Okay, hopefully this will work better. I'm just on my phone now, so I'm not gonna have Like a problem with my connection, hopefully sorry guys, I'm feel really bad Let's see Yeah, you can hear me. Okay if this cuts out, we'll try again. Hopefully I can get the whole thing filmed this time Okay, I Turned my Wi-Fi off. So hopefully this will Work We'll just wait for you guys to come back I'm just waiting for a couple of you guys to get back.  So now I'm just on data So hopefully that will help Hopefully fingers crossed Okay, sorry guys I Could go live on Instagram, but I I don't think I have as many people on there That would want to see plus I want this to go up on my YouTube channel. So I'm hoping this will work Looks like it is. Let me know you guys if it goes offline again, please And I'm just getting my app because I usually have them on my phone But I cannot get them on my phone cause I'm filming on my phone Let's get some cute fur children over here to pass the time Jack.  Are we still good? I'm so sorry Okay. Hi, we're almost there. We're getting there Jennifer might pop over She might just come right in right when I'm filming this. Did I just hit myself in the face? I sure did Okay Thank you guys for being so patient. I really appreciate it. Oh I love technology. Don't you this is what happens when you're in the classroom and stuff doesn't work. You just improvise Okay, here we go. Yeah. Hi. Here we go What's your favorite Disney princess Amber's world asks Ariel is my favorite Disney princess I love her who wouldn't want to be a mermaid Questions who are some of the other teachers you watch on YouTube? My favorites are Jennifer from genuine teaching. Obviously. She's my best friend Pocketful of primary. I love watching her. I love how she can make long like weekly vlogs I wish my computer would allow me to do that, but unfortunately it doesn't so that stinks I love watching mr. Thane too cool for middle school Real rap with Reynolds. I love teach like a girl. She's so funny how she like dances behind people I really want to do that and see I bet people would get so mad at me Ikea haul I'm gonna wait until I'm in my classroom Which I'm going to be going in on Monday because everything is still in the boxes And I think it would kind of be silly to do a haul with everything in the box So once I get in my classroom, I'll show you guys everything that I bought at Ikea What are some of the names you picked out for your baby? I'm not telling I'm not telling the baby's name We're planning on doing a photo shoot probably next week to reveal his name Um But I will make a video all about his name and everything so I'm really excited about that favorite thing about teaching I think is the relationships that I form with the kids. Absolutely love them. They turn into my little buddies Obviously after we get our expectations and procedures in place, but I just love them. They're like they're all my kids, you know How many years have you been teaching? I've been teaching for I Think it's technically only three, but I this is gonna be my third my fourth classroom. So it will I guess yeah three years Best and worst experiences you've had in your teaching career I really think that administration can make or break your experience and the kiddos depending on the behavior of the kiddos, but I really do think that administration can Play a major role in your experience in your experience. I have experienced Some really unsupportive administration. I've experienced some really supportive administration. So I think that just different experiences with that is You know kind of changes everything if I ever get the chance. Well, I teach high school students I thought about going back once my son is older and Getting my masters in secondary ed and just getting that credential so that I could teach high school I think that I'm still too young to teach high school I feel like I just wouldn't be as effective and I would rather be older if that makes sense I don't know if that makes sense My baby is due November 8th. So right in the middle of the school year. It should be interesting Do you ever consider switching careers in the future? Um, I have I have like asked myself what else would you do? But nothing has ever come to my mind. So I think teaching is kind of it If I didn't teach I would want to do something that involved children anyway. So like daycare, maybe preschool Kids camps things like that. I just love being around kids. So I think that that would be The other venue that I would go in that direction. I don't I don't really think switching careers within for me though What made it motivates you during a more challenging day of teaching? Just knowing that Every day is different, you know, I might have a really bad day one day and then the next day will be really great Each day is different. So if you have a hard day, you just kind of have to focus on the positives in your life and move forward and focus on the really, you know, great aspects of the day and just try to move on from that Inclusion strategies With engagement, I try to use a lot of Kagan strategies in my classroom They are really engaging. They get the kids working together. They get them talking If you haven't heard of Kagan strategies, definitely definitely research those Amina Hello, Amina But and I plan on doing a couple of videos about Kagan strategies in a classroom When I'm back in my classroom and actually use some students to model those So hopefully I can get some parents on board and get those modeled for you guys What are your thoughts of men in elementary education from Gabe He's a sophomore in high school and he's considering it I think that it's really important to have men in elementary education There are so many kids out there that have no Father figures in their lives and having men in education is so important because it gives those kiddos A person to connect with and plus there's too many chicks running around, you know, too many hormones We need some guys. We need some dudes to come in all of my like my favorite teachers growing up were all men and They were just fun. They just connected in a different way I mean the women were more nurturing, but the men just had so much fun with us, you know Considering moving to Phoenix, can you give me a top five pros and cons list about the area? I lived in Phoenix for about five years pros lots of shopping lots of restaurants Cons lots of traffic really hot too many people really hot And You don't really want to go out and do anything because it's way too hot I would definitely say don't move to Phoenix if you're gonna move to Arizona try the northern area We don't make as much money up here But the weather is way better or just move to a different state altogether If I didn't have my family here in Arizona my husband and I we would be in some other state I don't know where somewhere cool somewhere that pays better and Yeah, just Phoenix Go somewhere else. Go somewhere better. I Would love to come to England. Oh my gosh If I could afford it, I would be in England and Canada I would go