Welcome back, everyone today on the Joseph Carlson Show.
If for some reason you were offline or away from the news
over the past 12 hours, then you missed perhaps one of the
biggest beefs of all time. This is the beef of the most
powerful man in the world and the richest man in the world.
We've seen inklings of this relationship deteriorating over
the past 24 hours. The first signs were Elon Musk
criticizing President Trump's key legislation, the big
beautiful bill, calling it a bloated pig.
And from there, things derailed. Yesterday was the day that Trump
and Musk torched their partnership.
The relationship has completely imploded.
Insults, intense insults, were hurled left and right from one
to the other across the web for the world to see.
And today we're looking at it from aftermath, like a like a
big accident happened, like a plane crash or a train wreck.
And we're just looking at what happened.
Now we're going to be going through the details, the
timeline of events, how we got to this point, what it means for
both President Trump and what it means for Elon Musk.
We're also going to be going over many of the responses to
this event, people like Dan Ives, Gene Munster, these are
Tesla investors, Tesla enthusiasts going on the TV
quickly to play damage control. Now, we also have some good
news. On the day we had the jobs
report come in. This was hinted at by the ADP
report that looked really gloomy.
The jobs report came in a little bit higher than analysts
expected. We'll be looking at the numbers
and what this means for the market.
We also have news that Lululemon reported their earnings are down
20%. We're going to see what's going
on with this company, why the stock is cratering.
And we have a report from the information that Amazon is
reportedly training humanoid robots to deliver packages.
We'll be looking at this as well.
Now, we have a lot to cover in this episode, and we'll start
things off with the main story, the implosion of this
relationship. It seemed like just yesterday
that Elon Musk and Trump were together in the Oval Office,
talking about how good the relationship was, how
appreciative Donald Trump was of Elon Musk's efforts, Musk there
in his doge hat, his doge father T-shirt, standing alongside the
president. Now, this was a kind of odd,
sometimes awkward relationship from the beginning.
Having the richest person in the world, a business leader,
intermingling with the president.
It's just a bit different than what you normally see.
But we saw this go on for months where Elon Musk was basically
one-on-one with Trump all the time.
And from what we heard, even though they may not agree on
everything, they're besties, they're friends, they're very
close with each other. Some people even called them
family. In fact, there were family and
extended family photos of them taken at Mar a Lago, like they
had adopted Elon Musk into the family.
Now, Fast forward just a few moments, and the front page of
the Wall Street Journal is literally filled with articles
about the implosion of this very relationship.
So how did we get here? The first thing that I think is
important to note is that there has been frustrations building
up with Elon Musk and the White House administration, which is
President Donald Trump's team. Those two groups, Elon Musk and
presidents team, have grown a little bit frustrated with each
other for some time. In fact, just six days ago,
senior Trump aides swallowed their irritation with Elon Musk
and planned a chummy Oval Office send off for him.
They briefed the president on the allegations of Musks drug
use so Trump would be ready to defend the billionaire when
reporters raised the issue at his goodbye event as late as
Wednesday evening, Trump played down any conflicts with Musk in
meetings with Republican senators, even though the
billionaire had spent the past few days disparaging the
president's legislative agenda. That's the big thing that's
caused this. If you've been on X or Twitter
or whatever you want to call it, Elon Musk has been non-stop
bashing the Republican legislative agenda, The big
beautiful bill. Now you can have whatever
thoughts you want on the big beautiful bill.
You can believe it's a bad bill or a good one, or you can
believe that in politics you don't get everything you want.
You're not going to get all the tax cuts or the incentives or
the credits or everything that you want in a single bill.
After all, you have a lot of representatives, a lot of
limitations, a lot of constituents representing
different cohorts of the population.
Now, Elon Musk knows that President Trump can't just
demand everything he wants in a single bill.
He has to make these compromises.
Republicans have a slim majority in the House of Representatives,
but Elon Musk was highly critical of the bill anyways.
It seems like Elon Musk wasn't just critical of the bill, but
the bill was representative of his frustrations of other things
going on in the White House, other things happening
personally between his relationship with the
administration. And there are some things that
Elon Musk was likely frustrated about over the weekend.
After Trump dumped Musk's ally as the head of NASA, the
president made it clear to associates that he wasn't
planning a high profile confrontation with his former
adviser, according to a person who talked with the president.
Now, this doesn't seem like that big of a deal, but this is
actually a big deal. Elon Musk had a strong
suggestion of the head of NASA and the Trump administration did
not listen to Elon Musk's suggestion.
