In a turbulent time around the world, Tesla CEO Musk is trying to show a clear path to Americans whose assets have shrunk dramatically and whose lives have multiplied.
In the past two months, affected by factors such as the Russo-Ukrainian war, the US consumer price index has hit the largest increase in nearly four decades, of which oil prices rose by 24% in one month. Coupled with the high inflation rate, the cost of living for residents has increased significantly.
On March 14, Musk said on social media Twitter: "In general, in times of high inflation, it is better to own physical assets, such as real estate, or stock in companies that you feel can produce good products than to hold dollars." ”
This view coincides with the "stock god" Buffett. In 2009, Buffett advised Americans in the midst of a financial crisis that one of the best ways to fend off inflation is to "own part of a great company," which is to buy stocks.
Musk, a wealth upstart, rarely agrees with the "old money" Buffett. Although the two did not tear their faces, they often disagreed and fought each other.
Musk, for example, has always been dismissive of the "moat" and believes that speed of innovation is the key; Buffett is a big fan of this theory, which he considers a must-have for great businesses. Musk later complained that he was not a fan of Buffett, "he just sat there every day, reading all kinds of super boring annual reports."
Musk's relationship with Buffett's old partner, Munger, also doesn't get along well. At the beginning of Tesla's business, Munger publicly expressed in front of Musk how Tesla would fail; after investing in BYD, he ridiculed Musk for not being as self-aware as Wang Chuanfu. Musk is still grumpy years later, and often takes Munger's remarks out of the "whip" to prove that he has lost sight of it.
Buffett and Munger's Berkshire Hathaway are representatives of America's top investment institutions. The price of up to $500,000 per share shuts out the vast majority of grassroots investors and is destined to serve only the top of the pyramid. Musk and the two investment giants openly confronted each other, invisibly with the heroic temperament of "Warrior Fighting Dragon".
At the same time, Musk is extraordinarily friendly to ordinary people. In addition to guiding everyone to manage their money, he often replies to Twitter comments, and from time to time he will point out the names of several stocks and become the "leading big brother" of the US stock market, so that fans can get a piece of the stock market.
In 2021, Musk has flopped the crypto social software Signal on Twitter, game retailer GameStop, voice social platform Clubhouse and other companies, and related stocks have soared. Some fans said that after following Musk to buy stocks, they made a net profit of $200,000 a day and 600,000 yuan a week.
In addition, musk launched a vote on Twitter after being accused of tax avoidance, letting fans decide whether to sell 10% of Tesla stock and finally fulfill their promises, causing Tesla stock prices to fall 5% in a single day. In the United States, which pays special attention to tax obligations, this move has made Musk win a good reputation among netizens.
On the Internet, Musk strives to create an "anti-establishment" image that does not bend to Wall Street and is untamed, which is very much in line with the popular taste of the Internet age. But that's not the only face musk has as an investor.
Through the analysis of positions, it can be found that Musk is a firm practitioner of Buffett-style long-termism. For bullish companies, especially Tesla and SpaceX, he has never made any substantial reductions.
Musk, for example, sold and donated a total of 20.7 million Tesla shares worth more than $22 billion last year. But by exercising the option, Musk was granted 22.8 million shares, still holding about 17%, making him the largest individual shareholder.
More importantly, over the past two decades, Musk has used investment as a link to gradually build a strong network of business, technology and contacts, including Silicon Valley engineers, academic experts and government decision-makers. When encountering difficulties, he is always able to overcome dangers with the support of elites from all walks of life, and in the highlight moments, he gives back to his partners in many ways.
On the other hand, with his unnatural investment moves and remarks, he has become the darling of the media and netizens, always occupying a large number of pages for free. Admirers gradually formed the "Musk Cult", which in turn contributed to Musk's commercial success.
While flirting with investment giants, angrily throwing tens of billions of stocks, and leading grassroots netizens to speculate in stocks to get rich; while holding high-quality chips, strictly guarding stock positions, and building a cross-global political and business relationship network, this two-sidedness has created today's Musk. The world's richest man, who is full of performance and drama in the public eye, has built an invisible investment empire in the traditional way.
