Archive for the 'Money' Category

Only $43 Billion for a Tweet

Elon Musk is a household name, much like Henry Ford about a hundred years ago.

They both were innovators, they liked cars, and they were convinced that they knew what was best for the rest of us. They treated workers with disdain and didn’t always follow the rules. Ford was worth about $200 billion when he died at 83 in 1947, about $70 billion less than Musk, adjusted for inflation. At 50, Musk is a mere baby with time to build up his lead and his impact on us.

Musk is the world’s richest person even surpassing rock stars Foo Fighters and Red Hot Chili Peppers. Race car drivers Fernando Alonso and Lewis Hamilton love cars too but are worth only $300 million. At $18 billion, the Saudi Crown Prince pales in comparison. Amazon founder Jeff Bezos is about $90 billion short of Musk.

Although the Saudi family fortune is estimated at $1.4 trillion, it’s spread among 15,000 members. Musk shares his fortune with no one.

Viewed by some as being weird, Elon acquired the trait early on. When he was a child, his adenoids were removed because doctors suspected that he was deaf, but his mother later decided that he was thinking “in another world.” Echoing his mother, Musk’s business ventures sometimes rival those of the psychotic Howard Hughes.

Nearly all of Musk’s fortune is tied up in Tesla. With more than two million slavishly devoted Tesla drivers, the company is valued at about $1 trillion dollars. That’s 5% of the U.S. gross domestic product.

A company’s value is often reflected in its price/earnings or P/E ratio. If a company earns $5 per share of stock and its stock price is $50, the company is said to have a P/E of 10. The higher the P/E, the greater the expectation for a company’s bright future. Tesla’s PE is a whopping 209. Amazon sports a robust but not overly radical 47. General Motors has a P/E of 6. Some might say that Tesla is overvalued; others might say that GM is in the shitter.

An active user of social media, Musk has 80 million Twitter followers. My blog has about 200, not million, just 200. I influence no one other than my wife and my daughter. And even then, I get criticism.

Musk’s recent offer to buy Twitter for $43 billion reminds me of the movie, Citizen Kane. An ill-disguised story starring Orson Welles, it focuses on William Randolph Hearst, of Hearst Castle fame and chronicles his accumulation of wealth and power through his newspaper publishing empire. It demonstrates the impact of one man on the news read by most of America, and the fears of Hearst’s contemporaries who might be targeted for destruction by the influential and semi-neurotic mogul. It also shows the eventual decline of the man and his chronic unhappiness.

Not necessarily equally neurotic, Jeff Bezos’ acquisition of the Washington Post and Rupert Murdoch’s giant news media empire both march in the direction of using the media to advance one man’s favorite causes and his picture of what a perfect world should be.

Maybe Musk has too little to do. Maybe he just likes to rattle people’s cages. Or maybe he has a grand design for Twitter known only to him that comes from what his mother called “another world.”

With 80 million Twitter followers and the ability to sanction other Twitter posters (Barack Obama has 130 million followers) for behavior deemed unacceptable by a sometimes-peripatetic Musk, his influence should be of concern. 

On the other hand, it could be a fun ride. In a Tesla of course.

Cash is not king…

I have a cute box on the kitchen counter. It’s four inches wide, six long and four deep. Made of exotic woods, it contains much of what I need to sustain life in the event of an earthquake, fire storm, or a visit by unfriendly alien beings.

As my ability to locate things diminishes with age, I have used the box as though it were a lifeboat in hurricane battered waters. Realizing that, like the lifeboat, the box has just so much space, I am choosy about what goes into it. Once assigned a seat in the boat, the survivor can always be found in its assigned space. Time that would have been spent searching the house can now be spent watching more TV.

The principal occupants of the box are my keys, including our house, her house, and my car. Another space is reserved for my thirty-year-old wallet that Ila and I bought in Scotland. It has a Gaelic phrase on its face, the meaning of which has been long forgotten. The indestructible wallet has my driver’s license, auto club card, insurance coverage, and that registration thing I must give a highway patrolman if he stops me for driving like an old man.

The wallet also has my credit cards which, if used at their present stratospheric speed, will require replacement before my old wallet does.

The final occupant of the box is a wad of cash that includes ones, fives, tens, and twenties, all neatly arranged numerically and folded in half. This neatness was inherited from an old friend who not only arranged them numerically but also made sure they were all facing in the same direction. A shiny money clip kept everything in place. I asked him why he took such pains with his cash, and he said, “You treat your money well and it will treat you well.” I never really knew what that meant, but he was serious about it.

Other odds and ends litter the box but have no assigned seats. They linger in the box until I get up enough energy to file them away where they will never again see the light of day or toss them in the trash…same result but with less respect.

I will always have a seat for my wallet and my keys until the government, Mark Zuckerberg or Elon Musk find a better solution. Maybe a chip embedded in your armpit or a laser beam spilling forth from your eyeball will open doors or flash an electronic version of that thing you hand to the highway patrol guy.

I don’t think that cash has the same staying power as the other things. “Cash is King” will be a forgotten phrase that kids will think has something to do with that guy who used to sing Folsom Prison Blues and look a lot like Joaquin Phoenix.

Money was mostly unknown until about 1,000BCE when metal coins showed up. We bartered before that time, maybe like a cow for a shirt. Paper money arrived around 800CE and remained the currency of choice for over a thousand years until in 1960 someone said, “Why don’t we use a piece of plastic to buy things?” Sounded a little funny then, even funnier than a cow for a shirt. There are now 2.8 billion credit cards in use and the companies offering them fill up most of the space in my mailbox.

For sixty years I stuffed my pants pockets with credit cards and greenbacks; I needed both forms of payment since many merchants displayed signs saying, “Cash Only”. I used my credit cards infrequently since, like my immigrant parents, I avoided any kind of debt and the misery that would surely include putting me in the “poor house”.

As the years passed, my purchases using plastic began to exceed those involving cash. The recent pandemic accelerated the use of plastic as we avoided touching dirty money that might be carrying the dreaded virus. We did more on-line shopping that could only be transacted with a credit card. Coffee shops, including the cute one at the Ojai Valley Inn, would no longer accept cash for a three-dollar cup of brew.

Even the way we use the card has changed. Early on, we handed our card to the merchant who performed a series of steps to enter the transaction. Later we earned the privilege of sliding the card ourselves, hopefully with the magnetic stripe facing in the right direction. Current high-end technology allows us to simply “tap” the card on the reader.

These improvements have forced us to learn new tricks and on occasion feel frustrated as we fumble with the card, try to read the screen with our aging eyes, or wonder what the youngster behind us must be thinking as the line begins to back up.

Isn’t America wonderful? We can spend our money at the speed of light with an accompanying 18 percent rate of interest.

Feeling a growing confidence in digital technology, keeping cash in my pocket has diminished from a wad of papers that ruined the sexy lines of my expensive jeans to a single $20 bill for use in emergencies; I have yet to find that emergency. Yesterday, Jackie and I walked to the gym with only my Visa card; it was very liberating and I’m sure the women at the yoga class eyed me with greater admiration.

Now I understand there’s something called a QR Code that doesn’t even need a card reader to take your money.

Pretty soon we can just assign our paycheck or Social Security benefits to Visa or American Express at the beginning of each month and let them decide how to spend it.



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