to Canada and England in a heartbeat if I could afford it But I've only ever traveled to like Mexico and like the tropical areas Okay, here's a couple of questions from Vanessa blades that I didn't get to you How did you choose? Oh, I already did that one. My favorite place is to shop for teacher clothes. This is a great question I love going to Target. Old Navy has great clothes. Coles has great clothes I like to get a lot of graphic tees and And Like colored jeans because I don't wear jeans to work, but I can wear colored jeans to work, which is kind of weird Have I ever considered switching grade levels I would actually love to switch grade levels and do third grade because I student taught in third grade But I actually feel like I'm more effective if I stay in the same grade So I'm planning to stay in fourth grade as long as possible until my administrator needs me somewhere else Because the longer you teach one grade the better you get at teaching it. So A couple of you guys are asking you must be new to the chat. I'm not telling anybody the name of my baby yet We're planning on announcing that in the next couple of weeks. Hopefully here on YouTube. So keep your eyes peeled for that Let's see is there anything you feel that student teaching did not prepare you for as a first-year teacher I definitely wouldn't say that student teaching didn't prepare me for but college itself Like all the classes I took I didn't really feel prepared until after I was a student teacher So I think once you get into your practicum and your student teaching experience. You will definitely feel more prepared and more comfortable How do you create a healthy balance between school and personal life? Don't bring work home with you. Do it at work stay an extra hour go in an hour early Don't bring your work home. Just leave it there and And you'll be fine Okay, let's see. I'm gonna come over here to these questions How are you going to man a good questionnaire and how are you gonna manage a classroom and take care of a baby? Well, the good news is that my husband is home three days a week He comes home Mondays at 6 p.m. He's home Tuesday Wednesday Thursday. He leaves Thursday evening So he will be home to take care of the baby during the week And then my mom and dad live only 20 minutes away So they have offered to watch the baby while I'm in school While I'm working in school on Mondays and Fridays when my husband's not home. So it's gonna be I'm very blessed. I have to thank the big guns upstairs because I'm very blessed to be in this situation that I'm in And if it wasn't for this situation, I probably wouldn't have rushed will not rushed I probably wouldn't have wanted to try to have a baby You know because it would have been a lot harder. He's coming in November Haley Does your district make you have three months of lessons activities and assessments planned before you go maternity leave? I'm not sure yet. I don't think so I have to talk to my administrator and some other people about maternity leave Because I haven't really gotten a lot of information about it So once I have that information, I will let you guys know in a video all about maternity leave and how I'm handling that When did you realize you wanted to be a teacher I always kind of knew I wanted to be a teacher I started my college career as a Theater arts major so a musical theater acting singing dancing and I realized that I didn't want to wait tables my whole life But that as a teacher I could perform all the time So I really like to think of teaching as an art where you get to perform all the time. So What are you most excited about for being a mother I think just having that relationship with him I love having the bond between me and my husband and I think that having a new bond with this little person That's made from both of us is just gonna be so amazing and I like dream about just talking with him and Interacting with him and getting him to experience all those new things. Oh, are you still princessing miss your videos? I watch them every time I have a princess event So a lot of you guys might not know this but I do own a princess company that entertains children I used to dress up as princesses and I don't personally do parties anymore I do still own the company and I just manage my staff Obviously, I have a big belly now. So I can't do princess parties and I did them for seven years So I'm kind of like retired and I'm just the queen now Um So I probably won't be doing any more princess videos. I might put a singing video up here or there But hi Gabrielle. Is it Gabriel or Gabrielle? It's probably Gabriel and I just messed that up. I'm so sorry. Hello Let's see Who is your most influential teacher you've ever had and why I feel like I've Answered this one before but my fourth grade teacher, Mrs. Tripp. She was absolutely amazing. Hi, Amaya She I try to be like her She was also always so fun and bright and cheerful in school and would play music and let us do readers theater and So many amazing things and I just I hope that I can be like her someday Um, how many kids do I have I'm planning just two I would love to have a girl after this and if I don't have a girl that's okay I'll be the the lady of the house and And that'll be fine, but just two I don't want to have more than two. They feel like Two is good for me How do you prevent your voice from getting sore During singing I drink a lot of tea and for teaching because you can actually Get a sore throat from teaching and raspy. Actually, my voice tends to go out like the first week of school Because you're back to talking all day, but I just drink a lot of tea Lemon and honey water in the morning and it should I'm teaching fourth grade next year again Let's see. Okay. I'm gonna come over here Advice to new young teachers Just stick to your management plan be consistent.  I'm still not perfect I don't think there's any teacher that's perfect except for maybe my teacher across the way from my classroom. She's amazing I don't know how she does it Good organization tips just keep things in a specific place Have everything have a place and when you're done using it put it back in that place biggest struggle in teaching I would say Having too many students in the classroom. I have 36 and There's a lot of them I'm gonna put your name Aigley Aigley Sorry Treat the kids like puppies firm but kind absolutely There are ways to be firm in a nice way I Do plan on visiting my class when the baby's born I plan on coming in every Friday I don't plan on bringing him in every time I'll probably bring him in a couple times just to see everyone But I do plan on coming in on Fridays Just because I do want to keep my presence known and make sure the kids know that I'm not just disappearing Let's see I do have an email. It's apples and tiara's at gmail.com So you can email me I'm trying to find all your comments. They're coming in How did you come up with your YouTube name? Well, I'm a teacher and a princess and teachers love apples and princesses wear tiara's so that was kind of perfect Let's see Are you worried