People say with the recent unemployment payments that's there's no incentive to "work" anymore. But in my personal life I'm seeing more and more people quit their jobs to do things like live off Bitcoin fluctuation trading, living off stock market returns, renting out their properties. etc.
There seems to be almost no incentive to preform actual labor when just sitting back and watching Coinbase 24/7 is objectively more profitable.
Many people are making tons of money in crypto but even more are losing out. But people only post online when they are winning. It's the same as Instagram - everyone seems to have incredibly interesting lives but really most of us work 9-5 and spend most of our free time watching Netflix or performing mundane tasks. Social media focuses and amplifies the good parts of other people's lives.
Similarly, in my professional life I'm seeing more people working on silly apps that run a filter over a selfie than people working on e.g. medical image processing or you know, stuff that is actually useful. I see businesses who write a CRUD website/app to connect contractors (read: employers) to businesses. And they are hugely successful.
I don't know but something seems wrong in the way work is incentivized. Is the market broken?
This is the result of decades of policy favoring capital over labor. Tax rates on capital gains are lower than taxes on income earned through labor. The Supreme Court tells us that corporations are people too. Congress passes tax reform with permanent tax cuts for corporations but individual tax cuts that expire. Corporations run multi million dollar ad campaigns lauding “essential workers” as “heroes” yet they continue to pay a minimum wage that verges on poverty wages. Capital owners multiply their wealth every time a disaster hits while labor is still reeling from the last one.
What message is labor supposed to take from all of this? We are not valued at all, so why even bother? If society is set up to be a system where we all just trade paper and bits back and forth, then why do any productive work at all if you’re going to end up getting shit on?
Almost all wage earning activities have had downward wage pressure on real wages for the last 5 decades. The only exception to this sees to be highly defensible businesses/monopolies and the talent pool these businesses draw from.
I wouldn't be surprised for more daytraders to emerge playing games like GME/TSLA/BTC. With infinite printed money there never needs to be a greater fool. Shorts who go bust get bailed out, banks who bet long can pump the stock on near negative interest, Individuals can drive momentum to the point that other players leverage the money spigot.
After all as long as the money doesn't get withdrawn it doesn't impact the real economy right?
To make more money from investing than working you need a whole lot of savings. If by some miracle you can make 10% a year long term (and you haven't been poached by a hedge fund yet), and you need 100 k to live, that means you need to have more than a million in the bank ("more", because you want to compensate for inflation as well).
Central banks printed billions to "save" the stockmarket. Leading to gigantic hidden inflation.
Poor are poor. Middle class are screwed (money on bank account basically has negative interest due to inflation). So you can be a pseudo rich by just holding stock/bitcoin/peoperty - since they increase in value purely due to money print.
If you are a middle class person the central bank basically screws you to save the stock market.
Unpopular opinion but the central banks are the main source of inflation.
Now the economy is completely unglued from any fundamentals.
Endless money printing distorts value in weird ways in my opinion.
But I think what you're seeing is lots of fomo and people who had savings because they were forced to save (couldn't spend it), they should be back to their jobs when the market inevitably crashes.
Would be nice to have enough money to invest enough to make a nice living wage off of the market right now. Most people don't have that $$. Early adopters are WAY ahead of everyone else in this regard. Luckily I got in early.
We seem near the top of an epic bull run. I'm not sure the ability for everyone to get rich by trading virtual things between each other will continue indefinitely.
the people that say shit like "unemployment payments encourage laziness" are talking about poor people, minorities and people of color.
The people you're referring to doing crypto trading are typically affluent already, or people in social structures and communities where they have places and people to fall back on.
The headline is not only wrong but it is intentionally misleading.
I don’t understand the games people play when certain financial numbers line up and they want to “give credit” for all the profit to one thing or another. It’s not reality, and it’s not how a company is run.
Tesla is trying to grow as quickly as possible, and will deploy as much capital to that end that they can do so reasonably efficiently.
They sold about $10 billion of product with a gross margin over 20%. That’s $2 billion of gross profit that can fund their growth. They also had ~$500 million of credits due to making all those cars, so it’s $2.5 billion in gross profit from selling cars that funds their future growth. Additionally they apparently reported another ~$100 million of capital gains from Bitcoin. That’s an additional 4%.
