Notes From All Over, Part 1 -- July 25, 2019; Tesla Battery Sputtering?

Talk about a steal: reported earlier. Apple, Inc -- you know, the smart phone company -- is in talks to buy Intel's 5G modem division for $1 billion. More on this story here. But $1 billion?

• Apple: 
• market cap: $960 billion
• revenue: $260 billion
• cash: $80 billion
• INTC:
• market cap: $240 billion
• revenue: $70 billion
• cash: $12 billion
• Apple could buy Intel -- yes, the entire company -- just as easily; stranger things have happened.

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The Book Page

Wow, this turned out to be a great book. Finished it yesterday, now going back and re-reading, taking notes.

The Year of Lear: Shakespeare in 1606, James Shapiro, c. 2015.

Put me back in my Shakespeare phase which occurs about every three or four years.

Thesis:

• This was a tumultuous year for Shakespeare:
• a Scot was in his third year as King of England
• more and more talk of union with Scotland
• another religious war seemed likely (Protestants vs Catholics)
• the plague continued to be a huge problem; closed London, theaters
• Gunpowder Plot could have re-written European / British history; this was akin to US Secret Service finding small nuclear device in basement of White House put their by Russians or Chinese
• Shakespeare himself directly affected by effort to purge Catholics from England
• The only cultural artifacts created during the first decade of King James’s reign that still matter 400 years later (p. 131):
• Shakespeare’s play
• King James Version of the Bible
• Fifth of November

After several years of no production, Shakespeare all of a sudden has King Lear, Macbeth

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The Train Wrecks: Post-Mortem

Now that the train wrecks are over, it will be interesting to watch the post-mortems.

Although this had nothing to do with the Bakken -- for which I profusely apologize -- it is one of my favorite posts -- and kept me interested in blogging.

Now to watch the post-mortems. Already, Drudge has moved on. The banner this morning: Jeffrey Epstein on suicide watch. Well, duh. "Found mysteriously injured in his cell overnight."

Fox News: "distraught Dems, mainstream media turn on once-mythic Mueller after bumbling performance. What amazes me is that after weeks of preparations, working closely with Mueller, Nadler et al didn't see this coming. Here are the five big takeaways as noted by Fox;

• who really ran the investigation; obviously it was not Mueller
• Mueller continued to talk "exoneration"; even he knows that doesn't exist in US jurisprudence
• Mueller was forced to clear up confusion as to why did didn't indict Trump (Fox got this one wrong)
• Mueller lied, saying he did not meet with Trump for the job of FBI director (perhaps he did not lie; perhaps he forgot; early Alzheimer's still on the table)
• Mueller said Russian election interference is an ongoing issue that will continue in 2020 (worthy of Mad Magazine) 

With that list, I can honestly say there was only one takeaway: Mueller's legacy gone in a flash.

My five takeaways

• Mueller's legacy gone in a flash; Mueller shows signs of early dementia; couldn't answer even basic questions; quality/content of answers had hallmarks of early dementia; he won't be appearing any late-night talk shows;
• Pelosi wins; Trump wins; Nadler loses; pencil-neck loses; the latter really are as dumb as the president suggests
• rising GOP star: John Ratcliffe (any doubts? listen to his five minutes of fame "speech") 
• it's not over 'til it's over
• this isn't over

Others are now tiptoeing around Mueller and pre-senile dementia.

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Post-Mortems: Tesla

Updates

Later, 12:26 p.m. CT: link here. 

Later, 12:22 p.m. CT:

Later, 11:59 a.m. CT: from Barron's:

Oppenheimer analyst Colin Rusch reiterated an Outperform rating, lowering his price target to $356 from $437. We increasingly believe the success of Tesla, both medium- and long-term, is dependent on its ability to drive cost out of its battery pack and optimize range to support gross profit per vehicle and volume of sales,” Rusch wrote. Ben Kallo of Baird reiterated an Outperform rating and a $355 price target.

Comment: this is the sad little news. This is not the "1969 moon shot." This is not the "Manhattan Project." There is no silver bullet for a better, cheaper battery. There is a reason that Tesla lost money on storage this past quarter. The technology is simply not there. Batteries will not be exponentially improved; costs will not come down. Believe what you want but those are the facts. Limited range and high cost is still the rule for batteries.

Original Post

Down 14% in early-morning trading.

Headlines:

• "Tesla plunges on loss and co-founder's surprise departure"
• "Elon Musk's latest sales promises have analysts scratching their heads"
• "Tesla shares sink as Mush changes tune on profit"

From Zacks:

• earnings/revenue:
• EPS: loss of $1.12 vs estimate of 54 cents; note: before the earnings release, the estimate was 40 cents; now, that has been mysteriously changed to 54 cents; though in fairness, estimates were all over the map
• net loss: $408 million compared with year-ago net loss of $717 million -- so things are getting better
• revenues increased to $6.35 billion from $4 billion; but missed Zacks estimate of $6.38 billion
• production/deliveries:
• 2Q19: record deliveries -- 95,356 vehicles
• 2Q19: record production -- 87,048 vehicles
• surpassed previous records set in 4Q18
• total automotive revenues increased 60% year-over-year
• most interesting:
• energy generation and storage revenues decreased from $375 million to $368 million year-over-year

You know, looking at those numbers, Tesla actually did quite well.

Big takeaways:

• investors most spooked by missing numbers albeit not that big a deal
• the big news spooking investors: co-founder walking away without explanation; surprised everyone 

Gingrich:

• Mueller did not have detailed knowledge of the subject matter
• Mueller failed to answer more than 200 questions
• Mueller was frequently not familiar with citations from his own report
• on several key points, Mueller contradicted his own report and his own letters to Attorney General Barr
• laughable that Mueller could randomly assemble a hard-line anti-Trump group of Democratic prosecutors without asking their political beliefs; there was not a single pro-Trump Republican lawyer in the room
• the more I (Gingrich) watched Mueller, the more I came to the conclusion that he had been a figurehead (Rush and the rest of us figured this out in minutes; we did not have to watch hours of testimony)
• the real question: who driving the team and who was writing the report? Dirty little secret: We will never know.