The Problem With Elon Haters
Nate Robinson Doesn't Get Innovators, #TSLAQ Loss Hoard of Tens of $Billions, You Can Learn From Musk and Jobs
Let’s start with something upfront here: TSLA shares are and have in my view been overvalued and in a bubble for some time. However, a common mistake is to transfer one’s ugly opinions about something (and bubbles can be ugly) onto everything associated with it. This has left many bitter, resentful folks with clouded judgement about the man behind Tesla and Tesla itself.
Any investor should seek opportunities to learn from the mistakes of others (far less costly than your own mistakes). The story of #TSLAQ can teach us lessons far beyond the basic “don’t short a story stock” or “don’t short period”.
An Investor’s Worst Enemy: Yourself (Loss of Objectivity)
We know what the scoreboard shows: 2020 saw a meteoric rise in TSLA’s price and TSLA bears were eviscerated.
In a note to clients, Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, said mark-to-market short losses for Tesla totaled over $40 billion, as it was “far and away the most unprofitable trade in 2020 and had the largest yearly loss we have seen historically.”
Source: Reuters
Surely this has left a raft of embittered folks on Twitter and other outlets. But remember that these people were already bitter for years prior, interrupted by brief bouts of celebration and predictions of “imminent bankruptcy” such as the mid 2018 Model 3 “production hell”.
If you think that the path of anger, bitterness, and resentment will bode well for you as an investor, be my guest.
"Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering."
—Yoda
It is interesting to note the evolution of bearish Tesla arguments over the years…from “Tesla will never mass produce an EV” to “The China factory will never be complete/it’s a pile of dirt” to “Wait until the Bolt/Taycan/i8 come, Tesla won’t stand a chance in the face of this competition”. In other words, thesis creep galore.
Another Day, Another “So Brave” Article from Elon Haters
Enter a recent article by Nate Robinson, Editor-in-Chief of left-wing publication Current Affairs, promoted by some of the most prominent TSLAQ’ers on Fintwit:
Fintwit is full of Elon Schadenfreude types who salivate at any opportunity to attack against Musk or his enterprises. Many of these people are short TSLA (#TSLAQ—these folks have collectively lost $Billions betting the wrong way) or just don’t like the euphoria and hype driving his business. Some people think he is unethical or even criminal in the way he operates (you know, the typical ‘guilty until proven innocent’ judgment you see in the court of social media these days).
These folks will point to individual Tesla vehicle crashes, ignoring the baseline (prior probability) of deaths from car accidents in general, for example (availability bias). Reporting Tesla crashes generates many clicks for media outfits (many from eager TSLAQ’ers, of course), as opposed to the reporting a local crash of a Ford or Chevy vehicle. There are obvious behavioral biases and incentives driving many of these trends.
Anyway, onto the Robinson article.
Entrepreneurs Are Not Polished Like Politicians And Lawyers (And That’s a Good Thing)
Here’s how the Robinson article starts:
There are two facts that I have sometimes found it difficult to reconcile. The first is that Tesla, Inc. makes innovative and genuinely impressive electric vehicles that can hold their own against the fastest performance cars in the world. The second is that the CEO of Tesla, Inc., celebrated entrepreneurial genius Elon Musk, is a liar, huckster, and moron, who regularly says things so ignorant that I cannot understand how they can come from a human adult, let alone one treated by his fans as a super-genius.
—Nate Robinson
Yes, Elon has certainly made flat out wrong statements, notably about covid (incentive caused bias likely contributed in terms of wanting his factory reopened), but here’s the thing: that shouldn’t really matter because we don’t look to Elon for Covid expertise anyway.
Robinson seems to be making the mistake of looking to Musk as a scholar or philosopher rather than a doer. Doers are few and far between in our society, and they should not be considered scholars outside of their niche areas.
Here’s one example of this from another doer of this era:
…[Steve] Jobs refused surgery after diagnosis and for nine months after, favoring instead dietary treatments and other alternative methods. Isaacson says that when he asked Jobs why he had resisted it, Jobs said “I didn't want my body to be opened...I didn't want to be violated in that way.” His early resistance to surgery was apparently incomprehensible to his wife and close friends, who continually urged him to do it.
Source: Forbes
Jobs had a treatable form of pancreatic cancer, but instead deferred conventional medical treatment which may very well have contributed to his ultimate, tragic outcome. He wouldn’t even listen to close friends or his wife. His biography by Isaacson shows Jobs lived a life of strange, unscientific, and flat-out wrong belief systems when it came to many subjects. But here’s the thing—that highly unconventional belief system was redirected by Jobs into groundbreaking, beneficial contributions to society.
The lesson: geniuses are not straightforward people. That genius originates from behavior and thinking that is highly unconventional and can result in brilliance in certain areas, and yet also prove highly dysfunctional in other domains for that individual.
Jobs’ views on diet, cancer, and health should not take away from his contributions in his fields. Doers are not scholars and should not be expected to be so.