The Bitcoin did not drive their profit. The credits did not drive their profit. What drives profit — when selling a product with 20-25% gross margin - is how much you are spending on future growth. And they are growing at 50% YoY which is nothing short of incredible at their scale.
The same people shitting on Tesla now were shitting on Amazon 10 years ago (and we know how that turned out). It's the exact same situation, only Elon Musk is more active/controversial on Twitter than Bezos ever was.
Yeah, and then if you under reserve on warranty costs and stuff repairs into "goodwill" under Services/Other, people who don't know better will go on the internet and talk about how it's fine for the company to not have an overall profit because your margin is 20% even though you spend a good amount fixing cars you already sold because quality control is poor.
And to answer the other responder's response about Amazon - Amazon raised money twice, totaling $108M. Tesla is still raising money $20B later, they are funding their efforts primarily off investors not their own operations.
It's worth a review if you think the emission credits point is a substantial criticism of their business model. Also, bear in mind that they are a growth company, and are building two major factories concurrently (Austin, Berlin). If they didn't have emission credits as part of the revenue blend, they might slow down the growth a bit as a result. The point being that taking away emission credits would not necessarily mean they would elect to be not profitable.
"Much" may even be an understatement here; according to the WSJ article,
> sales of regulatory credits to other auto makers to help them meet emissions mandates, which carry a 100% profit margin, reached $518 million. That accounts for nearly 100% of Tesla’s $533 million in pretax income
it sounds like "almost all" would be a reasonable description.
If we accept that emission credits are intrinsically valuable (i.e. have some utility in the form of helping to reduce the adverse effects of Global Warming), I do not see why that is an issue. You can think of a portion of each credit as part of the utility of one actual Tesla car sold.
Crypto is wild wild west even a small speculation can send prices up like 10-20% in a day. There is little to no government oversight, if you have a hint or some insider knowledge there is lot of money to be made. Other thing you can do is whenever crypto is down just put few dollars across all options you have and eventually one of these coins will skyrocket and you diversify again.
Makes you wonder if it was all a pump and dump scheme to start accepting Bitcoin in the first place. Nothing changed between then and now in regards to energy use of Bitcoin. Completely legal tho, so maybe it's Elon's way of rubbing it in the SEC's face.
I'm curious — for startups that are funded, what do you do with your cash? Say, if you got $100k in pre-seed. Do you create a bank for your startup (e.g. First Republic) and put it in a cash account?
Do you put it in something like a managed or robotrader account? ...do you put it in bitcoin or crypto?
Tesla is only a car company the way Google is an email or search provider, imo.
Their long bet on cryptocurrencies is smart given instead of shedding electrical load into the ground, Tesla can probably recoup the electricity to power micro mining. There is so much fashionable hating on Musk, and that he manages to survive it means those people don't see what he does.
What a sensationalist title. Technically correct, yes, but misleading in spirit. Most people will see the title and not read the rest of the article, which results in the sentiment: "the only reason why Tesla is still afloat is because of XYZ." Would you want to invest in a company like that?
And yet, as we all know, Tesla has been an amazing stock to buy over the last couple of years, and it was also so incredibly predictable [0][1]. If you haven't made money on Tesla, then it's because of titles like this. I would be furious with WJS and all other publications that have been talking shit about Tesla - they are doing you a disservice.
[0] This statement tends to get people riled up, but I noticed a pattern: people who agree are those who have driven a Tesla, and people who don't are those who haven't.
[1] The experience of driving a Tesla is unlike anything else in its price class. But that's subjective, so let me make another argument for why the stock should have been an obvious buy all these years: the brand value alone will continue to propel their sales for years to come. When someone says "I drive a BMW" and someone else says "I drive a Tesla," which one stands out more? People care about brands, as you can see in the rise of the Coca Cola stock in the last 30 years (btw, if you haven't checked out that graph, you really should). So if Coca Cola was a good buy and we celebrate Warren Buffett for recognizing that, on the brand thesis alone, Tesla should have been as well. But I guess you won't read that in the WSJ.
>What a sensationalist title. Technically correct, yes, but misleading in spirit. Most people will see the title and not read the rest of the article, which results in the sentiment: "the only reason why Tesla is still afloat is because of XYZ." Would you want to invest in a company like that?
