Buffett.

He has $111 billion burning a hole in his pocket. He admittedly made a mistake not betting on Jeff Bezos and Amazon (AMZN) . He has dabbled in technology via a high-profile bet on Apple (AAPL) . He knows industrial companies better than any 30-year-old investment banker. He knows the electric car industry by way of a September 2008 investment in Chinese electric car maker BYD Auto. He has acknowledged that autonomous Tesla semi trucks may kill his railroad Burlington Northern (he could get in on that technology and ship parts via rail). So why shouldn't Berkshire Hathaway (BRK.A) billionaire investor Warren Buffett not buy all of Tesla, give Musk some shares in Berkshire and leave him as CEO and call it a day?

Valuation? Who cares in this case. Musk has built a decent enough moat around his business that could be strengthened under the Buffett family of companies. Take note of the $420 share price Musk floated, that's well below what many on Wall Street speculate Tesla is worth. Is Buffett the lone funding here? Who knows, but ain't it damn fun to speculate because this is a free newsletter? You bet.

In non-speculation, Ford (F) and General Motors (GM) executives will likely have interesting meetings on Wednesday. Pointed out Berenberg analyst Alexander Haissl:

"For the traditional OEMs, a privately held Tesla exacerbates several problems. Firstly, the company will be much better placed to execute its expansion plans, such as in China and Europe, with potentially accelerated time frames. That means Tesla competitors may have even less time to produce viable alternatives, or risk losing significant market share. Meanwhile, with likely less visibility on profitability or investment levels at Tesla, the OEMs will struggle to benchmark their own electric vehicle development plans and gauge the risk of becoming laggards. That means the OEMs may need to bolster their own investment plans, putting cash flow and return targets in danger."

Deep Thought of the Day 

Bank of America Merrill Lynch technical strategist Stephen Suttmeier said the market is acting normally for this point in the presidential cycle. "As would be expected, the Presidential Cycle is stronger during secular bull markets and the S&P 500  has been strong during the Trump Presidency. If the S&P 500 stays within the secular bull market Presidential Cycle pattern, S&P 500 3,000 is achievable sometime between October 2018 and April 2019. 

Around TheStreet

"International investors still look at the U.S. and say this is where I want to be despite the trade issues, despite the many things we can talk about -- the growth has been phenomenal, the underpinnings from an economic growth perspective are there, and we still think there is room in the cycle to continue." Those were the words of Sheila Patel, CEO of International Goldman Sachs Asset Management, to me on Tuesday afternoon. Full interview to come, but I didn't get the sense the markets were nearing some sort of August meltdown. September meltdown? Maybe.

"I expect you will see at least one more scare this year," SunTrust chief markets strategist Keith Lerner told me. "I think the market has digested the tariff news pretty well and the market consensus is that this is a lot of rhetoric, but if it turns out the Trump administration is going to push this further that could be a scare. Also if the Fed becomes more aggressive than people expect [that could be a scare]. And, the U.S. dollar is up, financial conditions are a little tighter -- if earnings halted a bit that could slow things up a bit." Encouragingly, Lerner doesn't think fresh lows for the year are likely amidst such a scare.

To those Salesforce (CRM) investors worried a little that the company now has a co-CEO structure, you can relax. Keith Block will join Marc Benioff in the CEO position, per an announcement on Tuesday evening. Tweeted TheStreet's founder Jim Cramer on the move: "There can be no more deserving person for this job!!! Keith is heart and soul Salesforce!!!"

Salesforce is a holding in Action Alerts PLUS.

 

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