That seemed a bit underhanded to Elon Musk because after all,
he's the one flying rockets to space, he's the one with SpaceX.
He has likely more experience than most people on Earth with
dealing with these type of technologies.
So he felt like he had big weight in the decision of the
head of NASA. And Trump didn't ultimately go
with Elon Musk's suggestion. So you see how that could be
frustrating for Elon Musk. After this event of him not
choosing the head of NASA that Elon Musk wanted, all goodwill
disappeared on Thursday. Elon Musk's critiques and
criticisms for the big beautiful bill got more and more intense.
Calling it a bloated pig, calling it all these names.
And Trump had heard enough. 13 minutes into an Oval Office
meeting with the German Chancellor, Trump laid out his
frustrations with Musk. Listen to what Trump says here
and keep in mind he has the German Chancellor in the White
House in the room with them. Look, Elon and I had a great
relationship. I don't know if it went well
anymore. I was surprised because you were
here. Everybody in this room
practically was here as we had a wonderful send off.
He said wonderful things about me.
You couldn't have nicer said the best thing.
He's worn that hat. Trump was right about
everything, and I am right about the great, big, beautiful bill.
President Trump initially addressing this issue seemed to
be somewhat moderate. He actually showed a little bit
of restraint here. He didn't hit back on Elon Musk
or do anything too personal. He just said that he disagrees
with them. But after enough time, this got
to a boiling point. President Trump had heard
enough. By Thursday night, Trump had
publicly toyed with cutting off government contracts to Musk's
companies. He said that he went crazy and
suggested that he is suffering from Trump Derangement Syndrome.
Now, I don't mind so much the Trump Derangement Syndrome
insult there or even saying that he went crazy.
Obviously these are big insults. But what's really uncalled for
from the president is to toy with cutting off government
contracts from a private company because of a personal feud.
The president should not be doing that.
It is indefensible for President Trump to use his position to try
to determine the outcome of companies because of personal
feuds. So in that case, he was
completely wrong. Now this gets so bad from here.
It gets so much worse than you would anticipate.
Musk floated. He started floating the idea of
a new political party, suggesting that Trump should be
impeached. Argued that Trump's tariffs
would trigger a recession and pledge to decommission a
valuable piece of space equipment.
So once President Trump targeted Elon Musk's businesses, he gets
real personal. The message is again posted the
entire world. None of this is done behind
closed doors. This is all just the hundreds of
millions of people Elon Musk says I'm sorry but I can't stand
anymore. This massive outrageous pork
filled congressional spending bill is a disgusting
abomination. Shame on those who voted for it.
You know you did wrong. You know it.
Elon Musk says whatever, keep the EV solar incentive cuts in
the bill even though no oil and gas subsidies are touched.
Very unfair. But ditch the mountain of
disgusting pork in the bill. In the entire history of
civilization, there's never been legislation that both is big and
beautiful. Everyone knows this.
Either you get a big and ugly bill or a slim and beautiful
bill. Slim and beautiful is the way.
So Elon Musk is taking a bit of Trump strategy of branding.
Trump loves giving these monikers and names to things big
and beautiful. And in this case, he's using
that tactic against them, saying it's slim and beautiful or big
and ugly. Now, you have to know Elon Musk
and Trump when you're renaming bills and going after things,
his key piece of legislation, which Trump is trying to
advertise as this great bill for America.
This is personal. This isn't friendly banter
between two friends. Now, when Elon Musk gets in
these cycles of accusations, we've seen him do this before.
He did the same thing with Sam Altman.
He gets in a cycle like he gets out of control or he loses his
nerve and he posts and posts and posts on X, with the posts
getting more severe, more personal.
Anything that he can scrap together as a gotcha insult he
tries to put in this flurry of posts.
The next one from Elon Musk is without me, Trump would have
lost the election, Dems would control the House and the
Republicans would be 51 to 49 in the Senate.
Such ingratitude. Now again, this doesn't seem too
bad, but realize that this is a very personal message.
Trump and Elon Musk are both very prideful people, very proud
of what they accomplish. When we look at Trump, he won
that election and Elon Musk is trying to take the Thunder away
from him, saying it wasn't because of you.
I did that. I'm the one that won you the
election. He is directly trying to steal
the limelight, the Thunder, the credit for winning the election
from Trump. That's about as personal as it
can get. Do you think Trump likes hearing
that someone else is taking credit for his victory?
No chance. No chance that he enjoys hearing
that from Elon Musk. This is about as personal as it
can get. Elon Musk is trying to get under
Trump's skin any way possible. But he doesn't end here.
