Elon Musk is not a Financial Professional
Elon Musk is a genius. The meaning of genius in this context being a person with very high IQ. This statement is so very true.
At the same time, what also seems true is that his Emotional Quotient is worse than a child throwing tantrums or a combative child who will behave even more foolishly when provoked.
In any case, High IQ and Low EQ coming together is a recipe for poor investing. However, I do not think Elon is a stupid investor. He is an extremely shrewd guy who knows exactly what he is doing or what he is tweeting. He understands the power of his tweets. His real problem is he cares a *** about anyone other than himself or Tesla and his business interests. He does not care about the impact of his tweets on others very well knowing the fact that it is going to cause a lot of people to lose money.
So, I was not surprised to know that many people who had invested following Elon’s tweets had lost money. Well first Elon is not a Financial Professional. Second even if you think he is, he is not your Financial Professional. It is time we understand these 2 important yet different statements. Not understanding these 2 statements causes people to act on his tweets or opinions and in the process harms their financial lives.
Let me ask you a different question.
Will you ask Elon to comment on brain surgery for someone you know?
No one in her/ his sane mind will do so. Just because he is a genius in 1 or 2 areas does not make him a genius doctor or a genius money man or even a genius plumber for that matter. So why do we ask people who do not specialize in something for guidance in those areas.
Coming back to Elon, ask Elon about Autonomous Vehicles? Ask him about Battery Technology and Space Exploration? Ask him about scaling businesses?
You are likely to get a ton of wisdom.
Ask him about your personal finance or how you should approach investing?
This is super idiotic. This is exactly the same as asking a genius cancer surgeon about autonomous vehicles or the future of space exploration. Even Entrepreneurs who have had multi-billion-dollar exits don’t understand personal finance (the way a world class professional would) but many even go to them for financial guidance.
The key point to learn here is to ask the right question to the right person. Asking the right question to the wrong person will do more harm than good.
The other problem with many geniuses is that they do not know how to say, “I don’t know”. It is super difficult for even someone with an average IQ to say, “I don’t know”, so do not expect anyone to admit not knowing about something freely. Even people when asked addresses that they do not know will sometimes point you in a different direction confidently.
A real professional on the other hand is one who can confidently say “I don’t know but I can get you someone that you should be talking to, or I am not the right one to guide you on such matters, so let me refer you to someone who is.”
The mistake which all of us do is to look at financial guidance or investing guidance from people who are geniuses even if that genius has no clue of your personal finance or even how to guide someone on their money matters.
So, I would not blame Elon. It is high time we take responsibility for our financial lives. After all, he has not claimed to be a financial professional or told you to follow him (even though he knows you will). The lure of making quick money is very hard to resist even for the wealthiest.
Financial Literacy is dismal and thus we fall for such quick rich schemes or tweets. This is one area where most humans are still in the same stage of evolution as our ancestors were. Everything else has changed. We are better in everything whether farming, driving, technology, space and so on but investing is one area where we are as primitive as ever. Manipulators know this well and they use it to their full advantage.
Finally, even if you love Elon so much, you should know that Elon is playing his game. What he tweets is relevant for him and people exactly in his situation. That is an audience of 1. Elon himself. This is in no way relevant to you or even makes sense for you. On the other hand, you are playing your game. You are an audience of 1 too. No one else is playing yours.
In my next Nano, I will give yet another example of asking the wrong questions to a team of geniuses.
The morals of the post: Ask the right questions to real professionals. Folks who are likely to give you a professional and wise response to your questions. Warning: Just because someone is a genius in a profession does not make that person an overall genius in every aspect of life, relationships, and work. Remember this Genius Handicap. This is common. It is time we understood it and overcame it.