A
Tesla and SpaceX are two cornerstones of Musk's business landscape. Among them, SpaceX was created by Musk himself; although Tesla has another founder, Musk actually plays the role of an entrepreneur rather than an investor.
On the basis of the two companies, Musk has built a Silicon Valley "Musk system" through a series of investments.
Since 2003, Musk has frequently made investments in the equity investment market, including solar panel installation company SolarCity, data center software company Everdream, game software developer Game Trust, and artificial search engine company Mahalo.
When Musk took a stake, these companies were in their infancy, and their founders were more or less related to Musk, either relatives and friends, or partners who had started a business together.
For example, SolarCity and Everdream founder Lyndon Rive is Musk's cousin, Game Trust founder Adeo Ressi is Musk's college roommate, and Mahalo founder Jason Calacanis is a good friend of Lacey's.
Musk's most famous investment is the mobile payment instrument Stripe. In 2011, he and his former startup partner, PayPal founder Peter Thiel, and other institutional investors invested $2 million in Stripe. After a decade of development, Stripe has become one of the largest mobile payment services in Europe and the United States, with a valuation of $95 billion in March last year.
By investing in these companies, large and small, Musk has reaped great financial returns. These companies echo and support each other, sending charcoal in the darkest moment of Musk's entrepreneurship.
For example, at the end of 2008, Tesla's cash flow was nearly exhausted and on the verge of bankruptcy. Musk quickly sold his stake in Everdream in exchange for $15 million. In addition, SpaceX, which has just received an order from NASA (National Aeronautics and Space Administration), also borrowed a sum of money to Tesla. After many financing, Tesla finally survived.
In addition, SolarCity needed a lot of money in the early stages of development, and SpaceX, which was in a relatively good situation, transfused it by buying bonds. Between 2015 and 2016, SpaceX bought $255 million in SolarCity bonds, and Musk himself bought $65 million.
After obtaining low-cost funding, SolarCity quickly launched a listing, but due to serious losses, it was quickly privatized and merged into Tesla. Today, solar-powered energy storage is one of Tesla's fastest-growing segments, contributing nearly $1 billion in revenue each quarter. It also helps Tesla expand its charging network and create synergies with the electric vehicle business.
After 2010, as Tesla's production capacity climbed and SpaceX orders continued to grow, Musk's business empire gradually moved away from the brink of collapse. He began to expand his investments to some of the more cutting-edge areas.
AI (artificial intelligence) is one of Musk's investment priorities. He was involved in an angel round of funding by AI company DeepMind in 2010, and four years later the company was acquired by Google, with speculation that the transaction amounted to $400 million to $600 million.
Just a month after DeepMind's sale, Musk invested in startup Vicarious, which it said would "build the next generation of AI algorithms." The following year, he donated $10 million to the Future of Life Institute, which focuses on how to ensure that humans have absolute control over AI.
Although Tesla's self-driving technology makes extensive use of AI, Musk has always been distrustful of this underlying technology, calling the development of AI "summoning demons.". He claims that he invested in AI to maintain an understanding of the technology while reducing the risk of AI development.
Interestingly, Musk is so afraid of AI that he released a humanoid robot in August 2021 and announced that it will give it a human personality by 2022. In the face of the pressure to create a new capital story, Musk also has to temporarily forget the fear of "AI dominating mankind".
In addition to making machines more human-like, Musk's interest in human body modification is not small.
Musk had invested in HALCYON Molecular, a DNA sequencing company, but the company quickly got bogged down in stiff competition and burned out of financing within two years. He also invested in Neurovigil, a brain signal monitoring product, in May 2015, and joined Neuralink, a brain-computer interface company, the following year.
Musk has a penchant for Neuralink. In 2020, he used a live pig to demonstrate the company's brain-computer interface technology to accurately predict the trajectory of pigs. According to his idea, Neuralink will benefit paralyzed people and help them regain their mobility, and will be experimented with humans in 2022.
