Macro Dragon: Legacy... A Class of One, Elon Musk (SpaceX)
Summary: Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.
Macro Dragon: Legacy... A Class of One, Elon Musk (SpaceX)
Top of Mind…
- Folks like to say that history is written by the victors, hence his-story or of course her-story… A more accurate term perhaps should be a-story, a-view, a-perspective… one has to wonder at the height of different pinnacles of the past… whether the people truly revered then, became immortalized… or whether – the more likely route – it was the stars that despite shining bright, did not get the attention they deserved then… your Van Goghs… your Jean-Michel Basquiats, your Galileos, etc…
- Its hard to determine just how many of the few epic supernovas of our times will even be remembered 10 – 25 – 100yrs time… be them individuals, institutions, movements, creeds, etc. Personally KVP feels your Buffets, Trumps, Obamas, Clintons, Oprahs, Brad Pitts, Jerry Seinfields, De Niros of the world, & even your Drucks & Soros… will join the likes of Steve Jobs & Jack Welch, as yet just another footnote in the pages of someone’s story. Yes fame & influence during their regime, but not eternal beacons set to shine forever in the midnight skies
- Yet every now & then, there is a spark that burns truly bright & celestial… we are fortunate enough to live at a time of one such super nova in the form of Elon Musk. KVP has written multiple times of this esoteric, class of one, maverick, African of an entrepreneur… just how game changing PayPal has been… then Tesla on the EV – batter storage – to now cutting edge & light years ahead autonomous driving software… & then as if that was not enough…
- Was chatting with a family office CIO yesterday & going through a host of things that are o the agenda this wk / month / regime… & he made a great point. No one is talking about the most important thing that just happened… & that in crystal clear hindsight was of course the successful transport of US astronauts by American made rockets from the private sector… Prior to this believe it or not, the US needed Russian help to get its astronauts onto the space station
- This is epic… in so many ways… as NASA highlight footage… plus NYT take SpaceX Launch: Highlights From NASA Astronauts’ Trip to Orbit
- And it’s all being lost in a world screaming in the Covid-19 crisis, re-openings, re-shutdowns, protests, riots, jobs being lost, etc. Watching SpaceX is akin to watching where the puck is going, watching the re-openings is watching where the puck is… you skate towards where the puck is going…
- And you know what’s insane, the upside on SpaceX is multiples of Tesla… Tesla is currently a $170bn company… at $900 its up +150% from the Mar $361 lows & its up +400% over the last year… could it be a +$1 trillion or +$2 trillion in 10yrs time… absolutely…
- As a side tangent, it’s still shockingly incredible to the KVP that neither the Saudis, nor the Norwegians nor the Chinese have bought Tesla outright – for the first two it’s the celestial edge to economies built around taking stuff out of the ground to burn it, for the latter it would cement its EV & lower pollution ambitions for raising the quality of life for its 1.4bn citizens. Either could have picked up Tesla when it was in the $20-30bn handle, let KVP go on to say… Tesla is never going to zero.. not in this universe… & $120bn is going to look cheap in 10yrs time… which should be the minimum time-horizon for a sovereign strategic multi-decade investment.
- And yes, Tencent lifting 5% stake in 2017 was masterful, whoever orchestrated that should get the mother of all promotions (that stake is c. $8.5bn at $800). And the kicker that people still have not realized – that’s even bigger than whether you believe Tesla is a car or an energy company – autonomous transportation software…
- So again Tesla’s current $120bn is going to look cheap in 10yrs time & yest, if Elon gets hit by a competitor tmr that stock tanks by at least 50% on its first day… the key-man risk here… is bordering on infinite. Yes, KVP would have insurance on this for any strategic big tesla exposure… Remember, Musk is African man, this dude, this maverick pioneer who is a billionaire, sleeps on the factory floor… i.e. that’s only the kind of stories you hear out of EM’s like china… that obsessions… you can’t clone that… you can’t build that… that is an outlier’s outlier… that is animal farms’… “some animals are more equal than others…”
- Yet SpaceX apparently had a valuation of $36bn in Mar of this year, i.e. pre this historic launch in a string of historic pioneering, never before done launches… Its KVP’s understanding that Musk owns over 50% of equity & controls over 70% of stock…
- Imagine what comes next, even before Mars… asteroid mining?… What valuation do you then put on such a company? 10x is probably on the lower end over a 5-10yr horizon, with +50x (over $1 trillion dollars) being very much in the realms of decent probably. How many +10x to +50x skews can you think of, over a 10yr horizon? And yes, you will have to get key person risk insurance…
- More importantly the structural implication for humanity & the long-term easing of pressure & damage that we are causing on this planet…
- Do you know what is written on mostly self-taught gravestone of Isaac Newton’s (the big papa of Physics)?
- “Here lies that which was mortal of Isaac Newton”
- At just 48yrs young, one cannot even be sure if Musk will even ever leave this galaxy behind one day – perhaps we’ll be uploading our consciousness into synths, drones & computers over the next 10 – 25 – 50 years (would make space travel much easier, as well as overall colonization of other planets). Yet if there was a such legacy monument to Elon Musk… what do you think it should say?
On The Radar Today
- AU: Current Account, Company Operating Profits, RBA (Remember BoC tmr & ECB Thu)
- UK: Money Supply, Mortgage Approvals, Net Lending to Individuals, 10yr Bond Auction
- US: Total Vehicles sales
- EZ: Italy out on holiday, French Budget Balance, Spanish Jobs Data
- NZ: Milk auction this evening
Start-End = Gratitude+Integrity+Vision. Create Luck. Process > Outcome. Sizing > Idea.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.