[ad_1]
October 14, 2018 by Frogal Moogal
The third quarter is over and the publication of the third quarter results of Tesla has begun. There are a lot of articles coming out suddenly and discussing what these results will be.
If you read articles like this, it's time to step back and calm down. When you read about Tesla, whether you're a bull or a Tesla bear, remember:
First of all, full disclosure
Before going into the rest, I feel it is important to highlight the biases that could influence what I write. It seems that many people who write Tesla articles do not feel the need to do so. At best, some people question their motives. At worst, it masks their true motives for writing.
That said, I write under a pseudonym. Nothing proves what I say or what I do not tell. And maybe that should be the first thing to remember. Everyone has a bias. They can reveal as much or as little as they wish or distort them completely.
I could say now that I own 1,000 shares of Tesla and that I bought less than $ 30 a share at the end of 2011. Today, that would represent more than a quarter of a million dollars. dollars. This could bias me to try to write on the title to improve its position. Or, I could just make that statement and write about my disappointment at the actions the company took or not, and use my position to show how serious I was.
But, nothing guarantees that I own this stock.
So the first thing to do if you read an article is to simply pull the facts out of the rest of it. An opinion is an opinion, regardless of the author's qualifications declared (or not claimed). Look for real facts, not opinions presented as facts.
My disclosure
That said, I will highlight facts that should not matter if I have 1,000 shares or if I miss 1,000 shares. I still think it's worth trying to emphasize my own bias.
I own eight shares of Tesla. When I started writing this article a month ago, I had four actions. Since then, I have doubled my position to eight. I think Tesla is in a similar position to that of Amazon about 15 years ago. There were real questions then if Amazon would earn a day of money to justify its valuation. Amazon could have gone bankrupt and an investor at the time would have lost everything. Instead, a $ 1,000 investment in Amazon would be worth $ 40,000 today.
I bought my eight shares assuming that they would likely continue to explode in the future, and if that were the case, a potential value of $ 80,000 in the future would represent a risk of 39, about $ 2,000 today.
When I started writing this, I had a model 3 on order. I now have this model 3. In other words, as a usual accountant, I now hate the volatility of gasoline prices and auto repairs when budgeting monthly. At the same time, my previous car clearly needed to be replaced.
At this point, the Model 3 is the only electric car able to solve my fuel price volatility problems while being able to serve as a long-range primary car. If another manufacturer had a charging network at the national level, I would be all ears. None do it.
I would like the company to continue, but I do not think I will be affected significantly anyway if that is not the case. If I lose the price I paid for the stock, everything will be fine. If suddenly the company goes bankrupt, enough models 3 have been sold and the demand is sufficient for me to think that they will be maintained. I may not have software updates, but that's fine.
That said, between Q3 and Q3, we are in the period during which we tend to have a plethora of articles written on Tesla. Here are some useful points to remember:
Anyone can contribute to similar sites looking for alpha
It's strange for me to see how much the Seeking Alpha site plays for a lot of Tesla fans. Here's what seems to be constantly neglected – you do not have to be an expert at writing for Seeking Alpha. In fact, if you visit his Becoming a Contributor page, here's how the site describes people who become contributors:
"More than 15,000 people have contributed to articles over the years. These include individual and institutional investors, fund managers, students, retirees, analysts and, basically, anyone who wants to share investment ideas and ideas with our community. "
It should also be noted that active contributors have free access to the "Pro" version of their site. The Pro site provides access to articles on more titles than those covered elsewhere.
This leads to the advantages and disadvantages of Seeking Alpha. The site can be incredibly useful as an investment tool for small investors wishing to create an investment strategy. It is particularly useful to obtain information on small actions that do not deserve to be covered.
However, it is not very good to make sure all information is accurate.
I worked for a publicly traded company in an industry unrelated to transportation. My multi-billion dollar position in society was high enough to know non-public material information. In simple terms, I could not buy shares in the open market without violating the rules of insider trading.
I have found Seeking Alpha during this time. This made me understand how the vast majority of people who wrote about our society in this country understood very little, because my information was often in direct conflict with the articles that people published. From time to time, there was an insightful article, usually written by the author, that focused specifically on the figures we had published and broke them down.
