This week I get rights to pull my "Restore Elon Musk (& Tesla) to Greatness" piece out from behind the "New York Times" paywall; so here it is; originally published June 11, 2024, 5:03 a.m. ET in...
Mr Musk has become an icon to, and attracted capital from, precisely investors who might take issue with the claim that the latest iteration of "Call of Duty" were less important than (as they might have it) 'the fake need for decarbonisation'—oil and the drilling for it are _much_ more butch than wind- and solar and hydro-power, so any scheme suggesting that the latter were preferable was probably dreamt-up by women—a suspiciously effeminate bunch—and other untrustworthy types.
Tesla accelerated the adoption of EVs by 2-3 years: a great boon to humanity. But that was in the past. I don't see what Tesla can do in the future that can't be done by somebody else at about the same time. It's just another car company, now. Elon Musk is a genius self-promoter, but is not a genius engineer. Most of his other enterprises (SpaceX aside) have been flops, if not pure vaporware.
Musk's real genius was in setting up a lot of charging stations. There was a chicken and egg problem. No one would build chargers until there were enough electric cars, and no one would buy electric cars with places to charge them. Tesla had a half billion dollar government development loan, and I'm guessing a good chunk of it went to build the Tesla charging network. Once the deadlock was broken, people started buying electric cars.
(Charging was a real problem. One day I was picking up some stuff at the local dry cleaners, and there was an electric VW Beetle out front with an extension cord running into the store. The car belonged to the proprietor's daughter. She was in town visiting the family and needed to charge. Nowadays, she could charge at the Safeway or Walmart, though there are obvious advantages to charging at dad's place of business. What's family for?)
The UK did not build charging stations that way with a single private player. So I don't think this idea is "genious". Clever maybe, in getting publc support to buld put the charging network. The lack of H2 stations has certanly symed hydrogen cars the US, although not in Iceland.
In some ways it was like GE and Westinghouse setting up broadcast networks to encourage the sales of radios. In England, the government did it. In the US, it was the private sector.
Or the BBC broadcasting the televised coronation of QEII in 1953 (from Alexandra Palace in London) to push the sales of tvs. ( Just as rationing was about to end)
The US TVA was a public that included the build out of electric transmission lines to spur take up of electrcty. The UK did the same on a national basis before the CEGB was privatized by Thatcher.
The problem with private infrastructure like charging stations with a single owner is lack of regulation over charging rates. If multiple owners do the same, unless a standard is enforced on physical form of the sockets, then owners can control vehicle sales.
We've seen how vested companes can pervert computer related standards when there is no public control with teh consumer being paramount.
I think a good follow up would be how many equity analysts rate Tesla as a BUY/HOLD rather than a SELL as the analysis and comps are very valid. Why any such analysts think that Tesla is not overvalued would be interesting. Is he intending to make electric airplanes as his cameo in Ironman 2 suggested? Or is it robots as he suggested? Is there any possibility that these might be what analysts are building into the price and would this float the stock price to their current level even if he suceeded?
Meanwhile, OT, Trump's DJT social media is priced well above its fundamental price that should be close to $0. Is there any explanation other than "investors" keeping the stock price high so that Trump can cash out to replenish his wealth as a bribe to reward the "investors" with huge tax cuts if he succeeds in winning the presidency?
I think fundamentals are overrated as a guide for investment. They might have made some sense back in the 1970s when stock prices were aligned with liquidation value, but the capital glut introduced by supply side economics has made them less relevant. Profitability and growth were nice, but other things offered higher returns. For example, in the 1980s, the way to make money was to find potential takeover targets. Conglomeration was easier with spreadsheets and lax antitrust enforcement, so getting in front of a takeover was the way to score. You could buy Intel or IBM or Microsoft, but you could do better by strategically anticipating Carl Icahn.
By the late 1980s, it was rather obvious that there was so much money sloshing around that the market couldn't stay down for long. No one panicked in the 1987 correction. As one analyst explained in the early 1990s, there was nothing to invest in so people bought stocks. Now, we have social media and meme stocks. It's all about anticipating which memes are going to catch on. Anyone can be Carl Icahn for 15 minutes.
I know this sounds horribly cynical, but consider bitcoin. Why does someone pay more than a token amount for a bitcoin? What are the fundamentals? It's all memes now.
