Elon Musk Keeps Pumping, Will He Be Dumping? - InvestingChannel

Elon Musk Keeps Pumping, Will He Be Dumping?

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Look Out Below, First-Time Homebuyer 

The only thing more annoying than the person who walks painfully slow and takes up the entire sidewalk? 

Making sense of housing data. 

The only two things you can generate firm conclusions from right now: 

  • Home prices, pretty much everywhere, have hit record highs. 
  • Mortgage rates have breached 5%, meaning your monthly payment on a home loan will likely be higher than ever. 

Is The ‘Good News’ Any Help For Homebuyers?

Bad news for banks could be good news for people wanting to enter the hot housing market. 

On Wednesday’s earnings call, JPMorgan Chase (JPM) signaled a housing market cooldown:

  • The bank’s home lending revenue was down 20% year-over-year. 
  • Mortgage loans decreased 3% from last year. 
  • Q1/2022 loan originations of $24.7 billion crashed 37% from last year and 41% from last quarter. 

The Mortgage Bankers Association (MBA) echoes this, reporting mortgage applications decreased – again – from the week prior. This time by 1.3%. The MBA expects April mortgage originations to be down 35.5% from last year. 

This and other signs of a slowdown should lead to at least a modest decrease in prices.

Consumers must determine if potentially lower price tags on properties will offset high rates. 

Another option – adjustable rate mortgages (ARMs). They’re back in fashion. The MBA says they now comprise 7.4% of all mortgage apps, the highest number since June 2019. 

If you still can’t afford a house amid all of this and rising inflation, you probably can spring for copious amounts of Arizona Iced Tea. The tall ass 23-ounce can still costs just $0.99, despite tighter profit margins. 

This has been the price for 30 years. 

Finally a 30-year relationship we can all get on board with, regardless of how much money we make. 

Arizona Iced Tea, baby – the great equalizer.


Elon Musk Keeps Pumping, Will He Be Dumping?

Key Takeaways:

  • A subscriber to The Juice raises a solid point.  
  • There’s something to it, as Elon Musk faces a lawsuit over his Twitter stake. 
  • Don’t hate on billionaires for being rich. Hate on them for being reckless with our livelihoods. 

A subscriber to The Juice replied to a recent newsletter discussing Twitter (TWTR) with this: 

Elon Musk’s Twitter play looks like a classic “Pump-and-Dump.

Thank you, subscriber of the week, for pointing this out. Because maybe I’ve missed it, but very few people take Elon Musk to task for his antics. 

Just this morning he added to his antics, offering to buy Twitter for $54.20 per share, or roughly $43 billion in cash, saying he wants to take the company private and “unlock” its “extraordinary potential.” 

The stock barely budged on the news. Maybe investors aren’t sure if Twitter will accept the offer or if Musk’s actually serious in the first place. 

It’s hard to know.

As we noted last week in The Juice, Musk might have violated SEC rules as he amassed his out-sized Twitter stake. 

There’s a class action suit in the works. 

Details, via Bloomberg

The investor said that, when Musk filed the form revealing his Twitter stake, company shares rose 27%, from $39.31 on April 1 to $49.97 on April 4.

Rasella is seeking to represent a class of investors who sold Twitter shares from March 24 to April 1.

Billionaires Don’t Deserve Hate Simply For Being Billionaires 

There’s a culture of hate towards billionaires these days. 

Whether it’s fair or not isn’t the issue. We can argue all day about how much of their wealth they’re morally obligated to give away and not get anywhere. 

Guess what? 

Elon Musk isn’t solving the historically, politically, and economically deep-rooted issues of poverty, inequality, homelessness, and affordable housing. Neither is Bezos, Buffett, Cuban, or Dorsey. 

Pains me to say this, but we’re stuck with these social issues. 

Hating on Musk and other rich people is less purposeful than blowing in the wind or chugging an entire Arizona Iced Tea without stopping. All of the above will cause needless discomfort. 

However, here’s where we – as investors – gotta draw the line. 

At people such as Musk who treat investing like it’s a game. 

It’s Not A Game. It’s Part Of Our Livelihood. 

Courtesy of the only billionaire friend we use more than it uses us, Google Search, dig this definition of livelihood. 

There’s literally nothing short of throwing him in jail (not saying we should and even then) that would take away Elon Musk’s livelihood. And he knows this. 

He also knows that many of the people – the investors – who hang on his every word or merely catch a whiff of what he’s up to can have our livelihoods taken away in an instant. 

One overly aggressive move in the stock market or with margin leverage and many of us could be screwed. Worse yet, more than a few people are a paycheck or two away from anything from serious financial struggle to being out on the street. 

The only responsibility Musk and others like him have is to not be reckless with our money

Yes, we all ultimately make our own decisions, however it’s Musk’s recklessness that cost presumably everyday investors money. We had no idea what was going down. We still don’t. Because there’s no logic or direction to Musk’s constant and seemingly errant charades. 

His subsequent immaturity – dissing Twitter, joining the company’s board, dissing Twitter some more, then deciding to not join the board – didn’t help. 

This morning, we’re all even more confused by Musk’s seemingly erratic impulsivity. Or is he just a genius we lack the capacity to fully understand? 

When the other shoe drops… When Musk exits his stake, which he hinted at doing if Twitter doesn’t accept his offer, there’ll be more pain on Main Street. 

For Musk, that’s just collateral damage. 

This is something more people should be angry about. 

The Bottom Line: Heading into this holiday weekend, no buy this stock or sell that one. We’ve got plenty of time for that as spring gets ready to really spring. 

Instead, we all should take a moment to realize the power of our words and actions. To some extent, we all have some power to wield. 

Some more than others. 

Investing-related class action lawsuits often have no merit. The one forming against Elon Musk just might. And we should all get behind to the greatest extent possible. 

It costs nothing for Elon Musk (and others like him) to keep his mouth shut and act like a responsible adult billionaire. 

It definitely costs relatively less than most of us can afford to lose through no fault of our own.

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