Debate Over Tesla’s European Market Share

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Debate Over Tesla’s European Market Share
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Whitney Tilson’s email to investors discussing his response to two readers; visits with two other readers; debate over Tesla Inc (NASDAQ:TSLA)’s European market share; Elon Musk’s SpaceX launches first all-civilian flight to orbit; charity poker tournament in two weeks.

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Q2 2021 hedge fund letters, conferences and more

Response To Two Readers

1) I wanted to share some advice I gave to a reader who wrote:

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"I don't have any income other than Social Security and have a very, very small stash. I would like to try investing in something that might give me a return. With my knowledge (zippo) and a tiny amount of money, is anything possible?" – Ann A.

I replied:

Dear Ann,

I would strongly caution you against trying to get rich quickly – it's the surest way to get poor quickly.

There is no shortage of schemes out there seeking to separate you from your money, so be careful.

I generally advise people not to put any money into stocks that they might need in the next three years.

If you have any such long-term money, an S&P 500 Index fund is a good option.

If you want to pick a few stocks, however, we have a low-cost newsletter (only $49 for the first year), Empire Stock Investor, in which each month we recommended stocks we'd put in our parents' retirement accounts. You can sign up for it here.

Best regards,

Whitney

2) Another reader, Jim S., wrote:

In your June 2 e-mail, you gave your list of "Turds" and said how they would collapse. I bought a $30 September put for AMC. In mid- to late August, I lost confidence in your recommendation. I sold it for a $900 loss (about 50%). Before I sold it, I asked what your updated thoughts were on shorting AMC. I never received a response. Last week it was selling for $3. I guess I should be happy I only lost 50%.

I replied:

I named 10 turds – nine are down by double-digits in a +7% market – and the average decline is 20%. Alas, the only one that's gone up is AMC Entertainment (NYSE:AMC). Here's the data:

clost

Lesson: When shorting, you need a basket approach.

Best,

Whitney

Debate Over Tesla's European Market Share

4) Yesterday, I sent my Tesla (TSLA) e-mail list with an insightful debate about the company's European market share between my analyst Kevin DeCamp, a long-time bull on the stock (who's made nearly 100 times his money on it), and a friend who's bearish. You can read it here. And if you wish to be added to this list, simply send a blank e-mail to: [email protected]

Kevin concludes:

I think the high valuation is the only bear thesis left.

The rest of the industry is shrinking overall and growing in a very small segment ("EVs") from a very small base – ZERO – where they haven't even proven they can be profitable nor make a viable product (see the GM Bolt debacle).

Tesla will grow around 70% this year and doesn't have any legacy baggage. Not to mention Tesla's software, energy, and AI optionality. Only time will tell who's right on valuation, but I think the market is reflecting what's obvious...

My view hasn't changed since I told anyone short the stock to exit/cover nearly two years ago in my October 24, 2019 e-mail, after the company reported a surprise third-quarter profit:

I am neutral on the stock. I think it's a terrible long, but probably also not a good short right now, either.

Elon Musk's SpaceX Launches First All-Civilian Flight to Orbit

5) Speaking of Tesla, CEO Elon Musk was in the news again yesterday for another incredible achievement by his private rocket company: Elon Musk's SpaceX Launches First All-Civilian Flight to Orbit. Excerpt:

Elon Musk's SpaceX on Wednesday evening launched four civilians toward the deepest orbit Americans have traveled to in more than a decade in another milestone flight for private space travel.

A Falcon 9 rocket with a Crew Dragon space capsule on top lifted off with a fiery plume from a pad at Kennedy Space Center in Florida just after 8 p.m. Eastern Daylight Time, according to a live stream of the takeoff...

I'm looking forward to watching the Netflix (NFLX) documentary about this, Countdown: Inspiration4 Mission To Space. You can watch the trailer for it here.

Charity Poker Tournament In Two Weeks

6) I am once again co-hosting the 11th annual Take 'em to School Charity Poker Tournament at Gotham Hall in New York City two weeks from today on Thursday, Sept. 30, at 6:00 p.m. The event is almost at capacity, but there are still some tables and tickets available for poker players and cocktail guests – you can sign up here: https://takeemtoschool.org. I hope you can make it!

The event will benefit Education Reform Now, a nonprofit organization, which I co-founded, that's committed to ensuring all children have access to a high-quality public education. In particular, because of COVID-19, children in poverty have lost almost a year of learning. Your generous support allows us to address this generational crisis. Thanks to the generosity of one of our donors, all proceeds from this year's event will be matched dollar for dollar.

This year's event will feature poker players battling for prizes that in past years have included two courtside tickets to a Milwaukee Bucks home game with the owner, Marc Lasry (with private air transportation to the game), a Sebonack golf trip with a one-night cottage stay, a table at Rao's, power lunches with some of the world's top investors, and a set visit for The Walking Dead.

For those attending as cocktail guests, there will be a variety of casino games and entertainment.

Here are pictures from the event in past years:

clost

Again, you can sign up here: https://takeemtoschool.org.

Best regards,

Whitney

Updated on

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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