The flurry of posts continue. In the mix of this, President
Trump starts to respond on his own version of Twitter, which is
Truth Social. He says Elon was, quote, wearing
thin. I have asked him to leave.
I took away his EV mandate that forced everyone to buy electric
cars and nobody else wanted that.
He knew for months I was going to do and he just went crazy.
Now this is kind of like a tit for tat.
President Trump is saying, hey, you're taking credit for me
winning the election. I'm going to go ahead and say
that nobody wants to buy your vehicles unless they have an EV
credit. So they're they're both kind of
striking at each other's egos, taking away credit.
You're you're successful, your company's successful because of
government EV credits. And Muscar is saying you're
successful because I got you into the White House.
Trump also continues to post saying the easiest way to save
money in our budget, billions and billions of dollars, is to
terminate Elon's government subsidies and contracts.
I was always surprised that Biden didn't do it.
There he is again striking directly at Elon Musk's
businesses. There we have them trading these
individual insults, striking at each other's pride.
Then we move on and get to the big bomb, as Elon Musk calls it.
This is kind of like his drop the Mic moment in this
ridiculous feud between these two people.
Elon Musk says time to drop the really big bomb.
Real Donald Trump is in the Epstein files.
That is the real reason that they have not been made public.
Have a nice day DJT. He has a nice little sign off
there to try to really let it sink in.
Try to make that one really hurt.
And that's the big bomb. This is the one that's going to
get hundreds of thousands, millions of likes, tons of
retweets suggesting that President Trump doesn't want to
release the Epstein files because he has incriminating
evidence within it. Elon Musk a few minutes after
posting that, doubled down and said, mark this post for the
future. The truth will come out.
And this is the last big bomb dropped in this entire dispute.
Now looking at this timeline of events, this entire dispute, I
want to Fact Check a couple things and give some important
context here. The first one is the EV and
solar incentive dispute. Elon Musk says that he doesn't
care if you remove the EV solar incentives, but you're not
removing any subsidies for oil and gas.
And that's unfair. And there's also been many
people that have told me that Elon Musk has been very outward
and very affirmative in saying that he doesn't mind if the EV
and solar incentives are cut. He doesn't care about them at
all. That's what he publicly says.
Those don't matter now to a Tesla investor, these EV solar
credits actually add up to a lot of money.
In 2023, for example, Tesla made $1.79 billion in sales from
carpet credits. Those are regulatory credits.
These are the EV credits that we're talking about here.
If they're removed, this 1.79 billion vanishes. $1.79 billion
is a lot of money to a company that's only generating less than
$7 billion in free cash flow. This makes up a good chunk of
the profitability of Tesla. These EV credits have been
beneficial in getting people into EVs.
So Musk is saying publicly, and he said before that he doesn't
care about the EV credits, go ahead and remove them.
But obviously they do mean a lot to Tesla.
They help out Tesla's business. Now on the note that it's unfair
because there's oil and gas subsidies.
There are no tax credits for buying a gas vehicle.
You go and buy a gas vehicle, you are paying full price for
that vehicle. So the oil and gas subsidies
they're talking about are for the businesses themselves, for
the CapEx investments. There are huge oil subsidies and
gas subsidies for the businesses themselves, but there's also
huge incentives for every big business, including Tesla.
The Nevada Gigafactory received a $1.3 billion tax incentive
package from Nevada. The Vermont factory received a
$465,000,000 loan from the US Department of Energy.
Even outside of the US, Tesla receives government subsidies.
This happens with virtually every big business.
All these businesses are subsidized by the government,
but EVs are uniquely subsidized in the direct purchase of a
vehicle, and gas vehicles do not receive that credit.
On the note that Elon Musk doesn't care about the removal
of EVs because he said so publicly, there is conflicting
reports on this. Bloomberg reported that Elon
Musk is on a mission to block President Donald Trump's tax
bill after he tried and failed to convince Republican lawmakers
to preserve valuable tax credits for electric vehicles in the
legislation. The Tesla chief executive
officer personally appealed Mike Johnson to save the tax credit,
the person said, requesting anonymity to discuss a private
conversation. Again, this this could possibly
be wrong. Maybe the informant in this case
doesn't really know or it's just made-up.
But either way, there are reports that he was trying to
keep these in. The other big thing that I think
needs to be addressed is this claim by Elon Musk that there's
this huge incriminating evidence of President Donald Trump on the
Epstein files and that Elon Musk is Privy to this and he has this
big smoking gun. He knows this information.
