THE WEEK: 'Elon Musk is a messianic huckster and a scam artist'
Elon Musk exists because he bribed DNC politicians and Senators Feinstein, Reid, Boxer, Harris, Clinton and Pelosi to give him free taxpayer cash and government resources. Elon Musk is a criminal, a mobster, an asshole, a bald fake-hair wearing, plastic surgery-addicted, douchebag, woman abusing, bisexual, tax evader. Musk exploits poor people and child slaves in the Congo and Afghanistan to mine his lithium and Cobalt. Musk spends billions per year to hire Russian trolls, fake blogger fan-boys and buy fake news self-aggrandizement articles about himself. Musk thinks he is the 'Jesus' of Silicon Valley. Fake News manipulator Google is run by Larry Page and Larry is Musk's investor and bromance butt buddy. Musk uses massive numbers of shell companies and trust funds to self-deal, evade the law and hide his bribes and stock market insider trading. A huge number of Tesla drivers have been killed and Musk covers it up. The DNC and the MSM refuse to allow any articles about Musk's crimes to be printed because they benefit from Musk's crimes. Musk has been professionally diagnosed as a 'psychotic narcissist.' In EVERY blog that you read that mentions 'Musk', at least 1/3 of the comments have been placed their by Musk's paid shills. Musk holds the record for getting sued for fraud by his investors, wives, former partners, employees, suppliers and co-founders. Elon Musk has gone out of his way to hire hundreds of ex-CIA staff and assign them to "dirty tricks teams" to attack his competitors and elected officials who Musk hates. Musk never founded his companies. He stole them in hostile ownership take-overs. Musk can't fix a car or build a rocket and has almost no mechanical skills. Musk is a lying con artist and partners with Goldman Sachs to rig the stock market. Over 1000 witnesses can prove every one of those claims in any live televised Congressional hearing!
THE WEEK: 'Elon Musk is a messianic huckster and a scam artist'
BRENDAN SMIALOWSKI/AFP/Getty Images
Elon Musk is a goofball techbro whose real business is quack philosophizing, not inventions or engineering.
I realize that the founder of Tesla and SpaceX really does make things, like electric cars and spaceships. But Musk's numerous attempts to realize his gleaming visions of a Jetsons-like future have never come close to living up to the (largely self-manufactured) hype. Lately he has started claiming that he is going to send cargo-laden rocket ships to Mars by the middle of President Trump's second term, in advance of the establishment of a permanent human colony. I'm not holding my breath.
Why have we allowed this lunatic a prominent place in our public and commercial life? Even his name makes him sound like the villain who convinces the Earth Federation in the year 4836 to trade in its fleet of perfectly serviceable if somewhat old-fashioned solar-powered starships for his sleek but shoddily made models that, allegedly, run on nothing but crystals from the planet Flion.
The line between science and science fiction has always been a blurry one. No sooner would Jules Verne write a story about, say, an electric submarine than some genius inventor would will it into reality. The problem with Musk is that he seems willing to calmly accept the reality of every nebulous Star Trek plot device in existence without bothering with the boring part where the thing actually has to work. Even a supercomputer operating on the principle of the so-called infinite monkey theorem could not devise a credible individual repository for all the wild things Musk believes. From the imminence of total human extinction to the perennial undergraduate assertion that, like, maybe we are all living inside in the Matrix, there is no implausible, discredited, absurd-on-its-face theory or cause that Musk has not endorsed with brio.
It would be difficult to think of anyone else who routinely says things as blinkeringly stupid to large audiences as routinely as Musk. Take his most recent pronouncement on artificial intelligence, a favorite subject of his, proffered to the similarly screen-ravaged consciences that attend the annual South By Southwest technology conference in Austin, Texas. "The danger of AI is much greater than the danger of nuclear warheads by a lot," he said. "Mark my words." Call me a Luddite, but I'm just not seeing it. The day when we are all putting on camo and fighting endless guerilla war against our cyborg overlords still seems to me pretty remote, alas.
There is one sense, however, in which I think Musk is absolutely correct about the threat posed by artificial intelligence to the flourishing of human kind. I am talking, of course, about self-driving cars. Just two years ago a bleary-eyed enthusiast in Florida, convinced of the mechanical infallibility of his robotic automobile, decided to ignore the road and watch a Harry Potter movie instead. Tragically but not, one thinks, very surprisingly, he soon collided with a semi truck and died.
Did I mention that the vehicle in question was, in fact, manufactured by Musk's own firm, Tesla? What kind of lunatic expects us all to pay him handsomely for the privilege of climbing into machines he himself considers vastly more dangerous than already existing weapons that could eliminate every life on this planet in a matter of five seconds? What does it mean that in addition to riding in his Terminator sedans and IG-88 minivans of the future he expects ordinary Americans to look forward to the possibility of flying in one of his boutique spaceships to infinity and beyond? At least here on good old terra firma it is at least theoretically possible to jump out of a moving Tesla once you realize that it is hell-bent on bringing your earthly existence to a fiery conclusion. What hope would there be in the cold empty reaches of space when the SpaceX Jupiter module decides that you are a threat to the mission and must be destroyed? I wonder how long it will take to process a refund.
