저자: GaryBlack · 외국인
요약 보기
Gary Black은 테슬라 주가가 2022년 추정 EPS 상향(약 12달러 vs 컨센서스 8.5달러)과 기관의 언더웨이트 해소, EV 세액공제 등으로 더 오를 것으로 본다. 2025년 EPS 약 40달러, 적정 PER 50배, 할인율 약 11.6%로 적정가 약 1,400달러를 제시. 테슬라 마진 28~30%를 전제로 보수적 추정. 루시드·리비안·애플카·니콜라에 대해서는 부정적 견해. 애플은 PEG 약 2.9로 비싸다고 평가하며 보유하지 않음.
다듬은 글
hey everyone meet kevin here you're about to see an interview from a few days ago where i have an interview with gary black about tesla this was at the end of a live stream so there's a good chance many of you who would want to see this have not seen this and if you have not yet seen it you gotta watch it so here's an amazing in-depth conversation with gary black hedge fund manager about tesla now we're gonna talk about tesla and to help me talk about tesla i'm gonna bring in a legendary tesla investor his name is gary black you should follow him on twitter he's amazing and incredibly insightful and i'm super excited to bring him on it's my first time talking to him on the channel and bringing him to you here and super excited so gary welcome aboard thank you for being here how are you doing good thanks for inviting me absolutely gary this is insane 1208 is this sustainable when is tesla going to go down so we can buy more i think it's going higher um you know when you think about what's driving this move it's a couple things one the 22 estimates keep going up right the analysts are behind they're pushing estimates up they're pushing price targets up two you've got a lot of portfolio managers who've been underweight tesla all year uh which has worked and now as the stock has taken off it's up uh 70 year-to-date right uh and then and you know the nasdaq is up like i don't know 20 23 or so you got all these portfolio managers scrambling and they don't like amazon anymore they don't like apple they don't like facebook they got to find something to buy and tesla has great fundamentals third you got the ev credit that's still out there right this is part of the infrastructure bill it's going to be 8 000 uh dollars for tesla just a zero today okay so that's another thing and then when you think about all the stuff next year you got cyber truck coming you got this 25 000 compact car coming when i look at tesla it's worth about 1400 bucks i think it's still going higher now you run an actively managed etf is there a limit to how much tesla you could have in it you know we have one limit we're uh what they call a non-diversified fund so we can have positions that are more than five percent we can't have any more than 25 percent in any one industry this is the ticker ffnd future fund um we've gotten off to a great start we're up i don't know close to eight percent in two months uh beating our benchmark speeding or beating most of the folks out there um but no we can't own more than 25 in any one industry that's our only limitation so we're getting close to about 10 which is kind of limited a lot of people think of but as long as we still see really good upside down side and when we put a stock and it's got to have at least two times upside the downside we'll continue to own it and and and probably be our biggest position too now uh a lot of folks complain that tesla's p e ratio is too high that it's fundamentally overvalued uh you know i i make argument videos against these folks regularly and try to show look at all these future revenue potentials that we have the growth rates that we have do do individuals in the market fundamentally misassociate pe with being over undervalued and then get stuck investing in value traps and then they wonder why they missed the vote on things like tesla i think individuals get it better than the institutional guys because i hear institutions saying that all the time and look if you go to business school even if you take a basic finance course you learn very early on as you alluded to you've got to look at present value of future earnings for future cash flows which is what we do so we go out to 2025 you go up to 2030 but we can only forecast about five years you come up with about 40 in earnings for tesla in 2025 and it's driven by eb adoption eb adoption is soaring okay so this year it's about six percent issue is three next year will be ten so we go out to 2025 and get forty dollars in earnings you gotta figure out what kind of pe you think tests will deserve in 2025 it's gonna slow it's not going to be you know the same growth rate you have today we come up with about 50 times it's the appropriate multiple looking forward from 2025 and you can calculate it mathematically you put 1000 bucks a share 50 times 40 is 2 grand and then you discount it back you got to come up with a discount rate that reflects tesla's riskiness tesla has about a 1.6 beta which is a measure of its risk units so i take the ten year treasury which is about two percent we think it'll be about two percent the average year equities beat bonds by six multiply that times one six you get eleven point six percent discount very cap m financial theory bs but it but it works and so when you discount two thousand dollars back by 1.16 for about three and a half years which is where we are in 2025 you get about 1400 so that's the way i think about it i still see plenty of upside for tesla if and where i'm gonna be wrong is ev adoption will probably accelerate even quicker than what i'm thinking is and tesla i'm assuming tesla just holds on to its market share it's in in the ev space so my bet is that we're going to continue to take our estimates up which will push our price target up even higher but when people talk about pes i just shake my head and say you don't understand the way to value road stocks nobody else growth stocks based on current pe why because the earnings this year for any growth stock whether it be chipotle or airbnb or trade desk or even amazon it's going to be much higher in the future you can't evaluate a growth stock based on pe it just doesn't make any sense brilliantly said uh i don't know by the way if there's a setting on your mic but if you could maybe dial your volume down just a little bit it's peaking a little bit no worries though if not uh in the meantime i wanna i just pulled up my sheet on tesla i have twenty dollars for 2025.
what you're you're twice as bullish as i am and i thought i was a tesla bull uh wait what's driving your 40 dollars yeah well i assume that ev adoption will be 60 percent by 2030 and then i back up uh at 2025 i'm at about 30 again in this year it'll be six 2021 next should be 10. i assume that tesla's gonna just hold on to a tv share a lot of people argue with me about you know focusing on ev share or focus on overall share so i multiply the adoption of db share and i get units i take the units without getting into all the details times the average price and i'm assuming the average price goes down over time remember they have cyber truck next year we'll have tesla compact in 2023 multiply it times the operating margin and i get earnings now my 40 number which is worth two thousand dollars includes nothing for solar includes nothing for servicing includes nothing for robo taxi it includes nothing for any kind of insurance i'm just looking at the ev business and ev business to me is worth 40 bucks to share in earnings now uh right the latest stat that i have here is that tesla accounted for 79 of new electric vehicles registered in the us in 2020 is that the the number that you're using no we're using a number that we look at it globally i think you're looking at just us so they operate globally in fact they make more teslas in china than they do in the u.s today yeah that's true yeah this is u.s on a global basis and there's a lot of data out there that you can track we try to do it by region but globally what's that globally about what 15 between 15 and 20.
it's about 21.22 today okay so when we go again we can get into as much math as you want but when we look at it we take the ev adoption times the tv show we use 21 by the way any option you can multiply each year you multiply it times the global sar and you get units units times pricing times operating margin gives you uh pre-tax profits put a tax rate about 15 20 on it and that's how we get our net income again we don't really add anything for energy solar energy we don't really anything for the service they don't make any money today hmm that's interesting yeah no that's that's exactly what i do as well as i literally put zero for energy and it's like a loss leader uh insurance semis robo taxi all that i use 40k oh sorry go ahead that's conservative then you're being conservative well yeah 100 what i um i also use about 40k a vehicle in 2025.