There's a couple of reasons where I don't consider this
threat serious at all. Frankly, I don't think Elon Musk
has anything here. One of the reasons why is
because these files have existed for years under Democratic
control. And there's a lot of things that
I'm willing to believe. But one of them that I'm not
willing to believe is that the Democrats knew about and had
access to highly incriminating evidence of President Donald
Trump, and they never released it.
I cannot come around to that conclusion.
There's some people saying or suggesting that the reason that
the Democrats would not release incriminating evidence on Donald
Trump is because there's also incriminating evidence on the
Democrats. But I don't believe that would
be the case. I think even if there was
incriminating evidence on some Democrats, they would have still
released it to sink Trump. They couldn't withhold
themselves. They couldn't help themselves.
If they really had access to information that would sink
Trump, that would make it so he couldn't become president, they
would have released it and taken down anyone of themselves along
the way. The other reason why I don't
believe that there's anything actually here is because Elon
Musk is not exactly new to launching baseless or
evidenceless accusations. He's done this thing a time or
two. In fact, he's done something
almost entirely similar to this exact post.
Six years ago, Elon Musk called the British diver in the Thai
cave rescue mission a pedo and a baseless and evidenceless
attack. Now, why did this happen?
Because at the time, Tesla tried to develop these quick little
mini submarines to go through and save the kids.
This was Tesla's effort to try to help out, and it was pretty
cool at the time. They were trying to help, but
this cave diver promptly said that these were basically a
waste of time. They wouldn't help.
They're too big, they're not going to fit through all the
jagged edges that you have to go through in these caves.
And Elon Musk took that as an insult, saying that his time and
effort was wasted here, that these things are basically not
useful. Elon Musk didn't like hearing
that, and he attacked The Cave diver.
He launched these accusations, calling this guy the same thing
over and over again. And the guy eventually sued him
for defamation. And during the trial process,
Elon Musk actually looked at the diver's background, tried to do
retroactive research to see if there is anything to justify the
claims he had already made, and he found nothing, absolutely
nothing. This was a totally baseless,
warrantless, evidenceless attack.
Elon Musk has a history of saying things he probably
shouldn't say that aren't exactly true during times of
great frustration. And just like in The Cave divers
situation where he actually apologized for saying those
things, saying he was frustrated at the time, I see a very
similar pattern in this case. This tweet is the response of
Elon Musk trying to get under Donald Trump's skin, saying
whatever he can out of frustration.
So for a few reasons, I don't believe if there's any big
incriminating evidence that Elon Musk knows alone, maybe I'll be
proven wrong, but I just don't believe Democrats would sit on
that evidence and not release it.
Even if it took down some of their own members, they would
want to release it. Elon Musk has a pattern of doing
this type of thing. And then finally, it also would
speak volumes about Elon Musk's character if he truly knew about
some big incriminating thing that the president did, but he's
refusing to release any details or he just waited until now
during a fight to release it. That's not exactly a great look
from Elon Musk either. To me, this strikes me as
someone out of frustration, going through a feud very
publicly, someone targeting his company, his accomplishments and
his pride, and is responding with a lot of frustration like
he's done in previous times. Now, after all of this happened
after Elon Musk dropped this bomb, Trump was reportedly taken
aback by Musk's escalation. Trump told advisers he didn't
believe he was harsh about Musk in the Oval Office and was
surprised at how aggressive Musk became.
Trump's aides spent some time Thursday trying to figure out
what Musk's goal was. The president told advisers that
Musk was just being a child. Now, understandably, a lot of
people are confused by the situation.
Some people that love both Elon Musk and Trump don't really have
a home or an identity right now. They're being forced to pick
sides in sometimes awkward cases.
Tesla stock is up 6% on the day, but that's after dropping over
15% yesterday. Now, Elon Musk is in the process
of trying to walk back a lot of the damage done, making a bit
more of a joke out of it. And there's also a report that
Musk was going to talk to the administration this morning,
that he had a call scheduled with the White House.
That report is not true. Trump says he's not interested
in a call with Musk. Now, while this is all going on,
we also have the Tesla thought leaders, the investors in it,
the ones that are trying to play damage control in the situation
as fast as possible. We had Dan Ives go on the TV and
explain how he thinks this is working out.
I I mean, there's a view that the battle here going on between
Musk and Trump that this is going to continue to sort of,
you know, increase. And what that ultimately does is
that autonomous in the regulatory vision.
