Elon Musk is the new Oracle.
This title which is accompanied by the respect of both Wall Street and Main Street was previously attributed to the legendary investor Warren Buffett, 91, who is called the Oracle of Omaha.
Buffett has inspired respect, admiration, and devotion to the point where the shareholder meeting of his conglomerate Berkshire Hathaway (BRK.A) has transformed over the years into a sort of pilgrimage for his legion of fans who often make the trip to all parts of the world to listen to him and see him, as well as his business partner Charlie Munger. Each of his financial advice is dissected and interpreted. Both bosses and amateur investors try to put his recommendations and opinions into practice.
If for decades, many investors and CEOs courted Buffett in the hope of being designated 'heirs', no figure has managed to emerge.
But ironically it was on the evening of Berkshire Hathaway's shareholder meeting, the first in person since the Covid-19 pandemic, that Elon Musk chose to forcibly take the baton of succession from Buffett.
Musk Embraces His New Status
Quite a symbol!
For observers of Musk, 50, they know that the billionaire calculates his every move well. It is therefore not insignificant that he chose Buffett's day of celebration to finally embrace the role of Oracle that his almost 90 million Twitter followers have been pushing him to play for many months now. Basically, the richest man in the world seems to say that a new era has begun. An era of which he is the center.
The serial entrepreneur will therefore now begin to provide financial advice to those who come to ask him for advice. His communication and his moves, which were already closely watched, will be even more so.
"Since I’ve been asked a lot: Buy stock in several companies that make products & services that *you* believe in," Musk wrote on Twitter in the early morning on May 1.
He added that: "Only sell if you think their products & services are trending worse. Don’t panic when the market does," Musk said. "This will serve you well in the long-term."
The tweet had already been liked over 450,000 times at the time of writing.
We will now have to get used to saying The Oracle of Austin, Tesla's headquarters since the end of 2021 and the city in which Musk now resides, not far from SpaceX, the aerospace company he founded to conquer Mars.
Fans Love It
In ancient Greece, The Oracle is the answer given by the Godsto a personal question generally concerning the future and most often requires an interpretation. By extension, the term "oracle" also designates the human intermediary who transmits the answer of the Gods as well as the sacred place where the answer is given.
So, it's no surprise that Twitter users started bombarding Musk with questions about the best investments once the tech tycoon put on his oracle clothes.
"What about real estate, is it good investment?" one user asked.
"Elon I put all my life savings into Doge coin when it was at ¢70 and I’ve been holding since," another used posted, referring to meme coin Dogecoin, Musk's favorite crypto. "I’ve had to take a 2nd mortgage out against my house, sell my car, and donate plasma to make ends meet. Do I continue the Hodl?"
"What do you think about metaverse / digital land purchases?" another user asked the billionaire.
Musk didn't answer these questions, but his very first advice as an oracle was taken as gospel by some fans.
"Invest in what you love is great advice to live by," said Lex Fridman whose podcast has already had Musk as a guest.
"Those are good, simple instructions," another user said.
Musk Blasts Index Funds
Shortly before officially becoming Oracle, Musk sharply criticized index funds in an exchange started by tech investor Marc Andreessen.
"The shareholders themselves are mainly not applying the pressure, rather their managerial agents--professional investment managers--are. See for example Larry Fink, who owns ~0.0000001% of the capital he speaks for," Andreessen wrote, referring to BlackRock CEO.
"Exactly, decisions are being made on behalf of actual shareholders that are contrary to their interests!" Musk commented. "Major problem with index/passive funds."
When a user agreeing with him added that "the reason why the market reflects the fundamentals of companies is because arbitrageurs (active investors) make it so. So what happens when everyone is passive?" Musk didn't hesitate.
"There should be a shift back towards active investment," Musk said. "Passive has gone too far."
Musk has already managed to convince Wall Street as illustrated by his ongoing acquisition of Twitter (TWTR) for $44 billion. According to press reports, the CEO of Tesla (TSLA) has secured a significant part of the financing from investment banks without providing details on his business model of Twitter for example.
Confidence and trust in Musk are also behind the enormous Tesla's market capitalization which is currently at $902.11 billion as of time of writing.
No automotive group is close.