Why is Elon Musk the richest man in the world?
Because he’s not afraid to place big bets.
He bet that people were ready to move away from physical currency…
And became a millionaire by helping develop the world’s first digital payment platform, PayPal.
He bet that people were ready to abandon gas guzzlers for electric vehicles…
And became a billionaire by leading Tesla to become the biggest EV manufacturer in the world.
As an early investor in OpenAI, he placed a big bet on artificial intelligence…
And now he’s competing in that space with his own xAI platform.
He is also betting big on robotics…
Neurotechnology…
Social media…
And he even placed a massive bet on outer space.
Elon’s company SpaceX currently operates the largest fleet of satellites in orbit…
About 50% of the global total.
Just last Monday its new Falcon 9 rocket successfully deployed 23 more Starlink satellites into orbit…
And the company is developing reusable rockets and robotic spacecraft intended to dramatically lower the cost of space travel and exploration.
But he’s not done yet.
Elon Musk made the biggest best of his career earlier this year.
And, so far, it looks like it’s paying off in spades.
A $100+ Million Dollar Gamble
Of course, I’m talking about the massive bet Musk made to help reelect Donald Trump.
Musk created and funded the $75 million America PAC, using it to dole out $1 million checks to registered voters in swing states who supported a petition sponsored by this super PAC.
He also gave his money and time to campaign for Trump in Pennsylvania, a state that was considered a “must-win” in the run-up to the election.
Based on Musk’s net worth, every hour he spent on the campaign trail was worth nearly $1.6 million to the Trump campaign.
But perhaps the biggest value he provided was the untold millions of dollars in free media Musk “donated” through the near-constant stream of pro-Trump material on his social media platform, X.
But why in the world would the world’s richest man dedicate so much time — and easily over $100 million of his own money — to make sure Trump returned to office?
All you need to do is follow the money.
According to estimates, Tesla and SpaceX account for $15.4 billion in government contracts over the last decade.
Whether it’s the hundreds of millions Tesla makes from federal emissions-trading credits…
Or the billions SpaceX makes off contracts to launch rockets, build satellites and provide space-based communications services…
In fact, most of Musk’s companies are deeply entangled with the federal government… and not all these entanglements are positive.
As the chart below shows, federal agencies have targeted Musk’s companies in at least 20 recent investigations or reviews:
Source: Jonathan Corum
Including some that are critical to his companies’ success…
Like an investigation targeting self-driving car technology, which is a vital part of Tesla’s future.
The Trump Whisperer
Trump made it clear on the campaign trail that, if elected, he’d use his executive power to help out Musk.
At a rally in Michigan last July, he said: “We have to make life good for our smart people, and he’s as smart as you get.”
And so far, the president-elect has made good on the promise.
Musk has the ear of the president… and he’s using it.
It’s reported that he wants employees from SpaceX to be hired as top government officials, including at the Defense Department…
And he’s also been putting in requests for a friendlier regulatory environment.
But even more critical to his future success is the power he’s been given to oversee the federal agencies that his companies are entangled with.
Along with former presidential hopeful Vivek Ramaswamy, Musk is set to head a new government agency called the Department of Government Efficiency (DOGE.)
Their mission?
To slash at least $2 trillion from the federal budget.
That means all those agencies Musk has been dealing with are going to have to answer to him for their spending.
Here’s My Take
According to a Bloomberg estimate, Musk’s net worth has increased $64 billion, or nearly 25%, since Trump’s election.
Tesla’s stock has skyrocketed 75% in the Strategic Fortunes portfolio.
Space X is said to command a $250 billion valuation.
I’d say his biggest bet is paying off so far.
But what does it mean for the future of our country?
And what does it tell us about where we should look for investment opportunities?
Look, I’m all for cleaning up wasteful government spending.
But leading edge companies benefited from Biden’s economic agenda.
The trillion dollar CHIPs act was a huge boon to the semiconductor industry. The U.S. will be technologically self-sufficient in the next decade, no longer relying on Taiwan.
And a lot of renewable companies benefited from subsidies stemming from the Inflation Reduction Act.
The $7,500 tax credit it contained even helped boost Tesla sales.
My view is that Republicans aren’t going to cut spending in these areas because they’ve created a tremendous number of jobs…
Especially in red states.
So the cuts will have to come from somewhere else.
That’s where things get dicey…
But it’s clear to me that investors need to start thinking right now about stocks that will benefit from less regulation.
I’m curious to hear your thoughts about Elon Musk’s latest big bet.
Are you looking forward to seeing him slash government spending?
Or are you worried about overreach?
Let us know what you think by sending an email to dailydisruptor@banyanhill.com.
That’s the dedicated email address for The Daily Disruptor where you can share your thoughts or suggestions about this e-letter…
It’s also how you can let us know about any topics you’d like us to dig into in more detail.
Don’t worry, we won’t reveal your full name in the event we publish a response.
So feel free to comment away!
And I’ll have more about Musk’s biggest bet in future issues.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