Does Trump now now not start to play nice in the sandbox with
Musk? Now, on this point, Dan Ives is
exactly correct. Part of the reason that Tesla's
stock rocketed up 30% after Trump's victory is the thought
process that Elon Musk had closely aligned himself as an
ally to the president, a key holder to regulatory approval.
Many of Musk's businesses, including Tesla, operate in
highly regulated industries, robotaxi being one of the most
highly regulated in existence. In many cases.
When I bring up Google and I look at what Waymo's doing, a
lot of people are suggesting that the big limiting factor to
Waymo's growth is manufacturing capacity, that they can only
grow as fast as they can manufacture or outfit cars with
their sensors. That cost, that capital is the
big limiting factor here. And I think those people are
wrong. I don't think that Google's
Waymo is limited by CapEx, manufacturing or any type of
capital restraint. I believe the biggest bottleneck
for Waymo by far is regulatory approval, proving that they have
a safe product that they can scale to different cities,
different capacities, different types of roads and airports and
do so safely over time and get all the green tape to do so in
different localities. That is a massive undertaking.
Waymo has the backing of Google. Google, if you don't know, has
virtually unlimited cash flows. They generate in a single
quarter, $20 billion. Google could buy unlimited
amount of vehicles. They could buy hundreds of
thousands, millions of vehicles in a single quarter if they
wanted, and they wouldn't even have to go to the bank to do so.
CapEx is not a restraint for Waymo.
They could invest unlimited amounts of CapEx.
They could scale up as fast as they want.
The big limiting factor here is regulatory approval.
Regulatory approval is done through the government and part
of what Elon Musk had working to his benefit.
It seemed like a genius 4D chess move was to become so close with
the biggest person, the person that has the most control over
regulation, which is President Donald Trump.
So by having that close relationship, Elon Musk had both
things at his side. He had regulatory approval or at
least an easier path to get regulatory approval.
And of course, Tesla has the manufacturing know how.
But in this case, Dan Ives is correctly illustrating that out
of the things that Elon Musk did, what he did yesterday is
sever ties. And not only severed ties, but
he burnt bridges. He exploded the bridge with a
nuclear bomb with President Trump.
They're not friends anymore. And President Trump is likely
not going to do anything specific to help out Elon Musk's
business. Tesla is now left to its own
devices with regulation. Elon Musk made sure of that
yesterday and that is not good for the Tesla investor.
Yeah, I mean, the timing is is obviously very head scratching
in terms of must just going aggressively right in terms of
the shot across the bow. And I was next next week you
have the launch of Cyber Cab robotaxis in Austin, so a
friends fight. So again, I think this is not
one that you could basically say this is going to continue to get
worse and worse. But clearly there's a line in
the sand here. Musk has taken a stands.
But I think the broader view, the reason Tesla stocks off the
way it is and I think overdone is because the view that this
means that Trump is not going to play nice when it comes to
regulatory autonomous. And a big part of the view, the
Dow is going to be a huge positive, and I still believe it
is for Musk and Tesla. This is possibly one of the most
ridiculous takes that I hear. And this isn't just an Ives.
There's a lot of people that are going along with this take
trying to downplay the the feud here, saying friends fight,
friends fight. Who amongst us hasn't fought
like this? Haven't you?
Haven't you fought like this with one of your friends?
I mean, really, who hasn't gone on to X with hundreds of
millions of followers and said that your best friend was on the
Epstein list? If I had a nickel for every time
I've done that with my best friend, Come on, Dan, friends
don't fight like this. This is not something we can
just chalk up to a friendly banter, to a little mishap, to a
tiff. Of course friends fight.
That's a truism. Every friend really does fight
at one point or another, but typically that's over a small
disagreement, something that's handled through text or in
person, not blown out to the entire world on X.
Not insinuating that your friend is on the Epstein list.
Friends do not attack each other in front of the world with the
most salacious and insidious accusations possible.
This is not just some friend fight.
And the people that are trying to downplay this like oh this is
something everybody does. It's just ridiculous.
I don't know about the rest of you, but if I had a friend that
did this, that went online and attacked me in similar fashion,
that would not be my friend anymore.
We would no longer be friends. That's not a typical fight.
That's not something you just shrug off and easily move past.
It's it's a bit different of a level.
Now. I understand the attempt for
people that are fans of Elon or Trump to downplay this.
I really do. You want to try to downplay it.
And even Elon Musk, I think is walking back some of this after
some of his frustration and and heated feelings have cooled down
a little bit. But the words here that were
shared were not of a normal friend fight, and we shouldn't
try to pretend that they were. This was an embarrassment.
