Is it a handover between the old and the new guard of American capitalism?
It looks like it.
The image of Warren Buffett and Charlie Munger praising Elon Musk is perhaps an acknowledgment of the tech mogul as the new pioneer of business on this side of the Atlantic.
Admittedly, Buffett, 92, and Munger, 99, two legendary and revered investors, have often had good words and compliments for CEOs and other entrepreneurs in their long careers, but the timing of Musk's praises is not insignificant. The occasion is also interesting.
The co-founder and CEO of Tesla (TSLA) is at a key moment in his ambitions: he is on the verge of making Tesla an automaker which produces millions of electric vehicles per year for different consumers with varying purchasing powers. If he pulls it off, he will have succeeded in one of the biggest challenges, which is to convince the average Joe to drive an electric vehicle.
'He's Very Talented'
Huge progress in Artificial Intelligence is also bringing Musk and Tesla one step closer to their goal of turning their vehicles into a four-wheel living room. To do so, Full Self Driving, or FSD, Tesla's driver assistance system, continues to add features to get the company's cars autonomous, despite investigations by regulators into its role in a number of accidents.
Musk and SpaceX, his aerospace company, are also very close to their dream of conquering and inhabiting Mars. They managed to launch Starship, the most powerful rocket in the world, last month even if this orbital flight ended in a few seconds due of an explosion. Musk has promised another attempt within a month or two.
Starship is a spacecraft that is expected to transport humans to planet Mars and return them to the moon, which makes the first orbital flight of this reusable rocket historically significant. A successful flight would have been a major step for humanity and for Musk, who has given himself the mission of empowering humans to live on the red planet in our lifetime.
It is in this context that Buffett and Munger were asked this question on May 6:
"I have a question for Charlie [Munger] regarding statement you made in the past," a shareholder from Toronto, Canada said. "You once mentioned that you would prefer to hire someone with IQ of 130 who believes is 120, over someone with IQ of 150 who thinks is 170. I understand that you were referring to Elon Musk. Given the recent success of his ventures such as Tesla, SpaceX and Starlink, I'm curious to know if you still hold the view that Elon Musk overestimates himself?"
Their responses were a profusion of compliments that any CEO and entrepreneur would dream of.
"Yes, I think Elon Musk overestimates himself, but he is very talented so he's overestimating somebody who doesn't need to overestimate to be very talented," Munger responded.
Buffett chimed in.
"Elon is a brilliant brilliant guy and I would say that he might score over 170, but he dreams about things and his dreams have got a foundation."
'Appreciate the Kind Words'
For Munger, Musk "would not have achieved what he has in life if he hadn't tried for unreasonably extreme objectives."
He concluded by saying that he and Buffett wouldn't compare to Musk, because “he likes taking on the impossible job and doing it. We're different. Warren and I are looking for the easy job that we can identify."
What is interesting is that these remarks were made during the annual shareholder meeting of Berkshire Hathaway (BRK.B), Buffett's holding company. He is the chairman and Munger is the vice chairman.
The two nonagenarians are traditionally at the center of this event. Millions of investors eagerly await to listen to their every word. They are the stars. Praising Musk with these words, knowing that their comments would travel around the world, is a signal undoubtedly sent to the business community and investors that the tech mogul is now a force to be reckoned with.
Musk understands this since he immediately thanked the two billionaires.
"Appreciate the kind words from Warren & Charlie," the billionaire said on Twitter on May 6.