about the kids having to go from you to another teacher and then back to you? I am a little bit worried about that. I've been kind of Struggling with planning because I'm plan trying to plan for when the sub is there and I'm like I don't want the sub to teach That I want to teach that that's my favorite like it's hard giving things up But I think just staying Involved in the classroom and coming in a little bit will help All these questions about the baby I Created my YouTube channel actually a long time ago. I've been on YouTube for about eight nine years I first started my first channel a child stream entertainment For my company and it was just like a singing videos channel And it's actually still active and then I started this channel because I wanted to do Princess related videos and then I started putting up teaching videos and I absolutely love putting those up So I've just continued But yeah, I just it's a hobby. I just like giving my ideas and Helping people out I Did think about being a music teacher and I actually failed music theory In college so that went out the door But I would love to be a music teacher Disciplining students it depends on the the crime. I like to have the consequence match the crime I Don't send kids to the office because I feel like that just takes my authority away and I I actually make them call their parents. I don't call their parents unless I need to But I'll have them stay in for lunch and they'll make a phone call and talk to their parents about what they've done It's a little more effective because they're like, oh, I have to talk to them and tell them what I did It's a little more scary I don't know who my sub will be I am going to do a classroom tour as soon as I get it done My hair is long today because I'm wearing hair extensions proud of it I'm gonna take a belly picture after this so I got all done up I'm not gonna be doing any more princess videos, sorry Not unless You know, I'm pregnant so I can't really wear any costumes The actress from young and hungry. Oh, that's funny. Everyone says I look like Jamie Lynn Spears, but I don't see that What do you do in a lesson goes wrong? Well, there's different things you can do you can stop what you're doing and do something else you can finish What you're doing? You can stop and apologize and fix the problem Lessons go wrong all the time. You just have to be flexible. You have to have a backup plan and Just be ready for that. I mean they go wrong all the time You know unless you've done the lesson like 500 times, which none of us have done No lessons gonna be perfect and that's what's amazing about teaching is that we keep learning as we go Aside from YouTube what other hobbies do you have I love to sing I love to go kayaking I like working out. I haven't worked out in a while because I've been tired But I used to love working out. I love shopping, which is kind of a bad hobby to have Yeah singing mostly Favorite part of the school day I Really like the part of the day when the kids are working Together on a project or an assignment and they're getting along and they're doing the assignment together and not fighting about About doing the assignment That's my favorite part of the day teaching is really fun How do you handle kids that don't learn as fast as others I do a lot of small group instruction and a lot of Collaborative learning so I like to group kiddos that maybe aren't understanding a concept with kiddos that are So that they can learn from each other Do you call the students that don't have their hand up sorry about yeah, I actually do Because a lot of times kids that maybe aren't understanding or think they aren't understanding something aren't gonna raise their hands So I pull sticks If I don't have a lot of things like Participation I'll pull sticks and if they really struggle I'll have them phone a friend and ask somebody else But I really don't call on hands all the time I usually just call people out like if I notice they're not paying attention I'll ask them a simple question and say okay. I'm gonna come back to you So make sure that you're you know Focused because I am gonna come back to you and ask you another question a very similar question So that kind of helps them to get on Why didn't I go with Jennifer to the tbt gathering? I didn't go because Jennifer got invited by a friend of hers from Phoenix who actually ended up taking her along with her and I didn't go because they plan on going to Disneyland and because I'm pregnant I can't go on any of the rides at Disneyland So I thought it would be kind of a waste of money To buy tickets to Disney and then just go there and eat and walk around and tired So I just decided to stay home and it was fine I I got to FaceTime with Jennifer when she was at her meet-up and everything So she was really great to include me and I'm excited to go next year. So Yeah, that's why I didn't go I just didn't feel like it was worth the money to not really be able to participate in everything so Um Okay, I'm gonna jump back to these questions just so that I make sure I get as many as I can K plus Lee says that she's very nervous about becoming a teacher and feels feels unprepared I would just say Once you find out what grades you're gonna teach get a hold of those standards Really try to understand what they are reach out to other teachers reach out to your team reach out to your Administrators and your coaches because they really do know these standards really well and they're going to be able to help you a lot Feeling unprepared Man, I think we all had that feeling just get yourself in there have a plan for the first couple of days Feel it out get those procedures in place and I promise you once those procedures are in place The learning will come I promise you Let's see the counselor at our school so Meredith Marshall says she's debating becoming an elementary school teacher or school counselor Do you have any insight into what the counselor does day-to-day? Do you ever interact with her? Do they come do classroom lessons on bullying? Thanks. Um, I Actually did have some good insight on my school counselor last year. My dear friend Alicia was our school counselor last year She was actually interning and She was a busy little bee. She took on all of the kiddos that had That were being referred to special ed that had behavior Issues, so they're very busy She did have to go and get her masters to be able to do that So as a teacher, you'll need a bachelor's but as a counselor or school psychologist You do need to have a master's degree So in psych school psychology She didn't really have time to do any classroom lessons She did have a group that she would pull kids into that were having a hard time in the classroom So that was nice But she was very busy Um, it's your fun all cool says what's your favorite food? I love Chipotle My husband is a law enforcement officer My favorite part of being a teacher. I think I've answered this one. I'm just interacting with the kiddos and having those relationships My dream vacation is Disney World Definitely Do you get