How much physics helped Elon Musk in creating his companies?

[Greg Bernhardt]

So if tomorrow SpaceX or Tesla fails, he can lose about 10 billions in a single day?

It's the case for most billionaires. No one has billions in liquid cash. It's all tied up in investments with various liquidity levels.

 

[Grands]

It depends, if someone has 1 billions in gold or houses they can lose all the money in one day, like Musk?

 

[Greg Bernhardt]

It depends, if someone has 1 billions in gold or houses they can lose all the money in one day, like Musk?

We don't know Musk's portfolio so who knows. Needless to say if Tesla fails he will be hurting, but I'm sure he has stashed plenty in other places.

 

[Grands]

Here there is another thing that I don't understand, Musk has that money in stocks, but we all know that stocks change their value daily.
Why the value of the stocks change everyday?

 

[Greg Bernhardt]

Here there is another thing that I don't understand, Musk has that money in stocks, but we all know that stocks change their value daily.
Why the value of the stocks change everyday?

Depending on the details of the company for that day people either think the company is worth the same, more, or less. The price reflects that.

 

[Grands]

So if a rocket of SpaceX explodes and people start to find that SpaceX is not a good company, Elon could lose billion in a few seconds ?
Why the opinions of people count so much?

 

[Greg Bernhardt]

So if a rocket of SpaceX explodes and people start to find that SpaceX is not a good company, Elon could lose billion in a few seconds ?
Why the opinions of people count so much?

You make some assumptions, but theoretically you are correct and it happens all the time. The stakes are high for publicly traded companies.

Here are a couple quick reads
https://www.investopedia.com/ask/answers/133.asp
https://www.investopedia.com/articles/fundamental-analysis/09/elements-stock-value.asp

 

[Grands]

How can the opinion of the people be analyzed second by second and put in a graph that represent the value?

 

[Greg Bernhardt]

How can the opinion of the people be analyzed second by second and put in a graph that represent the value?

The stock price expresses the opinion

 

[Grands]

I get it, but how can the opinion be caught by a computer?

 

[Greg Bernhardt]

I get it, but how can the opinion be caught by a computer?

People or computers make the trades and the stock trackers record it

 

[Grands]

So it is referred to the fact that people buy stocks at a certain price?
In the past, when the computer wasn't something for everyone, what happened?

 

[Greg Bernhardt]

So it is referred to the fact that people buy stocks at a certain price?
In the past, when the computer wasn't something for everyone, what happened?

You had a stock broker you could call to make the trade who had connections to people on trading floors.

 

[Grands]

You had a stock broker you could call to make the trade who had connections to people on trading floors.

And there wasn't no mobile phone?

Anyway how start everything, who decide that there is a stock that can be sold?

 

[mfb]

SpaceX is not publicly traded. The estimate of its value comes from the last round of fundraising. If people pay 210 millions for a 1% share, the company has an estimated value of 21 billions.

If either SpaceX or Tesla suddenly lose all their value (very unlikely), Musk would lose roughly half of his net worth, yes. If both companies do he would lose most of it. Certainly not everything - he’ll have some other investments as well. It would be stupid to put every single dollar into just two companies.

While it is rare, some people did lose (and win) more than a billion in minutes in the past.

Before there were mobile phones people had landlines and telegraphs. And before that trading was much slower.

 

[Grands]

Ok but how start the price price of a stock?
Let's suppose that a new company is founded, who is interested in buying stocks, and who decide how many stocks the company have?

 

[mfb]

The process is called initial public offering (IPO). The price is set by the company. Too high and no one wants to buy shares, too low and you don't get as much money as you could. But the price is then quickly determined by the trade between shareholders.

 

[Grands]

And who decide how many stocks a company has?

 

[NTL2009]

And who decide how many stocks a company has?

@Grands , you've really been all over the map in this thread. From Does Musk use physics, to does he deserve the money, to how he got it, and now the structure of a company and how it's stock is valued, issued, etc.

I think you would be better served by stepping back and reading some sources on basic business fundamentals. It's tough to learn with specific questions w/o first learning the fundamentals.

It would be like trying to learn how a computer works by having a disassembled computer in front of you, and picking up a random piece and asking someone "what is this for?". The answers would not be very helpful if you did not know a bit from a byte, how addressing works, how a computer uses RAM, ROM, etc.

 

[Grands]

This was my last question about the finance side, because I never studied economics at schools, I don't know if in the US at high schools there are lesson of economics.

