Motley Fool CEO Tom Gardner caught up with Aswath Damodaran, the "Dean of Valuation," for a discussion on topics including:
- Tesla valuations (from $50 billion to $1 trillion).
- Incentives, correlations, and costs in ESG scoring.
- Jeff Bezos, Elon Musk, and the companies they've built.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on Sept. 11, 2022.
Aswath Damodaran: If you are naturally impatient and you try to be a value investor, you're going to fail. You're going to fail because no matter how much you tell me about how much you believe in value investing, you're just temperamentally unsuited to be a value investor. I know that's why I end the book with a statement which is, that the best investment philosophy is the one that fits you as a person. The person you need to understand the most to be a great investor is not Warren Buffett or Peter Lynch. It's you.
Chris Hill: I'm Chris Hill and that's Aswath Damodaran. He teaches corporate finance and valuation at the Stern School of Business at New York University. Damodaran is a tough valuation expert. He's written textbooks on the subject. Motley Fool CEO Tom Gardner caught up with him for our recent FoolFest investing conference. We wanted to bring you part of that conversation as Damodaran weighs in on how the Federal Reserve could misread inflation data, the cost of ESG scoring, and how Jeff Bezos and Elon Musk have built their companies in different ways.
Tom Gardner: I wanted to just start with your reflections on inflation and maybe teaching those who are encountering inflation for the first time in any significant way. What are the domino effects of high levels of inflation for corporations, individuals et cetera?
Aswath Damodaran: I'm going to start by saying it's not high levels of inflation per se that are the issue. It's higher unexpected levels of inflation that they issue. To illustrate exactly what I'm saying, we give you a choice of two economies top-rated. One is eight percent inflation, the other is five percent inflation. First aid to saying, I'd rather operate in the five percent inflation economy. It's got lower inflation. But let me add something to that example. Let's assume the first economy is eight percent inflation, but it's guaranteed to be eight percent every year in perpetuity. In other words, it's eight and fix. The second economy is five percent inflation, but it goes from 2-8 back to 2-8. The average inflation is five percent. I would argue that as a business or as an investor, you'd have an easier time operating in the first economy than the other. Why? Because inflation is fixed, it's easy to build in your contracts, incorporated that means if you go out and buy a bond, you charge a 99 percent coupon rate, nodes recover inflation.
It's unexpected inflation that so damaging to us, not just as businesses, but as investors. Imagine buying a bond, that went unexpected, inflation rate of five percent. You charge a six percent coupon rate, but inflation comes in at eight percent. You've been a sense, given up some of your value because inflation came in higher-than-expected. I think what has us in the place wherein is we've been spoiled. We've added a decade of low and stable inflation. It's not as inflation has been low. There's an AI computer, the standard deviation inflation by decade going back to the 1930s. 2010 to 2020, had the lowest standard deviation and inflation of any decade in history. We've been spoiled. In fact, the way we've been spoiled, as most of us haven't even thought about inflation, including me for a long time. I wrote my first two book on inflation, the last two years. Why? Because inflation is now back in the game and we've got to think about it more consciously. If you're 25, 30, 35, you've never dealt with inflation before. It's not that you cannot learn, but there's going to be a learning curve. It will mean requiring you to build an inflation explicitly, enormous every decision you make. That's going to take a little bit of work.
Tom Gardner: Stanley Druckenmiller, a wonderful investor, has said recently that when inflation or CPI rises above five percent, you really do not get soft landings. What does a hard landing in this scenario look like?
Aswath Damodaran: Now the first thing it looks like it could be personally you could lose your job. I mean, that's been people to talk about recessions and recoveries and the abstract. But the reality is recession's have painful, people lose jobs, the wages get cut. Sometimes, and often the only time to deal with inflation that's out of control is to bring the economy to a crashing hard. Hard landing gear would be a recession that is long and painful. Soft landing will be recession that's much milder and much less painful. But there's going to be pain no matter what. The question is, how much will the pain be and how long will it last? I think it depends on, again, a very much on how quickly inflation comes back to levels that we can live with. The last month has been an upbeat month in terms of inflation. But that's often the case when you have inflation that's out of control.