An embarrassment for the country, an embarrassment for
Elon Musk, and an embarrassment for Trump.
It was embarrassing all around. It should have been handled in
closed doors or over a phone call, not blasted out to the
entire world. Now Dan goes on to give his
continued optimistic view about the future of Tesla.
And this is stock that I mean, I could argue it could be down a
little. And it's my view that like if
you're a believer in autonomous like we are in robotics, this is
a $2 trillion mark cap in terms of Tesla.
But the view that you went from basically first, buddy, in terms
of Musk with Trump in the White House, Mar a Lago, and now
they're doing this fight over social media.
It's not what you want to see as a Tesla shareholder.
And, and you saw with Trump, I think Trump's obviously a little
taken aback that Musk has taken this much of A stance.
But again, this is 1 where there can be a lot more chapters to
this story. I don't think it's done right
here. Now, Dan says that he could see
the stock being down a little based on this news.
But when the stock went up 30% after President Trump was
elected, based on Elon Musk's close relationship with him, Dan
said that was justified. So it was justified.
The stock went up 30% specifically because of this
close relationship. But as that very same
relationship implodes, it's not justified that the stock go down
as much. Now, next, we get the instant
reaction from Gene Munster on the same incident.
Gene Monster, if you've forgotten, is the person where
everything is bad for Google, everything is good for Tesla.
So this might be a true test. Is this in fact, finally,
something that's not good for Tesla, something that is good
for Google? Well, we'll see.
I think it was an overreaction. And ultimately Andrew really hit
the pressure point on the head. And I just want to zero in on
that. And when you think about AI and
this arms race, I mean, undoubtedly this the new
frontier in terms of global power and the physical AI piece
is 1 manifestation of that. And the most obvious example
that is going to be with autonomy.
So just to kind of play this forward, let's take the position
that Trump is more punitive to Elon.
It makes it more difficult for autonomous and then we look
around and we see autonomous vehicles in China everywhere.
I'm fast forwarding one to five years from now and in Europe and
the rest of the world. It would be a little bit odd, I
think for this personality blow up to really slow down that pace
of innovation. And so ultimately, I think that
what is best for the country is for autonomy to move forward.
And I think that that means that this is going to continue to
move forward obviously comes in a big time with Tesla next week
and and what we're going to hear from Austin.
Now keep in mind, Elon Musk just severed his ties with the
president, blew up this relationship.
The month that Tesla supposed to launch robo taxi vehicles, the
very month of it. And both Dan Ives and Gene
Munster saying that this is no big deal, the stock doesn't
really deserve to be down at all.
They're kind of shrugging this off like it's really not a big
event and Tesla and robotaxi will move on with or without
Trump's approval. In terms of what Gene Munster
says specifically here, that robotaxi is happening in China,
it's going to happen in the United States.
That is true. There are companies doing it in
the United States right now. Tesla's not the only company
that's in the robotaxi industry. I understand the effort that
these Tesla investors want to do to downplay the events, but what
was the purpose of this? What does Elon Musk and Tesla
gain from blowing up this relationship?
Where's the upside? Where's the tactic behind it?
He severed a relationship with the most powerful man on earth
that holds regulatory approval the month before launching A
robotaxi network. What is the purpose of doing so?
How is that good for Tesla stock?
And in the process, another thing that I'll mention is this
isn't just between a relationship of Elon Musk and
Trump. This is also blowing up a
relationship between Elon Musk and Trump fans.
Millions of people that really like Trump that will side with
Trump over Elon. Now they're not going to be
looking at Tesla as keenly as they were before.
Elon Musk has already damaged the relationship between the
Tesla brand and Europe. Many European countries, many
citizens there refused to buy Teslas, which were selling well
specifically because of Elon Musk's behaviour and rhetoric.
And now after blowing up a lot of relationships with the more
liberal side, left-leaning people, especially in Europe and
some in the US, he seems intent on doing that with people on the
right in the United States, severing his relationship with a
key figure, someone that has a lot of power and influence, and
with many of his millions of fans in the process.
So I asked the Tesla investor again, what is the purpose of
this? Elon Musk seems intent to
destroy relationships across the world with many people.
If that's not the intention, that's at least the outcome.
And I don't see how this is good for either regulatory approval
needs, key relationships, or the brand of Tesla.
Overall, I see this is a massive diminishing of the brand of
Tesla. Another event that will take
time to figure out, time to heal.
The same thing that investors in Tesla have been waiting for for
years. They've been waiting and waiting
for things to get better and approved for this company.
