BayesWatch
1yr ago
Barron's either has an inside scoop or is irresponsibly wrong.
As per my recollection, and as Matt Levine said today on Twitter, Musk at one point considered borrowing against Tesla shares, but instead borrowed against Twitter and funded the rest from stock sales (+investors +large shareholders who rolled over their shares).
Barron's is flat out wrong and should feel bad.
Hold up. I'm lost. While I'm sure that there are still mass graves, the bodies were generally burnt in the crematoriums. Am I mistaken on that front.
That isn't to say that there aren't mass graves or anything. However, is it not well known that the bodies were put into crematoriums?
Shouldn't you be challenging the claim that there were in fact crematoriums?
And I'm not undercutting you here. I want to get on the same page. Are you claiming that there was no explicit documentation related to death camps (save "coded" documents)?
Do you meant that Hitler himself never signed such explicit documents himself?
This rush to adjustment is absurd.
(1)
"But it looks like Musk is doing a bad job at Twitter." This is usually a reasonable predictor of failure. However, everything Musk succeeds at looks like an absolutely terrible idea until all of the sudden, it's not. So hold your horses.
In the case of Musk, the claim "it looks like he's running company x like a total clown" isn't good evidence that he doesn't actually know how to run company x. It is likely that he would look like in idiot even in the case that Twitter eventually becomes a trillion dollar company. Everything we are seeing is weak evidence of what the future outcome will be. The nature of market inefficiencies is that they are not obvious, else someone would have already exploited it. Finding major market inefficiencies almost requires you to see things in a way that would seem absurd to everyone else.
This is just the beginning. There are so many things that Twitter can become. I don't understand how people are writing him off so easily. How would you expect a world where Twitter is a huge success to look different than it does right now.
Did you think that Musk was going to do things that everyone thinks are totally reasonable, just as everyone expected based on his clear operational excellence a couple of weeks after buying it, it does really well? That was never going to happen.
I would expect a success to look something like "Musk is a total idiot" to "see I told you he was a total idiot" to "OK, it looks good now but it's just a blip on the radar" and eventually "Ya Musk was successful but it's because of his workers not him. Any rich guy could do this" and "did you hear about his fathers emerald mines?".
I don't understand how you are distinguishing a world where Twitter goes bankrupt from a world that it's absurdly successful. The expectation is that everyone would say that he was an idiot. Everyone would say that he has no idea what he's doing, and eventually people would say how it was obvious in retrospect (and had nothing to do with Musk). I don't understand why you would expect Musk to run his business in a way that doesn't seem stupid. Everything he's done for the last 20 years has seemed stupid. Until it wasn't. And people still think that every new thing he does, at those same businesses, is stupid.
Surprise, when people exploit market inefficiencies it looks stupid. If it was obvious sthen omeone would have done it already. Musk has a long history of doing stupid things that are totally reasonable in retrospect.
I don't know if Twitter will succeed or fail. I do think that if Musk does spend a lot of time at Twitter (at the expense of Tesla and SpaceX) he will make a tremendous return. I do think that there is a very large chance that Twitter will eventually make an absurd amount of money and that when it does so it will look nothing like it does today; I think that Twitter the micro blog platform will serve as a launching point for other more profitable businesses.
Things currently look exactly like we would expect a Musk success to look; they also look exactly like we would expect a Musk failure to look. As of yet we don't have sufficient information to determine whether this is a winner or a total flop.
(2)
Twitter is a far more plausible business than either SpaceX and Tesla. Tesla and SpaceX were terrible businesses, the idea of them succeeding is absurd, but we are so used to their success it seems like Twitter is uniquely terrible; the reality is that Twitter operates on far more fertile soil than Tesla/SpaceX. Tesla/SpaceX were pie in the sky companies that were going to fail with near certainty. Conversely, Twitter is a company that should be worth more, it was expected to be worth more, but has failed to live up to its potential. In a vacuum, Twitter is a far more plausible than SpaceX/Tesla.
(3)
There are a lot of claims that Musk is just some luck business guy. This is absurd. The odds that someone would hit gold so often, on companies that seemed certain to fail is incredibly unlikely. His first 2 businesses Zip2 and X.com (X.com acquired paypal and later rebranded as Paypal) might have been luck. He was a smart guy, but there were lots of smart guys making lots of money like that before the dotcom bubble. So it's impressive, sure, but that's it.