along with the other teachers? I love the people that I work with they are amazing people. I I'm I try to be a really positive person at work and Try to stay away from like gossip and negativity while I'm there. So if anyone does have, you know a problem I try to stay out of it and not listen to the negativity and I think that it's a really good idea Don't get caught up in gossip because being a teacher is just like being back in high school people are gonna talk about each other They're gonna talk negatively and it's up to you to decide if you're gonna be that way Sorry, I just burped I do read aloud to my students. I actually love doing read alouds. I read the entire book holes to them I mean they followed along But I read the whole book and they insisted that I read the book because I did the voices and they loved that I just got an email for my YouTube channel apples and tiaras at gmail.com so hopefully I can keep up To date with that. I probably won't answer those every single day just because it is you know gonna get busy But I will do my best to To answer emails if you guys email me Um authoritative teacher I would say that if you Ways to become an authoritative teacher is if you make a relationship with a student and they do something that you don't want them to do You still need to get on their butts about it. I had a kiddo last year who was amazing. She was the most Brilliant sweet kind person and she would constantly interrupt me during my lessons. She would get up She would like erase the board if I didn't want her to like she would just she was trying to be helpful But it was just more like she was controlling what was going on And so I had to take her off to the side and say look it's really disrespectful that you are interrupting me that you are doing this that and the other and she stopped and It's not me being mean.  I'm the teacher I do love you, but I need you to stop doing this because it's making it really hard for me to do my job And so she respected me for that. I I tried to never call kids out in front of the whole group I try to take them off to the side talk to them have a conversation because that's embarrassing I mean at least that if they're drawing attention to themselves and they've already got the attention of the class There's ways for me to call them out in a nice way rather than be mean about it So I try to do that A con of teaching I have a whole pros and cons video if you want to go watch that on my channel I would just say building relationships with difficult colleagues find something interesting to talk about with them that you have in common and Just say hi to everybody in the hallway. Don't just walk by, you know Just give a wave give a smile a smile can go a long way I'm reading the book wander right now. Actually, it's I'm planning on doing a literature study with it next year So I'm reading it right now Seating arrangements. I do flexible seating. So once they break my trust with flexible seating, then I assign them a spot Okay, I'm gonna scroll all the way to the top because I think I'm missing a couple Most of these have been answered. I'm so excited that so many of you are here watching me live. This is so exciting And I have my contacts in so I'm like trying to read these Sorry, I'm like super quiet. I'm trying to like read intently. I Don't use an Erin Condren lesson planner I use the life planner because I use planbook.com to plan my lessons Um, so I just use the life planner to plan like to like write when I have meetings and things like that in there Um, I do use class dojo. I have a video on my channel about how I use it Middle schoolers who want to be teachers, I would just say get yourself involved in a classroom Definitely Find ways to be Um Involved in schools Tell us about you. What about me? I do guided reading. Um, I Uh, I would like to do lit circles this year and I have done them in the past Just not with different books like we've done lit circles about chapters that we've read together Passages we've read together I don't really think that I would want to do Readings literature circles where all the different groups are reading different books Because I think that it's better that we all focus on one book at a time I think that would be better for higher level. Um, like sixth grade students Um, but the books that I choose the kids always love them. I always do because of when Dixie Um, I do Shiloh. I do holes. I'm planning to do hoot wander um This year and then there's a couple other ones that I've heard of danger in the desert is amazing for arizona because it sets there. Um Yeah, so Pregnancy is going great. Honestly, if I didn't have a belly, I wouldn't really know that I'm Um pregnant Um I'm from arizona in the united states If I could have a superpower If I could have a superpower It would be to Not gain weight Like I would love to be able to just eat whatever I want And not gain any weight And have a perfect body like a super gem or be able to work out and not feel tired That would be amazing. That would be super amazing Like a super mega body person I know I'm not fat by any means but We all have our Little things that we don't like and I would just like to be able to eat what I freaking want Freak the mighty Uh, let's see I do have a name, but I'm not gonna do it yet. Um If you guys are gonna be disrespectful in the comments go ahead and Get on out so par doll too. You can go ahead and leave I'm not gonna be Talk to you that way. Please get out Guys, just ignore the rude comments um All right, so I'm going on 35 minutes So I think I'm going to go ahead and wrap this up I'm really really super glad that you guys were all here. This just made my whole day And I hope that these questions that I answered today were helpful And if you guys have any other questions, please do not hesitate to add them in the comments below On this video because I am going to publish this video Um onto my channel so that others who weren't here today can watch it Um, so if you do have other questions, please Please don't hesitate to comment and ask and I will do my best to get to them Um, do you want to come say hi? over here Alice wanted to come and say hello Say hello, Alice She's like, what's going on?  These guys come into my classroom a lot too for um, whoa, um behavior incentives when we do um When they've earned enough points as a class we have dogs come in Do you want to say hi to jack? No, I'm gonna take a nap All right guys, so I'm gonna hit the road. Thank you so much for tuning in I really really appreciate all the love and I will see you guys in the next video And maybe I'll go live again. This was fun This was fun. All right guys. Love you. Bye


