Is Tesla Solar Worth It?

I was curious to see if Tesla solar panels would be worth it for my in-laws since they live in LA and complain about their high electricity bills, around $500 a month.

The Tesla solar calculator (on their website after you enter an address) says it’ll cost $35,000 to install the solar panels (16.32 kW) and 2 Powerwalls (it originally recommended 4, but that made the upfront cost significantly more expensive). 2 Powerwalls is enough to have 2.5 days of backup power which seems sufficient. Tesla says this would result in $93,819 savings over 25 years by saving $367/mo. It’s not immediately clear how the calculation is done, but $367/mo * 12 months / yr * 25 yrs = $110,100. If we subtract off the initial cost of $35,000, it would be a total savings of $75,100. This isn’t the most realistic way to analyze the true savings because the initial $35,000 would likely be in the bank earning interest, or even in the market earning an even higher yield. Factoring in inflation, it would be higher. However, if we take Tesla’s word for it at $93,819 in savings, that would be equivalent to what you’d end up with at a 4% interest rate on the $35,000 over 25 years. Not bad, especially when the interest you’d earn at the bank would be under 1% at current rates!

However, it starts to become a questionable investment (in terms of dollars saved) if you expect to make a higher return than 4% in the stock market (or your investment of choice). I suppose, ultimately, that the decision should also be weighed with how not having electricity for a day or two during a black out would impact you.


Neuralink Announcement

Today, Elon Musk gave an update on Neuralink’s progress on building an implantable device comprising 1,000 electrodes that can send and receive electrical signals via bluetooth. The device can already be implanted by a robot, and has already been tested on pigs. The demo featured a pig with the implant and a visualization of the signals (from electrodes near the part of the brain that is stimulated by olfactory nerves) being received in real time as the pig was walking around, sniffing and eating.

Furthermore, the team was able to build a neural network that could predict the pig’s movement of its legs just from the signals being received from the brain. It is truly fascinating that neural nets could be used to map electrical signals in the brain to real world behavior. I wonder, though, if the same neural net would work across different pigs, or if it’s unique to the pig the neural network was trained with. Either way, you could probably use the same model and transfer the learning to a new neural net for a new pig (or even another animal?) much more quickly than starting from scratch.

The applications of this technology are vast, as demonstrated at the end of the presentation with the Q&A and various team members’ comments on why they are so interested in developing this technology.

Interestingly, it seems the primary purpose of the presentation was to raise awareness and attract qualified engineers to scale this device to mass production.

Also of interest is Elon’s primary purpose for starting Neuralink, which is to be able to compete with AI in the near future, which Elon currently considers to be the greatest danger to mankind. That is, computers can communicate much more quickly than humans can with each other, so in order to have a chance to fight computers that are communicating much more quickly, we as humans also need to communicate as fast. The human voice and typed words are extremely slow compared to how fast computers can communicate with each other. For example, it takes less than a second for computers to move data across the internet to the other side of the world, but humans would take a few seconds to type a sentence or speak over the phone to communicate a message. That’s just sending a message. The other component is comprehending the message quickly. Humans can’t do that on their own any more quickly than listening to a voice at 2x speed or speed reading as quickly as humanly possible. That’s where Neuralink would come in. You could communicate with each other by just thinking, and the person on the other end would understand instantaneously relative to how we currently consume communication.

All this is extremely exciting and intellectually stimulating, however another part of me is honestly a bit scared to see what happens with this. There will be both good and bad actors using these devices. As if our smart phones weren’t enough of a distraction in our lives, soon we will have yet another technology that will likely disrupt our lives for better or worse.

One question I have is, how would the device know for sure what you really want to do? For example, I could have a quick thought about doing something, but the device may interpret it to actually perform the action although the action was not something I intentionally wanted to do, or was unsure about doing. That is, sometimes I think about doing something, but don’t want to actually do it (I’m sure we all procrastinate). I wonder how much intent you need to have in order to trigger an action.

Regardless, congratulations to the Neuralink team! This is a monumental achievement, and I’m excited to see what benefits to society this technology can bring.


Tesla stock price 8/21/20

Currently in pre-market trading, TSLA was trading at $2,043. I expect to see some significant selling at these levels since $2,048 is a significant fibonacci extension level based on the chart’s Elliot Wave pattern. Looks like we are finishing a wave 5. However, with the coming S&P 500 inclusion and battery day, I’m not sure how that will play out with the EW count and fib level. The next extension would be at around $2,728, so we could see that target hit over the next few weeks which could end wave 5. Let’s see!



