• Life changing income potential: up to $30,000+ commission for each and every referred customer transaction
• 100% free affiliate marketing program - No cost for you to join or participate in
• 3% commission on all gross client sales transaction amounts for all present and future sales and investment in precious metals and cryptocurrency
• You are also paid $30 - $100 for each qualified lead
• Example: average sale = $65,000 = $1,950 commission; sales easily = 6 and sometimes 7 figures. $100,000 sale = $3,000 commission and $1,000,000 sale = $30,000 commission
• Some affiliates have made $40,000+ to $100,000+ commissions in a single month
• Lifetime revenue share on customer transactions
Join NOW Exclusive Affiliate Program ✅ CLICK HERE Join Exclusive Affiliate Program
Disclosure: The owner(s) of this website may be paid to recommend Regal Assets. The content on this website, including any positive reviews of Regal Assets and other reviews, may not be neutral or independent.
Table of Contents:
- TSLA Options in 2021
TSLA at the end of 2020
A summary of where TSLA was at at the end of 2020, and my opinion on TSLA options at the time.
Tesla in 2021-2023
In this section I present my conservative financial projections for Tesla for 2021-2023.
Stock Price Predictions
Stock price predictions based on the 2021-2023 financial projections.
Evaluating the Attractiveness of Call Options
An evaluation of TSLA call options. In this section I share my opinion on how (un)attractive I think various options are.
A conclusion summarizing my stance on TSLA options today.
- Tesla's Businesses
LoB #1: AMaaS
This section talks in length about the market size of AMaaS (Autonomous Mobility as a Service). It also talks about Tesla's potential within that market.
LoB #2: EVTOL
A discussion about the EVTOL (Electric Airplane) market and what it means for TSLA investors.
LoB #3: EBoats
A brief summary of the electric boats and ships market.
LoB #4: Energy
What will the world look like when we transition to 100% renewables? This massive section goes in-depth on 100% renewable energy generation and storage markets and what that would mean for TSLA.
LoB #5: HVAC
To be or not to be excited about the HVAC opportunity?
LoB #6: AI
In this section I discuss the potential of Tesla's AI business. Chip sales, Dojo as a Service, and Tesla Bot, it's all there.
A ranking of all of Tesla's lines of business in order of interest to investors.
- TSLA's Potential
A financial model of what Tesla would look like if everything discussed in the "Tesla's Businesses" section comes to pass.
In this part, I present a large model projecting Tesla's financials over the coming years, as well as how it may transition from what it is today into an AMaaS juggernaut. I also talk about the things I learned from creating and playing with this model.
A brief conclusion to this section.
- Personal Portfolio Management
A discussion of long-term risks to TSLA investors.
A personal example of how I plan to manage my portfolio as Tesla's stock price (hopefully) rises over the years.
1) TSLA Options in 2021
Before we start, I want to recommend you to read My TSLA Investment Strategy post first before you read this section. The first section of that post about Investment Strategy is probably my favorite piece I've written in this entire blog, and I believe it's fundamental must-know information for any investor. But the part that is really important for you to read before you dive into this is the last section about TSLA options. It discusses in-depth the framework I use to make options trades, and we'll be applying the exact same process to TSLA today, in order to evaluate the current attractiveness of TSLA options.
But before we jump into that, I'll briefly reiterate how I viewed TSLA options at the end of last year.
TSLA at the end of 2020
Tesla in 2021-2023
First, I have to say that forecasting Tesla's performance for the next two years today, is much harder than it was 2 years ago when I first started trading options. Two years ago, the accuracy of financial forecasts were mostly a factor of how accurately one could predict the ramps of Giga Shanghai and Model Y. There wasn't all that much uncertainty involved in this, because we knew Tesla would be ramping the exact same product in Shanghai as it already had in Fremont, so we knew Tesla should in all likelihood be able to do it at least as fast as the disastrous initial Fremont Model 3 ramp. As for the Model Y, we knew this vehicle would share 70% of its parts with the Model 3, so that too looked like a relatively easy ramp.