 

[NTL2009]

This was my last question about the finance side, because I never studied economics at schools, I don't know if in the US at high schools there are lesson of economics.

Not much in US High Schools I think (but that was long ago for me). But there is a wealth of information outside of school - libraries and the Internet. And of course, asking questions on forums like this. But I do think learning from the fundamentals up will answer those questions, and then you could ask for help in specific areas you don't understand.

 

[Grands]

I tried to search on goggle that information, I only found that companies can collect or divid their stock, but I didn't find anything related to how many stock a company has in the first day.

 

[NTL2009]

I tried to search on goggle that information, I only found that companies can collect or divid their stock, but I didn't find anything related to how many stock a company has in the first day.

Google "IPO" or "Initial Public Offering"

 

[Grands]

In the US is quite common for people that doesn't have a major in economics buy stocks?

 

[mfb]

This was my last question about the finance side

In the US is quite common for people that doesn't have a major in economics buy stocks?

I agree with NTL2009, this approach isn't really helpful.

 

[russ_watters]

And who decide how many stocks a company has?

The owners/founders of the company or consultants they pay to decide it.

In the US is quite common for people that doesn't have a major in economics buy stocks?

It's usually between half and 2/3 of Americans who own stocks -- and anyone can buy them. Most people own them in mutual funds though, where other people make the buying decisions.

 

[Grands]

It's usually between half and 2/3 of Americans who own stocks -- and anyone can buy them. Most people own them in mutual funds though, where other people make the buying decisions.

I get it, this kind of activity doesn't help students to pay of their dept with university ?

 

[_PJ_]

Just on the point about Tesla and Musk acquiring the company and 'other engineers' to work on the cars and particularly the electric engine tech - regardless of who these people were or how much Musk was personally getting his hands greasy - the physics and expertise/knowledge of those engineers was necessarily essential in culminating the final product.

Whether or not any other CEO could have made such a success is debatable but even so, I believe there's some inevitability (already plenty of momentum in opinion and ideology as well as definite technological and economic incentive) to things like battery technology, commercial spaceflight and efforts to counter pollution of numerous emissive vehicles. As such, some physics and engineering competence and dedication is absolutely necessary - the deciding factor I think is time and motivation. Musk managed to provide the motivation at the right time in this case.

 

[russ_watters]

I get it, this kind of activity doesn't help students to pay of their dept with university ?

No. For almost everyone, investing is to save money for retirement and mostly starts after paying off big debts.

 

[Grands]

There isn't the risk to lose the money for the retirement?

Anyway I made a question some posts ago and I have no answers.

In this video, at 00:39 he says that he spend most of his time on engineering and design, while we said that on his company he use mainly business skills, because he doesn't have a degree in engineering.


In this other video he says that he wish he was an engineer so that he can create new products, but he didn't do that because he had to create a company, which is strange, because also an engineer can create his own company, an example are Larry Page or Jeff Bezos.

It's like " being a CEO it's boring, it is better to work for the CEO" which is strange, because an engineer that work in a company won't have the fame Musk actually have.
So I can't explain to myself if Elon is laying or if he want to say something that I don't understand.

Also here he says that engineers are better then physicist and scientists.

 

[NTL2009]

There isn't the risk to lose the money for the retirement?

Anyway I made a question some posts ago and I have no answers.

In this video, at 00:39 ... he says that he spend most of his time on engineering and design, while we said that on his company he use mainly business skills, because he doesn't have a degree in engineering. ...

I think in this, and all through this thread, you are looking at things far too narrowly and far too literally. Life is not so cut and dried (thankfully!).

So what if he doesn't have a degree in engineering - he has a degree in Physics which encompasses (and beyond) a lot of the thought processes and fundamentals that engineers use. Engineers learn specifics to their area of study, but those can also be learned by someone who understands Physics ( I worked with an excellent engineer - he had a BS in Physics - he learned the EE specifics on his own, or through added coursework, but never earned an EE degree). If you limit your knowledge to only what was taught to you in school in pursuit of s degree, you will have a very hard time succeeding in anything.

Try Googling all the inventions that were produced by people w/o engineering degrees. I'll wait... But two that come to mind are Steve Jobs and Steve Wozniak. Jobs never earned a degree in anything, Woz only got his degree after Apple had become a success.

In this other video he says that he wish he was an engineer so that he can create new products, but he didn't do that because he had to create a company, which is strange, because also an engineer can create his own company, an example are Larry Page or Jeff Bezos.

Too literal again, IMO. It's a matter of focus, not absolutes.