what did you find that reasonable thank you so much i'm a little higher than that i'm about 48-ish 48 wow okay if i change mine to 48. what i do i actually i break it down by model so right now model three model y you know probably 85 90 percent of the business you got to add model s and x which have been refreshed there's a lot of demand right now for those cyber truck i use about the same as model wild though i know one cyber truck goes out because they have over a million pre-orders cyber trucks price is going to get raised and really the wild card this is the hardest thing to model it is it is what is the compact gonna do test the queue some people call it a model 2 it's time to be model 2.
i don't think it's going to be called model q i think you're going to call tesla compact and then so you you've got to forecast tesla compact you need to figure out how much does it cannibalize model 3 because model 3 is going to be the thing the catalyzer is not going to be model y yeah so you got a 40 000 model 3 that's being catalyzed by you know what will probably start as a 25 000 tesla compact and that's the modeling question you know it's funny i just i just realized that when i when i updated my 40k per vehicle to 48 i realized that even though my projected eps for 2025 was half of yours uh if if i update uh to to about 48k a vehicle and uh and you're about 50 times earnings probably i think you're still a little bit more bullish than me but we're in pretty much the same place i agree with you how many units do you have in 2025 so in 2025 i have 4.8 you're close i have five two so oh look at that that's good no one's so interesting you know there's so many competitors uh not competitors but people on the sell side who do this for a living right and i manage money you do what you do real living but the sell side focuses on tesla and they just consistently get it wrong i'm always amazed at the beginning of every year and we're kind of getting to the beginning of the year i start so much higher than analysts on the current year which is what happened this year and then by the time we get to the end of the year they catch up so now i'm in 2022 because nobody's looking at 2021 anymore i'm using twelve dollars in earnings for next year okay you know what the street is 8.50 oh and this is about it's a 35 difference it's about the same difference that i was in 2021 at the beginning of the year and then they catch up and so now we're kind of at the end of the year we're looking 22 at 12 a share in earnings big number wow so now i want to ask you uh on margin we just broke a threshold here we just broke 30 percent on margin uh with uh with credits we expect that to be 30 without in the future you know the the whole credit debate like not even worth having because i'm tired of seeing the trolls like oh only profitable because of credits they're fine right i know you're on the same page with that but what do you think how high can this actually go have we have we peaked on margin or where where can an auto manufacturer actually go on gross margin yeah so first of all you're right back out the zeb credits which because they're going to go away and i assume they'll go away not in 2022 but 2023 is going to go away so my price target assumes zero is ep credits because as everybody starts making zevs you know making eds they're not going to need to buy them anymore so that that makes perfect sense to me uh 28 is the number for third quarter excluding the regulatory credits so i assume 28 for next year because i'm trying to be conservative and then i gradually move it up to about 30 by 2025 and that's my my assumption but again i think i'm being pretty conservative right now because i'm assuming a lower gross margin for next year than they had in the third quarter yeah yeah you're right yeah i think you are being conservative but that's good because that gives you that margin of safety which is perfect for investing and especially if you're managing someone's money you want to have it i'll tell you the biggest investment controversy is as competition takes off the gloves okay and they really try to go after tesla and risk cannibalizing their own what we call ice franchise internal combustion engine franchise and they take off the gloves and go at it you know as heavy as they can and deliberately cannibalize themselves are they going to gain share that's the key investment controversy and so far it's like where's the competition right they haven't really shown up and everybody keeps saying well they're coming they're coming and look from an evidence standpoint they are changing their strategy you see f-150 which is the best-selling pickup truck in america for 40 years now gonna bring out an f-150 eb okay you see uh porch mccann i'm a porsche guy i've driven porsches my whole life now i'm a tesla guy i don't drive portions anymore teslas but porsche mccann is the best-selling porsche they're gonna bring out a porsche mccann evie what are you drinking is that a monster yeah yeah i'm a little tired today i didn't sleep enough you have to drink this this is like the best thing out there what is that celsius it's like if you get on amazon after monster and red bull this is the energy drink people are buying we own it in our portfolio that's why i'm showing it to you what what stock is this cel-8 celsius got a market cap of well i don't know 7 billion talk to the owners you can't really talk to amazon people but this thing is a great part because it tastes good and it has no calories in it it tastes like florida what's that do you live in florida no but it's in florida that's where their headquarters is yeah yeah well that's why i was wondering because sometimes you get the like there could be that local bias right no no i live in chicago and you don't find this out here to be honest with you you know where you do find it you find it in sweden i think it got started but but by going back back to tesla the investment contrary is his competitors take off the gloves tesla's going to finally lose share i'm not buying it okay because there's a brand associated with you stick a mercedes or a volkswagen even a porsche name plate on the back of an ev people are confused because they're used to those brands meaning gas guzzling and and combustion engine and i'm going to give an example from the marketing world think about cigarettes okay marlboro camel newport are the top three brands in regular cigarettes you know where those brands are in e-cigarettes which is the newest thing those things they're nowhere it's new it's um focus it's mark 10.
you don't see this on e-series because it doesn't make sense to a consumer and see this is this is there's a big thing on cnbc today why do active managers all underperform because they all do okay and i think a lot of us because they never worked in a real operating job i have you probably have they've only been financial analysts they don't know what the consumers think they don't understand branding they don't understand jam you can't just swap a volkswagen name plate or a ford nameplate or a chevy main plate on an ev and expected to buy you know it's just not going to happen that easily so even if you look at porsche which has been the most successful with titan titan almost all the volume has come internally from panamera you could draw a chart it can go like this and america's going like this and so that's the problem here that the consumer doesn't let you just slap an ice brand on top of an ev and expect it to sell the consumer wants a brand that means clean energy that's why tesla's doing so well that's why we're going to do well that's why lucid will do well okay that's incredible you know i never thought about that before this uh but this transition you just mentioned between uh cigarette companies failing to get into e-cigarettes you'd think that would be the easiest most logical transition like if i were going to start an e-cigarette brand ten years ago or five years ago i'd be thinking to myself what's to stop marlboro from just rolling me right marlboro is sick and there's no such thing you know what's even more incredible i used to cover the tobacco before i know probably more than i should know about it philip morris with johns marlborough owns jewel they own the rights to joel they chose not to use marlboro on e-cigarettes yeah but all the topping cigarette butts they're all owned by the top tobacco companies wow really hard to take a tainted brand and stick it on something that's supposed to be like you know clean tar or whatever it's like a disconnect it's almost like an active etf you know it's very hard to take an etf and have like an existing brand name on it because details are all about transparency and you know saving on taxes things like that so when you try to take it back to a topic at hand when you try to take you can tell i've had one too many of these today right right when you try to take a clean energy brand you know like tesla and you put it up against an ice brand like ford or gm there's no way that they can compete with it it just doesn't okay so then i have a question for you because uh one of the things that i've liked about lucid is that it is one of the first uh non-uh tesla pure ev plays that's public and delivering vehicles now just just delivered vehicles saturday and i think that's led to a lot of enthusiasm for the stock i can't um you know the valuation's a lot more difficult to come around because you can't run numbers on their factory efficiencies yet because you have no quarterly earnings yet showing how efficient they are and i doubt they're going to be efficient i mean when neo first produced vehicles their margin was like