You have periods of hope. You say, hey, maybe inflation is coming back under control in many ways that can actually be damaging. Because what happens then is central banks ease up, they say, OK, the worst is over. Why put the economy into recession now? In fact, I think we're going to find very quickly with a Jerome Powell is more Volcker or more Burns because Arthur Burns, I feel sorry for the man. He had a long and distinguished careers in economists, but with a way we remember him in history as the Fed Chair from 1972-'78, where they repeatedly started on an attempt to fight inflation and repeatedly gave up too early. I think that the worry I have and inflation has a couple of good months is a federal say, you know what let's see that. Now, let's see if the Fed is staying power here to fight inflation, because it will require a lot more than what's already been done. Which will also mean more pain for people at the very bottom of the spectrum because they're not investors. They often work for their wages and their wages are the ones that are at risk most when you have to fight inflation.
Tom Gardner: Your preferred scenario would be to see someone like Paul Volcker step in and take the medicine now.
Aswath Damodaran: Maybe Jerome Powell has the backbone to do it I think. Because it will require backbone because politicians hate hard landings. Why? Because elections happen during the hard landings, you lose your job as a politician. Politically it's never been easy to have a hard landing. People forget that even Paul Volcker felt a great deal of pressure and you got to give Ronald Reagan enough credit to say look, he let Paul Volcker continue on its path of pulling to fight inflation first and worry about the economy later. Because that often is the mindset that might be needed to fight inflation.
Tom Gardner: In real any category, any financial asset can become overvalued or undervalued and some of them you can be rewarded for a tremendous patients even with overvaluation. But what are some of the key principles evaluation that you would apply to the asset class level and then we can talk individual companies and how you think about that in this environment?
Aswath Damodaran: It's all about cash flows, growth, and risk. No matter what asset class you're looking. If you're buying a bond, you're buying constant cash flows, no growth and only default rates. It becomes a much simpler asset class give buying equity's growth is a much more dicey component. It's objective, you've got to make judgments, but its cash flows growth address. There are some asset classes where you might not be able to put a value. Why? Because there's some investment class, let me not use the word asset. Assets by definition cash flows so if you're thinking about adding collectible steel portfolio, fine art, gold, recognize that those are not investments that can be valued, they can only be priced. Then after all, gold has been around for 4,000 years, the pricing of gold is very much a function or what do you hold it instead of financial assets.
Which is if you don't press financial assets to hold the value, you go to gold. If you're investing in collectibles or gold then you're pricing things, you're making a judgment on the pricing of these asset classes relative to others. But if you're looking at traditional asset classes, businesses, equity, bonds, I think you need to keep your eyes on cash flows, growth, and risk. That will give you the value part but as you pointed out, the price part is not in your control, its demand and supply mode and momentum. When you talk about undervalued, overvalued where recognizing a very simple truth about market, which is you control the value part. You can do all your homework. The price part is not in your control. You can't force the market to do what you want. It's going to do whatever it does which means the price at any point in time can be very different from value. Let's face it, all of investing is about hoping and praying that that gap between price and value closes.
My only suggestion is if you're an investor, which means you value businesses and you're hoping the price adjusted value. Then start doing some research on catalysts. What is it? Because this isn't magical. It's not like there's a moment of revelation to markets where price-adjusted value, there must be some catalysts that causes price to adjust the value. In some cases, it can be as simple as a new management team coming into play. In other cases, it might be a macro event that happens. Another company that collapses then makes people to look at the realities of what it is that should be driving. Hopefully, today's Bed Bath & Beyond action will lead some of these people investing in meme stocks to think about and what is it that causes these prices to go up and down. I'll be quite honest and investing, I think we've spent a lot of time on the value part of the process. We haven't really spent enough attention to the pricing part. In fact, we dismiss people who use charts and technical analysis because the charters, they don't do the things we think should be done.
I think we need to pay attention to those people who drive prices. I've actually been paying attention to the traders who drive up these AMCs and GameStop's and because they affect me. It's not because I want to be like them, but their actions can affect me because they're the ones setting prices, and guess what? I'm at their mercy when I buy something that's undervalued. Because they often other ones that will push the price up to the value and allow me to take my benefits. I think the key is to get out of whatever groups agree with you and talk to people who disagree with you. If your investment philosophy is built upon value, talk to people whose philosophy is very indifferent. Maybe they're pure traders, my favorite show on CNBC to be on is Fast Money because they put me in with five traders and I like the fact that they have nowhere to fish.
They're not going to talk about value because they truly believe that value doesn't matter. They believe the way you make monies you buy at a low price, you sell at a high price and I'd prefer that honesty because it allows me to talk about where I'm coming from and how we each need each. Trade exist without investors in the market and investors cannot exist without traders in the market. I think we need to accept that and be more willing to accept those differences when we think about when should you invest and where should we invest.