However, Neuralink has received a lot of criticism. One nonprofit group noted that the company used 23 monkeys for experiments, 15 of which were dead. Controversy over bioethics is likely to be significantly postponed for Musk's investment.
B
In addition to cutting-edge technologies such as electric vehicles, launch vehicles, AI, and brain-computer interfaces, Musk's investment targets also include the U.S. government. These "investments" include both real money and silver, as well as taking sides and taking positions to judge the situation.
New energy vehicles and commercial aerospace are the two cores of Musk's commercial landscape. In addition to facing fierce competition from traditional companies, they also need to overcome regulatory resistance.
Tesla not only has to compete with established American car companies such as GM and Ford, but also strives for government subsidies to offset huge losses in product research and development and capacity climbing; and SpaceX must not only compete with giants such as Boeing, but also win the favor of NASA, which is subordinate to the US government.
Musk must carefully manage his relationship with every U.S. administration and influence policy through political lobbying and funding.
According to a report by a private think tank in the United States, SpaceX has a detailed plan to seek political support when it was first established, and it has spent more than $4 million to lobby the US Congress alone. Last year, SpaceX and Tesla spent more than $2 million lobbying.
Musk himself has been involved, donating about $725,000 in various campaigns since 2002. He once confessed: "In order for your voice to be heard in Washington, you have to donate some money." ”
In addition, Musk also bet on the US presidential candidate by taking sides in advance. As for whether to agree with their political ideas, it has never been Musk's focus.
Musk, who describes himself as an avid fan of Obama, once lined up for 6 hours at one of the latter's campaigns just to shake his hand. During the 2016 US election, Musk changed again, and became very close to Trump and entered his think tank.
Both bets were a resounding success. Obama and Trump have ascended to the top of the presidency, and Musk has ushered in a harvest period.
Trump (fifth from left) Musk (far right)
A non-profit organization in the United States pointed out in the report that from 2007 to 2018, Tesla received a total of 3.5 billion US dollars in government subsidies, which is about 4.6 times that of Google and 5.1 times that of Apple. SpaceX has also gained a lot, becoming NASA's most important partner, and also received a $653 million order from the U.S. Air Force in 2020.
But after Biden was elected president of the United States in early 2021, Musk temporarily "fell out of favor".
In the past year, for multiple considerations, Biden has frequently shown favors to traditional American car companies such as General Motors on issues involving new energy vehicles, but he has ignored Tesla for a long time and has not invited Musk to meet with him. After being given a cold reception, Musk launched a personal attack on Biden on Twitter, calling him a "humanoid wet sock puppet" and sending an email to the media saying that "Biden deliberately ignored Tesla".
But Musk also leaves room for efforts to break the ice for the relationship between the two. In emails accusing Biden of ignoring Tesla, he said he would not have embarrassed words and deeds if invited to the White House.
In addition to trying to make friends with the highest decision-makers, Musk is also careful to maintain friendships with U.S. states.
Musk is in California, the core business is new energy vehicles, is bound to be close to the Democratic Party, but he tries to play around in the donkey elephant dispute. He once revealed to the media that he was "a major donor to the Democratic Party (although not the primary), but also a large donation to the Republican Party."
For example, Tesla has set up a headquarters and multiple factories in deep blue California to produce complete vehicles, auto parts and lithium batteries. But it has also set up production bases in deep red Texas and Nevada, where red and blue are relatively balanced, bringing jobs and income to the local area.
This balancing act pays off handsomely. For example, in September 2014, Tesla's super battery factory spent in Nevada, receiving a total of $1.4 billion in subsidies from the state government.
Overseas, Musk also attaches great importance to relations with the local area.
In China, he repeatedly praised employees in Shanghai factories, publicly praised China's economic prosperity, encouraged people to visit in person, and even formed a 5,000-kilometer supercharger line along the ancient Silk Road, and specially filmed a beautiful propaganda film to pay tribute to China's magnificent landscape.