I wouldn't invest in Tesla because it's valued at a price/market capitalization worth more than all other car companies combined. This is before we get into the crypto currency hijinks or Elon's market manipulating tweets.
The valuation is insane and not supported by the current or future business.
> The experience of driving a Tesla is unlike anything else in its price class
True, it’s more akin to driving a prius than a comparably priced german car. Especially when looking at the higher end Tesla models.
> When someone says "I drive a BMW" and someone else says "I drive a Tesla," which one stands out more?
At least in Europe “I drive a Tesla” makes you sound like a taxi driver. It’s just not a cool brand anymore. (Maybe Cybertrucks and Roadsters will change this?)
Your second argument, that Tesla is cooler than other car manufacturers, is even more subjective than your first. There can at least be some kind of metrics showing which car drives better.
[+] [-] question000|4 years ago|reply
There seems to be almost no incentive to preform actual labor when just sitting back and watching Coinbase 24/7 is objectively more profitable.
[+] [-] sschueller|4 years ago|reply
Labor should be tax free or low and capital gain should be taxed high. Time is more valuable than money and taxes should reflect that.
[+] [-] robjan|4 years ago|reply
[+] [-] MattGaiser|4 years ago|reply
You need a decent amount of capital to pull off the trading and renting. Unemployment isn't pocket change to those people, but it is not a lot.
[+] [-] amelius|4 years ago|reply
I don't know but something seems wrong in the way work is incentivized. Is the market broken?
[+] [-] ModernMech|4 years ago|reply
What message is labor supposed to take from all of this? We are not valued at all, so why even bother? If society is set up to be a system where we all just trade paper and bits back and forth, then why do any productive work at all if you’re going to end up getting shit on?
[+] [-] lumost|4 years ago|reply
I wouldn't be surprised for more daytraders to emerge playing games like GME/TSLA/BTC. With infinite printed money there never needs to be a greater fool. Shorts who go bust get bailed out, banks who bet long can pump the stock on near negative interest, Individuals can drive momentum to the point that other players leverage the money spigot.
After all as long as the money doesn't get withdrawn it doesn't impact the real economy right?
[+] [-] the_local_host|4 years ago|reply
[+] [-] fallingknife|4 years ago|reply
[+] [-] Grustaf|4 years ago|reply
[+] [-] brobdingnagians|4 years ago|reply
[+] [-] rvba|4 years ago|reply
Poor are poor. Middle class are screwed (money on bank account basically has negative interest due to inflation). So you can be a pseudo rich by just holding stock/bitcoin/peoperty - since they increase in value purely due to money print.
If you are a middle class person the central bank basically screws you to save the stock market.
Unpopular opinion but the central banks are the main source of inflation.
Now the economy is completely unglued from any fundamentals.
[+] [-] rawtxapp|4 years ago|reply
But I think what you're seeing is lots of fomo and people who had savings because they were forced to save (couldn't spend it), they should be back to their jobs when the market inevitably crashes.
[+] [-] astrowilliam|4 years ago|reply
[+] [-] tim333|4 years ago|reply
[+] [-] msgilligan|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] senectus1|4 years ago|reply
the people that say shit like "unemployment payments encourage laziness" are talking about poor people, minorities and people of color.
The people you're referring to doing crypto trading are typically affluent already, or people in social structures and communities where they have places and people to fall back on.
[+] [-] DougN7|4 years ago|reply
[+] [-] andrepd|4 years ago|reply
Is it? I find that highly improbable.
[+] [-] misiti3780|4 years ago|reply
[+] [-] muttantt|4 years ago|reply
[+] [-] zaroth|4 years ago|reply
I don’t understand the games people play when certain financial numbers line up and they want to “give credit” for all the profit to one thing or another. It’s not reality, and it’s not how a company is run.
Tesla is trying to grow as quickly as possible, and will deploy as much capital to that end that they can do so reasonably efficiently.
They sold about $10 billion of product with a gross margin over 20%. That’s $2 billion of gross profit that can fund their growth. They also had ~$500 million of credits due to making all those cars, so it’s $2.5 billion in gross profit from selling cars that funds their future growth. Additionally they apparently reported another ~$100 million of capital gains from Bitcoin. That’s an additional 4%.