Tom Gardner: When you talk about being at the mercy of those who've move prices, can you talk about the variable of time and time horizon to diminish that zone of risk and what would you say is your time horizon when you make an equity investment, for example?
Aswath Damodaran: I think time is your ally as an investor, but I think you also have to recognize that sometimes you run out of time before the adjustment happens. The old Keynesian saying of the market can stay irrational longer than you can stay solvent in fact here I would add live.
Tom Gardner: Now didn't he also say in the long run, we're all dead?
Aswath Damodaran: In the long run, we're all dead. He was full of expression that I think we should keep in mind. I think time has your ally, which means as an investor, you need a longtime horizon. The problem is we all claim to have long time horizons because that's what we're expected to say. In fact in my class and now have 400 MBAs I asked them at the start of the class how many of you who are longtime horizons to a person every person in the rule claims have a longtime horizon. I wonder how much of that is because that's what we expect good people to do, sensible people to do. But ultimately, your time horizon is not always entirely in your control. If you're a portfolio manager, your time horizon is only as long-term as your shortest-term client. That's a reality that actually gives individual investors an advantage over portfolio managers.
My advantage as an investor is I have one client, actually two me and my spouse. Since I've turned off statements and my statements are all paperless, she has no idea what we own so in a sense, I control my time horizon and I can hold as long as I want. In a sense, individual investors have an advantage of our portfolio managers and it's a really big advantage. It's something we should be taking advantage of. If you believe something is truly undervalued, you've done your homework, you buy the stock. The only pressure you should feel to sell that stock comes from within you. Unless you have liquidity, which of course can shorten your time horizons. Long answer to your question, time is your ally but for most people who manage other people's money, their time horizons are not under their control it's determined by their clients. If you manage your own money, that's a power you have, take full advantage of it.
Tom Gardner: I've always thought that Beta is not a measurement of risk, of course, IN the way that it is trotted out, if it were to be a measurement of risks and so measurement of the risk of your client abandoning before they should. It's not a measure of the risk of the businesses, it's the price movement that can, it's obviously shaking a lot of people out of the stock, that's what it is signaling depart.
Aswath Damodaran: In some cases, it can be both it measures the risk of a business, it measures the risk to investors, it measures period or risk that people who would be allowed because of price moves so much. It measures all of those.
Tom Gardner: I think I know your answer to this, you've just tried it out so if I buy a stock, it falls 50 percent I hold it for 10 years, and at the end of those 10 years is up 12 percent a year you would say, that's a wonderful investment as long as you're willing to endure a 50 percent decline.
Aswath Damodaran: That's I think something and I can't say that's a right thing to do or the wrong thing to do. You have to have the stomach for it. I mean, I wrote a book, and investment philosophies was driven by the, by what I saw in markets which is that if you go to any books that time we actually had physical bookstores we walk to the investments section, you'd all these books about great investors, Warren Buffett known. Then you could go down the list and he'd see people buying these books and these books are describing in excruciating detail what these great investors did to make the returns. Of course, the people who read the book would say, I want to be like Buffett. I know exactly what he did, I'm going to replicate it. But actually, if you look at the history of people who've tried to read the books and be like Buffett. In fact, I asked this question at my last stint in Omaha where I was invited by portfolio managers to come and talk to them about value investing, I don't think they're going to invite me back.
I asked him a question is if I said if I took their returns to the people in this room and these are long-term returnees to Omaha. They come to every other to pay homage to value investing. They claim to follow its adages, I would wager that the returns of the portfolio managers, so-called value investors in that room would have been beaten by an index fund over a long period. The question is, what is it that happens between the time we set off to imitate these great investors and are trying to do it that causes this leakage? The reality is it's not just an approach, it's a mindset. You need a psychology that actually allows you to adopt the mindset. If you are naturally impatient and you try to be a value investor, you're going to fail. You're going to fail because no matter how much you tell me about how much you believe in value investing, you are just temperamentally on suited to be a value investor. Now that's why I end the book with a statement which is the best investment philosophy is the one that fits you as a person.