If you’re interested in understanding the bull thesis and justification of Tesla stock price (currently $1836), watch the above video as it does an excellent job summarizing the key reasons Tesla is dominating the EV market and will continue to do so. Their R&D has paid off to give Tesla the lead in vehicle range (402 miles for the model S) by improving power train efficiencies, shedding weight (i.e. less wiring than competitors), octovalve heat pump (increases the Model Y range to be basically the same as the smaller Model 3), and increased battery energy density relative to competitors (already in all Tesla vehicles, with further improvements to be announced on Battery Day on Sept. 22). Tesla is also going to make its own batteries (will be confirmed on Battery Day) in addition to sourcing batteries from other vendors (Panasonic, CATL).

Competitors in the U.S. and Europe are not taking Tesla seriously enough yet, despite each announcing some plans for delivering EVs, and are likely to continue to lag. Tesla is highly vertically integrated, whereas traditional auto makers are not. Tesla does not advertise, and has the largest share of the EV market. That alone should tell you that there is something very special about this brand.

Another key factor in the bull thesis is Tesla’s lead (by far) in collecting real world driving data to continuously improve their autopilot functionality to reach level 5 autonomy.

Tesla continues to make solid progress on this front, reporting that its vehicles had logged a total of 3 billion miles on Autopilot as of April 2020, up from a cumulative 1 billion miles it reported in late 2018. This is well ahead of its nearest rival – Waymo (backed by Alphabet) which reported that its test vehicles had logged 20 million miles on public roads as of January.

Though they only use cameras and radar, they have the best autopilot system on the road. A few well known figures (Anthony Levandowski) in the autonomous vehicle space have pointed out that LIDAR will not work (Waymo, Cruise).

traditional self-driving stacks attempt to compensate for their software’s predictive shortcomings through increasingly complex hardware. Lidar and HD maps provide amazing sensing and localization of the present moment but this precision comes at great cost (with respect to safety, scalability and robustness) while yielding limited gains in predictive ability.

Put simply, the self-driving industry has gotten two key things wrong: it’s been focused on achieving the dream of fully-autonomous driving straight from manual vehicle operation, and it has chased this false dream with crutch technologies.

Elon Musk said this about LIDAR.

 LIDAR is a fool’s errand. Anyone relying on LIDAR is doomed. Doomed! [They are] expensive sensors that are unnecessary

Tesla’s approach of only using cameras is going to work better (both economically and in terms of building a general solution to self-driving) and will win the race to full autonomy, if anyone. Elon is already testing out the rewrite of the software which incorporates time into the neural net.

The FSD upgrade adds about $7,000-$8,000 to the purchase price of a Tesla, and is planned to increase as FSD continues to improve. The extra margin on vehicle sales is something that cannot be matched by competitors, who must rely on third party systems, and it is unclear how that would exactly work. Would all cars have to have ugly and expensive LIDAR sensors added on somehow? It just doesn’t make any sense.

If or when Tesla reaches full autonomy, it will truly be a game changer. They will be able to rapidly improve the reliability of FSD, and in theory, every Tesla with FSD will be eligible to be part of a robo-taxi fleet that makes money for you when you don’t need to use your car. Understandably, you may not want your expensive vehicle to be part of the fleet. Just like that, it would eat Uber and Lyft’s lunch. At which point, should the market cap of Uber or Lyft (maybe both?) be added to Tesla’s market cap?

I look forward to that day!

Tesla is simultaneously growing its energy storage business, which is growing quickly and expected to grow as fast as its EV growth or faster (~50% YoY). It also has the lowest cost solar panel solution in the US. These businesses are early in their long term trajectory.

There are so many more reasons why Tesla is crushing it and will continue to do so, but I will have to come back to that some other time. It’s amazing how much information exists about Tesla that gives retail investors as much more more information than institutions, many of which do not do as in depth analysis as Youtube channels such as Tesla Daily, Hyperchange and the Limiting Factor. Watching their content has increased my understanding of the company and confidence as a shareholder.


Investing in 2020

2020 is a year to be remembered. 2020 is the year COVID-19 shook the world (technically it started in 2019, but took until around Feb or March 2020 for the US to take is seriously, if you’d like to call it that). It’s also the year that Kobe Bryant died in a helicopter crash, the year of Black Lives Matter protests, and hopefully the final year of President Trump in office. As gloomy and hopeless this year was, the S&P has recovered just a few points from the previous all-time high after a sharp 35% drop from February 19 – March 23. For comparison, the financial crisis of 2008-2009 incurred a 57% decline in the S&P from Oct 10, 2008 – March 6, 2009.

I graduated in 2008, and I did not have a job lined up after graduation (to be honest, I didn’t know what I wanted to do after graduating and could have worked a lot harder to find a decent job). I’ve been interested in the stock market probably since I was around 17 or 18, and of course had virtually no capital to invest or play with then, but enjoyed (and still enjoy) keeping up with market news. As one could imagine, the majority of news and views of the effects of the financial crisis portended doom and gloom for the economy and stock market.

