Perhaps listening to Warren Buffett explaining how companies are businesses, and how you are buying part of the company will help explain the difference.
For example, when Meta P/E was 9, people should have said to themselves “hey, that’s an incredible opportunity”, rather than waste all that time hating on the company.
Crypto could recover if enough people “believe“ but there’s no real business
Why is that an incredible investment opportunity? Something like ~53% of the voting power is owned or controlled by Zuck, and there’s no indication that he has any plans to meaningfully return money to shareholders,* rather than continuing to write ten-digit company checks every month to fund the metaverse.
If you want to buy META as a bet on Zuck himself or the success of their conception of the metaverse, that’s one thing, but I don’t see how this is a reasonable value investment based on their current management and capital structure.
* I know Meta has done stock buy-backs from time to time, which are of course economically equivalent to a dividend (except more tax efficient), but from eyeballing their history of repurchases, it looks like they, like many issuers, managed to set billions of dollars of shareholder money on fire by repurchasing the stock while it was trading at rich multiples.
9 is the recent low, but presumably GP would consider 10 to be a good deal, too. Typically companies with a solid future making a reasonable profit are about 20 - 30; historically META is about in this range. If META still has "normal" prospects, then it is pretty undervalued.
However, this is not a Buffett view on things, as he evaluates based on intrinsic value rather than P/E. He also avoids tech companies because it's hard to figure out what their intrinsic value is. KO (Coca-Cola) for example, is going to grow about as much as GDP, it has a long history of 30% net profit, it has a huge moat so the dynamics of the company aren't likely to change. Thus one can actually attempt to evaluate its intrinsic value: what would you pay for a bond that earned 30% every year? Do the present value calculation and there you go. But what is META's prospects 10, 20, 30 years from now? Hard to say, and the social media landscape keeps changing. So Buffett would not invest in META--a P/E of 9 might be a steal, but it might also be an indication that the prospects of the company are no longer so positive as they were two years ago.
(AAPL is a notable exception to Buffett not investing in tech, because of how their products reinforce each other to create a large moat. At this point I think it is also fairly likely that Apple will be around making computers for the foreseeable future--even OS 9 didn't kill them off, and now they have market leading hardware and a solid OS and compelling ecosystem. In this way of thinking, one could argue they have similar dynamics as KO, but with the advantage that they have growth prospects. They also are returning 30% to shareholders, mostly in the form of huge stock buybacks. Hence Buffett has been a massive buyer of AAPL recently.)
> a P/E of 9 might be a steal, but it might also be an indication that the prospects of the company are no longer so positive as they were two years ago
This is the key point right here.
Just looking at stats alone isn't enough to know that you're seeing "an incredible opportunity".
Why are you looking at trailing PE ? You are buying future profits, not past ones. (And btw, Zuck has already told his shareholders that he has no near-term plan for the profitability of his investments.)
Let's say all the money is in BTC, which is down 74% YoY. If you started with $100, you'd have $26. And then you lost half of it, which brings you to $13. So you'd be down 87%, which is on-par with many tech stocks.
Curious to see what a more realistic 75mph highway driving test would show. Guessing around 600 miles which is very impressive. Seems like a nobrainer for Tesla to acquire them if their claims pan out.
It's not only the range that matters though. These batteries have a lot of cobalt, and Tesla is moving away from that. Moreover, we don't know how fast they charge, how many cycles they can be used, if they can be used in cold climates, how fire-prone they are, and maybe 10 other things that Tesla needs to consider for their production batteries.
But yes, if all those other things are decent enough, Tesla obviously has the money to acquire this startup.
"In practice, that means lithium iron-phosphate (LFP) chemistry, which historically has energy density 30 percent lower than cobalt- or nickel-based chemistries (and, unfortunately, reportedly cold-weather issues). Its first product, Aries, will go into production late this year. It's a battery using prismatic LFP cells in a structural cell-to-pack architecture without separate modules, packing more cells into the pack to lower the energy disadvantage against cobalt cells."
That statement is about the other battery mentioned on their website, the "aries". The "gemini" which is what is in the linked article is a combination LFP and NMC. NMC batteries are the ones with large amounts of cobalt.
> "The cathode will be made of a proprietary material rich in manganese that ONE says can be sustainably sourced at low cost. (The company has so far applied for 14 patents related to the Gemini pack.) The LFP cells cover 99 percent of the vehicle’s duty cycle, Ijaz told C/D, and the range extender is used for just 1 percent.
> As a proof of concept, however, the prototype pack used in the demonstration was powered by different cells. The capacity of more than 200 kilowatt-hours was provided by high-energy cobalt-nickel cells, while those intended for the Gemini line are still under development."
So this was just an energy density demonstration. It does sound like they plan to use LFP cells, not cobalt-nickel, for the production batteries.
As I understand it, LFP cells have a lower energy density compared to cobalt. Is this company claiming they can build a 200kwh LFP battery that takes up the same amount of space as a stock model S battery?
That's their goal as I understand from this paragraph:
> "The company dubs its prototype a proof of concept. The point is to show that real-world ranges far longer than an average driver's endurance (pit stops, ahem) can be achieved in the near future. The next step is for it to evolve into a new battery called Gemini, intended to go into production after 2023."
I found a chart once where someone measured efficiency of some EV or another. And the rule of thumb was that the cars hit peak energy/distance efficiency at 40-45mph and drop to about half that at 90mph.
Which would amusingly put your 600 mile guess just about dead on.
I'd expect the Speed vs. MPG graphs for many conventional (gasoline or diesel engine) cars to be similar. Air resistance (of a given vehicle) is roughly proportional to the square of the velocity. And air resistance (or drag, to be more technical) doesn't care whether the car's wheels are being powered by batteries, burning fuel, or a wound-up giant spring.
All cars have to deal with the v squared air resistance, but EVs also have motors that get less efficient at higher speeds, and the more power you draw, the hotter your battery gets and that's a negative too. So really everything is aligned to punish you for going faster than a threshold speed.
With a convential vehicle, it's not so simple. A lot of things get worse, but engine efficiency is usually better with higher temperatures (which is why the VW TDI NOx emissions fix results in more CO2 emissions; NOx is a result of nitrogen in outside air being exposed to the hot engine, lowering the temperature reduces fuel efficiency and NOx production), and the gearing is designed to get maxium fuel efficiency at higher speeds. Of course, if it would be commercially acceptable, an engine and gearing could be designed to get max efficiency at a lower speed and have a 40 mph super efficient vehicle. Hybrids can do a lot better at running the engine near peak efficiency or having the engine off, allowing for higher mpg all over the speed spectrum.
Air resistance starts very low though, until fairly high speeds other factors (e.g. rolling resistance) matter more. Weight is also relevant for climbing hills (more so for ICE which don’t reclaim any energy on the other side), …
I occasionally pop it up for 15 mins and see how many I can hit with the weapon of the week, but in a full game, it turns out reflexes are not the bottleneck. I've got under a hundred hours over 5 years or so. Can't imagine it being entertaining for 1000 hours a year.
I checked 2019. That promotion started mid July (so after Q2 ended), and was for Beats only with a mac or iMac which start at > $1000.
my point is this started before Q2 ended and includes much cheaper iPads. Again, this gift is 33% of the cost of entry level iPad Air. Also Airpods are much more broadly desirable than over the head Beats.