Things today aren't quite as simple as that. Predicting the next two years accurately mostly depends on accurately forecasting the Giga Berlin and Giga Austin ramps. There are numerous uncertainties associated with these ramps over the next two years:
- Unlike the Giga Shanghai M3 ramp, a host of new tech will be introduced in Berlin and Austin. Mainly 4680 cells (and all the new tech embedded within those) and structural battery packs.
- Austin will ramp a completely different vehicle (Cybertruck) that is unlike any vehicle anyone has ever produced.
- Tesla as a company appears to be heavily bottlenecked by not only batteries but also semiconductors at this point in time. Not knowing how long the semiconductor crisis will last adds uncertainty, and being reliant on large scale ramping of batteries both in-house and by suppliers adds even more.
- We neither know the ultimate planned capacity of Berlin nor Austin. This is in contrast to Giga Shanghai of which Tesla had frequently discussed planned annual capacity on earning calls. So the only question was how long it'd take them to achieve it.
Stock Price Predictions
- Bear case of $15B extrapolated EBIT after Q4'22
- Bear case of ~$20B extrapolated EBIT some time in late 2023
- Some hard to get a good feel for potential upside
- As for early 2023, it seems extremely unlikely that Tesla will be valued at less than 50x $15B extrapolated EBIT, which is $750B for a stock price of about $650.
- Furthermore, even a 75x EBIT multiple seems quite good value for Tesla, and considering the $15B projection is on the conservative side, $1.125T for a stock price of about $975 also seems like a safe-ish target.
- As for late 2023, it seems extremely unlikely that Tesla will be valued at less than 50x $20B extrapolated EBIT, which is $1T for a stock price of about $850.
- Furthermore, even a 75x EBIT multiple seems quite good value for Tesla, and considering the $20B projection is on the conservative side, $1,275 also seems like a safe-ish target.
Evaluating the Attractiveness of Call Options
- A ton of investors sold TSLA at $690 during the S&P inclusion, which was a massive selling opportunity. Then in January as the stock ran up further to $900, big TSLA whales like CWI and Baillie Gifford trimmed their TSLA stakes further (just look at fintel.io data). I struggle to think of why any large institutions would sell off TSLA below $600, unless it's indiscriminately sold off during a macro crisis.
- If Tesla achieves anywhere close to my conservative predictions (even if it undershoots by 20%), I cannot fathom the stock dropping much from where it's currently at, unless there is some severe unforeseen event or macro-economic crisis. For a stock to go up requires buyers to materialize, and it's a bit more complicated to guess who/when/why will decide to buy TSLA, but I think one can say that anyone currently holding a large number of TSLA shares is unlikely to sell those over the next 18 months unless something really crazy happens.
2) Tesla's Businesses
Now that we're all warmed up, let's discuss the much more interesting and exciting part of TSLA. Let's talk about TSLA's long-term potential.
The rest of this blog post is divided into three sections. In this first section, we'll be looking at all of Tesla's current and future lines of business, researching their potential, and discussing how much of that potential Tesla is likely to live up to. We'll then wrap this section up by comparing all these LoBs (lines of business) and deciding which ones are the most exciting for investors, and which ones are relatively uninteresting opportunities.
In the next section we'll use everything from this section to create two financial models, which I will then use in the final section to talk about what TSLA is worth to me today. In that final section, I will also talk about my personal future portfolio management and divestment decisions.
Although this section covers the potential of Tesla's various LoBs, there will be less focus on the chance of success of these LoBs. For one because you can simply refer to My Tesla Investment Thesis 1 and My Tesla Investment Thesis 2, where I already talked in-depth about a lot of Tesla's businesses, and also because one of the things that has changed over the past 12-18 months is the market's perception of Tesla. It is now common knowledge that Tesla is the leader in EVs and that the incumbents are the ones that need to catch up.
I still don't think the market's perception of Tesla is perfect. The market still appears to underestimate Tesla's rate of growth, how massive of an advantage Tesla's vertical integration is, and how hard it is for anyone to compete with Tesla when road transportation moves from personal vehicle ownership to AMaaS (Autonomous Mobility as a Service), among other things. But nonetheless the market's perception of Tesla is vastly different from what it was in late 2019, which brings a lot of advantages with it, such as most suppliers now undoubtedly being ecstatic at a chance to work with Tesla.
