Venture Life Share Discussion Threads

[doc60] 06/5/2020 17:47

Another bear case for Tesla is that Elon is a bit of a nutcase 😊

[doc60] 06/5/2020 15:59

Tesla are ahead of the game with respect to the motors, batteries and associated tech compared with the major manufacturers. The likes of Mercedes were slow to invest in EV R and D. I follow a car forum of petrol heads, some of them have bought Teslas and swear by them and will never buy an ICE daily car again. They'll keep/buy a conventional sports car as a weekend 'toy'. Quality control has been an issue but appears to be improving. They seem happy with the buying experience also. Instead of trawling around dealers and haggling, it's just like buying an iPhone from Apple.

[attrader] 06/5/2020 15:15

Thanks red, good points for me to dig deeper.

[adamb1978] 06/5/2020 14:52

Apologies attrader, I was looking at the trillion figure

[redartbmud] 06/5/2020 14:31

attrader

It is also possible for conventional vehicle manufacturers to transition to EV's. whilst maintaining, and slowing down production of petrol/diesel vehicles.
1. Stop development of new petrol/diesel models.
2. Switch R&D to EV's. That cost is already factored into budgets.
3. Continue to produce existing petrol/diesel models to satisfy demand. Generating revenue & profits.
4. Sell EV's through dealerships, alongside existing conventional models.
5. Convert factories to EV's, or sell redundant factories and replace them with new factories more appropriate to their needs.

Just normal business practice.

red

[attrader] 06/5/2020 13:47

Tesla Roadster ->

[attrader] 06/5/2020 13:40

Avg car sells for 42k with net margin of 10k. 10k x 10m = 100bn

[adamb1978] 06/5/2020 13:37

"Tesla can possibly sell 10m cars in 10-15 years. If so, company will turn 100bn profit "

Thats $100,000 profit per car. How do they earn that sort of margin?

[attrader] 06/5/2020 13:20

I have been reading up on Tesla and leaning towards bull case here.

- Tesla is ahead of its competitors. Battery, Brand, Net Promoter score all much better than other carmakers.

- Other carmakers have significant investments in existing factories which they can't abandon. New factories will need significant investment which is not an easy to raise. Focus & investment is diluted which will result in mediocre products.

- Carmakers are tied with dealers who make their money on servicing spare parts. Carmakers will have to cut additional concessions thus reducing their profitability and return on investment on EVs. Tesla on other hand has gross margin of 25% as it does not use dealers.

- Tesla is marginally profitable (ex cost of debt servicing). If they can scale operations without having to raise massive capital then they will keep taking market share.

- Govts mandating EV in various countries is going to help EV manufacturers

- Tesla can possibly sell 10m cars in 10-15 years. If so, company will turn 100bn profit justifying trillion+ mcap

I am looking for bear case. What can go wrong and why?

[adamb1978] 06/5/2020 09:24

Hi Apad

Yes, fair point re the dominance of the S&P by a few names. Its another reason why I dont see it as having a high likelihood of breaking through recent lows - unless we get to another real investor capitulation point and people running for cash, the volume of sellers for those names is likely to be a lot lower.

That said, I dont think the US has a good handle on the virus and are desperate to 're-open' when really a lot of it never closed. Cases outside NY are still increasing. Unless the warmer weather has a big impact in the spread (its not doing so in Singapore, Brazil, Mexico, Peru and other places) then there has to be a high risk that they'll need to re-implement measures to control it in a couple months time

Adam

[apad] 06/5/2020 09:13

6/5/20

Love these stories.
"In the five years since Mr Storonsky, a Russian-Brit and a former derivatives trader in his mid-30s, co-founded Revolut, the fintech toddler has spread into stock trading, current accounts, foreign exchange and cryptocurrencies. Mr Buffett once dubbed cryptocurrencies such as bitcoin as “rat poison”. Revolut wants to expand further, perhaps into car rental and ticketing apps that have been brought low by the travel lockdown. Mr Storonsky talks about flogging airline tickets at cost and cross-selling Revolut’s card services and foreign exchange via its financial “super app”. The group, which is still lossmaking, has hired an M&A team to see what’s about. Martin Gilbert, deal junkie and former boss of Standard Life Aberdeen, is now chairman, too."

I found the article on Buffet interesting because it wasn't the usual genuflection, Hydrus.
I am interested in practice, but we are genetically programmed to create heroes.
I was surprised Berkshire owned any airlines - the Wright Brothers comment is famous.

"Oil prices surged on Tuesday as optimism around ongoing production cuts and a recovery in demand with the reopening of economies around the world pushed prices higher." Folks are driving cars again, Red.

If I was set up to buy US shares, I'm sure I would have bought Disney. Near miss that!

CityPub interview in January Before Virus (BV)
www.proactiveinvestors.co.uk/companies/news/903083/the-city-pub-group-shores-up-finances-into-2020-903083.html

Some rule based stuff about BUR dual listing. Pointless rns. Far too late buying BUR. Lesson for the future.