Welcome back to the Deal Room, the first episode of 2024. So, Stephen, how is it going? And what's on the docket for today? Yeah, good afternoon, Anthony. And happy new year, everyone that's listening. I had a great 45 minutes listening to your predictions, your market's predictions pursued earlier on today. So, great job, Ant and Piers for that. But today, we are going to do a deep dive into Tesla. We thought we'd kick off the new year with a single headline, BYD outstripping Tesla in terms of car volume sales. And then we're actually going to maybe take a bit of a theme from Piers and Ant's episode and talk about the magnificent seven, talk about Tesla's business model relative to the other six, do a little bit of a bull in a bear case and then end up with a bit of a DCF discounted cash flow analysis that we will make available on LinkedIn, on our channels. So, looking forward to it, where do we start? OK, well, let me cover the story that's been in focus this week, which is the headline news that BYD has overtaken Tesla. They've essentially become the world's leading EV seller. And to give this some context with numbers, Tesla did sell more vehicles than analysts predicted in Q4. They sold just under 500,000. But BYD sold 526,000. And this is quite meaningful because actually that's on the EV side. That's battery only vehicles. But if you actually start to take in different things, so hydrogen powered models, things that then hybrid vehicles, things of that nature, BYD actually overtook Tesla back in the first half of 2022. So Tesla have got, they were kind of the, I think Piers always describes it. It's kind of like in cycling, you've got the lead pack and then there's the peloton. But the peloton has quite quickly broken, it's almost splinted off and BYD has sprinted up to catch to Tesla and in fact overtaken it. So one of the main things here is something that you did a great job. Many times last year of emphasizing was the emphasis on cost, efficiencies underpinned by BYD's vertical integration. And that meaning then from the suppliers resources to batteries, computer chips to the fact that actually BYD not only makes cars, its top battery maker means that its status in that arena that it can supply rivals, including Tesla itself and also giants like Toyota, for example. And so rather than dive into those numbers specifically, we're going to talk about these models of how they operate as a business for Tesla's case study, but also the magnificent seven. I mean, you're probably going to prove me wrong when you start talking about Tesla. But I think Tesla is a, I'm going to say it, Elon might be listening. I think it's a fabulous company for the other things beyond cars that it does. But I think that when you start to take into consideration the fact that with China and full state backing, I think BYD is going to go for really big things in the future. Yeah. So why is BYD, let's say the market capitalization of BYD is $79 billion. The market capitalization of Tesla is $740 billion. You've given a really, really good overview of BYD and why it's best place to take advantage of state backing plus technology. Why is it valued at kind of 11% of Tesla? Yeah. I mean, my only guess on that would be without looking at real details is the fact that the ability to access BYD, perhaps the foreign investment into a company like that comes with certain issues, that being that it is highly aligned as these technology firms are in China with the Chinese government. So I think that probably explains a bit of it. I would imagine as well that the Chinese state don't want foreign investment into that company. They want to control it themselves. So yeah, I think that probably explains a large part of it. I think it's quite a nice representation of the difference between a legacy command economy, AKA China, where there's a great deal of centralization in terms of investment and direction from a strategic and technological perspective and then a relatively open market economy that is based largely on the pools of capital that are spread across and directed towards the US. And that may well explain quite a lot of A, BYD's advance but still B, why it's only worth 11% or 12%, the pools of capital are just not as deep. Well, long term, I wonder how those pools of capital will shift because now you have the bricks expanding, taking in countries like Saudi Arabia, for example, and a further alignment with the world's most populous country like India, whose infrastructure, whose education affluence will continue to grow. The foreign capital doesn't need to come from those traditional sources that we've been used to seeing perhaps over the last few decades. Yeah, and look, their trailing price earnings ratio, BYDs, is still pretty punchy relative to the car industry, right? It's still at 20 times. Now, Tesla's is at 77 times trailing, 64 times forward-looking. So that's kind of pretty bombastic, but at 20 times price earnings ratio for BYD, compare that to VW, four times trailing price earnings, GM, five times, Ford, eight times. So it's still achieving a dislocated itself from a traditional car manufacturer's valuation. It just hasn't yet scaled the heights of Tesla. And quite interestingly, 31 out of 32 analysts have a buy rating on BYD. We'll talk a little bit more about Tesla in a bit. Yeah, and then the other one was, what we talk about for an investment, Warren Buffett was actually one of the initial investors. They've actually reduced their stake quite recently in BYD. And one of the things that they said was, they don't wanna bet against Elon Musk. And Charlie Munger, may he rest in peace, and Warren Buffett, they're pretty old school. I mean, they pivoted a lot with the investment now into Apple, you could say with technology. However, it was very interesting to see their comments. They were basically like, don't quite agree with how some of the things that he might behave for Elon Musk. However, he has a solid proven track record and perhaps it takes an ego like his to push the boundaries to reach the heights that he has done with most of the things that he's taken in. So yeah, but they've still got, I think it's about a 2.3 billion holding in BYD as it stands to this day. So still got some skin in the game. That's pretty punchy. So yeah, let's talk a little bit then about Tesla and I'm really interested.  So how do you start to value a company like Tesla though? That isn't just cars. Is it an automotive manufacturer? Is it a technology company? And many other things probably in between. So how do you actually, well, maybe we'll start with the business model then we'll get to how do you actually deconstruct that to get a valuation? Yeah. So this is a really interesting question because Tesla tends to be blocked in as part of the magnificent seven alongside six other technology companies. And we've had many experiences where we've created an acronym, whether it's a fang or whatever it might be and one or two of those companies have dropped off or dropped out of that core group of mega caps. And Tesla from a business model perspective is relatively different to all of the other companies within the magnificent seven. Now, this is interesting from a perspective of share price growth over the last year. And I know that you and Piers mentioned it on your pod, you know, Tesla up 110%, Google up 60%, NVIDIA 233%. So they're all going gangbusters. Just before we get into the business model and just to