Blain’s Morning Porridge – Dec 20th 2022: Peak Musk? The Bubble is bursting. And some thoughts from the front lines of the NHS!
“Then I woke with a yawn in the first light of dawn, saw him and blew his disguise…”
This Morning: Never hold a referendum unless you can be sure of the result. Musk has broken the Cameron rule, and leaves himself exposed and looking foolish. It may mean we’ve passed Peak Musk, and the bubble around his extraordinary assent has burst. And, as Nurses stage a second strike day, some thoughts from an NHS A&E department.
So much to think about in terms of Christmas shopping still to be done! So much still to think about in Global Markets.
One thing is very clear: 2023 is going to be a far more thoughtful year than the mindless bull market of the 2010-2022 era. The immediate future is going to be about picking stocks and credits based on thorough analysis of the fundamentals facing businesses and markets, and doing full and deep due diligence on any investment proposal. The era of trackers – simply following the market by buying a stock or bond index, is over and very much last year’s game.
Later this week myself and my colleague Neil Williams, head of Wealth Management at Shard will be doing our final podcast of the year, looking at our conclusions on Bonds, Stocks and Alternative Assets – and I’ll post it on Linked-in, Twitter (if it’s still there) and on the website.
However, the big question this morning is how far past Peak Musk we are?
Musk believes he is above accepted standards of normality. Consequences don’t apply to him – only to the little people. He can ignore economic orthodoxy and convention because he is so speshul. He doesn’t have to pay attention to the rules. Time to wake up and smell the proverbial coffee.
This morning I bet Musk is regretting not paying attention to the David Cameron Rule. (That’s the one that specifies never hold a referendum unless you are absolutely certain about the outcome.)
Musk made the mistake of putting his position as CEO of Twitter to the vote, promising to abide by the decision of his town square vote. 57% of Twitter users who voted wanted him out – Musk’s has not responded, although his sidekicks and fanboys are now muttering about a rigged vote. Nope. The Twitteratti generally despise Musk.
More revealingly, the troubles at Twitter are illustrative of just how the Elon Musk bubble has burst.
Tesla was extraordinary. Now it is just another company. 12 years ago it was the extraordinary driver of innovation that spawned the Electric Vehicle revolution. At one point Tesla’s Price/Earnings ratio was infinity based on expectations a Tesla replacing every single car in the universe, autonomous driving and infinite charging for free with software downloads as standard.
And then we blinked. Tesla’s stock is 63% lower this year. The PE is around 45, and now looks very expensive relative to every other auto manufacturer – many of whom are now eating Tesla’s lunch in the EV market. Telsa looks lame and tired, while its competitive moat is shallow.
Meanwhile, the whole EV sector is under pressure. Suddenly we’re waking up to the reality that putting all our eggs in the lithium battery basket might not be the smartest plan. It’s becoming increasingly scarce, expensive and is still (whatever Musk claims – and remember, telling the truth is another thing that doesn’t apply to his speshulness), practically impossible to effectively recycle. Its filthy from an environmental perspective.
More importantly, there may be much better, cleaner Battery Technologies out there, waiting to be innovated, but the market is so besotted with Musk it keeps lapping up Lithium. It’s in danger of becoming a road-to-nowhere distortion – by displacing investment into better, more disruptive, cleaner, simpler energy storage vectors.
Yep.. Tesla is looking likely to be as obsolete as the steam engine at some point. Such is the fate of all tech companies. They shine oh, so brightly… and then they are gone.
Picking alternatives to Petrol and Diesel is tougher than we ever thought. Lithium is limited and dirty. All the early promises made for hydrogen have gone nowhere – its difficult, requiring much heavier engines and new infrastructure. Toyota has gone curiously quiet about its efforts in hydrogen cars. Something new will emerge… and it won’t be coming from Tesla while Musk flounces round the chatrooms of Twitter.
Musk is CEO of Tesla and owes the shareholders a duty of care to manage the company in their interest – which is hardly apparent as he makes an idiot of himself on Twitter and remains fully engaged with SpaceX. The magic that one fuelled the momentum around Musk as an extraordinary technocrat and techtreprenuer is evaporating. As he plummets down the rich list, questions are being asked if he can afford the extraordinary debt he raised to finance the private equity acquisition of Twitter. At some point the doors that opened to him when Tesla expectations went from likely bankruptcy to trillion dollar company will slam shut.
