Investing Thread

[tower912]

A new term has been coined.  Richsession.  As I understand it, it sort of covers what Goose is forecasting vs what MU82 is seeing.

[MU82]

Earnings season is upon us this week. According to FactSet, analysts have slashed their earnings estimates for all but two sectors.

[MU82]

For the second time in recent months, Tesla announced price cuts, with the latest being even more significant: 20% for the Model Y (down to about $53K) in an effort to make it eligible for the $7,500 government tax rebate.

https://seekingalpha.com/news/3924385-tesla-looks-for-sales-rebound-by-cutting-prices-in-the-us

Mr. Market didn't like it, with TSLA down 5.5% premarket. Other auto stocks also are falling on the news.

Current Tesla owners also are grumbling, as the market for their used cars will be severely affected.

[MU82]

Bizarro World in Wyoming ...

A group of state legislators are seeking to end sales of new electric vehicles there by 2035 in an effort to protect Wyoming's oil and gas industries. The bill is the inverse of efforts by other states to eventually ban gas-powered cars, and comes as electric vehicle sales are becoming a bigger part of overall global car sales.

https://thehill.com/homenews/state-watch/3815311-wyoming-lawmakers-propose-ban-on-electric-vehicle-sales/?campaign_id=4&emc=edit_dk_20230117&instance_id=82917&nl=dealbook&regi_id=108420427&segment_id=122725&te=1&user_id=d36dcf821462fdd16ec3636710a855fa

[TSmith34, Inc.]

Bizarro World in Wyoming ...

A group of state legislators are seeking to end sales of new electric vehicles there by 2035 in an effort to protect Wyoming's oil and gas industries. The bill is the inverse of efforts by other states to eventually ban gas-powered cars, and comes as electric vehicle sales are becoming a bigger part of overall global car sales.

https://thehill.com/homenews/state-watch/3815311-wyoming-lawmakers-propose-ban-on-electric-vehicle-sales/?campaign_id=4&emc=edit_dk_20230117&instance_id=82917&nl=dealbook&regi_id=108420427&segment_id=122725&te=1&user_id=d36dcf821462fdd16ec3636710a855fa

I guess they'll need to build a wall and make Colorado to pay for it in order to keep EVs out.

[tower912]

Like 120 years ago when the horse lovers passed laws outlawing motor cars.   


Eventually, the market will expose their amusing choice.

[JWags85]

Hot take, I at least sort of understand their reasoning.  And lets be honest, its symbolic.  A state with a total population less than Milwaukee knows that they won't stop the progress of electric cars, but at least they can show their constituents that they have their back, in a way.  So its performative

But honestly, so is the mandating of the opposite, like California has done.  It won't significantly move the needle.

I may not bang the climate change/green energy drum as hard as some people, but I think its very important, when viewed pragmatically.  US emissions, much less passenger vehicles emissions in the US, pale in comparison to the emissions from Asia and Latin America.  Thats where the changes need to occur.  And that will come from investments in truly scalable, mass producible clean energy that is cost effective.  And that latter is important, cause developing countries or less developed countries that produce huge emissions really couldn't care less in the face of other challenges they face. 

Otherwise its performative stuff that may be well intentioned or make people feel better about themselves but its not truly impacting the greater problem.

I don't think the carriage maker/buggy whip and car analogy is apt just yet, maybe in another 20 years when the above has been addressed.

[MU82]

As Wags said: performative. The bill died in committee.

https://cowboystatedaily.com/2023/01/16/well-that-was-quick-resolution-to-ban-electric-vehicles-in-wyoming-dies-in-committee/

They'll probably try to make gay cowboys illegal next.

[MUBurrow]

But honestly, so is the mandating of the opposite, like California has done.  It won't significantly move the needle.

I don't disagree with most of Wags' post.  One nit to pick is with the above - CA's market share is sufficient that when they were allowed to determine their own emission standards, automakers had no choice but to comply becuase CA's market share is too large to ignore. Just last year, automakers actually supported a move to allow CA to institute their own emissions standards, likely because their catalogs of vehicles would comply and there's a barrier-to-entry benefit to the higher regulations.

[JWags85]

I don't disagree with most of Wags' post.  One nit to pick is with the above - CA's market share is sufficient that when they were allowed to determine their own emission standards, automakers had no choice but to comply becuase CA's market share is too large to ignore. Just last year, automakers actually supported a move to allow CA to institute their own emissions standards, likely because their catalogs of vehicles would comply and there's a barrier-to-entry benefit to the higher regulations.

Sure, but to my greater point, I believe that, globally, road transportation makes up about 12% of carbon emissions.  And thats including buses and commercial trucking.  So if every car in the WORLD went electric, that would barely eliminate a tenth of the carbon emissions. 