I agree. I was an equity analyst in the mid 1980s in the UK, and then a fund manager in a tax haven. I had seen the writing on wall about investing and how fundamentals were a good base, but the players kept chasing momemtum, and arb action were the plays (e.g. like in the movie Wall Street). Fundamental analysis is still useful for steering clear of hugely overvalued stocks like Tesla, but going short in various ways can still wipe you out before the stock returns to Earth. Finding truly undervalued stocks that will make a decent return eventually, is still a hard game.
IMO, most people in the financial markets trying to make excess returns are deluding themselves that they add value. But the money these parasites make spinning their "expertise" keeps them in the casino..
(a) find a disequilibrium & then (b) have markets recognize the equilibrium vis-à-vis (c) find a disequilibrium & then (d) watch the disequilibrium grow larger until (e) your funding disappears & (f) you have to liquidate. You need systemic advantages too—like huge amounts of very cheap insurance-company capital and the ability to accurately gauge your leverage...
Elon stated, years ago on a YouTube roundtable with some of young disciples, that first reason for building EVs was the belief in the ‘peak oil’ theory and not decarbonization. He was right for the wrong reason.
For a long time, Musk kept shooting his mouth off about SpaceX. Then he made that stupid "big kaboom" comment and launched an unauthorized sensor in that Tesla. It's rather obvious that the government put its foot down. Musk has been rather quiet on the SpaceX front since then, even after SpaceX actually did manage a big kaboom. SpaceX customers are not meme stock people.
(it's an interesting world where the customers are doing multi-billion dollar ten year high technology contracts. I remember going to an ATA meeting and being dined on filet mignon, lobster and other luxury foods by Boeing one night and Airbus another. There were at least 500 of us, but the cost of the meal was round off error. I wonder what SpaceX serves. There was also a dryly delivered talk about FOD which I found rather fascinating. I guess someone has to deal with the possibility of crap on the runway damaging an aircraft. Back then, Guam was the foreign object damage capital of the world.)
Shotwell has done a great job, but since she's a woman, she won't be made CEO. Still, it's rather obvious that she runs the company as if she were one. This is often the pattern. A woman makes a company work but gets everything except the title and pay for her efforts. We also don't hear much about the man behind the SpaceX technology either. I gather he was fairly well paid to keep in the shadows. No D-503, Designer of the Integral announcements for Tom Mueller.
Mr Musk has become an icon to, and attracted capital from, precisely investors who might take issue with the claim that the latest iteration of "Call of Duty" were less important than (as they might have it) 'the fake need for decarbonisation'—oil and the drilling for it are _much_ more butch than wind- and solar and hydro-power, so any scheme suggesting that the latter were preferable was probably dreamt-up by women—a suspiciously effeminate bunch—and other untrustworthy types.
Tesla accelerated the adoption of EVs by 2-3 years: a great boon to humanity. But that was in the past. I don't see what Tesla can do in the future that can't be done by somebody else at about the same time. It's just another car company, now. Elon Musk is a genius self-promoter, but is not a genius engineer. Most of his other enterprises (SpaceX aside) have been flops, if not pure vaporware.
Musk's real genius was in setting up a lot of charging stations. There was a chicken and egg problem. No one would build chargers until there were enough electric cars, and no one would buy electric cars with places to charge them. Tesla had a half billion dollar government development loan, and I'm guessing a good chunk of it went to build the Tesla charging network. Once the deadlock was broken, people started buying electric cars.
(Charging was a real problem. One day I was picking up some stuff at the local dry cleaners, and there was an electric VW Beetle out front with an extension cord running into the store. The car belonged to the proprietor's daughter. She was in town visiting the family and needed to charge. Nowadays, she could charge at the Safeway or Walmart, though there are obvious advantages to charging at dad's place of business. What's family for?)
The UK did not build charging stations that way with a single private player. So I don't think this idea is "genious". Clever maybe, in getting publc support to buld put the charging network. The lack of H2 stations has certanly symed hydrogen cars the US, although not in Iceland.
In some ways it was like GE and Westinghouse setting up broadcast networks to encourage the sales of radios. In England, the government did it. In the US, it was the private sector.
Or the BBC broadcasting the televised coronation of QEII in 1953 (from Alexandra Palace in London) to push the sales of tvs. ( Just as rationing was about to end)
The US TVA was a public that included the build out of electric transmission lines to spur take up of electrcty. The UK did the same on a national basis before the CEGB was privatized by Thatcher.
The problem with private infrastructure like charging stations with a single owner is lack of regulation over charging rates. If multiple owners do the same, unless a standard is enforced on physical form of the sockets, then owners can control vehicle sales.
