Hey so when it comes to tesla, i want to share a story with you about an institutional portfolio manager and give you some updates on that whole tesla firing ten percent of their staff debacle that led the stock to drop nine percent. Yesterday, along with a strong jobs report, leading to more fears that the fed's going to be more aggressive, let's talk about this now this. What i'm about to show you, i think, is a fascinating look into institutional money management, but i do want you to know that right now you can get 200 dollars totally for free by going to met kevin.com, tasty tastyworks is a stock and options brokerage platform. If you deposit, two thousand dollars with them for three months, they'll literally give you two hundred dollars.

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So take a look at this. This is from gary black on twitter. He says that my institutional portfolio manager friend said that the news about layoffs coming from tesla came out of a left field today, at 4 am by the way there have been a lot of people complaining about elon, musk's communication style. Here's an example of one of those complaints.

The problem is how elon musk communicates his messages. Without deliberating reminds me of his take tesla private comment. He needs to have a proper pr department to draft those releases and be clear what it communicates to workers and investors he's a one-man show costing us big all right. So so, let's break a couple of these things down and then keep going with sort of the institutional money management comment.

But this right here is an argument that essentially elon musk should be a little bit more clear, like hey. If you're sending out an email to executives, they're going to freeze hiring, maybe it should contain clarity about exactly wait, a minute who's getting laid off. Who needs to be worried? Is this a sign that production is slowing down? What are all of the details and maybe, rather than this going, you know coming out in a leaked email, how about it actually comes out in a formal press release right? This is not a terrible argument that they should have a little bit more uh. You know of a corporate structure, tesla's still kind of acting like a startup here.

I personally think the complaint that one man is costing us big is really, in my opinion, an opportunity, because, if you think about it, if tesla's going to lay off 10 of workers either through a fancy, formal press release with lots of things thought out or through An elon tweet and the fancy formal press release leaves the stock going down five percent and the elon tweet leaves the stock going down nine percent. Well, i have a better buying opportunity with the same fundamental information. Creating more short term fear, uncertainty and doubt, and so now i'm able to get a four percentage point additional discount i'll. Take the erratic communications when fundamentals haven't actually changed.

Let's see that's what we need to talk about here because see here's a hedgie that this this portfolio manager friend who says, i asked my analyst to get martin and zach. You know these are folks from investor relations over at tesla on the phone to explain the context. But of course no one gets back to me and i'm left scanning twitter to figure out if orders are falling off a cliff. You know - and this is the the in my opinion - the fascinating panic that you see in the stock market like this, even if you don't like tesla this right here is a lesson why why would orders be falling off a cliff if delivery time frames are stable? Well, it's potentially the case that supply chain issues are keeping order.

Time frames delayed and new pre-orders are falling off a cliff, it's not an unreasonable assumption, but what the person does with this unreasonable or sort of this uh? Well, i would say: um unfully informed assumption is the following: at 3 45 i tell my trader to sell to put an end to the craziness knowing full. Well, i sold a stock. I love with great fundamentals so here before corroborating their fear before this hedgie. Actually, figures out the additional details about what's going on with these layoffs which we're going to talk about they decide, you know what we can't take it anymore, we're going to sell now, hopefully, because i think that was a terrible decision, hopefully they're getting their free.

Two hundred dollars with tastyworks by going to met kevin.com tasty, but in the meantime they sell, knowing that they sold a stock with great fundamentals on really straight up, fear, uncertainty, doubt and assumptions. Remember when the email first came out, we were making a lot of assumptions. We're like okay, what does this mean like? Are there differences to orders who's actually getting laid off? We have some of those answers now and we're going to talk about those, but take a look at this and then he after saying he sold a stock with great fundamentals, went on to decry that elon is a ceo who bought bitcoin sold shares piecemeal to make A point that he paid a lot of taxes and then picks a fight with biden and two crazy senators. This, in my opinion, is not a rational institutional money manager.

This reads like an emotional child. Now i want to make it very clear. This is not gary black right. Gary black is talking about his friend.

I think gary black is very reason, but it shows you how even institutional money can get emotional. I mean look about it. It's like you, hear a piece of news. You start making these terrible assumptions, you think worst case scenario and then all of a sudden, you start justifying your actions.

By going. That's it the company's got great fundamentals, but the ceo is crazy. I mean he smokes weed, he he, but he bought bitcoin and that went down in value by you know six thousand dollars since he bought it and and he made a point about taxes and fights with politics and he's going woke and broke or whatever on twitter And it's like, oh my gosh you're fighting the woke brokenness on twitter right. It's like all of that that noise that franticness, that i just exemplified it's just pure stress and emotion, and that emotion multiplies their worst case scenario - assumption which ended up being wrong anyway.

But it shows you that if you ever feel this way, you're not alone, like institutional money managers, do this anyway, then complains about elon buying twitter enough already it's too much noise. In the end, i believe in the investment thesis that tesla will benefit most as ev adoption soars, but i get no satisfaction except an occasional cryptic tweet that no longer gets me excited it's all too much drama. So in other words, you get no satisfaction. In other words, this is an institutional money manager telling you here's a company with great fundamentals, but i'm not getting.

You know my little wee wee pleasure i enough and there's too much noise, so i'mma sell like a little weenie baby. That's that's kind of what you have here and it is shocking to me to see this same kind of like uneducated investor ridiculousness in the institutional money space, and it actually makes me lose a lot of respect for institutional money because, quite frankly, i think a lot Of institutional money is managed by people that don't really know what they're doing that. Actually don't do fundamental analysis and are just emotional investors throwing darts. I don't actually think they read about fundamentals or macro all day long, i'm not trying to say like.