That being said, Tesla is particularly unobtrusive about financial results aside from quarterly reports, meaning that there is little to be done. For this reason, the majority of Tesla's articles are written about things that are not facts, but are opinions based on circumstantial evidence.
We do not know how many cars were produced last week. We do not know how many are delivered each month. We do not know how many people are reworked. We do not know what the current demand is.
We see a lot of opinions on each of these ideas in articles. A parking lot full of 1000 models 3 can be a sign of a large production ramp, the sign of huge problems with the delivery process, the proof that all this has problems and needs to be corrected, or the sign that it there is no demand and these are spare cars. However, none of these can be proven without insider information, and those with insider information are generally bound by agreements not to share this information.
So, if people only formulate opinions, why do we get all these articles?
People read Tesla's articles
It's simple, really. If you want people to read and comment on your articles, write about a top company like Tesla can help you. More than half of the top 20 most-viewed articles on CleanTechnica.com were about Tesla last month. Not even half of the articles published on the site were Tesla articles.
Coming with a controversial hold, especially negative, helps even further. Those who are out of stock on Tesla perceive these items with a confirmation bias and share them with those who are bears on Tesla. Those who think they are ridiculous go there to comment on the falsity of the article or to look for information that might be missing. Commendations may have a similar answer.
The search for Alpha (and other similar sites) pays the authors on the basis of a formula that has a lot to do with the page views. Seeking Alpha pleases me to the extent that they encourage research on undercovered stocks by offering authors a guaranteed minimum. You can see the full breakdown here.
So, as a writer, you can write an article about a high interest rate action like Tesla and expect you to be paid more. The more controversial the article, the more you will be rewarded with a higher payment.
At the time when I write these lines, last week, 14 articles were published on Tesla in Seeking Alpha. Another stock I am, Crown Crafts, has exactly 12 articles written in the last two years.
Traditional relationships are not great either
You can read the above and think that I'm going into Seeking Alpha. I'm not.
The company I was working for when I discovered Seeking Alpha had huge financial problems and was undergoing a major reorganization. Although I found the majority of Seeking Alpha's articles missing, I was surprised to see how "experts" were further apart.
It's really amazing to me that we trust these experts as much as our experts. Mutual fund managers appear on the news to tell us their opinion of a company, but mutual funds rarely beat unmanaged index funds. You will find here an excellent article that explains why, but in short, why do we trust people whose funds beat index funds less than a quarter of the time?
I believe that the majority of people who manage these funds argue for their right to appreciate or dislike a title, as this can have a significant impact on security prices.
The company I worked for was often in the news during this time. I would hear so-called experts pontificating the agreements we were about to conclude and the revenues that they would bring to justify their bullish feelings about it … even though no such agreement would has never been proposed. Other times, the company's negative ratings were cited with clearly established "facts" when I viewed our internal documents.
At one point, we made the decision to close one of our major facilities, which was underperforming and was losing money in recent years. However, even if this decision had commercial meaning and we tried to wire it for a year, no expert was expecting it.
So what's the point?
Exactly what I started with. Whether you are a bull or a bear, take a breath and think about what we really know.
If you're a bear, yes, Elon's behavior has been somewhat erratic lately. Some executives left for undisclosed reasons. And the model 3 ramp has become much slower than Tesla wanted a year ago.
If you are a bull, the signs indicate that the Model 3 ramp is smoothing. The demolitions of the car by third parties were extremely positive. The company has been guided to be profitable from this quarter, and the leaked emails from Elon bear witness to this.
Finally, no matter who you are, we also know that stock prices are volatile.
Beyond, it's complicated. This is of course the case for any publicly traded billion dollar company. Try to separate the signal from the noise.
But do not trust a particular article. I will not trust anything until I see the results of the third quarter, Tesla itself. And yes, even that is subject to interpretation.
About the author
Frugal Moogal First a businessman, the Frugal Moogal examines electric vehicles from a company's point of view. Having worked in several industries and in roles that have managed to manage a lot of money, he thinks that the way to convince people that the electric vehicle revolution is present is to look at vehicles as a business.
[ad_2]
Source link
