Electronics whiz Elon Musk is now the world's richest person

[vad]

Hmmm .. so no more freedom of greed and right for collecting wealth, and if you are rich, your wealth must be distributed among those low life peasants ? 

I guess you are the socialism aficionado ? Any plan to migrate to Rusia or China ?  Be warned though, every and any thing related to China, is evil.

You can strike off Russia from that list. Russia used to be commi state, where everyone was equal in their poverty,  but that was over 30 years ago.The gap between rich and poor in that part of the world is now comparable to developed countries (for example, Russia’s Gini index is higher than Australian), while the tsar’s wealth (wealth available for Putin’s immediate personal disposal, measured by the wealth of his old buddies from kindergarten, wealth of his mistresses and family members, wealth of personal trainers, personal stylists, former bodyguards etc.) easily outshines Musk’s paper valuation.

[vad]

The biggest problem with TSLA I have right now is their $700 bn valuation seems sky high, it's got to crash down to something more reasonable like $100 bn... right?  I just can't see that being sustainable.

Sure, all investors are greedy idiots. But wait a minute, they can’t be greedy, if they waste money paying 7 times the stock price.

TSLA stock today is worth what others are willing to pay for that stock now. Same applies to future prices. Today’s market price is the best approximation of the future price.

PS. If someone can buy TSLA at $125 per share at the market today, or buy Bitcoin for $6,700 - be my guest. You will not only be able to prove me wrong, but also will have a chance to sell immediately at +500% profit, pay the taxes and feed the hungry. Any takers?

[BravoV]

You can strike off Russia from that list.

Hmmm ... you're right, I stand corrected as just realized the current "developed narrative" lately is stealthily shifted where its now white (as in caucasian) versus the evil China and the dictator Xi Jinping, while Putin no longer carry the dictatorship name tag anymore, and the calling is slowly fade away. 

[tom66]

The biggest problem with TSLA I have right now is their $700 bn valuation seems sky high, it's got to crash down to something more reasonable like $100 bn... right?  I just can't see that being sustainable.

Sure, all investors are greedy idiots. But wait a minute, they can’t be greedy, if they waste money paying 7 times the stock price.

TSLA stock today is worth what others are willing to pay for that stock now. Same applies to future prices. Today’s market price is the best approximation of the future price.

PS. If someone can buy TSLA at $125 per share at the market today, or buy Bitcoin for $6,700 - be my guest. You will not only be able to prove me wrong, but also will have a chance to sell immediately at +500% profit, pay the taxes and feed the hungry. Any takers?

Bubbles can and do happen.  Just look at the first Bitcoin crash or the Dot-Com bubble. 

The only way Tesla is worth $700 bn is if they outsell every other automaker in the top 10 - right now they aren't even in the *top 20*.

Sure, Tesla could overtake all of the other manufacturers, but I think a more likely outcome is they become a big player in the top 10, the stock market cools down for a bit, and they take on a valuation that is more in line with revenues.

[wraper]

Sure, Tesla could overtake all of the other manufacturers, but I think a more likely outcome is they become a big player in the top 10, the stock market cools down for a bit, and they take on a valuation that is more in line with revenues.

Tesla in not only a car manufacturer. Also they do way less outsourcing than others. You can think about it as several times more car made per car sold. Say one company does only a final assembly, which amounts to 20% of a whole process but other company does 80% of total manufacturing. It would mean that second company produces 4 times more car per car. And thus has much larger manufacturing capabilities and expertise in different areas. Tesla has their own material R&D, they develop their own alloys no other company has. They develop their own batteries and develop production lines. That's besides solar, energy storage and other things. They are even into medical (not ventilators, happened before COVID). https://bioprocessintl.com/bioprocess-insider/therapeutic-class/instant-carna-tesla-touts-rna-bioreactor-it-is-developing-with-curevac/

[vad]

Bubbles can and do happen.  Just look at the first Bitcoin crash or the Dot-Com bubble.

Right. And what is today’s Bitcoin price?

The reason why TSLA, Bitcoin and house prices on my street are surging is because there is too much liquidity on the market. Investors can take loans at record low interest rates and put the money where they believe there is growth potential. And it looks like the investors prefer Tesla to VAG.

[vad]

Hmmm ... you're right, I stand corrected as just realized the current "developed narrative" lately is stealthily shifted where its now white (as in caucasian) versus the evil China and the dictator Xi Jinping, while Putin no longer carry the dictatorship name tag anymore, and the calling is slowly fade away. 

The form of government and economic system is not the same thing. You can have dictatorships with free market economy (Singapore) and you can have socialist dictatorships (Soviet Empire).