The person you need to understand the most to be a great investor is not Warren Buffett of Peter Lynch. It's you. You need to know what makes you take, what makes you comfortable, what makes you uncomfortable. I tell investors to keep note of things that happened that make them uncomfortable in their portfolio. What happened today that makes you uncomfortable? Keep a journal because it will allow you to understand what it is that makes you uncomfortable and try to reduce that because if we let those discomfort stay on, you're going to get in the way of your own success. You're going to be selling things too early because you just can't take it anymore. I think understanding yourself is key to being a successful investor and that means being open to the fact that sometimes you look at your portfolio and makes you really uncomfortable. We try to push it away, we try to deny it, we try to act like it's not there. I think it's a mistake.
Tom Gardner: Among the many things that I love about your work and your approach is that you're a skeptic and contrary voice, your lifelong practitioner. I see you as those things anyway and experienced you that way and a philosopher. I've loved your take on ESG and I also want to ask you a little bit about Tesla as we come to the close. I'll just lay out what I think is your view of ESG, which is that there will always be these expressions that come along and they are really as much about the sales opportunity in the marketing hype around them as something that could be truly evaluated for its merit and thought through what the unintended consequences are, the implications, etc. For you, ESG borders on an outright scam or sales driven, but however you would express, it is not beneficial to the world that we are concentrated on ESG. I want to hear again, you explain why and then I'd like to hear, do you have an alternative?
Aswath Damodaran: I think that what may be suspicion 2019 was the first time everybody is shake because it had been invaded the corporate and invested would BlackRock buying Intuit, CEOs buying Intuit. What made me suspicious was a pitch that seem too good to be true, and let me explain through humanity, being good has always been a tougher choice. Otherwise you would need religion. Being good was easier to choice, then you won't need religion telling you don't be bad. Being good has always been the tougher choice. It is required sacrifice. What struck me is off-putting in the ESG sales pitch, at least as it was made in 2019, is ESG advocates were going around telling companies and investors that they could have it all. They were telling companies you can be good and you'd be more valuable. They were telling investors, you can invest in good companies and earn high returns.
That struck me as unlikely. I decided to take a look at the research supposedly that these advocates were using to back it up. The more I looked at this research, the more inclined I am to take the word research as my description of it, because these were advocacy pieces. Some of the most shoddy pieces of empirical or work that I've ever seen, backing up any concept. Written by people who are true believers. I'll give you a classic example. One of the ways that they justified ESG being good for companies is it's almost like every paper did the same thing. They ran a regression of profit margins are returns on capital at companies against ESG scores, and guess what they found. They found that there was a positive relationship and they jumped to the conclusion that must mean, that good companies are more profitable. Sounds reasonable, but let me offer you an alternative hypothesis. What if more profitable companies can do all the things that give them higher ESG scores. Let's face it.
If you look at ESG scores at sustainability or any of the others there are set of things you have to do as a company to get a higher score. They are all things that require resources, that require money. If you're barely making any money or your company at the very edge, there's no way you can come up with the resources to play these games, because these are gaming systems. Almost all of the research have found making the argument that ESG was good for companies, was fundamentally flawed. Then I looked at ESG returns to investors, and of course, if you look at those studies, almost all of it comes from the fact that the keys to over the last decade, ESG portfolios have been over-weighted with tech. This is a tech stock phenomenon near discovery. To me, ESG strikes are false node because it's advocates of promising things that cannot deliver. Yes, no return, we all want to be good, but accept the fact that being good will cost you money. As a business, being good will cost you money.
That's OK. As long as you get the shareholders are sent to do these things, go ahead and be good and say, now we're accepting less profitability because we want to do good. If you're an investor being good may need avoiding certain groups of stocks because you think that they do more damage to society. If you'd think tobacco is the ultimate sin, avoid tobacco stocks, even though they might deliver high returns. But it's a choice you and I should be making. Goodness is a personal choice. I decide what's good for me. But S&P is in no position to make the judgment for me. We're outsourcing our consciences to S&P and Morningstar and whoever else might be delivering these ESG scores and that never ends well. I think if we want goodness and I think this is a push back again, but I want to be good. That's why ESG is good thing. You want to be good, then you have to do the homework and what kinds of companies you should be avoiding. Rather than buying companies with high ESG scores because you have no idea what you're actually getting in your portfolio.