Lastly, before we get started. Here are links to the model I've created and talk about throughout this entire section, as well as the first part of the third section of this blog:
LoB #1 - AMaaS
- Tesla Network
- The Boring Company
- Depreciation will be dispersed among many more miles. If a brand new $25k EV depreciates $10k over its first 5 years of private ownership while driving 60k miles, that works out to a depreciation cost of $0.17 per mile. Even if that same vehicle depreciates as much as $20k after 5 years of service in an autonomous taxi network while driving 600k miles, half of which serve a paying customer, that is only $0.07 depreciation cost per mile ($20k / 300k).
- A person who owns his own car will either have to spend time driving, or pay for a self-driving system. Tesla's FSD is currently already priced $200/month, which works out to $12k over 5 years, meaning it's already more costly than the $0.17 depreciation from the bullet point above. This cost is likely to be much higher for a full FSD system. Of course an autonomous taxi service is also likely to factor in some cost for the the autonomous part of its service, but it's likely to be far less than for private car ownership similar to the depreciation example.
- Private car ownership requires you to own a multi-purpose car that fulfills all your needs, from your commute to work to your bi-annual family vacation, or it requires you to own multiple vehicles that all fulfill different purposes. Both options are expensive. AMaaS allows you to use a small and cheap, yet comfortable, vehicle for your commutes, and only use a larger, more expensive vehicle the few times that you really need it. This also saves a lot of money.
- Yearly worldwide useful VMT in million miles. In My Tesla Investment Thesis 2, I used 25 trillion miles per year, which was based off of 2B predicted vehicles on the road by 2035 that travel around 10k miles per year, and factoring in 25% further growth because autonomy will make transportation much cheaper than it is today. Another way to look at this is VMT per capita, which was ~4,000 per year for a lot of modern countries in 1997, but undoubtedly smaller looking at the world as a whole. If this ends up around two to three thousand per capita, total VMT will end up around 20-30T when the world's population rises to 10B in a few decades. I also factored in a much higher bull case, because this model projects the cost of transportation to drop significantly, so there is a chance demand will also rise more rapidly. One final data point is ARK's prediction of 30T vehicle miles traveled.
- Percentage of VMT through AMaaS. Given that 85% of the population already lives in urbanized areas, I went with this as my lower estimate.
- Hours per week per AEV (Autonomous Electric Vehicle). This is on the low end in my opinion, but this number does not impact the final calculation. It only impacts the fleet size needed at any one time.
- Avg MPH. This number also does not impact the final numbers. It only impacts the fleet size needed. The speed of the vehicles does not impact the cost per mile.
- AEV Longevity in miles. This number does impact the final outcome. The longer a vehicle lasts, the less the depreciation cost. Tesla is currently at 1M miles. I'm not sure how likely Tesla is to significantly beat this in the future. I assume it's not a huge priority for the time being, but if we see significantly increased longevities, this will reduce the depreciation cost per mile slightly.
- Useful Miles. Around 50% is what Uber/Lyft are at at the moment. I assume that a large-scale AMaaS network will likely be able to beat this at least slightly due to increased efficiencies and large scale machine learning applied to fleet management.
- Avg cost of AEV. The cost to produce a Model 3 is already around $30k for the base model. Some AEVs will undoubtedly cost more, such as cargo and luxury vehicles, but the average car occupancy was 1.5 persons per vehicle in 2017, so a small, cheap 2-seater vehicle should be sufficient for the majority of robotaxi trips. Battery prices should also continue to drop, and Tesla should be able to further reduce the costs of its supply chains and manufacturing, although other manufacturers may not be able to achieve this.
- World avg electricity rate. Currently standing at about $0.122/kWh, this is surely to come down. The 2030 goal is for solar power to cost between $0.03 and $0.05, and as we'll soon see in the energy section, costs of renewables are dropping rapidly.
- Miles per kWh. Tesla's average is currently around 4, although some vehicles do as well as 5 and some as bad as 3. Tesla's vehicles are already extremely aerodynamic and efficient, so I don't expect any major improvements on this front.