The developed narrative also shifts the other way. Russia’s GDP per capita at nominal values is now below China’s GDP per capita. What an insult to Russian chauvinism.

[vad]

In fairness to VW and petrol car manufacturers in general, I do believe that EV industry is driven by marketing hype. Investors are trying to follow the hype, ignoring the facts. And the facts are - the current EV technology, which is based on Lithium-Ion battery packs, does not provide significant advantages over cars with internal combustion engine.

EV is not the future of transportation, but rather one of the types of vehicles that will exist on the market in the mid-term future. Similar to lawn movers and pressure washers. You can have a fancy battery mover, that is underpowered, has short range, is expensive and short-lived (been there done that), or you can have a Honda mover. You can have electric Karcher, or a powerful gas pressure washer. Both types of products exist on the market, and both types have their uses.

I considered buying Model 3 for my wife a year ago. Did some math, decided against it, and bought her similar sized compact car VW Jetta that is as expensive to run as Model 3, half the price of Tesla, does not require hiring electrician to install 50 A outlet, and can be refilled in minutes anywhere.

The most surprising part was electricity cost.

Model 3 has rated economy of 26 kWh per 100 miles. Some users reported on forums 0.33 - 0.36 kWh/mile of actual economy, higher in winter, but let’s forget about that for a moment, and use the official 0.26 kWh/mile rating.

I pay 23 cents per kWh for electricity (11 cents for actual power, and 12 cents is delivery charge).

Putting charger efficiency and wiring power losses aside, 5.98 cents would buy me a charge that is good for 1 mile of travel (23 cents/kWh * 0.26 kWh/mile = 5.98 cents/mile)

Today gas price at the nearby station is $2.16 per gallon. So for the price of a gallon, I can charge Model 3 enough to travel 36 miles (216 cents/gallon / 5.98 cents/mile = 36 miles/price of gallon of petrol)

So thanks to greedy power distribution companies and low petrol prices, where I live the running cost of Model 3 is equivalent to running cost of petrol car with 36 MPG mileage rating - typical rating of a similar sized petrol compact passengers car.

[tom66]

You have 'unreasonably' cheap fuel in the USA, though!

Here, I can charge my PHEV on off-peak tariff at 5.5p/kWh (5 hours from 8.30pm).  A full charge of ~6.8kWh costs 37.4p and goes ~20 miles.   Cost per mile is therefore about 1.8p.   Even on normal electricity rates at 15p/kWh that cost per mile is around 4.9p.

When I have a BEV and put a 7.2kW charger in I would be able to charge up to 36kWh or ~125 miles per night on the cheap rate, depending on my use profile this could easily cover all of my typical driving with on-peak usage only being needed for the occasional road trip or mid-day charge.

Whereas on petrol at £1.10 per litre (US$6.60 per gallon!!)  my cost in the petrol-hybrid mode at ~45 mpg is about 11p/mile.

So in the worst case electricity is half the cost and in the best case it's a sixth the cost.

Now the other benefits:
- I don't have to worry about annual oil and filter changes,  nor being careful not to drive the car too hard when cold
- My car 'de-ices' and 'pre-heats' in the morning from the electricity supply, so I've never got to scrape ice from the windshield,  and I can pre-heat it remotely if I need to
- My car 'fills up' overnight and unless on longer trips,  I never need to visit a 'fuel station' and stand in the freezing cold for 5 minutes getting ripped off
- I have instant torque - EVs are really nice to drive - and regenerative braking means less brake wear
- I'm doing less damage to the environment and not causing health effects from pollution which harm the lungs of city dwellers

[nctnico]

I don't think we need another pro / con EV thread here.

[vad]

It is not that we have unreasonably cheap gasoline in the US, and you have unreasonably cheap electricity rates. The difference is probably due to redistribution through taxes and subsidies.

[nctnico]

I personally don't think Musk is worth even 1% of his so-called net worth. However, the meritocracy system allows some smart people to amass such an obscene amount of wealth and generally pay minimal tax. Worth should be somehow based upon how you help others and mankind. You'd be blind Freddy to think Alice Walton, "worth" $54 BILLION, is not at least just a little bit greedy when Walmart only pays their cashiers a lousy $10.78 per hour.

Probably the actual wealth of Musk is like 1%. As others pointed out: if Musk dumps all of his Tesla shares the shares will be worth 0 the next day. Musk is Tesla and if he stops believing in it nobody does. He'll already have trouble unloading 0.1% of his shares. Also the worth of a person owning shares in a single company is highly volatile. IIRC Jef Bezos (Amazon) went from 200 billion to 150 billion. That is mostly due to share prices fluctuating. He didn't go to the casino and gamble it away.