two percent then four percent you know it took a while for them to even get into the teens so how do you go about valuing something like lucid or do you even care is this just gonna be like a winner takes all yeah it is really hard i mean you point out i can't come up with a volume number i get that blockchain but i don't know what the deliveries are going to be especially since they're starting with the vehicles they started delivering a weekend for 170 000 yeah how many of the 90 000 or 80 000 they're going to actually sell i'm not a buyer here of lucid looks like it's about 37 i just think it's you know there's finger up in the air forecasting going on with lucid at this point and so i'm not a buyer of it on the other hand rhythm is going to come public next week ribbon they're going to put a value of about 60 billion dollars on vivian has a much better potential for succeeding because they're competing in the truck business which is the most popular part of the business it's about 20 market share so if you think about tam they're gonna be playing in twenty percent of the tam total adjustable market and then they're going to take their brand and leverage it another concept if you've worked in a brand management organization leverage it into a different category called suvs and you're going to have a ribbian suv sometime next year that's about 40 percent of the market so their tam is this is an interesting lesson from tesla their tan will go from 20 to 60 whereas lucid once you start with a sedan what are you going to do you leverage into an suv it doesn't really make a lot of sense so the reason why i got excited about tesla originally i got into the stock not that long ago 2019 because they decided they were going to double capacity because they opened up shanghai and they were going to leverage their brand uh into model y which is the baby suv they had a big suv which is the model x but that crossover segment cuv segment it's 40 percent of the market in the us it's like 45 of the market in china and in europe so if you're just doing the math you're basically going from at the time you're going from about 20 of the market with tesla and the big suv it was only a little tiny piece but that cuv segment the crossover vehicle segment is 40 basically gone from 24 i think it was to 65 percent of the market overnight and so here's here's what's going on next year they're going into europe with the cuv right they're going to make the model y in berlin they're exporting it in from china but it's it's overpriced because you've got to pay a 10 import tax from china to europe once you make it in berlin you can sell that cuv which is 40 of the market against all the european competitors that's huge okay that caribbean it's the same thing you're leveraging your brand you're building your your your tam so when arivian first comes out people are just going to put the value of the um of the truck in there which is the pickup truck right but you really got to think about is they're going to capture a certain percentage of the suv market as well let's see why do you think lucid can't uh make this transition from sedan to suv i think that's the one place you lost me good i mean you know think about it tesla was able to do it right but they had a model x for a long time i think it's harder now i think you know when tesla did it they were the only out there yeah why you got a ton of eevees out there and you you brought the chinese names before neo xpav they all have um they all have little sedans and little entities so i just think it's very hard at this point for lucid to go down the path of oh let's introduce an suv tesla um and ribbian and and you know the ice guys have all woken up so they're like you're going to have a volvo uh xc90 tv i guess next year okay there's a lot more competition today yeah but you've also got i mean like volvo they're expected to deliver like uh half a million electric vehicles by 2025 rivian's expected to do like one tenth of that by 2025.
who's expecting that's management that's managing forecast right uh oh sorry uh so uh this is uh one you know that for the only forecast i have for rivien is an analyst forecast and uh and then uh average analyst forecast for volvo but um volvo shows dvds for analysts exactly expected to deliver 1 million vehicles by 2025 with half of them being fully electric the rest being hybrids was an expectation okay that's possible i mean look volvo's got a great brand for safety i always think in terms of what i call brand equities and who owns them okay so performance for our performance but tesla also owns performance battery range is another reason by evs tesla clearly owns the brand equity for range even though uh lucid's got a you know 520 mile range um technology fsd tesla clearly owns that so i'm listing off all the characteristics that people use when they choose an suv if you go out and do focus groups of people say what's important to you okay those are three things i think as we get more and more into autonomous driving and you're starting to see it really ramp up safety becomes a huge element of the brand equity and who owns safety uh in the brand equity space volvo if you were to if you were to go to a bar tonight and ask 10 people what's the safest vehicle out there i bet you seven out of ten say volvo wow people don't say tesla tesla needs to own and i think elon knows that you hear him talking a lot about safety now i think you know that's a dimension that they will try to they have if you look at their actual safety records in terms of deaths for um mile driven accident they have one of the safest cars out there but people don't know about it and here's the problem tesla doesn't advertise you use social media try to get their word out elon's a great marketing genius using social media but once you've got all the other manufacturers advertising they're going to have no no they're going to have to somehow advertise a little bit just to compete with them but back to mobile volvo owns the safety uh brand equity right now so if you take volvo you add ev to it you add autonomy to it volvo could be a really interesting story here i haven't said enough to know whether i like stock or not the same public as you know last week now or why diversify it all in in the car sector if you've got a sector for cars autos why even bother with the other ones why not just all tesla you know my clients ask me that all the time you know in the ffnde thing i you know i'll respond to people on pm especially if they own or are fun they spend all the time and i've got one person who says why don't you just announce that you're going to 30 percent tesla in your portfolio because right now it's about nine if you look i didn't go up that way i believe in high conviction investing like if you really believe in something you should you know you should own a lot of it here's the problem and ron barron brought it up one of the big shareholders what if something happens to elon tomorrow yeah i mean he's a he's a very open guy i'm sure he doesn't have you know tons of bodyguards i'm sure his health is probably good but like me he probably works a lot you know and so the problem is if elon if something ever happened to him the stock would go down by at least the third you can't say that about the other mid caps multi-caps mega cap right you know maybe you could say with facebook with mark zuckerberg but i don't know a third yeah no not as much as elon people don't like zuck you can't say that about amazon you can't say it about google it can't say it about microsoft you can't say it about apple something happen tomorrow stock step back we already have bazel's basically out so the tesla if elon ever something ever happened to him this would be a great short controversy if you will um i would bet the stock would go down by third and that's that's the hard thing would you agree or no i i mean maybe maybe like a reactionary right reaction area um maybe maybe shaved 10 to 15 off longer term yeah i could i could see that yeah sure so that's why it's hard to go higher but you're right is it a winner take all game no at some point if you ever go to where you're out in california right kelly yep okay if you go out in la or san fran everybody's driving a tesla you know it's not like here in chicago where you don't see that many but you've got where you are there's so many teslas out there at some point it's not that it's not cool anymore people want to be different and so it's not a winner take all business and so you're always going to have a number two number that's actually the best question in my mind who's going to be number two exactly that's where lucid seemed like they had some promise but you're actually thinking that rivian has much more promise i think you know the problem with lucid is it's um these luxury sedans and while you can you can leverage that into trucks into suvs it's late because a lot more competition is in trucks and suvs now okay just think about you're gonna have cyber truck in the truck business everybody's got a ev suv now i just think it's gonna be harder to do that i think where rivien is standing it'll be interesting where where market cap actually comes from it's supposed to be higher okay supposed to be 60 billion and i think it'll stay higher but if you if you track these and we'll come back a year from now and see where we are i'll bet your aurivana will have great selling truck a great selling yesterday they're in the right price segment you know 60 70 grand it's high-end it's luxury they can always go down they can always go down and have a basic version of that for 30 or 40 grand it's like tesla did going from model s to model 3.