250 wH/mile = 4 miles/kWh
- Insurance cost per mile. Currently around $0.075 per mile, but this should end up MUCH lower in the AMaaS future. For one, autonomous vehicles should crash far less often. Secondly, we're talking about an average cost for the vehicles of only ~$22.5k. And thirdly, Tesla insuring its own vehicles cuts out the middleman. AVs should eventually end up being an order of magnitude (or more) safer than the average human driver, so I'm forecasting significantly lower insurance costs.
- Servicing cost per mile. Maintenance cost per mile for a BEV is currently $0.061. Considering we're talking about a very low average cost of ~$22.5k here, and likely reliability improvements, I see this being lower than what it is today. Just like SpaceX, after learning how to land their rockets, learned how to make more durable rockets that require less refurbishments between flights, I am sure Tesla will learn how to redesign vehicles so they need less servicing. Especially once they manage a massive fleet of millions of AEVs, and when it makes up the majority of a robotaxi's operating cost, which it will if the costs don't drop from today.
LoB #2 - EVTOL
- Short-haul miles flown. I found short-, medium-, and long-haul data here. I've assumed that only short-haul flights are going fully electric (at least in the near term), but short-haul flights are a little over 50% of all aviation distance traveled, so you can double this number to get the market opportunity of all EVTOLs. Elon has gone on the record saying that he believes SpaceX's Earth-to-Earth is more suitable for long distances though.
- Daily Aircraft Utilization Rate. I've taken this from this insightful Quora post made by someone with four decades of aviation experience.
- Longevity short-haul aircraft in years. Current airplanes last an average of 30 years.
- Price in k$. Short-haul aircraft currently cost around $100M.
- EVTOL Margin. Margins for aircraft are currently MUCH lower than 30%, but I'm trying to show here that, even with optimistic numbers, this LoB is still not particularly interesting to TSLA investors, so I've put margin at 30%. But it is likely that Tesla would improve on the industry's average margins, just like it has done in the automotive industry.
- Flat Fee & Price per mile. I based these on this article that presents a formula that can be used for airline fares.
- Passengers per flight. Between 85 and 100 pre-COVID, according to this CNN article.
- EVTOL Service Margin. Considering how thin margins are in the airline industry, I think 20% is probably optimistic, but a lot will be saved on fuel costs.
LoB #3 - EBoats
LoB #4 - Energy
|Data from 2019|
LoB #5 - HVAC
LoB #6 - AI
- A projection of the GPU market growing 10-fold from $20B to $200B from 2019 to 2027.
- A projection of the AI market growing to $1T by 2028, about $150B of which is hardware.
- Ease of developing the software for a task
- Size of the market for selling a bot capable of doing that task
- Benefit for humanity of a bot capable of doing that task
- AMaaS. This isn't even close. AMaaS is far and away the biggest short, medium, and anything but ultra long term opportunity for Tesla.
- Energy. Mainly because of energy storage. Tesla is in an excellent position and seems likely to end up with a leading market share and best-in-class margins.
- AI. The long-term potential is enormous, and because of the Tesla Bot's synergies with AMaaS for cargo transport, AI should be either #2 or #3 on this list. Dojo as a Service has the potential to be more interesting than energy storage. Perhaps AI will be a clear #2 in a few years.
- EVTOL. This market is quite a bit larger than boats and HVAC, and Elon seems more passionate about it. And we only looked at short-haul flights. If somehow batteries improve like crazy and SpaceX's Earth-to-Earth never takes off (pun intended), perhaps the market will end up being bigger than I calculated.
- HVAC. Elon has talked about HVAC, Tesla has already designed HVAC (for cars), and it seems like an easier product to scale than boats. So HVAC is the clear #5 in my opinion.
- EBoats. Clearly the least interesting opportunity.
3) TSLA's Potential
- OPEX % of Rev. Operating expenses as a percentage of revenue as low as 4 to 6.5% are absurd. There is no way around that. However, I will be able to explain these better in the next part when I discuss the 2035 financial model, so I will get back to my reasoning for this in a little bit.