Tom Gardner: The mistake is to propose that you can get better returns by being good rather than saying, if you want to be good, the returns should be the second factor. Otherwise, let's not pretend that that's what's happening when we come up with the scoring systems and that these scoring systems can be gained by the companies that are already high enough margin, have tremendous balance sheets. But when you get closer to the breakeven line and to a troubled balance sheet, it's going to be hard to really make a case to the shareholders, let alone other stakeholders in the company that they should be prioritizing at the same way. I remember talking to an executive who said, really when you compare the cultures at [Alphabet's] Google and Starbucks, I would say this person, somebody I admire said, I would say Starbucks has the better culture because they have a much greater challenge. At Google, you have tremendous margins. You have $100 billion sitting on the balance sheet. You can offer every park in the world to attract the best talent. At Starbucks, it's a tough decision to say we're going to provide healthcare, we're going to provide university access.
Aswath Damodaran: Starbucks to GM, how much tougher the desk becomes because you're in a sense, fighting for your existence as a company. How the heck can you play these games that ESG scores want you to play, because you want to get a highest score.
Tom Gardner: You don't have to share the factor or the companies, but do you have a personal approach that says I would not buy a company like that or into an industry like that?
Aswath Damodaran: I give a very personal example, about 25 years ago, I valued Monsanto. No, maybe 20 years ago and I found it undervalued. But I knew that if I bought the company I would be divorced. For my wife, Monsanto is the Satan of all companies. She hates roundup. This was well before the roundup problems even came into existence. I think though I don't own any tobacco stocks in my portfolio not because I know it's a legal product, I perfectly understand but it doesn't fit into my moral rubric of something I'd invest in. But I do it with open eyes which is Altria might be a great stock to have in my portfolio. Its solid cash flows may be exactly the company you want if inflation is coming back. That choice still has to be a personal choice. There are groups of companies.
I generally don't invest in Chinese companies simply because I find that whenever I invest in a Chinese company the Chinese government is part of my story whether I like it or not and I generally don't trust the Chinese government as a partner in any business venture. It has left me out of some markets which were higher return markets but I'm perfectly OK with it. It's what I need to have a conscience that I can live with and that's true for all of us. We can all bring in goodness and virtue into our investment decisions so that's not the fight we're fighting. The fight we're fighting is whether you want to outsource that. Your S&P or Morningstar are the some of the service to do it for you and I'm not willing to do that.
Tom Gardner: Closing questions here. A quick stop in the world of Tesla and then just some rapid fire fun questions to end. But with Tesla, two zones I'd like to just hear your thinking. One of them is, how do you run a valuation on Tesla? There are many people who think it's one of the most overvalued companies in history and I know whether you are invested in it or not. I know that you invested in 2019, maybe you continue to own your full position or some position or you sold. How do you go about valuing Tesla? Then the second is I really loved your opinions of Elon Musk and Tesla and viewing it as a corporate teenager. This is an adolescent with so much potential and so much unpredictability and that must have made your choice to invest in 2019 more complex. How to think about what CEO should we be looking for? Should we be looking for more corporate teenagers and having a little risk on area of our long-term portfolio to make sure we don't miss it because it looks odd. But so do many 15-year-olds and so did we when we were 15 making decisions out there in the world.
Aswath Damodaran: I heard Adam Neumann is coming back with a new company. Who knows when that company would go public. Let's start with the first question. I have always believed that new value companies you're telling a story about a company. In fact, I wrote an entire book on converting stories. The reason I did that is I've become troubled by how much valuation is become financial modeling. Big Excel spreadsheets, people have lost the skill, the craft of storytelling and Tesla to me is a perfect example of how stories will drive your ultimate judgment. If you view Tesla as an automobile company, you're absolutely right. It's one of the most overvalued companies you can ever see in the face of the Earth. Why? Because automobile companies, even the very best of them have single-digit margins. Why? It cost a lot to make. From that perspective, I can understand where people who think Tesla is overvalued is coming from. The problem with Tesla is I'm not sure what the story for Tesla is. I don't think Elon Musk is sure. One day it is an automobile company, the next day it's a green energy company. The third day it is, I don't know, an environmental company.
Tom Gardner: Rule of taxes?
Aswath Damodaran: No, it's one of those morphing stories which is one of the reasons my valuations of Tesla have shifted overtime because as the story shifts I've had to value the company differently. I'm an optimist on Tesla as this hybrid company, hybrid of automobiles/technology. You might be aware that if you buy a Tesla without the software from the company, your electric car becomes just a hunk of steel in the garage. This is a company that's very reliant on its software for all of its different functions to work. Right now it's bundled with the car but there could be a time when the software is actually unbundled and offered as a separate product. Why is that significant? Because software companies have 40 percent margins. If Tesla at some point in time becomes 70 percent automobile, 30 percent software, its margins are going to be three or four times higher than any automobile companies out there.