really set the scene of Tesla and how we try to consider the valuation and the forward-looking prospects of the company, the price earnings of Tesla 77 times, price earnings of Apple 30, Microsoft 36, Meta 31, Google 27, even NVIDIA has had this pretty remarkable year, price earnings of 62. So it's already an outlier from its share price divided by earnings per share relative to these other six Goliath companies. So you're thinking, well, I'm thinking, if I'm an investor, what is this secret source? What has Tesla got that the other magnificent seven hasn't in order to be valued at that remarkable multiple? And now when I think about technology companies, the breakout technology companies, the Google, Amazon, Meta, Apple, Microsoft, let's just keep it at those five for now. I think that they, all of them to some extent, take advantage of a number of things that make them worth what they're worth. The first one is high gross margins. And this is kind of anchoring it to some valuation principles and some business strategy principles. Now, everyone wants to run a high gross margin business. High gross margin business essentially means that you add an extra unit of sales and you don't really add much cost. Your cost of goods sold are relatively low relative to your addition of one sales. And obviously you think about a software product, doesn't cost a great deal more to add one node to that software infrastructure. So the gross margins of Meta over 80%. So for every dollar of revenue they generate, only 20 cents is direct costs. Nvidia 74%, Microsoft has increased significantly over the last few years as it's transitioned out of more kind of harder to build things into software and cloud computing and things like that. It's gross margin 71%. And this is what really attracts investors. You turn on the marketing tap and hopefully the profit margins just boom, boom, boom. And you've seen this with the big companies. Now Tesla's gross margin, it's been the subject of significant scrutiny is hovering just under 20% because it manufactures cars. And 83% of its revenue in 2022 was automotive sales. So yes, we can get quite excited about the technology. Yes, we can get quite excited about energy generation and storage. But actually it's gross margin is 20%. In fact, it's gone down from about 24% to just under 20% with the price cuts. So if I'm looking at one of these magnificent seven businesses and I'm looking at high gross margin businesses, then Tesla for me seems to be a bit of an outlier. The only comparable, quote unquote comparable is Apple because Apple manufactures stuff, but it's gross margins 44%. And that's actually increasing as it transitions more away from the hardware and more towards services, which is growing at 15% year on year. So it's a really interesting one to think, all right, why are we valuing Tesla at 77 times trailing price earnings when it's gross margins are only 20%? That would be the first thing that I start thinking about when trying to value this company. So my first rebuttal if I was to test the spokesman would be talking about the data gathering and our advantage to fuel our AI data systems and our models. And that's why they never talk about the car. I mean, the car has a very slow to market new design, the cyber truck, incredibly hard to manufacture. It's not going to scale up for ages. It's not going to be cash flow positive for a long time. It's kind of beside the point. It's just, that's I think more marketing. And then it's about the, it's almost like whilst their cars aren't particularly high quality manufactured against their peers, you just draw emphasis on all of the more sexy of the moment areas of the business, even from the automotive section without all the other things that they do as a company. Yeah, and this is super interesting. So I totally buy your point. I totally buy your point that Tesla could reasonably be valued dislocated from other car companies. But the fact that it's valued so much more than the extremely high gross margin tech companies leads me scratching my head. And yes, you're absolutely right. Artificial intelligence. I know that I was just looking at their earnings reports commission one of the largest supercomputers to accelerate the pace of AI development. This is all good stuff. But is it worth a 77 times trading price earnings multiple? What would be the similar for one of the traditional old school automotive manufacturers? So like a GM, for example, or Ford? From a gross margin perspective, 15 to 20% is the kind of, is the goal. BYD's gross margin is 19%. And then as I've said, the translation into price earnings is pretty grotty. So it's just really interesting. It's not what I would expect. Tesla is not what I would expect to see in a breakout trillion dollar market capitalization business if it weren't for Elon Musk and if it weren't for the legions of retail investors that love this stock. Let me go on. So the second thing that quite a lot of these big tech names have from a business model perspective is network effects.  Well, one of them is this thing called network effect. And best described to network effects best described to me by using the analogy of a telephone. You know, telephone network, which is a network while adding one more telephone to the network makes the whole network more valuable and makes that particular telephone access a more valuable network. So if you were the only telephone operator in the world there was no point in having a telephone. And so businesses like Facebook, Facebook is the ultimate network effects business where one additional user makes the whole network more valuable or makes the business intrinsically defensible. It's kind of secret source times X. And these are what, you know, this is again what tech businesses really aspire to be every time a new business lists on Amazon it makes it better for the whole community. Every time a new piece of SEO is optimized or a new thing is uploaded on YouTube it makes it better for the whole community. Tesla doesn't have that or doesn't have it to the extent that I can envisage it at the moment maybe there'll be a future community of Tesla users that contribute data and make the node and the network better. Maybe you could say that the data gathering from each node in the network improves the overall data set but it doesn't have as clear a network effects as some of the other businesses that we're looking at. Is there a translatable brand and marketing network effect by what Elon does by being Elon? Yeah, I mean, so it's interesting. So one of the things that's worth looking at in terms of the financials of Tesla is we always look at gross margin which is really important and Tesla's gross margin is now comparable with the rest of the industry. This operating profit margin is quite a lot higher than its comparables because they don't spend money on marketing. So in terms of when we get to the discounted cash flow later on, in terms of the free cash flow it's not got a pretty chunky line item that many other firms do that have to spend billions of dollars