The reality for Tesla is it’s just a car company… As such it needs to be managed.
Twitter… Perhaps Musk should walk away while he still has something to walk away from…?
The rest of this morning’s Porridge is from the front lines of Medical Care in the UK – where I found myself on the trolley yesterday.
I have nothing but praise for our Nurses, and while its shocking they are on strike – they have my full support and I don’t blame them!
Yesterday wasn’t a great day. Fortunately, the outcome was good…. I don’t know what happened, but I think a bug got me.
On Sunday I went out for a swim on our river. I reckon I might have swallowed something noxious in the water. (There are lots of visiting duck and geese, and the thought I might just have imbibed duck poo from a bird suffering avian-flu is quite horrible.) Whatever it was, it made me sick on Sunday morning, but seemed to pass through me very quickly.. (very quickly if you get my drift). I felt fine after an hour or so. We then went to an excellent Christmas lunch – which was great fun, but I found myself suffering indigestion, which is unusual.
As we walked home I felt a tightening across my chest – something scarily familiar from when I was really ill a few years ago. Thankfully, I’ve not felt that fearful sensation in years. It didn’t then help my iWatch started bleeping, warning me of irregular heart activity. I checked, and sure enough the ECG function on my watch was warning of Arterial Fibrulation – a potential precursor to stroke or heart attack. (I checked my blood pressure, oxygen and heart rate – and all were good!)
I worry about these things because I had my heart attack in 2016 when I picked up an infection following an operation, triggering an enormous cardiac arrest. Since then, I have recovered well – even becoming a Trustee of a leading heart charity; Heartbeat.
Sunday night was a nightmare. It felt like the heart-attack bogeyman was stalking me again. My heart started racing as anxiety took over. I took extra aspirin (to thin the blood) and tried to sleep it off. I called the local GP early morning – queued in the phone system for 20 mins, and got a call back from a GP later in the morning. She was quite explicit – get myself into Accident & Emergency.. which I did.
I want to stress the staff were simply excellent – but the conditions in a leading A&E department were simply awful. Perhaps because my file is marked with a Heart sticker I was sped straight into an alcove where a nurse checked my EGC (how my heart is beating), took Bloods and put in a canula – always a bad sign. I was then givin a chest x-ray and assigned a trolley.
I was slightly disappointed to be told my iWatch health monitor was a “gimmick” and not to be trusted. I can understand how medical staff might feel about wearable Med Tech – do they make us hypochondriacs panicking because of unreliable “cry-wolf” warnings? Or are they useful indications of problems? I hope the later because I pay attention to it.
I spent the next 4 hours sitting on the trolley which was parked in a draughty corridor along with lots of other patients, also on trolleys. Nurses and doctors flittered round – not actually treating anyone, but looking for space to put more trolleys. It was less than pleasant – I was walking wounded and would much preferred a seat somewhere less claustrophobic. The bottom line is far, far to many people in the A&E… why is another story about the health care system and its priorities.
Late in the afternoon a young doctor reviewed my notes, got me out the trolley park and told me there did not seem to be anything to worry about. Since April this year, I’ve been on “pathway” to have a proper appointment with a heart consultant early next year to review my dodgy ticker and the meds I am taking for it. I’m deliberately going through the NHS system to find out what it’s like for patients, our clients at the Heart Charity. It’s been extraordinary – it’s taken months of tests and more tests, and finally I get to chat to a doctor for 20 mins sometime next month. The alternative is private care – but I decided I should experience the NHS in order to know who it affects those without the wherewithal for private care…
I’ve been very lucky – I lost just one day as my misbehaving heart was scaring the Be’Jesus out of me and Mrs Blain. Imagine what it’s like for folk waiting months or even years for urgent diagnosis of cardiac, respiratory, or cancer scares, and then waiting even longer to have it treated. Love to them all this morning..
I love our NHS – but it needs to be fixed.
Its just as well I wasn’t going to hospital today – the Nurses are striking because our Government reckons they can be bullied into accepting wage slavery and a massive cut in their already low earnings. The ambulance teams are striking because their jobs are impossible because of the dysfunctional hospitals, and they want paid properly. My friends in the medical profession are giving up in droves.
Something needs to be done…
Out of time, and back to the day job
Strategist Shard Capital
Trustee, Wessex Heartbeat