um lucid started and once they have the uh lucid uh air i guess it is from dream to air i think yeah going down yeah i just don't i don't see that as being a huge market if you look at luxury sedans it's only about five or six percent of the market it's not a big it's not a big number interesting yeah i mean that's that's a good point uh maybe maybe they're trying to follow that sort of tesla like start with a luxury model ass but but like you say now you've got that competition tesla didn't have that competition uh so that's that's a very good point okay so you should loosen that 60 billion today market cap so it'll be very interesting now who's got a bigger market cap that's a good point what about uh the you even mentioned them uh neo and xpev uh x-bang motors do you invest in these no why there's too much competition i mean there's so much competition that you know the chinese government is encouraging everybody to go ev i mean the thing that knocked me not my socks off the last couple weeks that i think was a big reason why tesla started running it's been running since the second quarter earnings was the september um ev numbers they saw evie percentage pd adoption in china for september was 17 and a half percent a year ago it's five yes and everybody is playing in the eevee space and they're dedicated players right you got neo you got expat you got league you got byb you got four big players plus you got all the german company and you got tesla all bringing these up it's just very very competitive and i worry about it the melting pot of cars is in china is what you're saying yeah and the competition is intense when you look at expat they're bringing out 25 000 vehicles already and they have you know if you look at they're not making money but if you look at like the autonomy that they have they have level four autonomy already and they're putting them on 30 000 cars so it's a very competitive environment it's hard for me to invest in something that competitive in the us other than tesla it's kabuki theater right they're all pretending but it's there's nobody there that that can that really can compete with tesla yet except maybe lose it except maybe you know i'd say that the one who probably has the best chance of competing with tesla is it's the cell phone business when when apple brought out its smartphone and he had everybody including myself using a blackberry i had a blackberry motorola or a nokia okay and apple brought out its smartphone it just put those guys literally out of business right because it was so much a superior product and you just you don't see any competitor matching tesla in the near term in the u.s you know which is still inside china now what about uh you know tesla's obviously in in the solar space to some limited degree uh do you invest in any any of the uh like the end phase the solar edge the sunrun any of the other uh energy competitors we have nps we like encase um you know i know a lot of people have gotten tesla solar roofs they love them i mean they think they're great i still think there's some logistical issues they don't you know they seem to wait a long time there seems to be you know i don't think installation issues but installation delays and policing issues so they still don't make money on the business they will in fact in my model for 2025 i have been making a little bit of money by 2025.
but compared to the ed business it's like a nat it's like a you know it's a minuscule so yeah we like end phase we do play solar energy within phase we think that is the best operator and uh it's now probably the 15th maybe 20th largest position absolutely all right a big big bull on end phase as well so that's that's awesome i mean there's so many people that are you know investing in solar roofs because it's really important out in california where chicago is not that big a deal gotcha what uh what do you see about uh tesla in the event and i see this question coming up here regularly folks wondering about a split i think there's a lot of enthusiasm around stock splits and that maybe it'll run again like it did the last time uh you know running up to this split and then it kind of sold off uh after the split but uh what's your take on that you know nvidia just recently exploded after their split but but they've also been just killing it so any thoughts there it'll happen um we had a split last august and uh stocks played five for one it was announced on i just put a piece out of this on twitter if you want to look at it a couple days ago i think over the weekend uh stock was at 1374 when they announced it on august 11.
um and split five for one to do the math that's 275 by august 31st which is the split effective date when it went five to one it was up 80 in those 20 days and there's a reason for this and everybody says well it's like taking a um a pizza pie and splitting it into eight slices is it worth more and the answer is yes in new york if you've ever lived in new york and you try to sell by the slice you can get a lot more for your pie then you can if you sell pies that's just the way it works because there's some people who just want to slice and they don't want to pay you know twenty dollars for a pie they're willing to pay four dollars for a big slice and you get eight of them so the point is there there's definitely value added in the sense that there's a there's a management when they do a stock split and there's empirical studies that show this have more confidence in their business it's almost like self-selection those who do splits will leave so much money because no ceo wants to split their stock if they feel bad about their business because then it drops from there right just think about that and so tesla spoke their stock last year five to one and i had all these arguments with the bears that this is imagine being very confident go forward to this year and i don't know if it's going to happen because elon's now the richest man in the world and there's a lot of political noise about that oh yeah and i don't know if he wants to even call more attention to how much money he has he's still in the stock look he's he's going to call attention to himself no matter what because that's going to continue to go up from here and you know there's a lot of reasons for that we can talk more about the gamut squeeze that's been happening but i do think they're going to do another split yesterday did it 1374.
we're at 1200 today and so the board you know boards meet usually once a month today either by person usually it's not anymore it usually by phone or video conference the next board meeting will probably be in november usually it's the second week of the month how do i know that because it's consistent with the earnings for earnings the third week the month so the board has to review the documents the materials they get approved the audit committee blessed them zach and elon have to sign them as part of the thank you process my guess is there's a board meeting in november and they'll probably consider it whether or not it happens i don't know but if they don't do it november they probably have to wait until february but i wouldn't be surprised to see another split four for one or five to one in the next six months wow and then uh do you think that could lead to uh another push like you saw that last time i don't know 80 was too much i mean that yeah and i'm look i'm i still believe the stock is worth at least 1400 so to me 1200 does not give me no that said the stock is up you know 40 in a month after lagging all year and then it suddenly just took off and it took off literally it started with the second quarter print and then the third quarter deliveries came out october 1st then the china numbers came out october 9th and then the earnings came out whatever october 26th it's been up every single week and then you got you know retail investors and look i'm not sure who's who's engineering this gamma squeeze which we could talk about it's quite incredible to watch every day but i think the retail investors are buying it at the same time that you got institutional pms falling out of love with amazon and apple and facebook saying i gotta own something right i guess it looks pretty good and it's moving a lot so i gotta own it you know and i used to be underweighted so now i've got to go to microwave it and then you've got the hedge funds they're saying hey there's money here to own tesla we can create a gamma squeeze make the market makers pay up because they've got to be hedged so you know this is all feeding into itself which it's almost like a perfect storm for the bulls yeah so so tell me about that a little bit is it then possible that a lot of people whether they're institutions or individuals had these massively out of the money call options you know it's tesla's at six seven hundred and people are buying these twelve hundred fifteen hundred seventeen hundred fifty dollar calls for twenty two twenty three whatever and now all of a sudden they're coming in the money so uh you know the folks taking the other side are or having to hedge and and that's what's actually squeezing this price up do you how much of an impact do you actually think this this gamma squeeze is having on the price action here is this just like you say institutions catching up uh is it is it a little bit of everything you know retail coming in institutions coming in the gamma squeeze what percentage would you assign to the gamma squeeze i don't know but you know unlike gamestop where i can't come up with you know maybe it's worth 40 bucks i don't know what it's worth but it's not worth 108.
