Benzinga - by Shanthi Rexaline, Benzinga Editor.
Tesla, Inc. (NASDAQ:TSLA) CEO Elon Musk can’t get over the fact that investment guru Warren Buffett has overlooked the electric vehicle pioneer’s stock as an investment option.
What Happened: On Saturday, George Mack, an X platform user, raved about Buffett’s investment acumen by sharing an anecdote involving the billionaire investor. Mack noted that, during a talk in 2001, Buffett had asked students at the University of Georgia two questions that would help them better understand the character traits they should adopt and avoid.
Mack pointed out that Buffett had asked the students which of their friends they would invest in and get 10% of their income for life. Buffett then asked them which of their friends they would pick if they could short their friends’ earnings. The takeaway from those two questions, as Mack said in his post, was that the former group of friends had character traits that should be adopted while the latter group possessed traits that should be avoided.
Mack also made the point that Buffett’s thought experiment could be applied not only to money but also to finding happiness and more.
Replying to Mack’s post, Musk said, “Too bad he didn't invest in Tesla when it was 0.1% of today's value lol.”
Too bad he didn't invest in Tesla when it was 0.1% of today's value lol— Elon Musk (@elonmusk) November 12, 2023
Why It’s Important: In February 2022, Musk said that, when he and Charlie Munger met over lunch in 2009, he encouraged Buffett’s trusted lieutenant to invest in the EV maker. Instead, Munger allegedly discussed all the ways the company would fail. Musk’s comments came after a social media user had asked stock ideas for investing in Berkshire Hathaway, Inc.’s (NYSE:BRK) (NYSE:BRK) cash hoard, which was at over $128 billion at that time. The world’s richest man, in response, said, “Starting with T….”
Buffett and Munger’s stance toward Musk has since softened. At Berkshire’s annual shareholder meeting in May 2023, the two praised Musk as talented and brilliant.
Previously, Future Fund’s Gary Black shared that Tesla did not fit into Buffett’s investment strategy. “At 48x P/E stock has a lot of risk. Growth investors are willing to take that risk. Value investors don't," Black said in early May.
Buffett is known for his value investing — a strategy that focuses on stocks trading below their intrinsic value. Tesla, meanwhile, is a growth stock trading at an elevated P/E multiple.
Tesla ended Friday’s session up 2.22% at $214.65, according to Benzinga Pro data.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
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