Q4 2022 hedge fund letters, conferences and more
In their latest episode of the VALUE: After Hours Podcast, Brewster, Taylor, and Carlisle discuss Bill Miller Shorts Tesla Here’s an excerpt from the episode:
Tobias: Samson says that Bill Miller has a short on Tesla. That’s very un-Bill Miller like, isn’t it?
Bill: Oh, I heard Bill Miller’s portfolio is really something. Somebody said that we should talk about it. What did he say? He’s long Coinbase, Silvergate, Amazon, and Bitcoin.
Jake: Wow.
Tobias: And short Tesla.
Bill: Yeah.
Tobias: Long Coinbase, short Tesla is an interesting trade. There’s a very strong statement there.
Bill: I’ve never known. I’ve never known. [crosstalk] Yeah. Why would I know now?
Tobias: I’d rather be short Coinbase and long Tesla if that’s my only two options.
Bill: Yeah, if you ask me anything in the car space, my answer is Garrett Motion. That’s a company I’d like to own. So, that’s what a boomer I am. That’s it. They make turbochargers. So, I’m on the end of ice. I’m going to get destroyed on it. The terminal value is zero. It’s probably zero next year. How can you possibly be in it? I don’t know. That’s why I have no money.
Jake: [laughs]
Tobias: To be fair to Tesla, I don’t think it’s a donut, because it’s generating free cash flow. It looks to me like it’s generating free cash flow. I don’t know if that’s– If you dig into it forensically, I don’t know if that’s actually the case. But it does appear optically from the outside that it’s generating free cash flow. It’s got huge support. I said a few podcasts back that maybe Tesla was starting to look invincible, because it’s got such a huge community of people who are so on the message, they love the– [crosstalk] Yeah, exactly. I thought that the big risk to that was something like Musk destroying his own reputation, which now seems to have happened. But I still think Tesla is probably okay, but that doesn’t mean I want to buy it at $100– It’s like $117 today and I think– [crosstalk]
Bill: I don’t know. You want to counter trend trade it? You could do that. Moving average, the 50 days at $167, I could see a big bounce. The 100 days at $215, the 200 days at $245, [crosstalk] sold, fine.
Tobias: I want to buy for fundamental reasons.
Bill: Yeah.
Tobias: It could bounce. I don’t know about that stuff. I don’t know about how that all works. But it’s too expensive where it is. [crosstalk] We’re at the 50 bucks at 30.
Bill: I hear that moving– [crosstalk]
Tobias: I don’t think that stuff works on individual names, does it?
Bill: I don’t know. I think as an exit rule, it may.
Tobias: [crosstalk] just have more looked at it and he said it works on indexes but not on individual names.
Bill: That’s possible. They bounce around a lot more. But I wonder if it’s an exit rule, it makes some sense. At a minimum, I bet you’re spared a lot of carnage. Now, that may come at lower returns.
Jake: I’m sure Wes has done some work on this with a value in Momo and Meb as well.
Tobias: Yeah, at an index level, it certainly works. Probably at a strategy level, that works too. But I don’t think it works at an individual name level.
Bill: Well, there you go. Then, we don’t buy Tesla, I guess.
Tobias: Not here. I would love to flip long and buy Tesla at like $20. Wave it into the screen– [crosstalk]
Jake: What would that market cap imply? What’s that, like $40 billion, $50 billion?
Tobias: Like a 50– [crosstalk]
Jake: 50 billion?
Bill: There was a dude on Twitter, I’m pretty sure he went by Katis. If I’m not mistaken, he called Tesla pretty much at the bottom. And then, Maxar, he called, but apparently got blown up in between, which is not great. I like the way– [crosstalk] Yeah, that’s the problem. I don’t even know if he actually got blown up or not. I just think– [crosstalk]
Jake: That will be one of the annoying things to come out of this, is that assuming that it does crater eventually more, there’s someone will have time that short correctly and will take a huge victory lap on it when there’s a bunch of dead bodies in front of them that could have easily been them as well.
Tobias: Right. One time in a row.
Jake: Yeah. That will be unfortunate when that happens.
Tobias: I’m just trying to get right once in a row. It’s not that easy.
Jake: Just one time for daddy.
[laughter]
You can find out more about the VALUE: After Hours Podcast here – VALUE: After Hours Podcast. You can also listen to the podcast on your favorite podcast platforms here:
Apple Podcasts
Breaker
PodBean
Overcast
Youtube
Pocket Casts
RadioPublic
Anchor
Spotify
Stitcher
Google Podcasts
For all the latest news and podcasts, join our free newsletter here.
Article by The Acquirer’s Multiple.