significantly marketing and going through the old school distribution networks of automotive companies. So yes, you could say maybe it's not a network effect but it's certainly an advantage. There's certainly a tick in the kind of crows column for Tesla. Okay, so perhaps you could tell me a little bit then about the technology where we're at and where the advantages are with Tesla and then in comparison then to scale where are Tesla in real terms? So like unit sales and things like that. Yeah, so proprietary technology I would say this is probably a kind of a half tick in the bucket for Tesla. But then again, other car companies as we're discussing today other car companies are catching up from a technology perspective and you mentioned the vertical integration of BYD. Tesla doesn't, it's got manufacturing capability from a battery perspective but it hasn't yet ramped it up. So it's still very reliant on third-party technology providers namely Panasonic. So yes, from a kind of core automotive technology they had a moat or they had a gap. They were at the front of the peloton but it's being closed. I think obviously the most interesting part is the artificial intelligence layer the self-driving capability. When I'm just going to kind of very, very quickly reference the Uberbull, Cathy Wood you might have discussed this seven or eight months ago on the pod. I was just dredging up the $2,500 per share price target 10 times what it is today. And that was based on over 50% of their revenue coming from actually sorry, just under 50% of their revenue coming from robo-taxis by 2027 which is certainly pie in the sky. But this is the kind of mythical always around the corner breakthrough mega technology that Tesla is still probably best place to take advantage of. It's just that it's always just around the corner. It's never quite there and we can never quite feel it. So when we do a DCF analysis it's quite hard to slap on a great deal of future free cash flow to that line item. So Cathy Wood's like the supreme bull. I think she was hoovering up shares yesterday. I think even though BYD is overtaking them and everyone's being quite critical putting them under the microscope Tesla she's like, yep, perfect excuse, some negative narrative I'm gonna enter and load up a bit more. So what's the bear case then on the other side? Yeah, so I would say that the bull case is what Cathy Wood articulates and our investment management articulates. I'd probably furnish that with a little bit of macroeconomic or kind of macro regulatory Biden's industrial reforms discounts for EVs in the US of up to $7,500. There's some good tailwinds there that would crop up the existing valuation of the company. Now remember the Tesla's valued at $750 billion about $238 per share. Now, well, I've got my list of bear case points and I've obviously listed a couple with the business model but I put Musk up there. Is he part of the bear case? What do you reckon? Well, I think the easy answer is always to say that yes he's a liability. However, I sometimes have to check myself and you go through the catalog of calamities that he's said or done or tweeted and here he is. He remains in a position of power that he has. So I think that's lessened. In fact, when I talk about it more from some sort of threat from the board or from regulation, I think he's pretty untouchable on that side. I guess one of the things on him as a bear case is distraction. Does he have other things ongoing where he's a liability because he's not giving it due care and attention? Like what we saw with Twitter, I guess was the biggest example more recently where what it got valued again most recently and it's down a lot. And so you could argue, but I guess no one on the board can because he's Elon Musk of that thing's dead. I don't care what your 10 year X plan is. This company is thriving and we've got competition on our tails. So yeah, I'm a little bit on the fence.  He's a major bear consideration. I actually don't think he is so much because I think that we would have already have seen that if that were the case, would have already have negatively impacted the shares and it hasn't. Yeah, yeah, well, we'll wait to see how much more he can say and do. It's more extreme than what's come before. So yeah, so we'll put Musk on the fence. I think other bear scenarios before we get into the DCF, Cybertruck production concerns and also product quality concern, there's gotta be in there. I know that a lot of people, I think yourself included might say this, the Cybertruck's more of a bit of fluff, bit of marketing fluff and shouldn't really contribute to the valuation relative to the AI platform, but... Yeah, I saw a good strategist note from one of the banks. Can't remember which one might have been JP or MS and they were talking about that being your like, shiny product that you use to bring in new customers to then deploy to your most top selling vehicles as a strategy. So the Cybertruck was never meant to be a revenue generating product. That doesn't surprise me. It just in terms of the difficulty in producing those windows and the size of the car and I think it's got the biggest commercially manufactured pane of window for an automotive vehicle. So that kind of thing makes it very, very unscalable or difficult to scale at least. So we've got that in the bear case, new president coming, well, maybe. I don't wanna predict this thing, but it might well happen at the end of this year. So that, again, if we pivot to Trump, then that's not going to be good news for the EV industry. I would say, you know, the business fundamentals, if I was to... Oh, I'm not gonna make a prediction because it's impossible to make predictions about Tesla. It feels like they should not be part of the magnificent seven from a core fundamental business perspective, yet they are and they have been for the last 18 months. So I'm not gonna make a prediction. I've got an angle for you. They will remain part of the magnificent seven, purely on the basis of sell side institutions will ensure that they're within that camp to maximize then volume through that particular stock and the subsequent research and interest that it generates. It's too big a story not to be making money from. So I think it benefits sell side institutions as well as Tesla to be part of that. Which is the wonderful irrationality of markets, isn't it? Yeah. There's no fundamentals to suggest that it should stay at a 800 billion plus market capitalization company. Yet, as you say, there's the vested interest in the human element that is probably going to keep it within this magnificent seven, despite what my DCF might say. Okay. So is there any more points to add or is it DCF time? Let's go into DCF. Okay. When do we begin with this thing? Yeah. So I've done a very super, super simple. It's not what you call back of an envelope, but it's a very basic version of a discounted cash flow. But we will make available after this podcast drops. So what I've done is I've taken Tesla 2022 full year financials. It hasn't yet released 2023. I've