And Elon Musk, because of a petty disagreement, is in the
process of pushing that in the wrong direction.
Some people suggest that my commentary is negative on Elon
Musk because I just have some big bias against them, or that I
hate Tesla and that's not the case at all.
I don't hate Elon Musk or Tesla. I'm commentating on events.
I didn't force Elon Musk to wake up yesterday and cause a feud
and implode a relationship with the most powerful man on Earth.
That wasn't my doing. He chose to do that himself.
I'm looking at the evidence and observing what's going on when I
look at what Elon Musk is doing specifically with Tesla.
I would be very upset if I was a Tesla shareholder.
He's putting his own personal endeavors in feuds above the
company, above the company and its millions of shareholders.
And the same could be said for any stock that I own.
If I looked at any company that I owned, any single one of them,
and the CEO's decided to get in a personal spat with the
president, insulting them and burning bridges.
Especially if those CEO's worked in industries that rely on
regulation, that would be upsetting.
I'd be highly critical of them. People would say, Joseph, you're
not saying complimentary things about that CEO.
And of course, I wouldn't because that's not what a CEO
should be doing. I like my CEOs getting along
with regulators. For example, we have a new
holding of mine, Equifax, which the CEO recently had a meeting
with a key regulator, Bill Polte, This new figure that's
over housing and especially focused on closing costs.
He met with the CEO of Equifax. He says.
I had a good meeting with the CEO of the credit Bureau
Equifax. It was super constructive.
I appreciate his approach. We want to be invisible to
companies as long as we enforce our statutory and legal
obligations. Some companies and their CE OS
make it easier than others. This is what I like seeing.
I like seeing my CEO do the right thing for the shareholder.
They're trying to make business run smoothly.
They're trying to get the regulators on their side.
That's what me, the shareholder, is investing in the company for.
That's what we're paying the CEO for.
Now, if the CEO of Equifax was insulting Bill Poltay through
posts online and trying to destroy this relationship of
someone that directly regulates the company, that would be
upsetting. I'd be very critical of the CEO.
But that's not what most CE OS do.
So to be clear, the Tesla investors that say that I'm
biased against Elon Musk, the reason that I'm uniquely
critical against many of the things that Elon Musk does is
because Elon Musk does a lot of things to be uniquely critical
about. If that wasn't the case, I would
not be focused on him at all. But blowing up the relationship
with the president on the onset of the robotaxi release is
something worthy of criticism. Now moving on, we get to this
news of EU payroll. It finally came in.
This was something that we looked at the news from ADP.
They give us some insight, some bit of data, but it actually
came in better than expected. US payrolls gained 139,000 in
May, which points to gradual moderation.
Now, again, these aren't spectacular numbers, but they're
better than expected. The figures may help temper
concerns that companies are quickly ratcheting back
employment as they contend with higher costs related to tariffs
and prospects of slower economic growth.
President Donald Trump's decision to pause some of the
more punitive import duties, including those on China, has
helped lift sentiment among the businesses as well as consumers.
So this is what I was talking about in the most recent
episode, that this is all lagging data and lagging
sentiment. Things were really gloomy in the
month of April for businesses. They didn't want to hire anyone.
They felt like it was time to turtle in.
But a lot of that sentiment has changed from from being very
gloomy to now being far more optimistic.
If you ask those very same business leaders, they feel a
lot better because a lot of the the rates, a lot of the tariff
rates have been lowered substantially.
This is welcome news that makes it less likely we'll see a
recession this year. Now, we also had the earnings
report of Lululemon yesterday after market close.
The stock is down 20%, down $65. Let's go ahead and take a look
at the reasons why directly from the management.
We can bring this up on Qualtrim.
We have here a transcript summary.
We have the company now growing revenue by 7 percent, 8% on a
constant currency that fills a little slow 7% growth.
That's because it is Lululemon was growing really fast and now
the growth is decelerating rapidly.
Their guidance is now for five to seven and seven to 8% growth
in the 53rd week. They're basically saying that
they're now growing in this mid single digit rate, very slow
growth for a company like Lululemon.
Now I've looked at Lululemon stock for a long period of time.
It's one that's shown up a lot because over time it's actually
grown at a fast rate. They save a lot of money because
they don't do a lot of marketing.
You're not going to see advertisements for it.