NTQ FY in June. Is this sensible for a company trying to survive?
"Enteq, the oil and gas drilling technology Company, announces that on 5 May 2020 it issued and allotted a total of 357,569 new ordinary shares of 1p each ("Ordinary Shares") to a senior manager who is not considered to be a person discharging managerial responsibilities in relation to the award under the Performance Share Plan ("PSP") "

Adam, the problem I see with forecasting the big indices is their dependence on a very small number of companies - particularly the S&P. I am worried about the effect on ordinary businesses and consequently on consumer demand. An example, will a household name like Mark Warner survive? Unless things change very rapidly such companies may lose a year's worth of business. Still, probably a worthwhile exercise making a judgement to inform one's trading.

Stairway 1.6% down YTD. BOO and FEVR dominated as usual! Still frightened by SOS, still impressed by their emails. 😊

GLA

apad

[adamb1978] 06/5/2020 08:13

eel

Agreed. Markets seem toppy to me. Q2 will be horrendous, Q3 will be very bad but obviously better than Q2 and then as we move through the following quarters unemployment will be higher than normal, people who are employed will be spending a bit less and companies will be investing and hiring less. It typically takes 10 quarters for output to reach its previous peak after a recession - markets seem to be pricing in less than half that this time.

My base view on the implications of the above for markets is that we see UKX in the 5200-5400 and S&P in the 2300-2500 range at some point between now and August. The reasons for not expecting lower is central bank action and also investors having few/no others places to put their cash. I call that my base view, and put about a 20% chance that markets fall beneath that level for a sustained period, and say 20% chance they dont get down to those levels and stay elevated.

Adam

[redartbmud] 05/5/2020 22:20

Broker Forecast - Peel Hunt issues a broker note on Boohoo.com Plc
Peel Hunt today reaffirms its buy investment rating on Boohoo.com Plc (LON:BOO) and raised its price target to 350p (from 300p)

red

[eelanguilla] 05/5/2020 20:40

not sure what to make of the market atm ... seems overly optimistic. fdev tm17 and fres as well as the more boring tsco are my big winners out of this. rdsa dont know what to make of it. fsj is below my entry lvl but not by much ... feels wrong not running all of these but fdev has been so good might have to top slice. for what that is the question.

[redartbmud] 05/5/2020 19:37

Rdsb

Looked at a short term trade out, around £13.20 but didn't.

Rsw

No visibility, so no idea what yhe results will look like.
The share price has been perky of late. I hope that isn't hot air.

red

[apad] 05/5/2020 17:16

5/5/20
"Demand for new cars fell by around 97pc last month during the coronavirus lockdown.
Around 4,000 new cars were registered in April compared with 161,000 in the same month in 2019."

Doesn't seem to be affecting the supply chain companies enough? RSW rns on the 12th red. They are 18% below my top-slicing sale in Jan. I'm thinking of selling some more before the 12th.

Since the March 'V' RSW has moved steadily ahead of the All-Share and is now 7.5% up on 26 March start.

Excellent comment:
thereformedbroker.com/2020/05/04/this-version-of-warren-buffett/

My RDSB now up 9%. Will sell when the system settles down to more normal supply and demand. So, medium term hold.

Supply Chain Manager Fever-Tree USA
Fever-Tree USA is looking for a passionate Supply Chain Manager to join its team. We have seen huge growth year on year within the US market and wish to recruit a driven and experienced individual to help manage the supply chain. The position, based in Manhattan and reporting to the Head of Supply Chain, will play a key role as the company transitions from an import business to producing domestically. You will oversee the demand to production cycle, assist with co-manufacturer setup, manage day to day co-manufacturer operations, plan inventory levels, make production/procurement decisions, and be fully accountable for a team of one.

apad

[thelongandtheshortandthetall] 05/5/2020 16:08

Just an observation.

Autotrader has a market cap of £4.4bl
Whilst
Lookers is £93m
Vertu is £91m
Pendragon £106m

[redartbmud] 05/5/2020 11:07

Adam

caveat:
1. Quality.
2. Review if/when the story changes.

If I have a fault, it is that I hold onto a share for too long, when the story changes. Recognising the difference between short-term 'noise' and a major shift in fundamentals isn't always a black and white comparison, even though it should be!

red

[adamb1978] 05/5/2020 10:20

Thanks Val. Will have a look later for that specific items. Agree about long-term position being the thesis for investing

[adamb1978] 05/5/2020 10:08

Valhamos

I like ANET too. One thing which I mean to check before making a decision on them is current year figures given that I saw the forecasts were dipping. I wanted to check that there wasnt a fundamental reason for this. Otherwise, I agree with you

Adam

[hydrus] 05/5/2020 10:03

Novartis is on list of possible future purchases for me it's not expensive currently either.Will take a look at the other suggestions cheers both