Elon Musk is a con man and the US stock market is in a massive speculative bubble built around TOTAL SCIENCE FICTION.
TSLA’s current P/E is around 300—far beyond the fever dreams of the worst dotcom grifters.
There is ZERO chance even part of Musk’s trillion dollar payout will happen.
In a sense, this is great news because it means the economic lunacy of this market and the absurd narrative that sustains it is heading for a reckoning.
Tesla is a series of slick presentations by a conman that creates a STORY about AI and autonomous robots—a story that relies on revolutions in science and technology that have no evidence in objective reality, and no grounding in economics. Just to hit the first milestone, Musk will have to grow his low-margin car business by 10X.
The overall equities market is almost as stretched as it was during the dotcom bubble—but the context is far worse. The scenarios for a return matching current prices are thin and receding fast. They assume wild growth AND perfect execution AND no exogenous shocks to the system.
Again, none of those assumptions are in evidence here. Donald Trump is the president—and his Gatsby party was the ghost of 1929, hiding in plain sight.
It seems evident that we are headed for a crash sometime in the not too distant future, which may ironically end up being our saving grace. It took the trauma of the Great Depression to give FDR the mandate he needed to build all the institutions that are currently being dismantled.
We will need another FDR to rebuild them, much better.