okay tesla has got fundamental underpinning it's got a value that's worth using real numbers real forecasts real math dollars in my mind and any portfolio manager could do exactly what you and i do it would take an hour to say okay here's soar there's eb adoption here's evie's share here's asp here's the margin put a tax effect on it come up with an earnings sure it's not that hard and so you can come up with to your point you know somewhere between 1200 1400 maybe just looking at the ed business not putting any value on robo tax which the whole you know like park has after value is based on robo tax which i just don't see that but if i'm coming up with 1400 i got that as an underpinning and an institutional portfolio manager at fidelity or capital or you know any of these hero price they can come up with a number and that's why they'll buy it and say okay i'm underweight it's work but now it's not worth anymore so i better go at least a market weight so that's one factor second factor is i got all these catalysts happening i got you know the factories two factories coming online with basically double capacity if you try to buy a test you go online and try to buy it you gotta wait six months for the you know the model wire the monthly literally so you got that factor you got the eb credit s p upgraded their debt to one notch below investment grade last week it'll go to investment grade after fourth quarter there's no way it's not going to be investment grade because they're covering their interest expense 18 to 20 times yeah what do we get like bb plus or something like that right and we gotta get to the one grade below and yeah if this was not tesla with the history of tesla where it almost went bankrupt in you know 2018 this thing would be investigated the metrics would be investment grade the bonds trade is investment grade yeah we got that catalyst so you got doubling the capacity you got people deep frogging over each other to raise estimates you got the ev credit which will probably get past december first and then in the 1.75 trillion dollar house bill it's in there for eight thousand there's all this fight about uh if you're unionized you get additional unions yeah don't worry about that because i don't think that's gonna that's gonna survive although we lost it called by the union today which was pretty funny and then i got the cyber truck and the cyber truck isn't even out yet the cyber truck i don't know how many priorities are some people say it's a million some people say it's two million it can't really make more than about 250 000 a year at austin and some of these are never going to mature but that's a huge number right you're not really cannibalizing your other part i've got a cyber truck on order but i'm not going to get rid of my model y i use the truck for different purposes and i use my model 1.
okay so my punchline is it got this underpinning evaluation worth 1400 and then you throw the retail investor who's got newfound power okay on reddit or wall street bets and they're all talking about you know what stocks they want to own and they're all betting on tesla and then i got the whole hedge fund world saying hey this is interesting let's do some magic buy it retail i can really make some money here by just buying up lots of options and the poor market managers let's say poor but you know they're citadel they're suspended they're golden sachs they have to be delta neutral which just means that when you look at the delta okay so for an option it's how much for a dollar movement in the stock how much does the option move by so when they when a retail investor a hedge fund they don't know who it is they want to buy an option the market makers are selling the option to them but they have to be delta neutral so they have these options worth something they have to buy an equivalent amount of stock to be delta neutral and then what happens that's all taken care of and then the stock starts going up and it'll start going up tomorrow morning you watch it four o'clock in the morning and the positions they put on yesterday the delta will be higher so you got to go back and say okay because now the delta's gone from point four to point six because the 1300 now is getting close to being struck right they got a hedge more than what they did yesterday and that's the gamma squeeze and so if you think about gamuts it's the first derivative of delta so delta is the amount of change on the stock for a dollar worth of stock that's how much delta is okay so 26 would mean stock raised by the dollar the option goes up 60 cents the gamma is the slope of the delta the change in the delta right and you can look it up on td or schwab you can see what the gamma is but as the delta continues to go up gamma starts exploding and anybody who's ever sold calls and i have a couple clients i sell calls for we stay out of the market you know when we think there's a cow that's coming or earnings are coming or volumes are coming we try to like do it when there's nothing happening right yeah yeah buy one volatility is a little lower but whenever yourself falls you can watch the delta start creeping up and when they get too close you know and then and the stock price gets too too close to where i sold the calls off of you know i could sell you know 13 50 1400 calls now i'm gonna get a good return for one week okay you gotta go in you have to cover and that's what the market makers are doing the market makers are covering and they have to go back in time and say okay all these positions we put on last week we have to move them up we have to we have to cover them because the delta has moved up and that's creating this gamma space how much is it worth i don't know but it's a big chunk of it and you know i saw what happened with gamestop i never tried to short game stop or amc because that gamma squeeze the fight in the ass if you're trying to slip yeah and what i found as well what's so interesting about it just investing in general is look maybe the gamma squeeze is is a third of all the activity right that would be a very big weight that'd be a massive weight but let's just make the example that the gamma squeeze only makes up five percent of the volume just the fact that it exists and people are talking about the gamma squeeze could be enough of that dangling carrot for the institutions and retailers to hold on and keep buying right right exactly and see one of the things you can look at is the volume of tesla normally is 20 million shares a day today it traded 55 million shares yeah everybody wants to blame the retail investor for chasing it this isn't this has the power the retail investors don't have this much power hedge funds have three trillion dollars and i'm telling you i saw it with gamestop gamestop you saw the stock would like go up 100 one day and then paul percent the next day i am certain that a lot of the source of this gamma squeeze is hedge funds to say hey we can make some money here you know oh yes running it up in the morning selling it you watch today the stock ran up so much at the open and then it fell and then it zoomed up at the end you know it's like every day it's like a it's like watching a roller coaster so yeah i believe on that note though at some point uh tesla's uh euphoria will wane when the euphoria wanes again this this gamma squeeze will wane and then the rationale behind it and the actual act of it will wane uh is it not then possible that you're going to get some of these traders rotating out of tesla and we could see some more affordable prices here for tesla i guess the big question is how much will it run before then it's hard to know like i said i have a 1400 price target which i just went to last week i was at 12.
in two years i've never lowered my price target okay um and look the trick is when you get new information you raise the price regret my new information last week was eb adoption globally was way higher for third quarter than i thought it was and that's what caused me and i always try to lay out why i raised my price target that's what caused me to raise the price so i think you're right every institutional portfolio manager is like me right they try to get into a stock where there's like two to one upside down side they call this reward should be clubbing forward to risk but two two times upside for one downside that's the usual rule of thumb and then they start peeling it back trimming it when it gets down about half the time half times upside down side okay so the tesla's at uh 1200 if you got a hundred of upside you got 200 a downside that's one half okay you are going to see people at some point say this is too rich but having done this now for a couple years um and having been an investor for 30 years of my life you know upside down side targets work if you're disciplined about them you can make money mark you know everybody kind of kids that they don't have uh at this point sure they do every time jessica gets way above 10 she she cuts it back that's selling high buying lows selling high so she's very dis yeah i i admire it i think it's great i think you get you get some folks who are like oh she's you know selling tesla she must have lost enthusiasm i think these are just people who misunderstand how funds work it's not even worth really talking about so institutions will which so in 70 percent of tests stop yeah we'll start trimming once it reaches their place or it even gets closer to their price target sure and you know look as a growth investor you try not to get it early but you know you have to start being disciplined and peel back and look i look at it as once the analysts have baked in all the catalyst into the stock price so they've taken the estimates up if they get close to my estimates in 2022 which again is 12 bucks then it's time for me to start feeling back yeah example this last year we could talk about what would make tesla go down because that's kind of the root of your question we got off of tesla in uh late january early february when it hit 880 we go up at 870.