The US is currently emitting about 11% of the worlds emissions, about 26% of which is transportation.  If we use the proportions of the rest of the globe, about 75% of transportation emissions are road transportation.  So every car in the US going electric would mean 75% of 26% of 11%...aka a 2% decrease in overall emissions.  So again, a nice step in the right direction but really does VERY little to solve the problem, so its more performative than anything in the absence of better clean energy research and solutions.

Thats not to say "screw it, whats the point".  But people getting bent out of shape both ways are just looking for something to stomp on about rather than actually doing anything substantive.

[TAMU, Knower of Ball]

I think a 2% decrease in global emissions would be pretty substantive. Is it a solve? No. But I think it reaches the threshold for substantive.

[MU82]

So again, a nice step in the right direction

Yes. We need more of those.

[jesmu84]

I agree with wags.

Until corporations and governments reign it in, individual choices aren't going to move the needle enough to result in any substantive improvement

[MU Fan in Connecticut]

Jeez Wags!

I was at the EV show in Detroit in Sept 2021 and in one of the presentations it was stated the EV market is where the automobile market was when the Model T came out. 

[MU82]

Rough Tuesday for Musk:

A Tesla engineer testifies that a video promoting self-driving technology was staged. In a deposition taken as part of a wrongful-death lawsuit, the head of the company's Autopilot division said Tesla workers had planned out the car's route in advance and that drivers had participated in test runs. The 2016 video had claimed no human input was needed.

Meanwhile ...

Twitter reportedly suffers a 40 percent drop in daily revenue. A senior engineering executive told employees that the year-on-year decline came as more than 500 of the company's top advertisers had paused spending on its platform, according to The Information. It's the latest sign of how cash-strapped Twitter is becoming; another is an auction of goodies from the company's San Francisco headquarters.

Above from NYT's daily "DealBook."

[JWags85]

I think a 2% decrease in global emissions would be pretty substantive. Is it a solve? No. But I think it reaches the threshold for substantive.

We can agree to disagree on that, especially since thats a ceiling, not like "for a start it would cut by 2%".  And, not to move the goalposts (though Im aware I could thus be accused of that) thats 2% given the electric car influx is completely powered by clean energy, which we have no capacity to do so nor are we particularly close.  So it just goes back to my previous point.  The cost, effort, etc... to enact a change which would not yield even 2% change is wildly over-scrutinized and emphasized.

[MU82]

Microsoft plans to lay off 10,000 workers, the company said Wednesday, as it looks to trim costs amid economic uncertainty and to refocus on strategic priorities, such as artificial intelligence.

https://www.nytimes.com/2023/01/18/business/microsoft-layoffs.html?campaign_id=60&emc=edit_na_20230118&instance_id=0&nl=breaking-news&ref=headline&regi_id=108420427&segment_id=122814&user_id=d36dcf821462fdd16ec3636710a855fa

The company employed about 221,000 workers as of the end of June, and the cuts amount to less than 5 percent of its global work force.

"These are the kinds of hard choices we have made throughout our 47-year history to remain a consequential company in this industry that is unforgiving to anyone who doesn't adapt to platform shifts," Satya Nadella, Microsoft's chief executive, said in a message to staff.

The layoffs, which will begin on Wednesday, are the company's largest in roughly eight years. Mr. Nadella cut about 25,000 jobs over the course of 2014 and 2015 as Microsoft abandoned its ill-fated acquisition of the mobile phone maker Nokia.

Like other tech companies, Microsoft expanded rapidly during the pandemic. It has hired more than 75,000 people since 2019, seizing on the surge in online services and the expansion of cloud computing.

Microsoft's annual revenue grew 58 percent over three years, but rising interest rates and the prospect of a recession have tempered the company's outlook. In the quarter that ended in October, it reported its slowest growth in five years and warned that more tepid results could follow.

The changes, including severance and other restructuring expenses, will cost $1.2 billion, Mr. Nadella said. Microsoft is scheduled to report its quarterly earnings on Tuesday.

The company has been pursuing several expensive bets, including potentially putting another $10 billion into its investment in OpenAI, which makes the explosively popular ChatGPT artificial intelligence system, and a $69 billion acquisition of the video game maker Activision that is facing challenges globally by antitrust regulators.
Other tech giants have also been reducing costs after several years of breakneck expansion. Amazon is expected to begin a huge round of layoffs on Wednesday as part of its plans to reduce its corporate work force by about 18,000 jobs.

The business software company Salesforce said this month that it planned to lay off 10 percent of its work force, or about 8,000 employees; and Meta, the parent company of Facebook, announced at the end of last year that it was cutting more than 11,000 jobs.