- EBIT Multiple. If you believe a blended EBIT multiple of 25 is too low, please keep in mind that Tesla will no longer be a high growth company in this scenario, but rather more similar to a company like Apple/Google. It'll be in a commanding position within its market, but its growth is small at this point and mostly comes from efficiencies/optimizations and other lines of business.
- Shares Outstanding. As we'll discuss in the next section, I don't think Tesla will do any stock buybacks any time soon, even though it'll be generating loads of cash. Furthermore, if I'm not mistaken, Tesla's higher valuation should also lead to less dilution from stock-based compensation. However, I suspect we'll see another CEO compensation plan at some point, which could add 5% or 10% dilution.
- We're talking about a company that has a majority market share one of the largest sectors of the economy. As I pointed out before, a $5T AMaaS market size is very reasonable.
- The electric and autonomous revolutions of road transportation will reduce costs by a lot. Fuel, maintenance, and insurance costs will all drop by a lot.
- Lower costs and removal of the driver mean that AMaaS can be offered at a much lower price than private car ownership. Currently MaaS (Uber, Lyft, Grab, Didi) are expensive and have small market shares, but AMaaS will replace almost all private vehicle ownership due to better economics.
- The combination of much lower costs and much larger scale will lead to very high margins in this particular industry, especially for a company like Tesla that is completely vertically integrated.
- The large AMaaS market size. 24T miles is only about double today's demand for transportation. A reasonable assumption in my opinion.
- Tesla is on track to achieve huge market share in AMaaS. I really don't see Tesla having less than a third market share, and likely much more. But if you somehow disagree here, cut the number in half.
- Low cost of operating an AEV. The components here are: cost of AEV, electricity cost, insurance cost, and servicing cost. I think the cost of AEV used is pessimistic if anything. Electricity cost used is really reasonable in my opinion. Insurance cost is also pessimistic if anything. Servicing cost is the toughest out of the bunch. We'll see how it plays out, but I don't think it's unreasonable to expect Tesla to cut servicing cost approximately in half from today's levels, when it gets data from a massive fleet and is paying over $1T per year to repair its vehicles. It'll be very motivated to reduce these costs.
- Extremely high margin business, even at a low price of $0.20 per mile. I think $0.20 per mile, which is cheaper than a lot of public transportation, is reasonable, but if you disagree, use the bear column which uses a price of $0.15 per mile and 35% market share.
- There's a distinction between vehicles produced and vehicles sold, which we'll get back to later. After 2026, which is when this model assumes FSD to be safer than a human and AMaaS to start growing, I've modeled Tesla to finance a certain amount of its own production.
- Production is relatively conservative (14M in 2030) compared to Tesla's own guidance.
- Income & Valuation
- Cash Flows
- Balance Sheet
- Appendix: FSD Economics
- Appendix: VMT per Region
- R&D. In the Cash Flow section we'll get to in a bit, I have a forecast for Tesla's employee count reaching 1,000,000 employees in 2035. I've forecasted R&D expenses to grow in accordance with employee growth. This has R&D expenses dropping from about 5% of total revenues in Q2'21 to 1% in 2035, which I think is reasonable.
- Energy SG&A. I've separated SG&A into SG&A for each line of business, because I see different lines of business bringing along with them very different overhead expenses. I have energy SG&A at 8% of energy revenues. In Q2'21, Tesla's overall SG&A (excl. CEO SBC) was at ~7% of overall revenue, but this is of course mostly automotive. We don't really know the overheads of Tesla's energy business, so I've been slightly conservative with 8%. Even if it's higher than 8% today, I'd imagine it'll drop with further economies of scale.
- Automotive SG&A. I've kept this at 5% of automotive revenues if Tesla sells every vehicle it produces, even though the model has Tesla no longer selling a lot of its production from 2026 onwards. These SG&A costs still have to be considered, because just because Tesla no longer sells a percentage of its vehicles, it will still have to pay its Finance staff, HR staff, etc. Honestly, 5% seems insanely low, but somehow some way Tesla was already a little under 7% in Q2'21, even though the S&X lines were mostly dormant, and even though it's still in rapid growth mode, meaning SG&A is likely slightly inflated with overhead costs in anticipation of near-term growth. Also, with further economies of scale over the next 10-15 years, automotive SG&A as a percentage of automotive revenue should also come down slightly. So even though I almost can't fathom how Tesla can be this efficient and have such low operating expenses, it has already proven that it is somehow that efficient.
