Elon Musk is the first person to be worth more than $400 billion (with a b!)

So big news item today, or maybe small depending upon how you think about it, is that Elon Musk's net worth surpassed $400 billion. $400 billion. And he became the first person ever to do that. His net worth is up 74% since the past year, which is just an insane level of growth for one person's net worth. But there's some interesting aspects of it, so I'll talk about those. So the first thing that's really interesting is how he's done it, right? So your typical way that somebody reaches these kind of stratospheric levels of wealth is the classic Rockefeller, Warren Buffett, Jeff Bezos, Marc Benioff. These are all folks that did one thing and did that one thing really well, right? They all tended to just build one company that became incredibly valuable. They owned a lot of stock in that company, and that brought them into the stratospheric heights of these kind of centi-billionaires, right? All followed the same pattern. But Elon's pattern is actually very different. He is the first one to have multi-billion-dollar massive hits come out from multiple companies. And it's not just two, right? Now he's done it 4 times by my math of companies that have turned out to be making him a billionaire. And that has what, you know, that is what's interesting about the path and, you know, what's so freakish about what the guy's managed to do. And of course, number one in that portfolio of stuff is Tesla, right? He's rode Tesla, uh, all the way up, uh, including so much as, uh, trying to get himself a $100 billion valued, uh, pay package, which there's been a lot of arguments in the Delaware court about whether he'll be allowed to get that or not, whether it's fair to shareholders, uh, which also has a lot of implications to whether businesses will keep putting their businesses and registering them in Delaware. Um, if you discover that the courts are preventing these, the shareholders and CEOs from making a lot of money, they may decide to choose to put those businesses in other places rather than what everybody does today, which is register their businesses in Delaware, um, for various reasons. So number one, he's wrote up this Tesla thing and that's turned into hundreds of billion dollars of outcome for him. The stock market loves it and it keeps going up and, you know, pretty amazing. But wait, there's more. So number two, in terms of the things he's been able to do, is SpaceX, which Tesla's great, but arguably SpaceX has more of a potential to change the future of humanity. And investors recently just put a bunch of money into the company at a super high valuation. So again, like, don't quote me the numbers, but it's several hundred billion dollar valuation. And the reason people think it's going to be so valuable is that, that basically SpaceX is building a platform to reach space more cheaply, effectively, and safely than anybody else. And when you do that, you can monetize space in ways that nobody else can. And Starlink is one of those, right? Everybody that uses Starlink, which is this new low Earth orbit satellite system. Loves it, right? And they're starting to use cell phone calls on it, and you can start to see how there's a potential there for recurring revenue that basically will be the aggregate of much of what the globe is spending today on internet, cell service, and communications, all going through one company. So in the end, that's just one of the things that SpaceX can do, uh, in terms of monetizing all this stuff. We haven't gotten to some of the more crazy things— space manufacturing, colonization, uh, and then of course the one that we all kind of don't talk about and are scared of which is the weaponization of space, which people have said they're not going to do, but countries still seem to be doing it. But wait, there's more. He has taken his purchase of Twitter, which he bought for $44 billion, near and dear to my heart, and then seemingly turned Twitter into now a platform more valuable than when he bought it. When we all looked at it, it looked like he was overpaying. Everybody said that, you know, Twitter had not figured out how to monetize, not figured out how to evolve like Meta and Facebook had. Instagram and other platforms. And he's turned it into something I think pretty valuable. And historically, Twitter's business has been less about advertising— people don't talk about this— and more about the data, right? Twitter has had a huge business mining the data of all of our tweets and turning that into valuable things that folks like the NSA and hedge funds and different folks, they mine it to figure out what kind of decisions they should make. So that business has Elon as a billionaire. And by the way, this data mining aspect of Twitter, like, it's billions of dollars that people are spending to buy this data because it's so valuable, right? It's very valuable if you're a quantitative hedge fund to get the latest and greatest of what people are saying from a sentiment analysis or news or breaking, you know, breaking things that tend to now be breaking on Twitter before they break in the