However, Musk then picks two companies that were near certain to fail, just terrible ideas, even if they had adequate funding, which they didn't, and turns them into no only functioning businesses, but implausibly large successes. I don't think you appreciate how absurd this is, and how this, in combination with his two software startups, suggests that there is property of Elon Musk that makes a company likely to succeed. It would be improbable that he was so consistently lucky in not only business, but in what were the WORST businesses; these businesses were terrible ideas. You would have to be looking to loose money to touch them. The nearest competitors to both businesses have some of the largest revenues in the world and don't touch either of those markets. The improbability of succeeding at all these things is implausibly improbable.
He had 180 million before tax, and wanted to start a rocket ship company and a car company, despite not having nearly enough capital to make a weak attempt at either.
There hadn't been a mass manufacturing automotive company since the early 1900's. Starting one should have required a ton of capital and time. You might not know this but Tesla has the highest automotive gross margins of any car company not named Ferrari, despite Musk's silly automation and manufacturing ideas being mocked as the whimsical overconfidence of a fool. He was a complete idiot until maybe 2 or 3 years ago, and turns out all those stupid ideas created the highest automotive gross margins and companies are tripping over themselves to incorporate them into their assembly lines. Tesla has higher gross margins than Toyota (the king of not only auto manufacturing* but of all manufacturing*), Mercedes, and BMW, despite the current standard cost of manufacturing electrics cars currently being $10,000 higher than that of ICE vehicles. This is absurdity upon absurdity.
SpaceX is just an exercise in implausibility and improbability. The odds of its failure were a near certainty. It's rivals were rich governments, and defense contractors that make bids on Trillion dollar government projects. It would have been a near certain failure with adequate capital, which it didn't have, not anything close to it. The majority of satellites in space were launched by SpaceX. The overwhelming majority
If he would have gone out and looked for business that were most likely to fail a rocket ship manufacturer and mass production automotive company would have been pretty good attempts. You need to go back in time 20 years and consider how absurd these companies were. They were terrible ideas. Certain failures. They both succeeded beyond any imaginable best case scenario.
I don't care that Musk makes cool rocket ships and cars. I don't care that he's "disruptive". That means nothing. What matters is that he picks businesses with the most infinitesimal improbability of succeeding. It wouldn't matter if he had founded a company that makes industrial solvents conditional on its success being so incredibly improbable. T
he salient feature of Musk isn't the cool stuff he makes, it's this strange property that lets him take businesses that are certain failures, and to not only make them profitable, which would be absurd, but absolute giants, that dominate the spaceflight industry (civilian and private) and produce significantly higher gross automotive margins than those of not only BMW and Mercedes, but Toyota as well; all this despite the industry standard that it is $10,000 more expensive to make an electric car. FYI up until the recent supply chain woes, Tesla was increasing gross automotive margins each quarter by a couple of percentage points, despite cutting the prices of the cars by an even larger percentage (that's wild).
Musk is simultaneously the most overrated and underrated person alive. He's overrated because people think he's amazing because he makes cool cars and rockets ships, and because he's super "disruptive". Meh. He's underrated because people don't appreciate the degree to which he puts himself into situations with the most overwhelmingly certain probability of total failure and turns them into implausibly massive successes.
There is some special quality that allows Musk to totally defy probabilities, to an insane degree. At a certain point it's not luck. There is no reason to expect that this weird ability would not extend to Twitter. Everything he does is outside his domain of expertise. Twitter is the closest thing to his first businesses were he wrote all the code, so prima facie, if he has any "area of expertise" Twitter would be his only business that is plausibly related to that area of expertise.
I think that he is very very smart. I think that people dismiss this because fanboys on Reddit praise him for silly superficial things like disruption and making cool stuff. What you should care about, what matters for this conversation, and what is actually impressive about Musk is his ability to give the middle finger to the Gods of plausible outcomes. You hear so much fanboys praising him for silly reasons that one would dismiss the whole thing. He deserves that praise and more, but not for the reason that he gets it.
The whole idea that he's a genius because "cars, rocket ships, and disruption" is silly; it is Musk's absurd ability to shift probability's that stands out. By analogy it's like saying that Tom Brady is the best football player of all time because he's good looking. It totally misses the boat.
Everyone needs to take a step back and wait.
Ya, but, hypothetically, wouldn't that selection have only existed among the pool of already available slaves.
So if there was selection it would only be among the pre-selected group (of tribes that got enslaved by other tribes, I guess)?
I don't see how your point disagrees with what the parent comment says. Sure there was selection, but that selection would be among a pre selected group, and said means of selection would have dysgenic effect.
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