Something is wrong when lowest paid workers can barely afford a decent meal for their kids or transport to get to work, whilst the super-rich are hell-bent on making more money than they know what to do with. Inequality is getting a lot worse in the US and other places (very evident during COVID-19) and I suspect this kind of greed might be a major cause of the civil unrest in the US.

That is not entirely true. A lot of wealth is invested in companies. Inflation makes sure that sitting on a stack of cash is making people poorer. Investing their money into the economy makes them richer. How well countries are run and taxed has a much higher influence. In some countries there are large groups of people which have no outlook at making a decent living due to lack of education and jobs. That is not just the case in the US but France is also a very good example.

[vad]

Here is how Musk is going to spend all his money:

“The CEO of Tesla and SpaceX plans to dedicate as much money as he can to colonizing Mars, and he's selling most of his material possessions in the process”

https://www.google.com/amp/s/www.businessinsider.com/worlds-richest-person-elon-musk-dedicate-wealth-mars-colony-2021-1%3famp

[VK3DRB]

Even communists in China understand that this does not work.

I guess the OP is an extremist, more extreme than China that he hates so much. 

BravoV, your guess wrong. Probably unlike you I have studied Chinese history and I have worked in China. In fact I was part of a team that engineered the very first computer manufacturing plant in China. I have a plenty of Chinese friends. I don't hate China at all. Its regime is another matter but I don't want this thread to devolve into a political discussion that you seem to want to stir up. I am not a socialist by the way.

There is nothing wrong with fairness and equality. Some of the super-rich say anyone can achieve whatever wealth they desire "in a free country". Some religious charlatans selling the prosperity gospel preach that God will make you rich if you ask Him (just give us your credit card details first though). In India people are destitute "because they were bad people in a past life" - a perfect excuse for the rich to ignore the poor. People brought up on the wrong side of the tracks or in the wrong country have the opportunities stacked against them. Musk may have been born poor, but he is one in a billion who has hit the jackpot though "merit".

There is nothing wrong with becoming wealthy. What matters is what the rich do with their wealth. If it is just to hoard more loot (greed) by exploiting others, that cannot be good. If it is used to make the lives of others better (altruism) in a fair and just way, that is a good thing. Unfortunately most of the super-rich fall into the first category.

Consider this example... a billionaire only buys two new pairs of jeans per year, and a poor person cannot afford new jeans at all. Now if the billionaire shared a small portion of his wealth to help uplift 1000 poor people (through responsible taxation and good government) so the poor people can now afford two new pairs of jeans per year, the number of jeans manufactured every year goes from 2 to 2000. The jeans business is now booming. Simplistic example, but it shows growing inequality actually impacts economies negatively.

[wraper]

Consider this example... a billionaire only buys two new pairs of jeans per year, and a poor person cannot afford new jeans at all. Now if the billionaire shared a small portion of his wealth to help uplift 1000 poor people (through responsible taxation and good government) so the poor people can now afford two new pairs of jeans per year, the number of jeans manufactured every year goes from 2 to 2000. The jeans business is now booming. Simplistic example, but it shows growing inequality actually impacts economies negatively.

You are one of many people who do not understand that there are only so many goods produced. If you give free money away, what will happen is inflated prices, not increased production and all-embracing happiness. And all those rich people do not keep all their money in the bank or cash. That money is invested in something, to take it back, they need to sell something, like factory. And if sell, to whom? The same rich person who have their money invested in something.
You can make some small group of people happy by giving the money away. But in no way it will work on large scale. BTW if you didn't know, there is way more money than goods which can be bought for it. If that idle money is released to "peasants" for immediate use, it will cause immediate money devaluation and thus burning of any monetary savings.

[VK3DRB]

https://www.drive.com.au/news/elon-musk-had-an-unusual-reaction-to-being-named-the-world-s-richest-person-124918.html?trackLink=SMH1

[tooki]

Musk has teams of talented engineers, but the guy himself is a visionary and a bit of an asshole.  I think it's a lot of credit, more than deserved, to say that Musk is a genius.  Steve Jobs was a similar type of person.   Visionary and very motivational, although he was more art-oriented.  He didn't design the iPhone though, as others often say, instead his engineers did.  They are the ones who should get the most credit.

At least Steve Jobs really did have a deep understanding of usability (which is why IMHO Apple’s usability has suffered since Jobs’ passing), and while he wasn’t an engineer, by all accounts he did know a lot more about the underlying technology than a lot of people give him credit for. Yes, he absolutely brought the arts/humanities angle to Apple, but it was simply the lens through which he viewed technology: how can technology solve problems for users and for humanity as a whole?