Oh i'm better because i do, even though i do do that, i'm just saying it's. This is shocking to me, okay and and if you're stressed out by this, like i'm a little stressed out by this as well, you get life insurance in as little as five minutes. All you have to do is go to medcap.com life, it's what lauren and i use, and she had pre-existing conditions all right and they're. Just like nope here you go.

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It's like super super cheap for term life met kevin.com life, okay, so what actually happened? Well, let's take a look at elon, musk's follow-up, email. Here's his follow-up, headcount reduction, tesla will reduce, will be reducing salaried head count by 10, as we have become overstaffed in many areas. Ah, okay, all right note: this does not apply to anyone actually building cars battery packs or installing solar hourly headcount will increase well. Okay, that now goes to show that this institutional person was a total weenie baby and was wrong about their worst case scenario.

Assumption, because what elon's really telling you is that hey we're going into a recession, we're going to cut costs where we have too many people doing too little work and oftentimes that could be in salaried positions like management, human resources, bookkeeping. If all of a sudden, you have three bookkeepers, but the work could be done efficiently by two. What do you need them for? I just lost two salaried staffers and at first when i lost them, i'm like oh, my gosh. This is terrible.

Now i'm like crap we're doing what four people used to do. I'm sorry what five people used to do, including me with three people and i'm like damn that just saved me. You know four to five hundred thousand dollars a year. What does that do? Well? First of all, in a recession, it increases your ability to survive, but in addition to that, it also increases margin.

It makes companies more efficient, it cuts the fat. That's a good thing: we're going to get some more color on cutting the fat in just a moment too. No. This does not apply to anyone actually building cars.

Okay, so this turns on the head. This assumption that oh no uh car production at tesla must be plummeting hourly headcount will increase, which actually makes sense when you're ramping factories right uh. Okay, take a look at this here. This i thought was very interesting.

Oh yeah and a lot of people have been asking me for this. A lot of people have been asking hey like. Is there a list where you have like your cameras or your gear or stuff that you like to use stuff you like to buy or whatever? Yes, i've been updating it and i'm going to update it some more as well today, so you can kind of check back to it every so often if you want but honestly go to medcavan.com shop, and you could just see my little amazon affiliate page there or Whatever and i just updated it, so it's got some fresh cool things on there that i think you might like, but anyway take a look at this. This is ford's number of employees over time and and uh rob from tesla daily posted this, because joe biden obviously slammed uh elon musk for this.

This uh, you know cut here, and this has been ford's employee trajectory, and this has been tesla's employee trajectory. So it's kind of funny to hear joe biden slam tesla when, when you know ford is actually the one that has had the substantially declining head count, and even after this 10 salary reduction or whatever the workforce reduction of 10 cutting, mostly salary positions, tesla's, probably going To grow by next year, if we're at 100k right now, but we subtract 10k workers and that's 10 right, but then we hire 20k hourly, you know. Maybe these are the salary. These are the hourly.

Well, then, we actually grew by 10. The total workforce right. So very good, clarifying email here, which is very, very good, but this is another one that i thought was very fascinating. Gary black spoke with some employees to get a little bit more color on.

What's going on and uh, he says here. This may be what happened, and this sounds you know i i don't know like partly this potentially sounds a little erratic, which is not good, but then again, i kind of do think that elon musk has quite a level of erraticness to what he does, but sometimes That, actually is what makes a great leader you see a problem, and you try to deal with it right away rather than you know, waiting for somebody to do a study on it and waiting a year to figure out how to best do something, and just do It right it's kind of an entrepreneurial mindset, but anyway this may be what happened after elon came back from his visit to twitter headquarters. He saw that the fremont facility was well under capacity which prompted elon's tweet to those working from home. To return to work then - and that's probably because you see a bunch of empty desks or whatever, then several thousand employees turn up at fremont and it was chaos and all of a sudden, elon musk's.

Probably looking around going wait a minute. We have way too many people, which is actually a very interesting factor about work from home. Is that if everybody's in the office - and you see a bunch of people standing around because there's not enough work, you're like okay, let's fire people, if everybody's working from home, you think you know work's getting done, you don't know how many people are actually just standing Around because they're, not in the office for you to see right now, obviously you can manage in such a way that you have like performance goals and, and you could try to track all this stuff at a more mature company. That's what larger companies typically do or they don't they just let people sit around.

You know who knows it depends on the company. But anyway, then these people come gary black says not enough parking desk office space, which convinced elon that there were too many people at tesla. This is different from 2018 when they fired ten percent of people. That was pre-planned and human resources was involved.

This time it wasn't now, everyone is scrambling trying to figure out how to proceed. I've talked to half a dozen tesla employees today. Nobody is panicked. Many went through this in 2018, but this is different because back then a lot was going wrong and today most things are going right.

Almost all are supportive of elon's directive that those work from home should go back to work work at the office. Several worry about complacency and that the company has grown too fast. No one told me that order flow was declining, there's clearly a here. We go again feeling and a working in the moment, mentality rather than long-term planning.

But people said that's the culture and it works. Okay, all right interesting, so it gives us a little bit more color that yeah i mean this is just kind of the way our tesla culture works, but fortunately, right now we're in a place where a lot of things are going right rather than things going wrong And so i think this is this is very, very insightful. First of all, huge shout out to gary black make sure to follow him on twitter, make sure to follow me on twitter and get that free. 200 see this tasty work, coffee, mug right here.

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