The truth about Musk, though, is that for all his visionary cant there is nothing especially revolutionary about him. He is, in fact, a typical example of a type that is painfully familiar in American life: the shamanic huckster. Such persons have flourished in the fertile soil of this continent and the equally fecund imaginations of our free-thinking citizenry almost since the Mayflower. Sometimes people like Musk convince their fans to follow them into the desert and eat magic mushrooms in between a capella campfire renditions of "Masters of War" and freeform rap sessions on the mysteries of consciousness. Sometimes they see visions of both Jesus and assorted Hindi deities and declare themselves "greater than God." Sometimes they convince the Beatles to go with them to India. Sometimes they just hand out pamphlets outside train stations and bum cigarettes from tired commuters.
Musk is, thank goodness, much closer to the anodyne type of messianic lunatic than to the Jonestown variety. If it weren't for his peddling of high-priced death-traps that federal regulators have so far allowed to traverse our crumbling roads, I would feel comfortable declaring him essentially harmless. As things stand, Musk is someone we should mostly ignore rather than worry about. When the robot overlords somehow fail to take over the digital simulation we all inhabit, even he will be relieved.
ELON MUSK BELIEVES HE IS BETTER THAN JESUS
In light of the recent failure in Florida – the massive explosion of SpaceX’s Falcon 9 rocket and the quick destruction of Facebook’s $195-million-dollar satellite as a result – it is important to test the validity and future of Elon Musk’s space program and business model.
Earlier this year, Elon Musk was quoted as saying that the “Falcon 9 rocket costs about $16 million to build… but the cost of propellant… is only about $200,000.” This egregiously wrong estimate raises questions about Musk’s grip on reality — after all, just this year a single launch cost about $62 million dollars.
The reason why costs have skyrocketed from previous estimates is that the Florida failure marks the second failure in fifteen months. This is of no surprise — rocket delays are very common for SpaceX. Critics and fans alike have agreed that Elon Musk can certainly dream big, but then lack on the delivery. It’s why SpaceX is reported to have delayed each of its launches an average of two years each.
But this begs the question: If SpaceX has not been able to deliver on launch times, why should the market expect to see successful and timely launches in the future? How does Musk manage to stay in business?
The answer is that the market isn’t the one to decide, despite the fact that SpaceX is apparently a private company. Out of all of SpaceX’s contracts, NASA is documented to contribute to 85% of SpaceX’s revenue. Additionally, the number of direct governmental subsidies (without accounting for tax credits) climb up to about $5.5 billiondollars and is also peppered with $200 million dollars in varying governmental contracts. These estimates do not even account for the money Musk funnels in from SolarCity and Tesla, his two other ineffective companies which receive $4.9 billion dollars in government support by themselves.
Without the help of the government, SpaceX would not have been able to fail as many times as it has. Private investors would not tolerate Musk’s reckless mismanagement, and the company would’ve went belly-up years ago. But, since SpaceX is essentially a built-for-government company, Capitol Hill will continue to allow Musk to waste taxpayer dollars on futile launches and projects.
Last year’s failed Falcon 9 launch — the one that caused $118 milliondollars in taxpayer-funded cargo to be blown to smoke — should have taught the government a lesson about picking “winners and losers.” The winners they think they are picking are actually losers that are stealing American family’s money, and effectively stifling innovation in the market of space flight.
The excuse for the failed Falcon 9 flight fifteen months ago was, according to Elon Musk, the result of being a “little bit complacent,” as well as the failure of a third party manufacturer to produce a structural piece. Now, the Falcon 9 failed yet again, and a delusional Musk shouldered the blame on an imaginary UFO interfering with the launch.
It is inexcusable to make the same mistakes in such succession and expect that the government and the market will buy into incredulous lies, all while continuing to dole out taxpayer-funded contracts.
Meanwhile, as the government continues to fund Musk’s reckless projects, SpaceX’s main competitor, the United Launch Alliance (ULA), is sitting on the sidelines with an impressive 100% success rate for launches.
Tell me: why does the government continue to let Musk waste our tax dollars when the contracts can instead be given to a fully efficient competitor? It is truly mind boggling. When the government seeks contracts, it should go with the company that has the best return on investment, not with the company that gives a cheaper estimate and then continuously blows the projects up into pieces just months later.
This should especially be the case when dealing with Elon Musk, a reckless CEO that has also effectively delayed every line of his car line through Tesla Motors and turned no profit margin. It should be easy to determine the track record of a man who has historically shot for the stars, but ended up back on earth because he could not even get ten feet off the ground.
