Tesla Posts Surprise Profit | Hacker News Reader

Tesla Posts Surprise Profit

cnbc.com

14 pointszdean6 comments

Tesla is building the infrastructure for a supercharger network. If Tesla has any common sense at all, eventually all electric cars, not just Tesla's, will depend on this network. To me, this makes TSLA an obvious buy. Who cares if Tesla sells any of its own cars? It will control the national, and likely global, infrastructure for all electric cars in the future. That is worth a lot of money.

I'm young. I have $4,000 in my IRA account. Based on my earning potential, in 15 years $4,000 will mean relatively nothing to me. So it's in my best interest to invest in high-risk, high-reward stocks with my current funds. I am going to invest 100% of this $4,000 in TSLA. I'm in this for the long play, and I believe in the company.

Yes, when you're younger you (general you) typically are less risk-averse, so you can invest in these high risk high reward stocks.

That being said, whether it's TSLA or AAPL or some other "sure thing," exposing yourself to such a large amount of unsystematic risk isn't really wise. What if Elon Musk dies tomorrow? What if a plant catches on fire? Then your $4,000 could be decimated. Yes $4,000 will not mean much to you in 15 years, but compound interest average returns for 15 years hopefully should.

I love TSLA and I have money invested, but I don't think it's wise to be 100% in anything, no matter what it is.

$4,000 compounded at 5% interest in 15 years is $8,315. (Ignoring further additions to the IRA, since those are irrelevant to current decisions). $8,315 will be about as meaningless to me in 15 years as $4,000.

> Tesla is building the infrastructure for a supercharger network. If Tesla has any common sense at all, eventually all electric cars, not just Tesla's, will depend on this network. . . . It will control the national, and likely global, infrastructure for all electric cars in the future.

I really disagree with this conclusion, especially that it would be simply a matter of "any common sense at all." Tesla currently has an incentive to develop this infrastructure — to encourage people to buy their cars — and so they are currently the only major player. But this head start is not as valuable as you might think. As soon as the electric car market is big enough for widespread demand for charging stations, other companies will build them as well. You don't think BP or Exxon could install charging stations at hundreds or thousands of their gas stations in a matter of months? It's not like there is anything prohibitive to creating a charging station, barring Tesla's ability to secure some truly essential patents on charging or (more likely) battery swapping technology. But even if they play their hand perfectly I don't give them good odds of controlling a significant portion of electric vehicle infrastructure; a head start that could be wiped out in a month by companies with much deeper pockets just won't get them there.

I'm curious why the expectation was a loss of 17 cents. TSLA made a profit last quarter, what changed to not expect some of the same this quarter? As most (if not all) of the pre-orders are filled, perhaps there was worry that folks wouldn't buy them off the "showroom" floor?

Oh, well, I obviously thought differently as I bought call options yesterday, as well as held on to the shares we already have. And I'm glad I did. :-)

Well, profit was not expected last quarter either, and analysts are generally pretty slow to act. Also there may be various cyclical or one-time charges involved; a negative income isn't necessarily a sign of being down on a stock. Especially comparing this quarter to last year's same.

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