[MU82]

The night before announcing 10K layoffs, Microsoft execs hosted a big-money gala that included a private performance by Sting.

https://www.wsj.com/livecoverage/davos2023/card/microsoft-hosted-sting-performance-in-davos-on-night-before-it-announced-layoffs-cRHO4k295pSWarvtfQRJ?campaign_id=4&emc=edit_dk_20230119&instance_id=83078&nl=dealbook&regi_id=108420427&segment_id=122896&te=1&user_id=d36dcf821462fdd16ec3636710a855fa

On Tuesday evening, Microsoft hosted an event. It was an intimate gathering of 50 or so people, including the company's top executives, who got to while away the evening listening to a performance by the musical artist Sting, said people familiar with the event.

The concert would end up sounding a sour note to some employees at Microsoft the next morning. On Wednesday—while much of the company's leadership team was halfway around the world from its Redmond, Wash. headquarters—it announced plans to lay off 10,000 people. It was the largest round of layoffs Microsoft has had since 2014, and as CEO Satya Nadella would explain in a blog post, reflected the need for the company to adapt to a global economic slowdown.

Top Microsoft executives have been a major presence at this year's World Economic Forum. On Tuesday Mr. Nadella was interviewed on stage for a Wall Street Journal panel and he spoke about the promise of artificial intelligence. On Wednesday, he was on stage again, discussing the headwinds for the tech industry, and the need to do more with less.

As the Microsoft layoffs came down, some employees described it all as a bad look. While hobnobbing at Davos is part of doing business for major tech corporations and the events are planned far in advance making it difficult to change them, some employees thought it wasn't the right time for a company-sponsored Sting concert. The theme of the event was sustainability.

[The Sultan]

This Davos World Economic Forum seems to becoming a greater and greater waste of oxygen each year.

[forgetful]

Rough Tuesday for Musk:

A Tesla engineer testifies that a video promoting self-driving technology was staged. In a deposition taken as part of a wrongful-death lawsuit, the head of the company's Autopilot division said Tesla workers had planned out the car's route in advance and that drivers had participated in test runs. The 2016 video had claimed no human input was needed.

Meanwhile ...

Twitter reportedly suffers a 40 percent drop in daily revenue. A senior engineering executive told employees that the year-on-year decline came as more than 500 of the company's top advertisers had paused spending on its platform, according to The Information. It's the latest sign of how cash-strapped Twitter is becoming; another is an auction of goodies from the company's San Francisco headquarters.

Above from NYT's daily "DealBook."

Didn't the Theranos frauds go to jail for a long time for similar reasons?

[TSmith34, Inc.]

Didn't the Theranos frauds go to jail for a long time for similar reasons?

Holmes and Sonny went to jail for defrauding investors, i.e., rich people. Our system is a lot more lenient when you merely defraud regular old customers.

[Uncle Rico]

Holmes and Sonny went to jail for defrauding investors, i.e., rich people. Our system is a lot more lenient when you merely defraud regular old customers.

That's the beauty of trickle down economics

[muwarrior69]

Hot take, I at least sort of understand their reasoning.  And lets be honest, its symbolic.  A state with a total population less than Milwaukee knows that they won't stop the progress of electric cars, but at least they can show their constituents that they have their back, in a way.  So its performative

But honestly, so is the mandating of the opposite, like California has done.  It won't significantly move the needle.

I may not bang the climate change/green energy drum as hard as some people, but I think its very important, when viewed pragmatically.  US emissions, much less passenger vehicles emissions in the US, pale in comparison to the emissions from Asia and Latin America.  Thats where the changes need to occur.  And that will come from investments in truly scalable, mass producible clean energy that is cost effective.  And that latter is important, cause developing countries or less developed countries that produce huge emissions really couldn't care less in the face of other challenges they face. 

Otherwise its performative stuff that may be well intentioned or make people feel better about themselves but its not truly impacting the greater problem.

I don't think the carriage maker/buggy whip and car analogy is apt just yet, maybe in another 20 years when the above has been addressed.

So what metrics will be measured to demonstrate that the climate has stopped changing? Also, how do you run a modern economy without fossil fuels? Tell me what part of modern medicine that does not require petrochemicals, glass, plastics, metals that have no carbon footprint?

Does CA have the electrical grid and capacity to power EVs by 2050. It is my understanding that it takes more power to charge an EV than to run a home central air conditioner.

Are the fossil fuel alternatives really clean and have absolutely no impact on the environment?

[MU82]

We clearly need fewer EVs and more guns.

[Babybluejeans]

To be clear, the idea that US emissions "pale in comparison" to those of Latin American and Asian countries is false. The US produces the second-most emissions in the world.