Jobs was also notoriously brash, and had strained personal relationships with many people (and was eventually fired from the company he founded). And Robinson’s piece goes into similar anecdotes about how Musk has at times behaved similarly with his employees and others. Doers will not be as polished as politicians, though we should be grateful for that given the track record of today’s politician.
Another Jobs parallel:
Musk’s preference for hype and exaggeration over follow-through and diligence has created a great deal of dysfunction within Tesla, as journalist Edward Niedermeyer reports in Ludicrous: The Unvarnished Story of Tesla Motors. Little that Musk says can be trusted.
—Robinson
Ever hear the one about Steve Jobs and his Reality Distortion Field?
What You Can Get From Jobs and Musk
Towards the end of the long piece, Robinson finally seems to have some self awareness (much later than the rest of us who haven’t gone to Elon for covid advice):
The idea of “genius,” even of being “smart” itself, also needs to be ditched, because it implies that if someone is impressive at some narrow task, they are Intelligent and thus worth listening to on subjects going beyond their tiny area of expertise.
—Robinson
Hate to break it to you, but most “smart”, “intelligent” people are not worth listening to on subjects beyond their areas of expertise. This is not unique to Elon, and most of us are aware of this…
Of course, Robinson never comes up with an example of “how we can do better than Elon” because he probably knows the answer—we can’t. Curiously, he brings up Carl Sagan (who was not an entrepreneur), but I guess he was an astronomer so he thinks there is an overlap here for some reason?
A question for Robinson: If Elon was replaced with another Sagan, would we have mass produced electric cars and humans being taken to space like we do today? Was Sagan a Da Vinci? We already have many Sagans in our university and research institutions. While they perform groundbreaking research and motivate the next generation entrepreneurs (like Elon), they themselves are not capable of achieving such staggering accomplishments.
The Argument Against Elon Predictably Turns to Drivel
Musk fandom arises in part because he is offering something resembling a path to clean energy and space exploration, both of which are appealing and important. But it’s a mirage, and following it will take us further in the direction of dystopia.
—Robinson
So now Musk’s clean energy vehicles which can be seen on roads and driveways around the world and the astronauts he is putting on ISS is a mirage? And Elon has created a dystopia? Perhaps this ludicrous view is a symptom of spending too much time on social media or reading click-incentivized reports about Tesla.
He ends with his “coup de grace”
Instead, we need a humanistic vision of a high-tech future, one that rejects workplace tyrants, privatized spacefaring, and ever-multiplying underground freeways in favor of democratic governance, strong public institutions, and transit for the people. It can be done, even in the world of Actual Machines. And it can be more inspiring than anything Elon Musk has ever dreamed of.
—Robinson
Yawn…
If he had been paying attention the past 40 years, he’d know public spacefaring (initially propped by Wernher von Braun and Soviets who have their own dark and ethically dubious pasts…) has failed and grown into an ineffectual bureaucratic sprawl, with an end result of American astronauts relying on the Soyuz to get to orbit.
It’s a shame to see a supposed “left-wing” commentator trash the only path we’ve had to widespread EV adoption and Western spacefaring in the last decade.
What You Can Get From Jobs and Musk, Even if Others Reject Them
You can learn an incredible amount from the Elon Musks and Steve Jobs types of this world—even as others adamantly refuse to learn anything from them.
What a wise person would do is learn in specific domains from such people. For example, one could learn plenty about product development or presentation skills from Steve Jobs. Should you learn about medicine or dieting from him? No.
Similarly, one could learn a lot about the physics of rocketry, chemistry of batteries, and mechanical aspects of cars from Elon Musk. Should you learn about covid from him? No. Expecting such things from either person is foolish.
It makes me deeply sad that Elon Musk is seen by many as our biggest Dreamer, because his dreams are so pitiful. Because he is a 12-year-old, they often just involve having the same shit, but bigger and faster, rather than actually doing the hard imaginative work of figuring out how to solve our hardest social problems.
—Nate Robinson
No, what’s sad is that Robinson boils down a guy who has simultaneously made EV’s popular and restarted Western manned spaceflight missions in the past decade to “a 12-year old”. Elon has already made many of his dreams (what folks like Robinson would have called pipe dreams in 2012) a reality.
Sometimes it’s best to use Occam’s Razor: if you want someone nicer, polished to have done all these things for humanity, where is this mythical person? Why have they not risen to the top? Why did we get this random guy from South Africa? Why do we often get people like Jobs and Musk instead?
The Answer: If we could have done better than Elon, we already would have.
These folks want someone who is as slick and measured as a corporate lawyer to be the next groundbreaking entrepreneur. Unfortunately for them, the world does not produce such individuals, for their ideas would merely be conventional by the very nature of such people. You can have your politicians, lawyers, and consultants by the dozen if that’s what you’re after, but they’ll never rise to the level of a Musk or Jobs in terms of their uniqueness and ingenuity.