we actually hit the position and we exited the position because it had gotten close to our price point i think our price started at the time yeah you sold for two months we did and we got out because one they wouldn't give any guys this is when they were basically going from they guided every year they said we're going to grow at 50 long term and i thought that was a red flag um the fourth quarter call was not good at all and they bought bitcoin and look one we could talk about whether that was good or bad that's not the point but an institutional portfolio manager looks at it is you know they want you to reinvest the cash in your core business four businesses building new gigafactories and they have huge rois when you build new bigger factories buying bitcoin is something i could do that myself right it's like buying art or buying gold it's like why do i want you to put your money in bitcoin yeah yeah we feel comfortable with it because the stock fell we got off at 870 and stock got down to 620 we got back in because then my risk reward was back to like two times but at 870 it was like a half so anyway long story short institutional pms want to make sure that the cash reinvestment as they call the marginal return on an investment it's going to be positive it's going to exceed the cost of capital capital if you want to look at equity only it's about 11.6 so that's why people when they heard about that bitcoin investment like what are you doing we could do that ourselves just give the money back to us what what do you want to be like microstrategy or the stock totally dependent on bitcoin the michael sailor approach yeah i mean it's not what people are putting money into people want to build you know 10 giga factories over the next 10 years you know they don't want to put it in bitcoin they can do that themselves so anyway that's one of the things that as long as bitcoin stays small it's a billion three think of it as a billion three of their trillion dollar evaluation it's minuscule but if if that if that bitcoin investment went to zero tomorrow it's a dollar off the stock price right there's a yeah that's a good point it's not a big deal yeah microstrategy i think they hold somewhere around seven and a half billion in bitcoin and um their market cap is about seven and a half so the market has basically said the company is worthless you're just investing in the bitcoin and it's interesting to me since michael sarah i listened to him he's on nbc today yeah anytime he says institut you know corporate america and i should be in corporate america it's going to buy bitcoin i just shake my head and say they're never going to go into bitcoin because it's drilled into you as the cfo and the corporate treasurer you invest in the business and what's left you give it back to the show if you've got access to all the things you need to grow your business so all the gigafactories which is where they should put the money you pay down debt you buy back stock or you paid out i don't think tesla should pay out dividends because that really restricts you it's very rigid but if they wanted to buy back stock whenever got hit i think that would be a good use of cash i would rather than pay down debt for now they have about eight billion dollars worth of debt which is minuscule they can get rid of all their debt get to the investment grade rating and i think that's good because there's a lot of mutual funds that can't own stocks with a junk bond rating so that's what i would do i would basically pay down debt with their cash if they don't need for gigafactories and then they can buy back stock opportunistically if it gets hammered because you know the china first month of the quarter numbers are always bad because they ban meaning this is what the media says they're beheaded because they export out a lot so the domestic number which is residual always looks weak and they get me to say oh china demand is falling which is what they said back in july is what they say every month the first month of every quarter and i'll probably say in november because my my bet is you're going to see a big drop from uh for october which will be reported november 9th that's the first month of the fourth quarter you'll see a big drop from september where the number was a record but hopefully investors have learned the way this works that the first month of the quarter they export out the second month of the quarter they export out about a half the third month are all domestic but that first month you satisfy the exports first so that's something that could happen that could make the stock of them a bad what would be a bad investment of the cash building restaurants would be a bad use of the cash okay let starbucks or mcdonald's pay for the right to sell food at your charging stations don't go build your own restaurants you don't know how to build restaurants you know i i know that elon's brother builds restaurants but that's just not your core composite it's not why and restaurants are notoriously dangerous uh business in general so you mentioned crypto you brought it up do you own crypto and uh what do you think about it look i don't own it because i can't value it i can't using any kind of you know discounted cash flow discounted earnings comparable i can't use any of the traditional evaluation methods but jerry you don't need any of that stuff you just know somebody's going to pay you more tomorrow yeah greater pool theory when the music music stops yeah i have friends of mine i have people in my family knowing crypto you know and you do what you want i'm not going to own it but i don't need to i can i can look at the russell 3 000 all day long come up with great names that i think can double over the next five years i don't need it okay give me some of those uh i just gave you one celsius is a great name spotify is a great name uh airbnb is another great name i think snap snap's gotten crushed because people think you know you think they can't figure out the algorithm you know for the new iphone uh yeah yeah um they'll figure it out um ttb is another one you know they trade desks they can figure out you know ways around the iphone code where they can like group things together people together they don't have to know that the specific people they can just look at it as population they have algorithms that can get around it and convince advertisers it's not it's not about that the advertising doesn't work on a snap or you know even twitter's a good example um it's just they don't have the tools to measure it measure the roi which they need to develop so that's just thinking about first party tools versus third parties yeah but i mean like roi measurement in ads is the easiest way to sell more ads if you can it's conventional i mean that's when i used to work i used to be a brand manager at jmj you know we would do it using surveys i mean you can you can measure roi but you can't use it you know using your phone anymore okay we'll figure out ways to do it so we like that we like etsy um hey that's one of mine too nice what about pinterest what pinterest i struggle with i i just don't know if it's if it has lasting power yeah i agree like a snap or twitter has lit we don't own twitter anymore we used to twitter's different because it's mostly brands okay so like you will advertise on it united airlines will advertise on it they don't need to be able to capture everybody's individual data which is big branding so twitter's probably fine snap is the one we own we think it'll be fine long term okay wow that was interesting um okay so now i want to ask you macro elon musk responded to jack dorsey and kathy wood and all of them kind of arguing on their own pedestals about inflation jack dorsey says hyperinflation is coming elon musk says he sees costs pressures going up kathy woods saying the velocity of money's down so money circulating less therefore pulling inflation down and we also know that every manufacturer is double triple ordering right now as soon as this double triple ordering stops we clear up these supply backlogs we could be in a deflationary environment i want to know where your head is on this i view inflation as being transitory you know you look back at every time we've had one of these epidemics and they don't look just at the u.s what you see is the government really creates a lot more uh money to the fed you know the fed will put out lots of very easy money policy monetary policy you see there's a lot of physical stimulus because you're trying to offset the fact that the economy closed down while the epidemic was raging and you can go back 70 years and you can see this happens every time usually what happens afterward is you get a lot of physical stimulus you get a lot of physical stimulus and you got easy money for you know a year or so and you get this temporary inflation the temporary inflation is because you get a lot of shortages you can't today you can't get enough help you know you talk to restaurant owners they're trying to hire people at 20 now and they can't do it they operate with limited hours um and that causes treasure inflation but like if you were to go talk to an uber driver today okay now all of a sudden there's a ton of uber drivers out there and the uber fees are coming down okay you're going to see that with all kinds of commodities as more and more people go back to work because their safety has been exhausted their benefits have been exhausted to your point as prices go up you always get more supply because it's more profitable for folks to make stuff you're going to see the supply shortages ease over time i don't know if it's going to be six months diamonds whatever but they release they will be transitory they'll have inflation come down so i'm not buying the argument that this what what um powell didn't call transitory inflation has now somehow turned into secular inflation not by him right right it just it seems like the tilting point has just been delayed a little bit sort of peak inflation and now you got this risk that you got governments particularly in europe because europeans sometimes do they worry more about inflation than we do okay because the hyperinflation had after world war ii you have the risk that people start really being restrictive in their fiscal policy or their monetary policy and to your point that pushes us into a deflationary cycle because you've got too many goods and there's no more shortages there's just too much supply now i believe that you've got yellen who's a dove you know when she was running the fed powell's a dove and you still probably have the majority of fed members who were dovish okay so i don't think powell will make the same mistake i think powell is going to remain dovish they will start tapering which remember tapering is just taking away the punch bowl okay so the punch bowl is being replenished at 120 billion dollars a month 120 billion out this month which means they're buying bonds okay so they're pushing long-term interest rates down we're going to do 105 next month and then we're going to do 90 the following month and we're going to 75 the following and over time the punch bowl stops being replenished because everything's fine again okay that's what i think is going to happen and look if we start seeing bad data like let's suppose gdp which you know right now let's say 4s to late 2022.
