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Tesla stock dropped a bit after Elon Musk dismissed a some analyst questions, calling them “boring” and “bonehead.” The take from the business press was that Musk‘s behavior was “bizarre” (Marketwatch) and “irksome” (Wall Street Journal).
“The 2 questioners I ignored on the Q1 call are sell-side analysts who represent a short seller thesis, not investors.”
In other words, these were analysts who had a drum to beat (hardly an unusual circumstance, as I’ll explain below). Musk continued that the first question was boneheaded because
“it had already been answered in the headline of the Q1 newsletter he received beforehand, along with details in the body of the letter.”
In other words, the analyst who asked the first question didn’t bother to read the materials he’d been given (again, not unusual with analysts) or, if he did read them, he wasn’t able to absorb the information because he was filtering it through his preconceptions.
Musk continued to explain that the second question (about Model 3 demand) was absurd because
“Tesla has roughly half a million reservations, despite no advertising & no cars in showrooms [and] even after reaching 5k/week production, it would take 2 years just to satisfy existing demand even if new sales dropped to 0.”
In other words, the analyst who asked the second question either can’t understand, or is willfully deciding to ignore, basic math and simple logic.
Now, I don’t know those analysts personally and, for all I know, they may be frelling brilliant, but in my experience financial analysts are a fairly dim lot.
Look, anyone can be an “analyst.” The title carries exactly as much weight as “consultant.” Maybe less. To be an analyst, all you really need is the ability to look credible, ask obvious questions, and then write a semi-coherent paragraph that fits within the parameters set by whomever is paying your salary.
The only other job requirement is the shamelessness to promote the few times your predictions turn out to be true and quietly bury the many times your predictions turn out to be wrong. And even then, you can hedge your bets by being vague about the time line.
Analysts are never, ever called to account when their predictions go wrong. For example, Lawrence Kudlow has has been predicting rampant inflation for decades. But rather than being laughed off the air, he’s now Trump’s Director of the National Economic Council.
While clueless Kudlow might be an extreme case, there are dozens of similar examples. Just look at what happened to the careers all the analysts who were predicting Y2K disasters. (Hint: they moved on and got promoted.)
As for the analysts who follow Tesla, Elon Musk surely knows that most of them are full of bullsh*t, because the games they play are painfully obvious. No CEO of any intelligence (much less Musk, who is genuinely brilliant) would give a two-cent stamp for the opinion of ANY analyst on earth were it not for the lemming-like behavior of a certain class of easily-bamboozled investors, not to mention a small army of business reporters who depend upon the analysts for juicy quotes.
Seriously, imagine what it must be like to be Elon Musk surrounded by people of average or slightly above average intelligence who continually ask silly questions. It would be like you or me being forced to spend 24 hours answering questions from toddlers. It’s a wonder he doesn’t go crazy.
Anyway, what’s truly “irksome” about this entire situation is that, rather than asking ludirous questions, the analysts could have asked questions that actually meant something, like:
- “Why are you simultaneously promoting the idea of self-driving cars and the notion that AI constitutes a threat to humanity?”
- “How can you prove 100% that the supply chain for all your component parts have zero child labor or slave labor?
Yes, I realize those aren’t the sort of questions that financial analysts are supposed to ask at an earnings call but that’s the point. If you want to understand the earnings, read the damn report.
Don’t waste Musk’s time–or ours–trying to work your own lame agenda.
For more than a year prior to a fatal crash in Arizona, Uber’s self-driving cars failed more often, and more dramatically, than competitors’ autonomous vehicles. At the same time, Uber reduced some safety precautions, and was sometimes misleading in its description of its program and its failures. And regulators in Arizona, the locus of Uber’s testing, have taken little action to protect residents despite those worrying signals.
The New York Times reported yesterday that, in October of last year, Uber altered its testing program by putting only one safety monitor in each autonomous car rather than two, over the safety concerns of some employees. That move came despite evidence of deep problems with Uber’s autonomous vehicle efforts, dating back as far as December of 2016. That’s when Uber vehicles were seen running red lights in San Francisco. The company first blamed one of its human safety drivers, before it was uncovered in February that the problem was actually with the autonomous system itself.
Evidence quickly emerged that this was not a freak occurrence. In March of 2017, Recode obtained internal documents showing that human drivers had to take over from Uber’s system very frequently relative to the same numbers for other self-driving efforts. Then, the same month, a self-driving Uber flipped on its side in Arizona, though Tempe police found the Uber was not at fault.
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These public troubles seemed to reflect internal problems. The leadership of Uber’s self-driving car unit has frequently been described as troubled, with high levels of engineer attrition. Meanwhile, Google spinoff Waymo alleged in an explosive lawsuit that Uber had stolen technology from it by way of former Waymo executive Anthony Levandowski, who was fired from Uber in May of last year.
Finally, just a few days before this week’s fatal crash, an Uber vehicle in self-driving mode crashed into another vehicle in Pittsburgh. Fault in that crash had not been determined as of recent reporting.
San Francisco regulators put a quick stop to Uber’s testing there in the wake of the red-light incident. But even after sustained warning signs, Arizona officials took no such action, and reiterated this week that there were no plans to change the state’s hands-off regulatory approach.
Many observers believe that the future of Uber hinges on the success of its autonomous driving program. The company regularly posts quarterly losses with few historical parallels, even as regulators and critics argue with growing vehemence that the company is exploiting and underpaying its drivers.
Autonomous vehicles were intended to square that financial circle by taking driver pay out of the equation. The company, according to the Times, had planned to launch a self-driving car service in Arizona by December. CEO Dara Khosrowshahi has canceled a planned April visit to Phoenix to check in on the program’s progress, though the company claims that change is unrelated to the crash. The company’s bigger plans could also now wind up delayed – including not only progress on the road to autonomous driving, but towards its hotly anticipated initial public offering.
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Last week, President Trump said no politician had been “treated worse” than him. The internet pointed out some presidents who might challenge that. The post While You Were Offline: Trump Says He’s Treated Unfairly. Abe Lincoln Like, ‘What?’ appeared first on WIRED.