8 Comments
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Alyosha's avatar

The play is never the play when everyone is playing.

The Synthesis's avatar

Your passive-flows observation and the SpaceX valuation fight are the same argument in different clothes. Once more than half the market buys regardless of earnings, real price discovery migrates to the private names where there's no flow autopilot, which is exactly where the "outré" battles get fought. On that Fidelity fund stuffed with SpaceX, Anthropic, and OpenAI: the trap is pricing them on software multiples when the binding constraint is physical, launch cadence for one, transformer and power capacity for the others. A 10-year lockup is a bet that the constraint clears, not that the narrative does.

Andy Fately's avatar

Nicely put

LJones's avatar

SpaceX looks to me like a bet that Musk will stumble into a way of making money in the future by creating a vision and story leveraging then current tech. He’s faster and harder working at this game than anyone else out there. Same time, I’m not seeing anything in those SpaceX assets resembling anything like a rocket ship.

Andy Fately's avatar

The one thing I have observed about Elon is that he simply does things, irrespective of whether others think they are possible or not. I don't think you can bet against that, but I have no idea what the right price is.

LJones's avatar

I agree. He’s a doer/builder/visionary and inspirational leader. Still, betting on him isnt for me, at least on the collection of misfits assembled into SpaceX. I guess we’ll soon see what real money says…

The Synthesis's avatar

SpaceX has a hard asset Musk can't story his way past: the rockets work. Starlink alone is a real cash business riding on reusable launch nobody else matches. Where the vision-vs-substance tension bites isn't the engineering, it's the price. The Lead Time argument applies here too: when a name trades on narrative multiples, the binding constraint gets mispriced long before the story breaks.

Andy Fately's avatar

As I said, I don't know what the "right" price is, and your point about time horizon is everything. I have greater concern about a future administration coming in and suing them for antitrust because nobody else launches rockets at his cost and hamstringing the business, than I have about his ability to achieve goals. but for your grandchildrens' accounts, it is probably a must to own