made a number of assumptions based on looking at historic drivers and also looking at some market analysis. So for example, one of the key drivers to any discounted cash flow, starting with the income statement is revenue growth. Now I've started revenue growth at 20% annually. This is going down slowly to 10% by 2027, which is relatively conservative. So 20% year on year growth in 2023, going down to 10% by 2027. I've looked at slightly improved gross margins across the five years. So a company continuing to eke out economies of scale related productivity gains and margin gains. So that's from a income statement perspective. And you can see net income go from 12.7 billion in 2022, all the way up to about 48 billion by 2027. Again, we will publish this later on. Most importantly, and DCFs are only as good as the inputs and the assumptions that you provide. So most importantly, when looking at a discounted cash flow analysis, the two key things that you really need to look at are your discount rate, which is represented by your weighted average cost of capital, and also the terminal value perpetuity growth rate. How quickly is this company going to grow, assume that it continues forever after 2027? And just tweaking those two numbers is gonna totally change the valuation, right? So I put a weighted average cost of capital for Tesla at 8.8%. That's calculated based on a capital asset pricing model cost of equity. Company doesn't have any debt, makes it a little bit easier, bearing in mind the risk-free rate of 3.91%, et cetera. So 8.8%, which taking a look at some other DCFs is about average, it's maybe slightly on the low end. And then terminal value perpetuity growth rate at 3%, which often you proxy, you look at US GDP growth as your kind of terminal value proxy, so between two and two and a half percent, but we're gonna be slightly more bullish because it is Tesla and there is such a big market to gain and it's still a small player within such a large market. So there is a case for 3% in perpetuity. So when you kind of pull all these numbers together, you pull the five-year projected income statement, you project it out to 2027, then you apply a discount rate that is represented by the weighted average cost of capital, and then you put that perpetuity growth rate terminal value on the end. Guess what? Guess what my implied value per share is? Bearing in mind that Tesla is currently valued at 238 and a half dollars a share. What did my, and by the way, just so you know, I didn't look at, I didn't solve to get close to the valuation. I put it in valuation, share price blind. So what do you reckon I came up with? Something a lot lower. I think it's gonna be, so what was the share price they currently trade? I think 238 and a half. Okay, I'm gonna say you can knock 100 off that. 138. 241 dollars 30. Wow. How nuts is that? Okay. But again, if I lower the perpetuity growth rate, I've just got my model up right now. If I lower the perpetuity growth rate to 2%, then the implied value per share drops to 210 dollars. So this is how sensitive the model is and how you really need to take DCF as a range and as a kind of guide. The assumptions can be challenged and batted back and forth forever from a revenue growth perspective, from a WAC perspective.  I'm not being overly optimistic, I don't think. And look, 241 dollars. It's not the 2,500 dollars that Kathy would suggest it, but I don't think I'm gonna get a job from her, but anyway. If you are working at a sales side bank, so investment bank, and you're doing an ex-research role, they obviously come out with quite, there's kind of a meeting consensus around valuations. However, they are fringe ones. How much of it then is you are given a protocol model or follow to conform to the more bullish or bearish bias or is it, I mean, and how much is it just actually acting on the information at hand and evolving as we go? Yeah, I think there'll definitely be non-objectives, totally rational incentives and cajoling towards a particular outcome within an equity research team. And you do have very, very well-known equity research analysts that are perma-balls or perma-bearers that are going to adjust assumptions depending on their world view or maybe let's extrapolate the house's world view, the bank's world view, but these equity analysts live and die by the quality of their analysis. So if they were totally, if they were kind of pathy wood bombastic and this was clearly a bit of a publicity thing, right? There's not a lot of financial wherewithal in that $2,500 price target.  I'm just looking at the buy-sell hold ratings for Tesla at the moment. We've got about 16, I think we've got 16 buys, 31 holds and a couple of cells. So, you know, they're clustering around, around the fact that the valuation is pretty fair at the moment. So it's just quite interesting to do this analysis. Would there ever be a situation where the company could spin off certain parts to improve any of the metrics which you've mentioned or to see value, let's say in one particular component, like the data that comes from an increased amount of users driving their car? Yeah, absolutely. And you know, DCF is not the only way to value a company and a lot of equity research analysts and M&A analysts will do a sum of the parts valuation that will try to look at their discrete business units and value them individually. And then if the overall valuation is 50% higher than the valuation as a collective, then there's definitely gonna be pressure to maybe spin off or to restructure. In the case of Tesla, that's difficult because it does have this, it's not necessarily a flywheel, but it's got the kind of technology, aiding the car selling process, all the quality of cars and the cars providing feedback to the technology. So it probably doesn't feel like a sum of the parts can be done, especially since automotive sales is still 85% of revenue. But yeah, it's definitely something that a more in-depth analysis would take a look at. So Tesla year end 2024, what do you reckon? How much was it out for the year? Last year? 110% wasn't it last, last 12 months, something like that. Yep. You know what? I'm gonna rely on the experts. And I think you guys said the magnificent seven will be up in 2024 and they're probably outperforming the S&P, but not by as much as they did this year, which was obviously a pretty mad year. So I'm gonna say the same. I think that Tesla is gonna be up despite, again, it's so silly, despite all of my rational thinking and it's probably gonna be up, but not by as much as it was last year. Cool. All right, on that note, we'll wrap it up. Thank you, Stephen, good to get the show back up and running for 2024. As you said, we'll find a way to try and share your breakdown of some of these numbers. And please do drop a comment. There's quite a lot of terminology there. If you're brand new to corporate finance, you might not understand all of them. Just ask us on that post, drop a comment and Stephen will be happy to reply, I'm sure. All right, thanks very much, everyone. Thank you, Anne.