It's like " being a CEO it's boring, it is better to work for the CEO" which is strange, because an engineer that work in a company won't have the fame Musk actually have.

Take it with a grain of salt. Ever heard "the grass is always greener..."?

.. So I can't explain to myself if Elon is laying or if he want to say something that I don't understand
.
Also here ... he says that engineers are better then physicist and scientists.

Well, he's entitled to his opinion, isn't he? That's all it is. Before listening, I would have expected him to say that engineers are more directly connected to the end product, w/o them the advanced ideas of physicists would not become reality, and would not do anyone much good. But the example he gave was LHC - w/o engineers, they can't have such a machine, and the physicists need it to advance. Heck, the physicists also need to get to work, so are car mechanics 'better' than physicists? It's all a little silly to me.

I don't really agree with his reasoning, it's just one way to view it. Seems circular, engineers wouldn't have their machines w/o the physics that led to things like the transistor. And on and on. Don't overthink it.

 

[Grands]

think in this, and all through this thread, you are looking at things far too narrowly and far too literally.

I get it, but i appreciate so much Elon Musk so for me is important everything he says.
Obviously this doesn't mean that he is right about everything, but for me it's a very important person.

So what if he doesn't have a degree in engineering - he has a degree in Physics which encompasses (and beyond) a lot of the thought processes and fundamentals that engineers use. Engineers learn specifics to their area of study, but those can also be learned by someone who understands Physics ( I worked with an excellent engineer - he had a BS in Physics - he learned the EE specifics on his own, or through added coursework, but never earned an EE degree).

I understand, but you know very well that is hard to obtain a major in Physics, and study physics request a lots of time, especially if someone like this subject and one to study more on himself.
What I'm trying to do is that a major in Physics, in my opinion, doesn't give the possibility of having a lots free time to learn also EE or something else.

But two that come to mind are Steve Jobs and Steve Wozniak.

Steve Jobs didn't invited nothing in terms of technology he just founded a company, also Larry Ellison doesn't have a degree, and neither him invented something but they never regret this fact like Elon.

Heck, the physicists also need to get to work, so are car mechanics 'better' than physicists? It's all a little silly to me.

I totally agree.

If you limit your knowledge to only what was taught to you in school in pursuit of s degree, you will have a very hard time succeeding in anything.

At high school I didn't have any problem by doing what teachers wants from me, I always paid attention to what they said.
Now I'm realizing that one of my biggest mistake is not trying to learn something by myself, due to the fact that now online is so easy to find books in pdf, thanks man for this hint.

 

[mfb]

The LHC example is quite silly.
You cannot analyze particle collisions without a particle accelerator or without using cosmic rays - yes, obviously. Particle accelerators are tools purpose-built for particle physics in a collaboration of engineers and physicists. Many of the people working on the machines call themselves physicists, doing accelerator physics. The people designing particle detectors typically have "physicist" as job title. In general there is no sharp line between physics and engineering in fundamental science.

 

[russ_watters]

Steve Jobs didn't invited nothing in terms of technology he just founded a company...

While that is naively true, there may be no better example of the "strategic vision" factor than Steve Jobs(maybe Henry Ford). That company *is* Steve Jobs, in corporate form. The Apple management proved that in the 1980s by firing him, then collapsing, then bringing him back to become the largest company in the world, despite an exclusionary culture.

There isn't the risk to lose the money for the retirement?

Yes, but the risk is small and that has to be weighed against the risk of not having enough money to retire if you invest for lower growth.

 

[Grands]

The LHC example is quite silly.
You cannot analyze particle collisions without a particle accelerator or without using cosmic rays - yes, obviously. Particle accelerators are tools purpose-built for particle physics in a collaboration of engineers and physicists. Many of the people working on the machines call themselves physicists, doing accelerator physics. The people designing particle detectors typically have "physicist" as job title. In general there is no sharp line between physics and engineering in fundamental science.

I agree.

While that is naively true, there may be no better example of the "strategic vision" factor than Steve Jobs(maybe Henry Ford). That company *is* Steve Jobs, in corporate form. The Apple management proved that in the 1980s by firing him, then collapsing, then bringing him back to become the largest company in the world, despite an exclusionary culture.

Is still strange for me how Jobs had the ability to create a factor in Cina that produce Apple products, having no competences in the industrial sector.

Yes, but the risk is small and that has to be weighed against the risk of not having enough money to retire if you invest for lower growth.

The US government doesn't care about the money for people retirement?
In Italy we pay a lots of taxes for having this service, 20% of the salary went there.