Thread by @wolfejosh

1/Some thoughts

“To The Moon aint fundamental analysis

It is an INDUCEMENT—an encouragement of belief

And the only thing that is fueling that rocket ship To The Moon is the credulity of others

—pressure tactics WEAPONIZED to induce greater fools
vice.com/en/article/7kb…

2/

“What was that word that you used that starts with a P? “Profit”?!…That's such a weird word. I haven't heard that in so long.

Contrary to the SCARCITY of the word today, profits are a great measure of the VALUE that you provide to people.

People are saying…

3/ Probably my favorite example—both in pursuit of space—is Bezos x Musk

Amazon compounded capital the way a great business should

Elon has parlayed an almost religious movement of true believers to fund losses.

4/ And if you raise cash from raised expectations––fundamentals don't matter

you can keep leading people—or misleading them—

so far, there has been really no great penalty for people whose relationship with the truth is less than ideal.

5/ in ‘99/00–succes led people to borrow—in some cases extravagantly on margin—to invest more

all 1 big party + then when the punchbowl got taken away people suddenly woke up as if in the Ishiguro novel “The Buried Giant” & said Wait a second these co’s are gonna run out of 💵

6/ The tragic thing: lower income people gambling or speculating lured deeper and deeper at the worst time

you’ve not seen mass layoffs, bankruptcies, suicides—all the things that come from tragic financial downturns

people clinging to hope that their portfolios will come back

7/ My full time job is investing in scientists + entrepreneurs who competitively bring cutting-edge crazy tech to market

YET we want them to have real businesses solving real problems with margins + economics + cash flow so that they dont have to constantly promise new investors

8/ Today, there is an excess of excesses

it's not a prediction. It's observable––in front of your face

focus on areas neglected and scarce

when the shit hits the fan, you want to be in the other room, and you want to be focused on stuff that other people haven't yet found

9/ you’ll see people running like ‘02 to re-learn wisdom of decades of Buffett letters + take accounting classes + understand IS/BS/CF + how they flow together

To The Moon is narrative-driven inducement to get in the pool—and you're starting to see stuff float in the pool🏊‍♂️💩

10/price is what you pay—value is what you get

price is only a measure of belief + expectations Fundamentals are measure of value
discrepancy between fundamentals + expectation is where great investments are made

—Religions only exist based on the strength of their believers

11/ Elon has, in the case of SpaceX, delivered real teams of people that have delivered technologically, competitively advantaged engineering marvels. Hard to criticize SpaceX.

In the case of Tesla, you have millions of customers that are very happy….

12/…You have a minority of customers that feel like they were misled. And you have an entire tribe of investors that are true believers and a minority of people that are saying the emperor has no clothes. I don't know what Elon truly believes….

13/ But I know that that number of true believers in Elon and the messages that he's been putting out are not going anywhere.

And I would say I massively underestimated the power of religious belief.