regular media by hours, right? We learn about things on there first. That's hugely valuable. So people pay up for it. So Elon taking this idea that Twitter is all about the data, see, saw how that can relate to the fourth startup that he has, which is the business around AI, right? So they started a startup straight up after he flirted with the OpenAI people. This startup is one where they from scratch have taken a lot of the public knowledge around these large language models or the AI models and is using that as a way to build a tech startup that has an unfair advantage in the AI space, which is it has all the Twitter data available to it. And he brought in the Twitter shareholders and has made them all super rich, uh, by making it a situation where they can win in the new AI startup. So that's number 4. So tie this all together, like, this is just one of the most unique ways in which somebody has become like a multi-billionaire, you know, in history. And, uh, love him or hate him, like there's a level of aspect of just admiration you need to have that somebody has made these kind of changes after coming in, you know, as an immigrant into this country 25, 30 years ago and made just kind of these crazy creations that have impacted so much of American life and the global life. So anyway, so why, um, something I forgot, like why is this AI startup of Elon's valued so highly when other AI startups are not? Well, it turns out in a lot of these things, what matters more is the data you have and less what matters is what algorithm or technological advantage you have. So if you look at Google, for example, what matters at Google is not the algorithm. We all kind of know how they work. What matters with Google in terms of its advertising dominance and its search dominance is all the data that they've built up over time. Right? That's why they've been hoovering up everybody's virtual and real-world data for decades in order to build that moat. Because the algorithms are pretty easy, and you'll see this with the tech companies, Meta, uh, Google, everybody will give away their algorithms. They don't tend to care if people know what the algorithms are because their moat is actually data. And Elon, by buying Twitter, which looked crazy at the time, was actually acquiring all the data that he needed to go get into the AI business. And, uh, man, that's some 4D chess right there. So talk about the last thought on all this, which is the idea that this whole net worth thing is kind of bullshit. And I mean this in the nicest way possible, which is if you go look at how people do the math on this net worth, right? They take the number of shares that an Elon or somebody else owns in a company. They take the last price that it traded at and they multiply those two numbers together to get a value for their ownership of that business. Well, there's a problem there, right? Could you actually turn that money into cash? Or could you actually turn that value into cash, right? All the, let's say a share just sold at $50 a share and somebody bought one share. Well, you own a million of those shares. Are there a million buyers, right? Are there a million shares demand out there to buy at $50 a piece? Well, absolutely not, right? If you go start selling and liquidating let's say you own 50% of Tesla in his case, and you go start selling off those shares, there's only so much demand out there, right? That's going to, that's going to suppress the price. The price is going to go down. So the net worth kind of thing is just kind of a BS deal. And unfortunately, one of the things that a lot of people writing news articles and stuff like that, like, if you're a reporter, a lot of times you're not an economist, you don't understand how this stuff really works, and you also can't do math, and sometimes you have an agenda. And sometimes that agenda is you want to show people there's a lot of wealth inequality in this company, country, and get people really angry. And there's no better way to do it than going out there and being like, you know, Elon Musk's net worth went up by $300 billion in X number of days. Well, yeah, but you have to understand how like math works and how the way these types of equity and stuff like that will get priced. It's not the reality that, that equity and net worth like that is the same as cash. Uh, it's very different. And, uh, it's one of the things that frustrates me as somebody who reads the news with a critical mind is a lot of times people are writing things with a level of intellectual dishonesty. So, uh, and then the last thought on all this, uh, man, if you look at what Elon's done from a 4D chess standpoint, no smarter thing than he's done than get in bed with the new administration, right? Like, All of the things he's involved in from X to Tesla to SpaceX, like he's in there doing business development and lobbying like nobody's business with what he's doing now. And, uh, man, it, uh, it looks smart and the market can see how smart it looks. And that's why all these values of his shares are going up because they see that converting to more valuable companies over time and more money for him.