In October last year, Tesla's Berlin factory in Germany was completed, and Musk not only brought his mother to celebrate, but also gave a speech in German and promised to open a brewery in the factory area to meet the preferences of Germans.
Musk's utilitarian overtures will even go in unexpected directions.
In early March, as the fierce war between Russia and Ukraine was raging, Musk called out to Russian President Vladimir Putin via Twitter, asking for a "heads-up" and betting on Ukraine. This statement is sensational, but it can also make Musk earn a lot of image points in the West.
C
Most of Musk's investments are targeted, either to improve the business landscape or to open up government relations. But sometimes he also has a blue eye for things that he can't see for the time being, and plays the boy who scatters money.
Musk's bumpy investment has played an important role in spaceX's development history.
In 2001, a group of rocket enthusiasts in the United States held a fundraising event to try to raise money by selling tickets for $500 each. But Musk gave $5,000 all at once, managed to grab everyone's attention, and hooked up with NASA scientists at the event.
In the following years, in addition to continuous sponsorship, Musk also frequently attended community activities and built contacts in the space field. Among them was the astronautical scientist Michael Griffin, who quickly became the leader of Musk's space think tank and became NASA director in 2005.
According to common sense, good friend Griffin served as a leader in NASA, and Musk's spaceX, which was just starting out at that time, should have been close to the water tower first. But somehow Griffin has been reluctant to give SpaceX the green light.
At this time, Musk's accumulated connections have a place to play. NASA staff lobbied Griffin continuously, eventually making SpaceX a supplier to the International Space Station, with orders worth as much as $1.6 billion. SpaceX is firmly positioned and has a lot to do with this order.
Another example is virtual currency. Musk changed his Twitter profile to "Bitcoin" at the end of January last year, triggering an increase in the price of the coin; in early February, a Tesla document showed that the company had bought $1.5 billion worth of bitcoin.
Compared to the Bitcoin market and Musk's total wealth, a modest $1.5 billion investment in virtual currency is not much. But Musk only used a small cost, overnight became a super big V in the currency circle, and any tweet can make the currency circle tremble.
In a tweet the other day, Musk, in addition to calling on the public to buy physical assets, stressed that "I still own and will not sell my Bitcoin, Ethereum and Dogecoin anyway", and the price of the three virtual coins rose in response.
Musk, who claims never to sell coins, clearly doesn't care about the actual return on this investment. What he enjoys more is the attention and pursuit of thousands of fans, as well as the pleasure of "white prostitution" media pages through coin speculation.
On the Internet, the "Musk Theology" has been formed. From products to technology, from companies to individuals, Musk's words and deeds have been studied and interpreted, and various analytical articles and books are full of sweat.
Musk's wealth is also expanding. On March 17, the 2022 Hurun Rich List was announced, and Musk was the world's richest man for the second consecutive year, with wealth increasing by 4% a year.
At present, Musk holds about 1.29 trillion yuan in assets, equivalent to half of the world's largest private equity Blackstone Group, and can rank 5th in the global private equity list. All of this was laid when Musk came up with $6.5 million in 2004 and became Tesla's largest shareholder.
In the past two decades, Musk has invested in enterprises and governments on the one hand, achieving great commercial success; on the other hand, investor connections and image, creating a cutting-edge image that is very different from "old money".
Under the guidance of this set of alternative investment techniques, whether in the elitist-dominated political and business circles or in the Internet that deconstructs tradition and despises authority, Musk can be successful, maximize his own interests, and build an invisible investment empire.
Resources:
Finance, "Musk Rice Circle: Follow the World's Richest Investment Gates Says Be Careful"
Sina Technology, "Musk sold $22 billion in Tesla shares last year, but the number of shares has risen"
36 Kr, "DeepLy Revealing Musk's Investment Philosophy"
Forbes China, Tax Avoidance or Philanthropy? Where did Musk's $5.7 billion donation go? 》
Alphabet list, "Musk is the master of the political and business game"