- Autonomy SG&A. There likely is some overhead for the development of FSD software. A lot of the salaries of engineers working on FSD are likely counted under R&D, but these engineers need offices, they need to be recruited by HR people, etc. So then why is Autonomy SG&A zero? Because I reckon that these costs will be negligible in comparison to revenues. Ordinarily a lot of the SG&A of software companies comes from sales and marketing costs, but Tesla doesn't need to market FSD, because every person who buys a Tesla will see it is an option during configuration.
- AMaaS SG&A. This is the toughest one for me. I want to say that AMaaS SG&A (at least long term) will be quite a bit lower than automotive. I also can't think of a lot of overhead costs that come along with an AMaaS business. The main ones I can think of are related to servicing and charging infrastructure. But we've covered a lot of those in the costs of AMaaS (cost for charging and cost for servicing), so what's left is employees who manage the expansion of these infrastructures. Also some finance, HR, and data science employees (optimize useful miles etc.). It appears entirely logical to forecast a much lower % of revenue as SG&A for AMaaS than the 5% we used for automotive, so I've gone with 2%. It really seems nutty how low that is, but at the same time it seems logical to me.
- Capex. I've looked at Tesla's capex and capex projections for 2020-2023, and concluded that they're spending about $20B to bring online production capacity of approximately 2M over that period. That means they're spending about $10k per unit of production capacity. I've then forecasted capex to be $10k * the increase in production capacity I forecasted for that year. Tesla will likely get more efficient, but if you haven't noticed it yet, I'm a fan of conservatism in projections like this.
- AEV Fleet. Investment into Tesla's fleet of AEVs, taken from the AMaaS tab.
- Stock-based Compensation. This is based on the projected employee headcount.
- Depreciation, Amortization, and Impairment. According to Tesla's SEC filings, they depreciate machinery and equipment over 2-12 years, and buildings and structures over 15-30 years. I've assumed all capex from 2021 will be depreciated over a 20 year period, and so DAI grows each year by 5% of all cumulative capex from 2021 to that year.
- Tesla Fleet Depreciation. This is the Tesla fleet depreciation cost from the AMaaS tab.
- In AMaaS line 21, the model shows Net Cash / OPEX at the beginning of the year, which is a measure of the size of a company's cash position. Anything over 1.0 is quite healthy.
Top 25 Net Cash / OPEX ratios in S&P 500
- AMaaS line 22 has a row called Disposable Cash. This does not automatically adjust, but has to be manually adjusted for each year to a desired net cash / OPEX position at the start of next year. Think of this as Tesla management deciding at the start of each year how much money they'll spend on building AEVs for their own fleet of robotaxis.
- AMaaS then calculates the number of vehicles Tesla can afford to buy with its disposable cash off of the average COGS per vehicle that year. In reality, Tesla will probably buy the cheapest ones themselves, but that would add further complexity to the model.
- The AMaaS sheet then adds this number of vehicles to the fleet, and the Autonomy sheet subtracts this number from the cars sold.
- The Cash Flows sheet subtracts the $ amount spent from Tesla's cash position, and the Balance Sheet tab adds it to the monetary value of Tesla's fleet.
- The AMaaS sheet also calculates the depreciation of the Tesla fleet, assuming a lifetime of 10 years.
- Finally, the Cash Flows sheet adds back the depreciation cost to Tesla's cash position.
|Traffic in India|
4) Personal Portfolio Management
It's cool to know that Tesla could potentially reach a stock price of $28,455 perhaps some time in the 2040s, and that $18,690 is an indication of where TSLA could be at in 2035, but this of course doesn't mean I won't sell any shares if TSLA shoots up to $18,689 tomorrow. The two main reasons for that are risk and opportunity cost. Let's start with risk.
