Nvidia vs. Tesla - A Striking Contrast Between Two Stocks

This is a stunning contrast between a meme stock that remains disconnected from underlying reality and one of the most remarkable companies of this century that is positioned in a way that investors don't quite yet believe. One a stock that credulous investors are buying at a premium and another that skeptical investors are hesitant to buy at an remarkably reasonable price.

Tesla:
Margin Deterioration: Operating margin plummeted to 1.4% from 4.1%.
Valuation Disconnect: Trailing P/E sits at an extreme 345x multiplier.
Capital Strain: Free cash flow reversed into a $1.09 billion burn.
Market Headwinds: Facing intense EV price wars and autonomous competition.

Nvidia:
Profit Powerhouse: Operating margins actually exceed 65%.
Cheaper Valuation: Forward P/E is highly reasonable at 22.7x.
Insatiable Demand: Customers are immediately purchasing all available AI chips.

Just focus on the margins alone.
Tesla profit margins of 1.4%.
Nvidia profit margins of 65%.

Irrational exuberance contrasted with rational skepticism.

*******

And the morning after I posted this on 22 July, Tesla is down more than 13%, its P/E ratio closer to 300.

And to be fair, Nvidia stock price is down 2.5% this morning as well. 

Fainting Spells

She seems entirely too perky. 

How do you suggest that we slow her down?

Do you know any good fainting spells?

You Think

It is not just that you think differently from other people. You think differently from everyone. And as if that is not enough, you think differently WITH each person.

Think about that.

Band Evolution

They started out as a punk band but then the guitarist learned 3 new chords so now they're a pop rock band. If he does that two more times, though, they'll have to bill themselves as prog rock.

(I know. I know. Maybe only 4 people will get this and only two of them who will find it entertaining. Kind of like the audience for a prog rock band.)

Donald Trump Paid $6 Million in Damages Today to E. Jean Carroll

Somehow this fact and the fact that Trump is the only president in the 250 years of this country to have never beat another man in the general election seem related.

Per Mother Jones, if only women had voted in the 2016 election, Hillary Clinton would have won 45 states (plus Washington, D.C.) for a total of 458 electoral votes. If only men had voted, Donald Trump would have won 35 states for a total of 350 electoral votes.

You American voting boys. You really need to up your game.

AI Representation

Lindsay Graham dead.
Mitch McConnell brain dead.

Makes you wonder how long before districts will be perpetually represented by the AI avatar of a politician who once was an actual human. Like Disney's Hall of Presidents but avatars actually sitting in congress.

The Limit of Institutional Imagination

What invention is to products and technology, entrepreneurship is to institutions. 

One of the limits to an entrepreneurial economy will be our institutional imagination. By definition, institutions can do what no individual can. This suggests that the imagination of an individual is not enough. We need something that - like the capability of institutions - emerges out of the interaction of individuals rather than is a story told by or curated by some charismatic leader.

Hacking Consciousness Is Easier Than Hacking Voting Machines

Our perceptions are more subject to manipulation than our votes.

Voting machines are physically protected by strict security protocols and lack internet connection. By contrast, human minds are constantly connected to open information streams.

The Fifth of July!

Happy Fifth of July!
The first day of the next 250 years.

It Was Indeed

It was the least we could do, he said.

And, indeed, it was, the very least they could do.

New Politics for the Next Economy - What Comes After the First 250 Years of America?

America has reinvented itself four times. I think we're on the fifth. Two hundred and fifty years in, that seemed like the right thing to consider today.

Since 1776, Americans have reinvented our country four times. Jefferson's generation transformed a collection of colonies into a constitutional democracy. Lincoln's generation built a national industrial economy. FDR's generation made labor as important as capital and created global institutions. Reagan’s generation created an information economy.

Each transformation was stressful. Each required Americans to rethink old assumptions. And each created radically new possibilities, very different economies.

I believe we're at the cusp of a fifth transformation.

New Politics for the Next Economy asks the question: How do we adopt a politics that allows us to change our institutions into tools that allow us to realize our potential, to become our better selves?

The central question? How did America become the country it is today? It traces America’s evolution and asks what it could become next.

The book is intentionally optimistic. Rather than dwelling on what's broken, it explores what might come next—and how ordinary citizens can help build it.

This is a book about renewal — a fitting thing to think about on the day we mark 250 years of being American. I'd be honored if you'd take a look.

New Politics for the Next Economy is available now in paperback and Kindle.

https://www.amazon.com/New-Politics-Next-Economy-Critical/dp/B0H6P5MZ6Z/

A Gerontocracy If You Can Keep It, Er, Keep Them Alive

The country is 250 years old. How old is that?

Well, not that old. The three oldest members of congress have a combined age of 267 years, so the country is only about three lifetimes old.

Oldest members of congress:

• Chuck Grassley (R-Iowa): 92 years old
• Hal Rogers (R-Ky.): 88 years old
• Maxine Waters (D-CA): 87 years old

And of course President Trump is now 80.

Mitch McConnell (R-Ky.): 83 years old, is the second oldest Republican in the House. He leads the Senate Republican Conference. Mitch is currently lying in a coma in a hospital bed but still "serving" in the House.

The word you are looking for is gerontocracy. To paraphrase Benjamin Franklin who quipped that we had a Republic if we could keep it, we have a gerontocracy if we can, you know, keep them alive.