Saturday, January 21, 2012

On The Rebound




Several readers of my blog emailed me that Tesla stock had a rebound this week. Of course it was going to rebound after last week’s big drop and of course Elon Musk the Tesla CEO gave positive pronouncements on the status of the Mosel S. Elon opined that the company expects to sell 20,000 of these cars next year and with a gross margin of greater than 25%. Well Elon’s personal life is also on the rebound. His second wife Talulah Riley, a British actress, and Elon are separating. Elon’s first wife was a Canadian named Justine. Justine was not tight lipped about Elon and spilled a lot of beans on a show called Divorce Wars. I really do not care about the Musk Man’s marriages except to say that Telulah must have given Elon acting lessons prior to the split. 20,000 Model Ss with a gross margin in excess of 25% in 2013 will not be manufactured nor sold, and as they say in the old country if this happens I will eat my hat. Of course Mr. Musk did not say 2013 he said next year. He said this on January 16 so it sounds like next year is a lot sooner than all of 2013. Per Eric Savitz of Forbes, Elon also stated that the departure of the two lead engineers “was actually a slightly positive development”. I guess we will have to wait for Justine or Tululah to remove that positive spin and shed some light on how Elon sees positive from negative. Elon is so cross wired he may actually wrongly connect the terminals on the Model S and have the car go 130 miles per hour in reverse.

My disdain for Tesla is only matched by my disdain for academic chemical engineers who are at the pig trough of department of energy funding for pure junk science. We still have fools teaching in California state universities who are converting SUVs to run on hydrogen and only getting a 60 mile range but claiming zero emissions and we still have the department of entropy funding this junk. Talking of California, governor Moonbeam just fired the head of the high speed rail project that is supposed to whisk passenger from San Francisco to Los Angeles before the 22nd century arrives. This project is now estimated to cost $98.5 billion. Hey Jerry why not heat it up a smidgen to 98.6 so we can reach body temperature and keep the project alive? This puppy is so cold its temperature is that of Anchorage in mid February. For my overseas readers 98.6 degrees Fahrenheit is about 37 degrees Celsius. If the Chinese were to build the California High Speed Rail it would cost $37 billion but heaven forbid we have two trains on the line at once, we would all experience a Chinese Fire Drill.

The good news in these Ignited States is that we have 240.5 million private vehicles with an average age of almost 11 years. The way things are going for the economy, I predict by the time Tesla produces 20,000 vehicles a year and enjoys a gross margin of more than 25% there will be 11 million private vehicles registered to the inhabitants of the US with an average age of 240.5 years. Of course TSLA stock will rebound in 240.5 years and when this happens and folks who paid $26 a share on January 16, 2012 will be able to say the rebound was real and their belief in Elon paid off.

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