Antitrust / Anti-Monopoly Actions
- Tesla is engaging in a lot of pro-competitive behaviour. Elon has said since forever that other manufacturers are allowed to use its Supercharger network, and now it is finally opening up the network to other vehicles. Tesla has open-sourced its patents. Elon has said that he is open to licensing Tesla's FSD system, and that he is open to potentially supplying batteries to other manufacturers. Although I don't see Tesla supplying batteries any time soon, I don't think people understand how important this stance from Elon and Tesla could become in the future. It's the opposite how Microsoft operated.
- I would argue that breaking up a future quasi-monopoly Tesla would hurt consumers, not help them. I'd expect that dividing Tesla's AMaaS business into an automotive, autonomy/FSD/AI, and an autonomous ride-hailing business will increase costs and therefore prices. All these businesses are ahead of any competitors in their own right, and breaking them up will not change anything about them being market leaders or even quasi-monopolies.
- One also has to look at what Tesla will have done if all this comes to fruition. It'll have helped save the planet through renewable transportation, energy storage, and perhaps some renewable energy generation. It'll also have freed the world from having to spend time driving. It'll have reduced traffic deaths and accidents by an order of magnitude. It may even have reduced time spent in traffic with the help of TBC (The Boring Company). And most importantly it'll have significantly reduced the global cost of transportation by cutting it in more than half and removing all up front costs by removing the need for private vehicle ownership. It'll have done a lot of good for the world, so why would a government change something like that?
Discounting for Risk
Discounting for Opportunity Cost
- No longer have 100% of my portfolio in TSLA. Although I believe it to be EXTREMELY unlikely for TSLA to go to $0, which is part of the reason why I am comfortable having 100% of my portfolio invested in TSLA in the first place, I cannot say there is 0% chance of it happening. Currently I still think it's too costly to not be 100% invested in TSLA, but once this cost comes down enough, I'd like to put just a tiny percentage (probably no more than 1%) of my portfolio into something else, just to eliminate the worst case scenario.
- I've heard Dave Lee talk in some of his early videos about having a part of his assets in dividend generating assets to cover his family's living expenses, while he aggressively pursues 10x and 100x gains with the remainder of his assets. I plan to do something similar in the future, when doing so is less costly in terms of missed TSLA gains.
- Continue to maximize returns on the rest of my portfolio, but also factoring in the amount of time investment it costs me to get those returns. There are more important things in life than money that all take up time, and I don't want to siphon too much time away from those just to maximize returns.
Now we're finally ready for this. I'll start this off by listing the most important variables that go into these decisions:
- Personal goals. I've just discussed my own.
- Some risks not factored into the financial models.
- A potential very long-term stock price of ~30k based off of 60% market share in a 25T miles per year AMaaS market. A bear scenario for this with lower margins and just 35% market share would mean a stock price of ~$10k.
- Potentially a stock price of ~$20k in the mid 2030s, BUT multiple very hard to predict variables. If a few things go differently and/or slower, the stock price could easily be much lower around $10-15k instead.
- Although there are some potential risks and downsides, there are also some potential super long-term upsides, mainly Tesla Bot and much higher growth in global VMT due to the lower price of transportation, especially in developing countries.
There's very limited downside, even in the near term, and upside is still humongous. I doubt I could find any better investments, especially not one I'm comfortable putting all my money in to. Therefore, I keep 100% of my portfolio in TSLA.
- Big changes to Tesla's future outlook that change my long term outlook on the company.
- Options opportunities to take advantage of.
- A stock price of $3,000.
Now, because I wrote the options section so long ago when the stock price was $50+ cheaper, I'll go over that again and likely rewrite some parts, before going over everything to check for mistakes, and then finally publishing.
Thanks for reading!
DIVERSIFY and GROW YOUR IRA WITH METALS and CRYPTOS
REQUEST YOUR FREE 2021 INVESTORS KIT
Kit includes information on our company, products and fees.
Bonus: you will also receive free DVDs and a 10 year anniversary silver coin.
✅ CLICK HERE Claim Your Free Investor Kit