41–50 of 67 posts
Even Jim Cramer (famous Tesla bear that he is) took issue with this “analysis”. > Setting a price target of $10 on a $200 stock "really is insane," the "Mad Money" host said. "How about $8? How about $12? Ten basically says, 'I want to get talked about. Let's talk about me.'" > "If he had done $47 would we have talked about him? No, but 10. Ten is right in your face," Cramer said on "Squawk on the Street." "I questio…
Earlier quoted context omitted.
“When the dust settles, Tesla may be a Chinese company. Tencent is the latest big investor.” This is something people don’t understand about the trade deficit. Most people think the trade deficit means that China sends the US way more stuff than the US sends to China. That is not true. Of course China doesn’t send stuff without asking for things in return. China sends stuff and then has the right to buy pieces of Ame…
Then old white people voted to change that and Trumped the status quo.
"All black people are _____" is equally unacceptable.
The $10 TP that's been published is pretty out of the ordinary and appears like it was published to grab the attention of his readers and the press. Research analysts commonly will publish a controversial analysis that can be supported by their work in order to get more investors on the phone, since that's where commissions are generated.
This could also potentially be the MS analyst sending a message to the company that they need to do more to address concerns around demand. This sort of research is typically read by investor relations, and the important pieces sent along to C-suite executives and the board.
Even Jim Cramer (famous Tesla bear that he is) took issue with this “analysis”. > Setting a price target of $10 on a $200 stock "really is insane," the "Mad Money" host said. "How about $8? How about $12? Ten basically says, 'I want to get talked about. Let's talk about me.'" > "If he had done $47 would we have talked about him? No, but 10. Ten is right in your face," Cramer said on "Squawk on the Street." "I questio…
Jim Cramer also suggested people should buy as much Lyft stock as they can ( https://www.thestreet.com/video/get-lyft-when-ipos-jim-crame... ). With his long history of bad calls, there's no reason to give any more credit than he deserves.
Earlier quoted context omitted.
What about the guy played by Christian Bale in The Big Short[0]? Surely his models were not BS. [0] https://en.m.wikipedia.org/wiki/The_Big_Short_(film)
The thing is, it's impossible to tell the difference between clever and lucky even in retrospect. It's entirely possible that his models were BS. Even a broken clock is right twice per day.
The issue is that the things you're trying to model are usually extremely complex and dynamic, in a way that's fundamentally unlike most sciences where the objects of analysis obey more or less immutable laws.
So it's less like trying to model where a kicked ball will land in a football game, and more like trying to model where the ball will be after 30 seconds of passing and running.
But Michael Burry wasn't doing that, and his models weren't wrong. He correctly saw that the characteristics of the mortgage contracts that were being put into MBSs invalidated the assumption of uncorrelated defaults that were being used in the banks' and ratings agencies' models.
I wonder what underpins these sorts of targets. Tesla has 177.29 million shares outstanding [1]. At $10/share the market cap would only be $1.77 billion. At first blush that seems like a large discount on Tesla's assets (real estate, facilities, parts on hand, cash/cash equivalents). At the same time Tesla is servicing $12.7 billion in debt [1]. What does $10/share represent? Why not $1 or $30? Genuinely curious abou…
It's all bullshit. I once did some consulting for a very well known person in the financial services industry, a recognized leader in the field. As part of that work I got to see his financial "models". They took the form of the most incredibly complicated Excel spreadsheets I have ever encountered. They were real monsters with hundreds of thousands of rows, dozens of workbooks. Being a software engineer, I wrote som…
Even Jim Cramer (famous Tesla bear that he is) took issue with this “analysis”. > Setting a price target of $10 on a $200 stock "really is insane," the "Mad Money" host said. "How about $8? How about $12? Ten basically says, 'I want to get talked about. Let's talk about me.'" > "If he had done $47 would we have talked about him? No, but 10. Ten is right in your face," Cramer said on "Squawk on the Street." "I questio…
It was a "worst case" target; the malfeasance is that it was placed too high. The equity will be wiped out if there's a restructuring. It's hard to imagine a future where TSLA is worth a low, but nonzero amount - there is a ton of debt first in line. Tesla still has a non-zero risk of failing; what kind of "repercussion" do you believe there should be for pointing this out? In my opinion, the right way to value Tesla…
See this article on the cash flow of Uber, Tesla, Lyft, and Snap.[1] Those guys have far worse startup cash flow than Google, Amazon, Apple, or Facebook. Far, far worse. It's hard to think of any business in financial history with that much cash burn up front. Some of those guys are going to have a Chapter 11 bankruptcy haircut. They'll probably all survive, but the investors, not so much. Tesla has to raise a lot of…
“When the dust settles, Tesla may be a Chinese company. Tencent is the latest big investor.” This is something people don’t understand about the trade deficit. Most people think the trade deficit means that China sends the US way more stuff than the US sends to China. That is not true. Of course China doesn’t send stuff without asking for things in return. China sends stuff and then has the right to buy pieces of Ame…
If my hypothetical explanation is correct then the implicit goal of “fixing the deficit” ends up reading as ultimately somehow ensuring China has less money, and just that China has less money, when I think that the legitimate national security concerns around the trade deficit would be better addressed by some actual investment oversight.
But, again, maybe there’s something about the deficit entitling China to stakes in US companies that I’m not seeing.
Earlier quoted context omitted.
Financial analysts use one of three approaches. There's the "whatever my gut tells me" approach, which is surprisingly common. There is modern portfolio theory. And nowadays there's machine learning. And it's all bullshit. MPT is bullshit because it uses volatility as its model of risk, which is IMHO the wrong model. They use it because it's something they can measure and so write academic papers about without soundi…
What was the unit of analysis? Stock, sector, index, market, world?
Even Jim Cramer (famous Tesla bear that he is) took issue with this “analysis”. > Setting a price target of $10 on a $200 stock "really is insane," the "Mad Money" host said. "How about $8? How about $12? Ten basically says, 'I want to get talked about. Let's talk about me.'" > "If he had done $47 would we have talked about him? No, but 10. Ten is right in your face," Cramer said on "Squawk on the Street." "I questio…
It was a "worst case" target; the malfeasance is that it was placed too high. The equity will be wiped out if there's a restructuring. It's hard to imagine a future where TSLA is worth a low, but nonzero amount - there is a ton of debt first in line. Tesla still has a non-zero risk of failing; what kind of "repercussion" do you believe there should be for pointing this out? In my opinion, the right way to value Tesla…
If they are still solvent on bond payout day, they have made a tidy profit. If they are not, it doesn't matter!