However, betting against the economy was the wrong move after March 2009, although bearish views were preached seemingly everywhere, and gold was touted by a few investors as a good hedge against the collapse of the financial system (which I believe it is), regardless of a deflation or inflation scenario. Gold did do well, but up to a point (let’s say Sept 5, 2011 where the price peaked at $1,920 / troy oz). After that, we saw a 45% decline to $1,046.54 on Nov 30, 2015. If you were long gold, you would have been crushed. I admit that around 2011, I was super hesitant about the stock market given the magnitude of the earlier collapse, and as I understood more how the financial system worked (fractional reserve banking), and what quantitative easing was (money printing), it was not possible for me to turn bullish without a better guide around the bullish view and reconciling with the seemingly fragile state of the economy, rigged nature of the markets and financial system with the Federal Reserve as a backstop and lender of last resort.

It took me years to turn bullish or just give in and put more money into stocks for retirement at the very least. I learned my lesson the hard way–don’t bet against the Fed. BTFD. And, as interesting as gold was as a trade or investment, make it a relatively small percentage of the asset allocation (no oversized bets). I now understand that gold should be thought of more as an insurance policy, and frankly does not compare to owning the stock of a company that can grow much more (i.e. FANG would have been a juicy investment).

Fast forward to 2020, where the S&P 500 enjoyed a 405% increase from the March 2009 low. Then a pandemic is beginning and people are dying from a previously unseen virus, and there is no known treatment or vaccine. Cities and countries are going into some form of lockdown or shelter in place. The market is beginning to see severe declines, but this time, I’m a bit more prepared and sell off a good chunk of my investments before we hit bottom. I buy a few puts here and there on SPY because now I’m thinking we’ll go down further, but I’m losing money because volatility is so high, and stocks aren’t going down further. I look for investments that could do well once this is all over even though everyone is saying we have more downside left to go. On top of that, I subscribe to high quality research which sees the market as a glass half full. It reinforces my instinct to buy some stocks. I do exactly that, near bottoms, and just wait. Using some technical analysis techniques I learned over the past two years or so, I have target prices for two big trades I’m in. Over the next few weeks I’m anxious, and the psychological effects of making large trades or bets unfortunately shows up in my relationship with my spouse.

Thankfully, over the next few weeks or months, the trade plays out my way, and I’m rewarded for the risk I took. Feeling confident, I enter more trades, some of which are options trades, which don’t play out the way I had hoped. Luckily, these additional trades were much smaller and didn’t do significant damage to the earlier gains.

Enough story telling, that’s not the purpose of this post. The purpose is to communicate the value of investing in high quality research. I’ve paid for various newsletters, and had mixed results. Some folks are were bearish and overly cautious and talked more about scenarios years out vs focusing on the here and now. I found one that so far has been working very well, and the research is much more analytical and less biased than others I’ve subscribed to. I’ve learned that some major factors are age demographics and population size. The more people there are with purchasing power, the more likely the stock market goes higher (because more people buy stuff). It’s one very simple framework, and of course just one factor of many others.

Despite the fear of death and uncertainty about the future, life went on. People need groceries. Most people generally still had to work, whether at home or at their work place. Interestingly, many companies did spectacularly well because of the pandemic (Slack, Zoom, Amazon, and many others). Many also did poorly and small businesses in particular were more likely to go bankrupt, especially if they were not lucky enough to get a loan. I wish I could say I got in on the stocks that did well because of the pandemic, but at least I was able to capitalize on some other opportunities (there were many opportunities in general, but one only has so much time to spend researching them while working a full time job).

Even in August 2020, the mainstream media cannot really explain why stocks have rebounded and still portray how bad things are right now (which they are, undoubtedly). This leads to another important fact about stocks. Stocks look forward, and reflect future earnings. If a company has a few bad quarters while the virus persists, but afterwards, when the virus is gone, the company has earnings go back to “normal” (after factoring in inflation I suppose), the price today factors in those “normal” quarters as well. In a recovery, earnings might be expected to be even better than “normal”, and the price today would reflect that as well. That’s why there’s a discrepancy between the market and the present day reality.

I’ve only come to learn this from the research I subscribe to. It’s really quite basic, and I like the how rational the analysis is. Interestingly, one major reason stocks are high is because of the Fed intervention and the increase in money supply. I haven’t really kept up with the Fed’s operations, and haven’t heard much in the media or Twitter about it other than the Fed buying corporate bonds, but I have seen a chart of the increase in one metric of the money supply, and that is definitely also another way to reason about why stocks skyrocketed and may continue to do so. I suppose those two rational views coupled with the bearish sentiment is actually quite bullish (the inverse of sentiment can be a good indicator of market direction).

It’s hard to believe that stocks rebounded and may even continue to do so, but I’m not a professional investor, and how I feel about the economy frankly doesn’t matter. I have already suffered from lost opportunities in the market after the financial crisis, and I will not miss this next opportunity if experts that I pay good money for are bullish.