[SiliconWizard]

Musk has teams of talented engineers, but the guy himself is a visionary and a bit of an asshole.  I think it's a lot of credit, more than deserved, to say that Musk is a genius.  Steve Jobs was a similar type of person.   Visionary and very motivational, although he was more art-oriented.  He didn't design the iPhone though, as others often say, instead his engineers did.  They are the ones who should get the most credit.

At least Steve Jobs really did have a deep understanding of usability (which is why IMHO Apple’s usability has suffered since Jobs’ passing), and while he wasn’t an engineer, by all accounts he did know a lot more about the underlying technology than a lot of people give him credit for. Yes, he absolutely brought the arts/humanities angle to Apple, but it was simply the lens through which he viewed technology: how can technology solve problems for users and for humanity as a whole?

Yes, I agree with this. As far as I can tell, and whatever one may think of Steve Jobs, my view is all he had in mind was to release products that would make people's life better in some way. And with a touch of class. That's how he saw technology. I can't think of a single Apple product that wasn't designed with that goal in mind actually. I can't think of a single Apple product that was just a gratuitous display of technology.

Elon Musk has a completely different mindset. Contrary to Steve Jobs, he seems to promote technology just for the sake of it, while only moderately, if at all, thinking about the consequences. He also clearly has a mindset tied to politics, whereas Steve Jobs, again as far as I can tell, absolutely didn't. This has multiple consequences. Musk's companies have been heavily subsidized, directly and indirectly. The amounts are gigantic.

[wraper]

Musk's companies have been heavily subsidized, directly and indirectly. The amounts are gigantic.

You don't know what you are talking about and how subsidies Tesla received compare to other car manufacturers. As of tax deductions for EV buyers, Tesla was against it for a long time since it negatively affects their competitiveness towards other EV manufacturers.

[coppercone2]

you know in terms of subsidies I wanna know why the hell Amazon even has a R&D subsidy, its a fucking ware house. Its like saying "i need goverment money to figure out my business logistics and management problems' under the guise of 'science'. It makes me suspicious of businesses receiving subsidies. Its probobly a bunch of BS laden with loop holes.

[wraper]

you know in terms of subsidies I wanna know why the hell Amazon even has a R&D budget, its a fucking ware house. Its like saying "i need goverment money to figure out my business logistics problems' under the guise of 'science'.

Amazon is not "only a warehouse". Its also AWS which actually brings more income than their retail part. Not to say there is much more than being a warehouse in regards to selling goods.

[coppercone2]

so its a help desk under the guise of r&d

r&d brings to mind you know, stuff that can be taught in science class. Cloud storage is about as R&d as the bus station locker you can rent.

[wraper]

so its a help desk under the guise of r&d

r&d brings to mind you know, stuff that can be taught in science class. Cloud storage is about as R&d as the bus station locker you can rent.

AWS does not appear and develop in vacuum  . https://en.wikipedia.org/wiki/Amazon_Web_Services Do you really think that cloud provider with largest market share can exist without R&D?

As of 2020, AWS comprises more than 175  products and services including computing, storage, networking, database, analytics, application services, deployment, management, mobile, developer tools, and tools for the Internet of Things. The most popular include Amazon Elastic Compute Cloud (EC2), Amazon Simple Storage Service (Amazon S3), Amazon Connect, and AWS Lambda (a serverless function enabling serverless ETL e.g. between instances of EC2 & S3)

Not to say retail business does not exist in vacuum as well.
What about Echo/Alexa, Kindle and other stuff?

[coppercone2]

like maid service. not sure if secretary rentals (often not so synthetic as you think for advanced tasks! ask it something complicated that makes it useful and likely it will be a help desk employee deciphering it) qualify you for R&D. I think of new medications, increased process efficiencies, etc as R&D. Clearly the goverment does not but there might be a reason why Biden is so surprised that a fucking giant mail order business manages to get money from the goverment during the troubles of last year.

It's like getting a microphone connected to a secretary that just listens and does nothing physical. You could do the same thing in 1920 if you wanted to.

'miss just listen to this voice box and tell the gentleman on the other end of the line the time when he is too lazy to look at the clock and jot down some appointments for him and give it to the next shift'. (probobly happened half the time anyway when you get some broken russian accent yelling into the alexa box, as far as the news reports show).

[wraper]

like maid service. not sure if secretary rentals (often not so synthetic as you think for advanced tasks! ask it something complicated that makes it useful and likely it will be a help desk employee deciphering it).

Dude, you are so ridiculous it's not even funny. Amazon R&D budget is largest in the world. They spend way more than Google or Microsoft and develop hell a lot of things. https://www.forbes.com/sites/walterloeb/2018/11/01/amazon-is-biggest-investor-for-the-future/?sh=159f7ef21f1d