but i do worry that you get so many people who are screaming inflation inflation inflation because they're looking at where it is today yes yes there's no perspective of history here that every time you have one of these epidemics you have massive fiscal policy benefits because they close the economy for a while and they have massive monetary policy and that stops okay and once it stops you're going to have more deflationary force by definition so i'm much more in the camp of deflation is still as much a risk as inflation i mean look there's four things this is the secular stuff that are driving deflation okay one is you got global outsourcing one is you got price transparency one is you got automation and the fourth is demographics people getting older they're leaving the workforce um global price transparency is the last two weeks substitution so it makes everything real competitive global global sourcing and you can get the cheapest goods possible whether you're nike or lulu or anybody and in demographics people get older they leave the workforce and they don't spend as much they don't have as much income that's deflationary you see that's that's what really happened in japan that's why japan's place went to zero and you're seeing that all over the world yeah i've got those forces that are secular and then i have this temporary inflationary stuff which is because of covet and now this massive stimulus but you know i i look at that as being temporary and this will all take care of itself once people start producing goods again and once people run out of benefits they have to go back to work yeah well i don't want to stay home and day trade not everybody can stay home and day trade i see yeah so yeah i mean i agree with you as well when you say uh inflation might be so evident now because uh to and such a fear for folks because it is so evident now we're seeing it happening right now it's kind of like pain is always the most painful while you're in pain but your memory of it or your expectation of it is is never as bad uh so uh i agree with you uh and uh i don't think you'd probably be the right person to ask if you think crypto's gonna crash when we start heading towards deflation you know i've been i've been thinking crypto is going to crash well it almost crashed back in uh july it went to 29.
but i can't i can't figure out a way how to value it and i've done on twitter and i've got a lot of fires they tell me how you value it and people do what you do they say well it's going up you just sell to somebody else let's not tell me how to buy it you know um that's all we got man that's all i got here it's like a network effect you have to calculate the value of the network and you can put a value based on how many people are in the network and that sounds plausible so i'm not predicting it's going to crash so i've come to grips with tesla's going to hold some as long as it doesn't grow i'm fine with it again tesla if tesla's bitcoin investment went to zero you'd have to knock the dollar off the share price not over earn it it's worth a buck out of you know twelve hundred dollars it's the same thing like you said if you include energy or insurance it's like a few dollars of the share price like nobody cares or even like robo tax robo taxi is probably the most divisive topic yes you know tesla has an advantage you know they've got two million cars running around collecting data you know they can feed into the you know the dojo the dojo can like look at all these different scenarios and say you know in this situation this is what you should do based on you know what what cars are coming and where you are in the world and you could you could have like uh you know this this this ai driven machine driven uh network that basically can drive all these cars all over the place fine i get that the problem is that you know a lot of the equipment was designed back you know for 2016 2017 type hardware and a lot of the especially the chinese autonomous vehicles you know they're spending a lot more per vehicle on hardware than tesla is so they might have where tesla might have you know eight cameras okay or you know um but no lidar no radar anymore you know that the chinese makers might have 12 3 lidars and one radar and so they don't have the dojo network they don't have like the ai that tesla has but they're doing okay and i use your state of california as a good example there are eight players now been approved for autonomous vehicle testing tesla i would think would like to be approved for testing but they're not and to be approved for testing if you read the fine print it says you've got to be level three to level four and they're not yet okay because there's still too many interventions so i'm not saying that it's a bad even what i'm predicting is you'll see uh just like when you used to buy a car you could have a base stereo you could have premium stereo and i'm not saying intestines base but you could have two levels of um autonomy one that's more of a commercial great autonomy and one's more consumer great autonomy so i think for robo taxi which is commercial you're going to have cars that might be you know much more expensive that people buy they're equipped with all kinds of stuff in it to make sure that they can drive autonomously including lidar radar more cameras whatever and i think unless tesla wants to do that it's going to be hard interesting oh that's very interesting so so what you're saying is we might see this you might for example buy the model x full self driving but in the future uh you might have to add on um the commercial package to make you legal for california standards to sign up for uber or whatever right maybe and look i used to drive pushes it was a bose stereo which is pretty good push charges for everything like two grand extra you'd have the basically you pay two for bows you'd get a burmeister for seven and the burmeister was like you get in the car you can sit there all day and listen to it i'm just saying autonomy is one of those things that you could add all kinds of hardware to make it better and i'm not an engineer and everybody knows but you're not an injury you don't know anything yeah that's true but i look at what a lot of the competitors are doing a lot of competitors are putting a lot more money into their hardware than tesla is right now and so all i'm saying is it's not a fade to complete the tesla gets to the finish line first because once they get their fsd to work perfectly because they're bringing all this information in all they do is flip a switch and voila they have instant distribution okay whereas nobody else has that so i'm saying tesla will probably get there by 2025 but i think a lot of people are going to get there by 2025.