It's all through word of mouth. It seems like it's an incredibly
strong brand, very high end. But I've seen some significant
problems with companies like Lululemon and any brand focused
company. It's virtually the same reason
that I I don't buy Nike stock. If we look at Nike stock, this
is a Bill Ackman investment. It's one that's gone through a
big sell off. Nike's down 35% over the past
year. It's attracted a lot of value
investors, a lot of compound quality investors.
But I don't like investing in companies where the Moat of the
company is primarily through its brand value.
Brand value is a Moat and it can be powerful at times, but I
think it needs to be combined with many other types of moats
like network effects, like how embedded the product is, like
switching costs, all that type of stuff.
Even though Lululemon makes these high end yoga pants and
all the stuff that people like, there's now many competitors to
Lululemon, many other companies making also high end clothing,
and they're undercutting their pricing.
You have companies like Aloe Yoga, Viori, Athletica, all
these new brands popping up, gaining market share.
For that reason, I continue to avoid these type of companies.
Now we finally get to the news story that Amazon is in the
robotics game. In this case, they're in the
humanoid robotics game. Amazon is reportedly training
human robots to deliver packages.
The Information reports that Amazon is developing an AI
software that will enable robots to operate as package delivery
workers that are ferried around in Rivian electric vans and will
soon be ready to start real world testing at a new facility.
Citing an anonymous source involved in the effort, The
Information says that Amazon has almost finished construction of
an indoor humanoid park at one of their retail giant San
Francisco offices that roughly it's roughly the size of a
coffee shop. The obstacle course reportedly
contains 1 Rivian van for training purposes, with Amazon
aiming to have the humanoid robot quote hitch or ride in the
back of Amazon's electric Rivian vans and spring out to deliver
the packages. The report coincides with Amazon
launching a new agentic AI team that's helping develop
technologies that willpower robots, quote, operating in
Amazon distributions and logistic hubs.
In a statement to Silicon Valley, Amazon says that quote,
instead of rigid specialized robots, we're creating systems
that can hear, understand and act on natural language and
commands, turning warehouse robots into flexible, multi
talented assistance. Now this is something that is
not only not surprising, but something that I have been
saying for years with Amazon. Amazon is the preeminent,
leading, biggest robotics company in the world by far, and
there's not a close 2nd place. A lot of people talk about Tesla
being the leading robotics company.
A lot of people say that's the robotics, AI robot play.
I think it's Amazon, and I've held this position for a while.
Amazon has ample experience creating robots.
They literally have 750,000 robots working in their
warehouses. We've seen footage of these very
specific robots, these little mini Waymo machines that glide
around the warehouse floors. They pick up different,
different shelves of products and they bring them to the
picking station. Now that robot was very specific
and Amazon is broadening the capabilities of robots.
Now there's ones that resemble a bit more of a human and they say
that they can actually feel what they're grabbing.
That's how they describe it. They get actually sensor
feedback from what they're grabbing.
They can see how it feels and determine how much pressure
apply if the product slipping and so on.
To me, this looks a bit more humanoid.
And here we have news that Amazon is now actively trying to
create robots specifically for delivering packages from Rivian
vans to the house. Now, this is an interesting
application of Amazon because right now we look at the retail
business as being very low margin.
That's the word repeated from retail.
Part of the reason why is it's expensive to deliver all those
items every single day, multiple times a day to the same house.
To hire hundreds of thousands, in fact around 400,000 delivery
people to deliver those items from the vans to people's homes.
If Amazon was to theoretically replace these workers with
robots that jumped out of a van and did the delivery themselves,
they would no longer have to pay around 400,000 people.
They could save on lunch breaks, they could save on insurance,
people getting hurt, taking time off staffing, training,
everything associated with hiring a human.
Humans are far more expensive than maintaining robots.
We know that through ample evidence.
Over time, this is an opportunity for Amazon to have
enormous margin expansion in their primary business, of which
they are by far the largest. So just this little news piece,
the Amazon is actually testing this, looking at humanoid robots
to do delivery is substantial. And when we're looking at this,
again, part of the limiting factor of these type of robots
has not been the physical technology.
The physical technology has been very strong, very good for a
long time period. We can make the hydraulics and
we can make the machines work well.
The difficult part is the software, but AI is helping to
solve the software equation. Amazon can infuse the physical
hardware with their AI models, train it on how to do these
deliveries, how to make it from the van and walk up to the
porch, not run into anything, not bump into anything, have
lots of safety protocols in the process, and in doing so, raise
the margins of the company. So I think this is actually
potentially huge news for Amazon.
I'll be following the story. It's not the only reason to get
bullish on Amazon, but I think it's one more.
That's going to be it for this episode.
See you in the next.