Tom Gardner: You can bet they're getting the best developers relative to the automobile that wouldn't be able to recruit that talent.
Aswath Damodaran: Absolutely. I think when people adopt a sense of certitude on Tesla which is I'm absolutely sure it's overvalued or I'm absolutely sure it's undervalued, I can see where they get that certitude from. This is a company where I can get based on the story at tailored range of values ranging from 50 billion to a trillion. They're all possible. Some of them are plausible. A fewer are even probable. Tesla is one of those companies where I'm going to continue to value the company. Try to adapt my story to what I'm seeing on the ground. Constantly I'm looking to see whether they're trying to unbundle software. What else are they offering that have higher margins? I'm trying to adjust my story to reflect that. It's also a stock where I'll be maligned from both sides because I already know I get hate from both sides. I get hate from the Tesla lovers and say, how can you even challenge the notion that Tesla is going to be the greatest company ever? The other side I get people who come from the point of view, this is a scam. Why would you ever attach a value to a company run by a man like Elon Musk.
Tom Gardner: That gets us to the second question of the corporate teenagers in this world. I'm halfway through Brad Stone's wonderful second book on Amazon, Amazon Unbound. Thoroughly I enjoyed the first, the everything store and the second and you see that there is a high level of unpredictability in the methodology and the willingness to fail to try out a number of ideas. In fact, that's one of the things that criticisms that Musk gets is, well, you've had all these ideas, how many of them have really materialized? But I guess I'd say, all you really need are SpaceX and Tesla to know that there's something pretty extraordinary there happening and any venture firm would love to have the collection of those different assets but Bezos with the Fire Phone. He was opposed to Alexa initially as I understand it. He was with the Fire Phone and the Fire Phone failed and he said, well, here we go, let's go with Alexa. He was willing to change his mind frequently but that's sort of dynamism. We associate that will a little bit more with youthful indiscretion and decision-making and embracing risk and do they really think through all of the process? How many corporate teenagers should we be looking for for our portfolio or how should we evaluate those companies?
Aswath Damodaran: I know there are some people who will take this the wrong way. But we should be glad we live in a world where Elon Musk and Jeff Bezos have had a chance to do what they did. I've said this half-jokingly that if Elon Musk had been born, he was born in South Africa but if he'd stayed in a part of the world and not come to the US, he'd probably be more likely to be in jail than to be running one of the most wealthiest man in the world. He's a rule-breaker and then that's the nature of his being and it often gets him into trouble. He's a rule-breaker. He thinks outside the box. He has enough vision to cover 1,000 CEOs and that sometimes is I think not upsetting to Tesla shareholders. The focus. You need to focus on building the greatest car company but it is who he is. You take the package. The difference between Musk and Bezos is they're both rule breakers. They're both are willing to try things and change, but Bezos was willing to build a company that outlasted. I remember in 2014 by then Amazon was already one of the greatest companies. I was talking to an investor group in the US and I asked the group how many of you know who the CEO of Amazon is. You'd be surprised how many people in that audience did not know Jeff Bezos's name. We forget the reason Jeff Bezos is partialy.
Tom Gardner: Washington Post.
Aswath Damodaran: No, because he bought the Washington Post and then got entangled in political disputes that basically made him a household name. For the longest time, Jeff Bezos was in a sense building a company and a management team that could outlast. The problem I have with Elon and Tesla is I think he's an incredible visionary but he needs to seem to want to make everything still about himself. Tesla is a personality-driven company. I ask people, what if you woke up tomorrow to a new story. You're a Tesla shareholder, you own shares at whatever, $1,000 per share. We opened up and you woke up tomorrow to a new story that Elon Musk has checked into rehab. It's not an outlined story. Given Elon's history, who knows what the next story will be? What do you think will happen to Tesla stock price if that happens? In my view, the company is so entangled with the founder here that one goes down, the other goes down with. If I were giving advice to Elon Musk and he's not a man to take advice kindly. Now, my advice is that he build a team at Tesla that can outlast, that he make this less about him and more about the company but I'm not sure he's going to listen.
Chris Hill: As always, people on the program may have interest in the stocks they talk about and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Chris Hill. Thanks for listening. We'll see you tomorrow.