for several big winners. Dollar wise the 100 million per year vehicle market far exceeds GPU sales. I know the vehicle TAM but have to guess at the future AI TAM
Plus I can actually drive a Tesla and see how good it is. I have to depend on books and outside experts for GPU and AI knowledge.
But both are risky, lots of things could go wrong.
The risks to Tesla are mostly internal, screwing up. NVDA has both internal and external risks.
It’s not a matter of either/or, invest on one, both, or neither.
Li ion batteries are recyclable
Just as the lead acid battery in your car is recycled.
In fact the whole car is mostly recycled , something that gave steel minimills their start
The Tesla service infrastructure problem has been discussed at considerable length. Read the SA Tesla board among others.
First, let’s be clear about the capital raises have been for: Growth. Tesla won’t need raise capital any more. It may, however, want to raise capital. With a quadruple in revenue expected next year, there will be billions of dollars of profit available to reinvest in the business.
you mean, ‘in my opinion’
the odds that they ‘quadruple revenue’ is pretty sketchy
but the odds they won’t need to do another capital raise doesn’t mesh w/history
there is nothing clear about this
but hopefully it works out for you as capital raises haven’t dented the story anyway
The fact is that the only thing that counts is stock price. If you were a bear and the stock went up ,you were wrong, if you were a bull and the stock went down, you were wrong
Expect to be wrong a lot if you want to be a successful investor.
Re Tesla, so far the bulls have been right. A factual statement, the future is a speculation.
I don’t understand spending lots of effort posting about a stock where you guessed wrong in the past and don’t want to own now.
Mauser,
If you’re referring to someone (me or someone else) as being “wrong” because they never bought a stock that went up then you may not be thinking clearly. There will always be stocks that go up that weren’t bought. This is true for every single person on the planet. Remember, that there are no called strikes.
I’ve passed on TLSA. I will continue to pass on TLSA. I have shared my opinion on TSLA even though I’m not in the stock. Sure, I don’t need to get involved in this discussion and it is sounding to me that there are people who own TSLA who would rather not hear my opinion. And now that I think about it further, I’m not really getting anything out of sharing my opinion on stocks that I don’t own or will probably never own. I thought I was being helpful, and maybe my posts on TLSA were helpful to some people, but I can see that there are also some people who are so emotionally vested in TLSA that they can’t even see other points of view.
Chris
IT’S TIME TO QUIT ARGUING ABOUT TESLA, AS THE ARGUMENTS ARE GETTING KIND OF PERSONAL. There are 48 posts in the thread and everything that is to be said has been said. LET’S DROP IT AND MOVE ON.
Thanks for your cooperation,
Saul
as being “wrong” because they never bought a stock that went up did not mean or say that
Only ,meant that they were wrong about that stock if they had a strong opinion about it. If they used the money to buy something else that went up more ,then that opinion was right .
For me the full Tesla story is yet to be written. And perhaps more than most there is a big difference between Tesla the company and TSLA the stock. I have always said Tesla will flop big time or succeed big time. But that the odds are somewhat in favor of the latter.
It used to be my biggest holding (a profitable one) but I have started cutting back on it recently. I plan to bring it down to a 2X holding over the next couple of months.
If anything the anti TSLA crowd seem more emotional to me, since they in fact have no tangible interest in the stock.
Sorry, did not mean to ruffle your feathers. Nothing personal. I enjoy reading your posts.