Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future Ashlee Vance

HarperCollins, May 19, 2015 - Biography & Autobiography - 400 pages

16 Reviews

In the spirit of Steve Jobs and Moneyball, Elon Musk is both an illuminating and authorized look at the extraordinary life of one of Silicon Valley’s most exciting, unpredictable, and ambitious entrepreneurs—a real-life Tony Stark—and a fascinating exploration of the renewal of American invention and its new “makers.”

Elon Musk spotlights the technology and vision of Elon Musk, the renowned entrepreneur and innovator behind SpaceX, Tesla, and SolarCity, who sold one of his Internet companies, PayPal, for $1.5 billion. Ashlee Vance captures the full spectacle and arc of the genius’s life and work, from his tumultuous upbringing in South Africa and flight to the United States to his dramatic technical innovations and entrepreneurial pursuits.

Vance uses Musk’s story to explore one of the pressing questions of our age: can the nation of inventors and creators who led the modern world for a century still compete in an age of fierce global competition? He argues that Musk—one of the most unusual and striking figures in American business history—is a contemporary, visionary amalgam of legendary inventors and industrialists including Thomas Edison, Henry Ford, Howard Hughes, and Steve Jobs. More than any other entrepreneur today, Musk has dedicated his energies and his own vast fortune to inventing a future that is as rich and far-reaching as the visionaries of the golden age of science-fiction fantasy.

Thorough and insightful, Elon Musk brings to life a technology industry that is rapidly and dramatically changing by examining the life of one of its most powerful and influential titans.

Elon Musk is working to revolutionize transportation both on Earth, through electric car maker Tesla -- and in space, via rocket producer SpaceX.

He owns 23% of Tesla but has pledged more than half his stake as collateral for loans; Forbes has discounted his stake to take the loans into account.

The Tesla CEO stepped down as chairman in 2018, after making alleged "false statements" about a plan to take Tesla private, triggering an SEC probe.

SpaceX, Musk's rocket company, is valued at $74 billion after its latest funding round in February 2021.

He grew up in South Africa, then immigrated to Canada at age 17. He landed in the U.S. as a transfer student to the University of Pennsylvania.

ON FORBES LISTS

#2

Forbes 400 2021

#2

Billionaires 2021

#1

Innovative Leaders 2019

#25

Powerful People 2018

#12

Richest In Tech 2017

Global Game Changers 2016

STATS

AGE50

SOURCE OF WEALTHTesla, SpaceX, Self Made

SELF-MADE SCORE8

PHILANTHROPY SCORE1

RESIDENCEAustin, Texas

CITIZENSHIPUnited States

MARITAL STATUSIn Relationship

CHILDREN6

EDUCATIONBachelor of Arts/Science, University of Pennsylvania

DID YOU KNOW

Musk was accepted to a graduate program at Stanford, but deferred attendance to launch his first business, software company Zip2.As a kid Musk taught himself to code; he sold his first game, Blastar, for about $500.

NET WORTH OVER TIME

$13.9B

Billionaires

March 2017

I operate on the physics approach to analysis. You boil things down to the first principles or fundamental truths in a particular area and then you reason up from there.

Elon Musk

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Elon Musk Trolls Bernie Sanders Over Billionaire Tax Debate—Offers  I’m guessing you heard about the plunge in Tesla TSLA +3.7% (TSLA) stock spurred by founder Elon Musk’s recent tweet asking if he should sell 10% of his shares.

(The tweet—a poll of Twitter users—garnered a positive response, by the way; Musk says he’ll abide by it.)

I know—another bizarre Musk tweet doesn’t seem to mean much to us income investors. But this one is different, because as hard as it may be to believe, it’s telling us one thing: buy municipal bonds—an asset class many investors dismiss as “sleepy.” That’s not true: there’s a reason why “munis” are favored among billionaires, starting with their huge tax-free dividends.

And what Musk’s tweet is telling us (even if Musk himself doesn’t realize it) is that if we buy munis today, through closed-end funds (CEFs) like the one we’ll discuss below, we’ll get in just before a rush of new investors. And we’ll be pocketing yields that could be worth more than 8% to us, too!

PROMOTED

Muni Bonds: Musk’s New BFFs?

Let’s start with why Musk posted this poll: he was responding to recent talk in DC about taxing the unrealized stock-market gains of billionaires. Specifically, the prospective tax aims to curb their regularly used strategy of keeping their shares unsold and borrowing against them to fund their lifestyles, thereby skirting the capital gains taxes they’d have to pay on any sales.

But if unrealized gains were taxed, billionaires would likely sell more shares and, more importantly, find tax-advantaged alternatives. That’s where munis come in.

The Muni Hack to Tax-Free Income

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Many investors yawn when they hear about munis because the benchmark index fund for the asset class, the iShares National Muni Bond ETF (MUB), yields a paltry 1.9%. And a long-term return chart for MUB is pretty flat compared to the S&P 500.

But if you dig deeper, munis get a lot more interesting. Remember that MUB’s 1.9% income stream is 100% tax-free for qualifying investors (and most Americans qualify). That means, to get the equivalent of that 1.9% cash flow with dividend-paying stocks (or real estate investment trusts or junk bonds), you’d have to get a 3.2% yield if you’re in the highest tax bracket.

Of course, us CEF investors know that we can do a lot better than MUB by skipping the ETF option and going with a muni-bond CEF.

A Muni-Bond CEF Whose 4.9% Yield “Transforms” Into 8.1%

That brings me to the fund we’re spotlighting today, the PIMCO Municipal Income Fund II (PML), which yields 4.9% tax-free. That’s equal to an 8.1% taxable yield if you’re in the highest tax bracket.

PML Versus Taxable Yields

PML Versus Taxable Yields CEF INSIDER

What’s more, PML has easily beaten MUB in the last decade, with a solid 8.9% annualized total return. In other words, it’s done just what we CEF Insider members want it to: deliver strong and steady price gains while letting us enjoy our dividend in peace. (It’s worth noting, as well, that our default risk is low here: fewer than 0.001% of muni bonds default.)

Muni-Bond CEFs Give Us a “Heads You Win, Tails You Win” Setup

If an unrealized-gains tax is pushed through, or even if just a hike in billionaires’ taxes goes through, money will inevitably shift into the muni-bond market, moving prices higher.

And even if none of these tax plans materialize, anxiety about higher taxes on the rich won’t go away—a billionaire tax has been a talking point for over a decade now. And while that’s in the ether, investors will see value in top-performing muni-bond funds like PML, due to their lower volatility and tax-free income streams.

Michael Foster is the Lead Research Analys