2020-Feb-14

Macro Dragon: Musk, Elon Musk - Entrepreneur Extraordinaire + Maverick Game Changer

Maverick Game Changer…

• Say what you want to say about Elon & Tesla, but the future of history books are likely to eventually leave in the shadows such standout figures such as Gates, Jobs, Ma, Disney, Rockefeller – not because their contributions were not massive, critical & disruptive, they were/are… but just because of the brilliant light beaming from the Super Nova that is Elon Musk.
• Seriously they should start putting him in all the James Bond movies going forward, with the same last name, first & last name tag line. Musk. Elon Musk. We’ll not even touch on PayPal, Space-X or a host of his other “side projects” (which are basically other teams/companies entire “life projects”)… let’s just check in on Tesla.
• The stock closed o/n at 804, its up +92% YTD – continuing in the process to fill football field sized graveyards of Tesla shorts – having recently made ATH last wk of 968.98. Tesla announced that they are going to do a +$2bn capital raise through a share offering at a strike of  $767 a share, which is a c. -5% discount from yest close of 804.
• This is smart of Elon & Tesla’s Management – this is what rational companies are supposed to do on the highs of the longest business cycle in recorded in modern history. You issue stock because its expensive. You issue stock because your up +350% since the summer of 2019 & your still a growth company that has high CAPEX needs.
• What you don’t do is, is what the majority of the companies such as Boeing are doing – go out borrow money to buy back shares, that lead to management hitting their stock option targets, then let you grossly negligent CEO leave with $60m, which is +$10m more than what your offering for compensation to the families of the Boeing MAX Jet Planes that crashed. All due to a software update error that was linked to internal incompetent systems that once again maximized near-term profitability over something as priceless as one’s brand & reputation. Few people think about 2^nd, let alone 3^rd order consequences… KVP thinks about them a lot & that still not enough.
• Back to Elon – can you imagine him across from Idris at casino poker table of the next James Bond  – I am not sure whether or not he gets us to Mars… but if anyone could do it… its likely to be a multi-billionaire maverick who has a work-ethic that defies anything else that we’ve come across on the Macro Dragon. How many multi-billionaires on their 3^rd legacy gig, do you know who sleep on their factory floor? Have you ever worked a +100hr wk? Its not rainbow & unicorns KVP can tell you that.
• The bulls on Tesla, contend it’s a renewable energy company that is disrupting the stored energy space & is light years ahead of the competition (giga-factory in China, etc), whilst the bears (TSLAQ crowd) will argue its an overvalued badly run automobile company with an Ipad stuck onto a plastic frame  & a volatile CEO at the helm.
• Here is an interesting piece from the Macro Tourist who has gone short Tesla with a stop along the recent 960ish highs. Whilst KVP has no dog in this fight, any short expressions would be tactical long puts (i.e. vol is historically low across asset classes), unless one has the capacity to do intraday trades. With ESG & Social Impact investing being a key theme that will not go away – alongside very few pure plays out there – its hard to envisage a world where Tesla goes to zero, could it go to $1000 or double again to $1600? Absolutely, especially if the equity melt-up continues.

On The Radar Today:

(Times would be SGT)

• NZ: Biz Mfg. Index 49.6a 49.2

• JP: Tertiary Industry Activity

• EZ: GER Flash GDP +0.2%e +1.0%p, EZ Flash GDP 1.0%e/p & Jobs data, TB

• US: Capacity Utilization, Industrial Production, Bix. Inv., FOMC’s Mester @ 00:45

-

Have a fantastic wkd ahead everyone, stay healthy as well as keep your mind open to profitable & abundant opportunities. Life happens for us. 

Namaste,

-KVP

-

Some Anchor Pieces from #SaxoStrats:

• Jakobsen & SaxoStrats team with our 2020: Outrageous Predictions

• Our latest 1Q 2020 Quarterly Outlook: The Great Climate Shift

• Eleanor on a Meta trend: Climate Deeply Embedded in Risk & Opportunity

• Garnry on The Godzilla theme: Green stocks are the next mega trend in equities

• KVP on the Fed: The Half-Life Fed & Min. One Cut By 1H20