The Bitcoin did not drive their profit. The credits did not drive their profit. What drives profit — when selling a product with 20-25% gross margin - is how much you are spending on future growth. And they are growing at 50% YoY which is nothing short of incredible at their scale.
[+] [-] misiti3780|4 years ago|reply
[+] [-] thomaskcr|4 years ago|reply
And to answer the other responder's response about Amazon - Amazon raised money twice, totaling $108M. Tesla is still raising money $20B later, they are funding their efforts primarily off investors not their own operations.
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] gutino|4 years ago|reply
[+] [-] vuldin|4 years ago|reply
https://www.cnbc.com/2020/07/23/teslas-sale-of-environmental...
[+] [-] bhauer|4 years ago|reply
https://pbs.twimg.com/media/E0ES_LuX0AED-eo?format=png&name=...
It's worth a review if you think the emission credits point is a substantial criticism of their business model. Also, bear in mind that they are a growth company, and are building two major factories concurrently (Austin, Berlin). If they didn't have emission credits as part of the revenue blend, they might slow down the growth a bit as a result. The point being that taking away emission credits would not necessarily mean they would elect to be not profitable.
[+] [-] jfk13|4 years ago|reply
> sales of regulatory credits to other auto makers to help them meet emissions mandates, which carry a 100% profit margin, reached $518 million. That accounts for nearly 100% of Tesla’s $533 million in pretax income
it sounds like "almost all" would be a reasonable description.
[+] [-] finolex1|4 years ago|reply
[+] [-] akshayB|4 years ago|reply
[+] [-] jb775|4 years ago|reply
[+] [-] fullshark|4 years ago|reply
[+] [-] grecy|4 years ago|reply
https://twitter.com/elonmusk/status/1392602041025843203
[+] [-] coding123|4 years ago|reply
[+] [-] yawnxyz|4 years ago|reply
Do you put it in something like a managed or robotrader account? ...do you put it in bitcoin or crypto?
[+] [-] josefresco|4 years ago|reply
[+] [-] ericmay|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] motohagiography|4 years ago|reply
Their long bet on cryptocurrencies is smart given instead of shedding electrical load into the ground, Tesla can probably recoup the electricity to power micro mining. There is so much fashionable hating on Musk, and that he manages to survive it means those people don't see what he does.
[+] [-] sunstone|4 years ago|reply
[+] [-] sergiosgc|4 years ago|reply
[+] [-] aerosmile|4 years ago|reply
And yet, as we all know, Tesla has been an amazing stock to buy over the last couple of years, and it was also so incredibly predictable [0][1]. If you haven't made money on Tesla, then it's because of titles like this. I would be furious with WJS and all other publications that have been talking shit about Tesla - they are doing you a disservice.
[0] This statement tends to get people riled up, but I noticed a pattern: people who agree are those who have driven a Tesla, and people who don't are those who haven't.
[1] The experience of driving a Tesla is unlike anything else in its price class. But that's subjective, so let me make another argument for why the stock should have been an obvious buy all these years: the brand value alone will continue to propel their sales for years to come. When someone says "I drive a BMW" and someone else says "I drive a Tesla," which one stands out more? People care about brands, as you can see in the rise of the Coca Cola stock in the last 30 years (btw, if you haven't checked out that graph, you really should). So if Coca Cola was a good buy and we celebrate Warren Buffett for recognizing that, on the brand thesis alone, Tesla should have been as well. But I guess you won't read that in the WSJ.
[+] [-] throwaway20875|4 years ago|reply
I wouldn't invest in Tesla because it's valued at a price/market capitalization worth more than all other car companies combined. This is before we get into the crypto currency hijinks or Elon's market manipulating tweets.
The valuation is insane and not supported by the current or future business.
[+] [-] ryanlol|4 years ago|reply
True, it’s more akin to driving a prius than a comparably priced german car. Especially when looking at the higher end Tesla models.
> When someone says "I drive a BMW" and someone else says "I drive a Tesla," which one stands out more?
At least in Europe “I drive a Tesla” makes you sound like a taxi driver. It’s just not a cool brand anymore. (Maybe Cybertrucks and Roadsters will change this?)
[+] [-] boomboomsubban|4 years ago|reply
[+] [-] unknown|4 years ago|reply
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