yeah i mean really i mean personally i think all tesla really needs to do is throw on forward-facing lidar my opinion because you're going to have hate mail when you say that okay trust me because elon hates lidar he just thinks i mean that investment that's what he it's true i i i guess maybe i i don't know i mean maybe i will uh i've i've mentioned that a few times on this channel so maybe i'm a little bit more callous to saying that but uh you look at a company like uh microvision tesla could buy them uh i mean it's it's a fraction of uh i mean what what's microvision now i mean it can't be that expensive but anyway you buy microvision you have forward-facing lidar it's just not that hard throw it into the rear-view mirror console it's a 1.3 billion dollar company it's it's nothing and i wouldn't be surprised because i think what don't people don't appreciate especially in china they're putting a lot of money into their autonomy and a lot of them are level four already even the cheaper ones and i think at the end of the day that's going to force tesla to have to spend more on the autonomy hardware i see i agree with you on that uh you see it like even um nvidia see nvidia has written on their blogs i have this written down here nvidia has long recognized that lidar is a crucial component to an autonomous vehicle's perception it's kind of interesting because i i really like nvidia and i i believe and trust them so i do think this is a little bit of a blind spot by elon but again i'm also not an engineer well and when they made the decision not to use lighter lighter was very expensive at the time yeah and a spinning so look i don't know the answer i just think to put you know let's suppose you have a three thousand dollar price target on tesla without naming names which 1500 comes from evs and 1500 comes from robo taxi where you're saying you know if you take every one of these supply supply-driven models every one of these robo taxis number of hours per day um number of cents per mile number of miles per hour number central mile here's the math that's a supply driven model as opposed to demand model is what's going to be demand for you know autonomy and working into that and look if i'm uber or um lyft i'm not just going to give up i'm not just going to let you know tesla come in and take my business it wouldn't surprise me to see more like subscription models that you have with cable where you know you pay some monthly rate and you can use it all the time because you're not now talking about giving up why do you think uh lyft and uber shut down their self or sold off their self-driving segment but they're using they're using other players they're investing in um third-party um autonomy units and that's that's what i think i don't think they thought they could do it themselves i think they were better off pitching their wagon to other autonomous or do you think um they're going to go for like the hertz model where hertz is uh renting these things uh maybe full self driving individual customers rent them from hertz and then and then tesla has the full self driving through that so it's kind of like uber's using tesla see you can't rent a tesla today through herds that will drive you by itself you still it's a level two autonomous vehicle right and you have to be look you you can watch all the youtube videos there's a lot of interventions they're nice have you been in it yet the full self driving sure it's hard it's hard for me to imagine because i'm looking at it today because every time i've been it i mean i have it i have an fsd car it's it's like somebody said what's it like i said well i like watching i hate to say this but it felt to me like a drunk driver you know he was 17 years old yes the first time i drove it you know because i talked about a couple weeks ago when i got it and it it makes mistakes right it doesn't do well with what they call unprotected less when you're approaching an intersection you know on the light you have to like go across two and trap doesn't do that well it doesn't um it's not something that you could just kind of let it drive itself from point a to point b now i don't know if there's anything that's like that but all i'm saying is it's you're a couple years away from a level four level five tesla vehicle being put in a hurts and they just push a button or they stay into their you know into the air take me from here to there i just don't think area and so therefore and i can't figure out the pricing if you have a prescription model it's not going to be a dollar per mile some people are assuming it may not even be 25 cents a mile and you have a lot of players trying to do this and so on it's going to be competitive i'm not saying tess is not going to get there because they have the best engineers in the world working on this i'm just saying it's it's not a beta complete that they're going to get the first market okay so two competitors i want to ask you about uh and then uh then i'm gonna uh we'll we'll wrap it up so i don't keep you all day uh apple car and then i'll save the other name because you'll probably just laugh it off but we're gonna start with apple car is this a risk even have a chance why haven't we seen this thing is this a joke are they just going to end up partnering with somebody like lucid so that way uh you know lucid's got the car apple's got the software right like what is this i don't see apple doing much it's kind of like i don't see tesla making an iphone good point for competency i don't i don't think apple will ever have a car that can rival test they'll try right but i think the short answer is they'll partner up with somebody they got more capital than anybody they can use their stock which is worth you know 2.8 trillion dollars or something and buy somebody for 50 billion and that's the way they'll get into autonomy um i don't see them doing it themselves that's not their core competency that's not what they do so i would i don't say it's a joke but and i'd say they'll try but i think they'll fall short they'll wind up buying somebody wow okay do you invest in apple i don't own apple um i wouldn't be honest with you that's 2.5 trillion um look apple's expensive the way i look at valuation but i look at you relative to growth if you think about a discounted cash flow there's only really four variables there's earnings there's the growth rate there's the history rate there's the beta okay that's it and well you use the beta that's for you to pick your discount rate other people pick it out of the air okay but i can look it up and see this i'm looking 1.6 bloomberg right now apple's growing their revenues at eight nine percent okay and it's trading right now at 26 pe so the way i look at the world it's 26 divided by eight or nine it's trading about three times a peg which by the way that's what the s p trades at two point eight two point nine russell one thousand growth which is the universe in which that's competes uh 22 peg is about 2.1 2.2 okay you know where tesla's trading at one eight one nine probably one nine today i haven't calculated but it's probably one eight if they got 55 percent growth and they're trading at 100 times my estimate for 2022.
that off the top of my head so tesla still looks cheap to me apple i can't own it when it's got a 2.9 peg i'd much rather on google which we own google's got about a one google's about the same as tesla today you know it's got nice growth rate you know it's called 18 16 revenue 18 earnings and as of today google said yeah i think apple's just been killing right now because of uh its growth here during the pandemic but you're right it's growth rate i mean they're expecting 3.7 percent and 22 5.5 23 6.1 24.
26 times it's growing at 16 that's pretty good the cheaper cheapest stock i look at in the mega cap space magnet cap defined is over 200 billion mark cap is facebook but facebook has hair you know the whole metaverse changing the brand and i actually think that's a smart idea you know yeah with the google approach but i can't get excited about facebook because people aren't using facebook like they usually they use whatsapp they use instagram but facebook is the lack of a better word dying facebook product yeah well i i kind of agree with you i don't like facebook either i do however and this is not the other stock i wanted to ask you about i do like matterport now don't let me saying that influence your thoughts on that do you you into matterport at all no i haven't no just 3d scanning real estate like a physical space is right i see that as a potential bridge to almost metaverse mostly because maybe because i'm from the real estate space i'm um a little bit biased towards these 3d scans but um my vision of the metaverse is uh super brief uh somebody could scan up there you could scan up whatever property you live in and uh invite over 10 different contractors into your your meta home get your estimates that way forget having to invite them over in person you know well that's that's the way that's the future yeah yeah exactly okay so the last thing uh and i have a feeling you're probably just gonna laugh this one off but i'm gonna give the the best bull case i could think for him nicola okay nichola i know i know i know i told you but i i gotta say you gotta give him credit for this idea that uh putting hydrogen in a battery life and having a battery electric vehicle having this together would create demand for hydrogen fuel stations which means maybe we'd actually finally get a hydrogen transition which i just don't see happening otherwise you know you got like plug power has their hydrogen uh commercial vehicle partnership with renault out in france but nobody's got hydrogen stations so it just seemed like that nickel idea that initial badger idea of hydrogen battery the idea was good they were complete fraud of a company but but what do you think about that idea and then maybe separately the company do they have a chance you have kids uh-huh okay would you let your wife and your kids drive in a nicola badger that's fueled by hydrogen i i mean i guess i haven't thought about that so you're you're anti the explosive the hindenburg effect and elon has said this it's an unstable gas and it's not it's not the most easy to use uh power in the world and i just think there's a reason why you don't have hydrogen-fueled vehicles you know driving around the road think about if one gets gets hit you know just think about one gets into an accident i just need points it's unsafe but i don't i don't see it being commercially viable nickel's going to go away at some point either somebody i don't know if you've ever talked to people there um i mean i have and it's that's really kabuki theater at nicola i'm sorry and this is before trevor milton it was kabuki theater and you know you could you could talk to other people there i think they're just making it up they go on look they'll have prototypes um you know right now they have i think one client they're supposed to be delivering vehicles by the end of the year anheuser-busch and if they don't get their vehicles to them you know that's their last client and i just don't see them ever producing at scale vehicles in either arizona or in uh i guess the plan over in europe and so i put i put their value evaluate what they have in cash it's about two to three dollars at some point they'll realize that they'll just sell it because they're gonna run out of time so so your discounted cash flow is where's the balance sheet here it is this is what it's worth three bucks it's cash that's great gary black thank you how do people follow you uh at garyblack00 on twitter uh that's the simplest way or you could go to ffnd which is the ticker of our active etf um we just post 100 million dollars today actually in assets not ffd but our firm and our premier product is ffnd you can find us on twitter just go to go the website at the future month future fun awesome awesome thank you so much for being here this has been amazing if you don't mind stand by for a moment for everybody watching appreciate it and until next time you
Comments 0