Washington should only invest in spaceflight when it understands how to make a good investment. Just because you like Elon Musk and his vision for the world does not mean that he will deliver on his promises. Actions speak louder than words, and at this point, Elon Musk’s actions have spoken loudly. It is time to take a step back and ask how many of Elon Musk’s promises are empty words without results.
Failed Businesses Built by Elon Musk and Cronies Cost Taxpayers BillionsApril 20, 2016In "Politics and Economics"
Uninvestable Tesla Motors
Tesla is an uninvestable stock for me, not just because of its high valuation but also because it fails our fairly basic quality test, which I shamelessly borrowed from Warren Buffett: Would I still buy this stock if right after the purchase the stock market were to close for ten years? If you are a big Tesla car and stock fan, before you start throwing rocks at me, pause and wait till you finish this article – the rocks and I will still be there.
Think about the next ten years. But before you start mentally drawing upward-sloping lines from the current environment into the next decade and drooling over the rosy vision of Tesla’s future that Elon Musk has painted – produce half a million model 3s and bunches of semis and roadsters, and then send a roadster to Mars (I kid you not; that is in his 2018 plan – I’d like you to think about another version of the next ten years: higher (maybe much higher) interest rates, a recession in the US and around the globe, and a less promiscuous bond market where Tesla would have pay a substantial premium to US Treasuries (as would any other company that loses over a billion dollars a year in a highly cyclical industry). And now answer this question: Would Tesla survive this change in economic weather if it happened next year or even three years out? And the answer is … a weak “maybe” at best, and “unlikely” at worst.
The counterargument I’d get: Yes, but we are not going into a recession. Actually, we are. I (and nobody else, for that matter) just don’t know when. After nine years of appreciating stock markets and tepid economic growth, we tend to forget that recessions are a regular economic fact of life, usually arriving every four to five years (so we are overdue for one). Most Millennials have yet to experience adulthood (have a job and a family) through a recession. They have also never had to borrow at high interest rates – but that is liable to happen, too.
Recessions are usually caused by expansions. Recessions are like the hangover that comes after the wild college party (economic expansion). It’s hard to have a good, fun college party with lots of booze and then not experience a hangover. (I am not speaking from recent personal experience but rather am trying to communicate in language to which Millennials can relate). During the expansion party, companies may build up too much inventory or erect too many factories, and consumers may overconsume.
If you own high-quality companies, ones that meet Buffett’s “ten-year stock market closed rule” (as we do), you don’t have to spend a lot of time and energy thinking about when the recession will hit (we don’t). However, if you own Tesla you’d better have a very clear, shiny crystal ball that will reveal lots of detail about the direction of interest rates and the global economy.
Recessions are tough for deeply cyclical companies: The bulk of their costs are fixed, and thus lower sales usually result in significant declines in net income and often lead to losses. This is why car companies and their deeply cyclical brethren don’t trade at high price-to-earnings levels when the economy is doing well. That is when their earnings are high. The market doesn’t usually take these high earnings at face value, knowing full well that there are lower earnings (or losses) around the corner when recession comes. Tesla, however, doesn’t have to worry about this low price-to-earnings problem, because in spite of its $50 billion market valuation, it has no earnings, just losses. It trades at whatever price-to-future Elon Musk tells you it does.
If you own Tesla stock and you only see one rosy (Musk) version of the future, you are ignoring the very real risk that the benign economic environment of today will not persist indefinitely into the future . Good luck – you’ll need plenty.
One additional but very important point. In the past I was dismissive of traditional automakers’ ability to compete with Tesla. I felt their hundred-year past of producing internal combustion engine (ICE) cars was going to hold them back, the same way Nokia’s dumb-phone past prevented it from effectively competing against Apple’s iPhone. Nokia tried to take the dumb-phone operating system Symbian and turn it into a smartphone operating system. It had a lot of engineers who knew the Symbian operating system, and thus it seemed a logical path at the time. The right approach would have been the more difficult one: Hire new engineers and create a brand new operating system. There was absolutely no reason why Nokia could not have developed its own Android-like OS, even if doing so would have required either retraining or, more likely, laying off Symbian engineers.
For a while it looked like I was right about cars, as the Big Three took a hybrid (Symbian-like) approach to electric cars – they were having a hard time saying goodbye to ICE. However, as we look at the future lines of electric cars coming from US and German automakers, we now see them severing the connection to their ICE past and embracing electric.
Disclosure: I am an unsecured lender to Tesla through my $1,000 deposit on a Model 3.
So, how does one invest in this overvalued stock market? Our strategy is spelled out in this fairly lengthy article.
Vitaliy Katsenelson is chief investment officer at Investment Management Associates in Denver, Colo. He is the author of “Active Value Investing” (Wiley) and “The Little Book of Sideways Markets” (Wiley). Read more on Katsenelson’s Contrarian Edge blog.