We've seen how vested companes can pervert computer related standards when there is no public control with teh consumer being paramount.
I think a good follow up would be how many equity analysts rate Tesla as a BUY/HOLD rather than a SELL as the analysis and comps are very valid. Why any such analysts think that Tesla is not overvalued would be interesting. Is he intending to make electric airplanes as his cameo in Ironman 2 suggested? Or is it robots as he suggested? Is there any possibility that these might be what analysts are building into the price and would this float the stock price to their current level even if he suceeded?
Meanwhile, OT, Trump's DJT social media is priced well above its fundamental price that should be close to $0. Is there any explanation other than "investors" keeping the stock price high so that Trump can cash out to replenish his wealth as a bribe to reward the "investors" with huge tax cuts if he succeeds in winning the presidency?
I think fundamentals are overrated as a guide for investment. They might have made some sense back in the 1970s when stock prices were aligned with liquidation value, but the capital glut introduced by supply side economics has made them less relevant. Profitability and growth were nice, but other things offered higher returns. For example, in the 1980s, the way to make money was to find potential takeover targets. Conglomeration was easier with spreadsheets and lax antitrust enforcement, so getting in front of a takeover was the way to score. You could buy Intel or IBM or Microsoft, but you could do better by strategically anticipating Carl Icahn.
By the late 1980s, it was rather obvious that there was so much money sloshing around that the market couldn't stay down for long. No one panicked in the 1987 correction. As one analyst explained in the early 1990s, there was nothing to invest in so people bought stocks. Now, we have social media and meme stocks. It's all about anticipating which memes are going to catch on. Anyone can be Carl Icahn for 15 minutes.
I know this sounds horribly cynical, but consider bitcoin. Why does someone pay more than a token amount for a bitcoin? What are the fundamentals? It's all memes now.
I agree. I was an equity analyst in the mid 1980s in the UK, and then a fund manager in a tax haven. I had seen the writing on wall about investing and how fundamentals were a good base, but the players kept chasing momemtum, and arb action were the plays (e.g. like in the movie Wall Street). Fundamental analysis is still useful for steering clear of hugely overvalued stocks like Tesla, but going short in various ways can still wipe you out before the stock returns to Earth. Finding truly undervalued stocks that will make a decent return eventually, is still a hard game.
IMO, most people in the financial markets trying to make excess returns are deluding themselves that they add value. But the money these parasites make spinning their "expertise" keeps them in the casino..
(a) find a disequilibrium & then (b) have markets recognize the equilibrium vis-à-vis (c) find a disequilibrium & then (d) watch the disequilibrium grow larger until (e) your funding disappears & (f) you have to liquidate. You need systemic advantages too—like huge amounts of very cheap insurance-company capital and the ability to accurately gauge your leverage...
Elon stated, years ago on a YouTube roundtable with some of young disciples, that first reason for building EVs was the belief in the ‘peak oil’ theory and not decarbonization. He was right for the wrong reason.
Interesting! Reference? Brad
https://youtu.be/J9oEc0wCQDE?si=mlvXfZwWsg5k4TAh.
It starts at minute 33 “it was not initially environmental sustainability but we would run out of energy by mining hydrocarbons”
For a long time, Musk kept shooting his mouth off about SpaceX. Then he made that stupid "big kaboom" comment and launched an unauthorized sensor in that Tesla. It's rather obvious that the government put its foot down. Musk has been rather quiet on the SpaceX front since then, even after SpaceX actually did manage a big kaboom. SpaceX customers are not meme stock people.
(it's an interesting world where the customers are doing multi-billion dollar ten year high technology contracts. I remember going to an ATA meeting and being dined on filet mignon, lobster and other luxury foods by Boeing one night and Airbus another. There were at least 500 of us, but the cost of the meal was round off error. I wonder what SpaceX serves. There was also a dryly delivered talk about FOD which I found rather fascinating. I guess someone has to deal with the possibility of crap on the runway damaging an aircraft. Back then, Guam was the foreign object damage capital of the world.)
Shotwell has done a great job, but since she's a woman, she won't be made CEO. Still, it's rather obvious that she runs the company as if she were one. This is often the pattern. A woman makes a company work but gets everything except the title and pay for her efforts. We also don't hear much about the man behind the SpaceX technology either. I gather he was fairly well paid to keep in the shadows. No D-503, Designer of the Integral announcements for Tom Mueller.