Ledger of record

The most interesting idea/thought of my day goes to this thread by Balaji Srinivasan.

I need to really spend some time studying this, thinking about it, and seeing what work is being done to achieve this. Since the advent of bitcoin, I’ve been thinking about how the content we see online can be verified cryptographically and attributed to a person, and how truth / facts can be established. The vast majority of major media outlets in the US make us all dumber. There is very little consideration for objectivity, scientific thought, fact checking, and truth for that matter. It’s not only a shame, but extremely dangerous, especially now that “news” is used to propagate dangerous lies, misinformation, and actually create civil unrest, whether it be the escalation of the violence between protestors and the police or other federal agencies, or the idea that the coronavirus is a hoax, etc.

It is deeply saddening to see people 100% believe some things that the media tells them that are not true. While it’s tempting to make fun of these people or take pride in being better informed and call it a day, but it is so much more important thing is to focus on potential solutions to the problem because we can’t just change people’s beliefs over night to solve our problems.


How to Install WordPress on Ubuntu in 2020

I’ve installed WordPress a few times over the past decade or so. I have never managed to keep a blog up and running for more than a few years. In the end I end up not renewing the domain and/or terminating the VPS it’s installed on. Hopefully this blog stays longer. At $5 / mo, it’s much easier to justify paying for this VPS than the $10 I was paying a few years ago. I’ll go through some basics about how I set this up (FYI this is not a full tutorial).

I first launched a new Linode running Ubuntu, and secured it a little bit (changing SSH config, setup the firewall rules). I installed mysql-server 8, nginx, php5-fpm and downloaded WordPress. I was following some tutorial online and I got stuck once I had setup nginx config, the mysql db, user and password and had wp-config.php setup with the proper credentials. I tried loading my WordPress site through my browser but it wasn’t loading properly. I forget exactly what I saw, but after googling around for a while, I finally found someone’s blog post which posted the solution.

ALTER USER 'user'@'localhost' IDENTIFIED WITH mysql_native_password BY 'mypassword';

Mysql 8 changed their authentication method! This was super frustrating, but I’m glad that someone discovered the fix and I was able to get WordPress setup.

I also setup https using Letsencrypt (free!), which I highly recommend.

You need to create a Diffie-Helman params (takes a while):

openssl dhparam -out /etc/letsencrypt/certs/dhparam.pem 4096

and also run certbot:

certbot certonly -d, --standalone --cert-name

Writing is useful

It’s been a while since I’ve written anything. I figured starting a new blog would be a start to write down my thoughts more, which have lately been super unorganized and all over the place, especially now that I have a little one to take care of! Writing is useful. It helps one focus, clarify, organize and even prioritize thoughts and ideas.

What are some thoughts that I’ve been having? I feel less productive than usual, and that’s fine given I have a baby to take care of. But my concern is that even if I didn’t, I would still feel “unproductive” and lazy. Covid-19 doesn’t help, as it keeps me indoors a lot more in my small home, where it gets very warm and there’s no AC. If only the AC guy I found on Yelp would submit the documents to the HOA so I could get a mini split installed.

I don’t want to just kill time. I want to make good use of it. It doesn’t matter whether it’s caring for my daughter, learning new things, reading books, writing, programming, or creating things, I just want to make good use of time and not have regrets.

Netflix does not help this situation. The last show I watched was Halt and Catch Fire. My spouse and I were hooked and finished it in about four or five days! At least it was somewhat educational or relevant to technology, the history of computing and the Internet. The transformations of various characters was also interesting.

SPOILER ALERT. Donna went from a busy working mom to a successful partner at a VC firm. Gordon went from a bored employee burned by a past failure in entrepreneurship to having multiple successful exits. Joe shed his unwavering salesman / Steve Jobs like visionary mentality to a softer, more thoughtful and caring human being. Cam went from a stubborn, fiery, my way or the highway genius coder to, well, mostly the same but more mature and less temperamental.

Watching the show made me think (not very deeply) about whether I wanted to do something as cool as any of these characters did, whether it’s starting my own company (something I’ve always wanted to do), being a VC (I don’t think I’m the type), or just working harder to become a better programmer (the most realistic option).

I’d love to read more books on programming, learn to code in more languages, think deeply and learn about new tech especially around cryptocurrencies, learn more about management (and do it). These are all great, but one can only spend so much time on these things while juggling actual work, taking care of a baby and loving my spouse. Not to mention the time I spend on Youtube, Twitter, managing stocks and investments, reading investment newsletters, and distracted by so many interesting content I find on Hacker News, Twitter, and Reddit. Oh and checking the Wall Street Journal a couple times of day, and, Am I so predictable? Is this all I amount to? A news and content addict? Sad.

Perhaps the solution is to not just read something interesting, but to actually apply it and create something with what I’ve learned.