What Lies Deep Down
Spotting a True Expert
1,227%.
$10 into a profit of $122.70
$100 into a profit of $1,222.70
$1,000 into a profit of $12,270
$10,000 into a profit of $122,700
$100,000 into a profit of $1,227,000
$1,000,000 into a profit of $12,270,000
1,227% just sitting in plain sight for everyone to see. I’d be remiss if I didn’t mention a 1,227% appreciation in just a mere four years. Something that everyone would want a slice of. Something that would leave everyone wondering, “What’s the catch?” To give some context, the average interest rate of a savings account is .39%, just .032% of 1,227%.
Cathie Wood and ARK Invest Management expect Tesla’s stock price to rise from $163, the price today, to $2,000, or 1,227%, by 2027. Tesla is an electric vehicle company that is treated as a technology company and has seen its stock price rise almost 742% over the past five years. 742% from April 22th, 2018 to April 22th, 2023 is absolutely nothing to sneeze at. The expectation from ARK Invest, not the best case scenario but the expectation, is that Tesla will not only top its past five year performance of a 742% appreciation but top it in four years.
The expectation of a stock priced around $20 in April of 2016 all the way to $2,000 in 2027. Tesla is a well established company having the best performance of all S&P 500 stocks over the past five years and a market cap that now stands at $523.18B, the 9th largest in the world. Cathie and team see the market cap rising to $5,000,000,000,000, dwarfing Apple’s current market cap of $2.61T.
Some may say it is bold or some may say it is irresponsible. The US stock market operates as one of the most efficient exchanges in the world. If you think the market is missing a life changing opportunity on a robotaxi, another name for an autonomous taxi, there is a good chance the market has already priced it in. Possibly you think Tesla could ramp up its deliveries considerably, I have bad news as the market has probably already priced it in to a degree as well.
However, these headlines are what gets the clicks. They provide talking points that no one can ignore. A 1,227% appreciation is something that will get anyone to double check that their eyes are not deceiving them. However, just because these numbers and quotes grab headlines does not mean they should.
I want Iguodala
During the 2019 finals, Max Kellerman, an analyst on First Take on ESPN, is asked who he wants from the Golden State Warriors to take the final shot. With everything on the line, who would you prefer, Kevin Durant or Steph Curry? His response is still heard today.
He goes on to say emphatically, “Of everyone on Golden State, open shot, fate of the universe on the line or the Martians have the death beam pointed at earth you better hit it, I want Iguodala!”
Not Kevin Durant or Steph Curry, Andre Iguodala. The host didn’t even provide Iguodala as an option, realistically thinking Kellerman would never elect for him to take the final shot.
Max Kellerman later asks for Iguodala's response on that line and him taking the last shot. Iguodala calls him crazy.
Remember, Steph Curry, Klay Thompson, and Kevin Durant all played for the Golden State Warriors that year. All future hall of famers. Some may even argue that Curry and Durant have an argument for the best player of all time. They are quite an accomplished trio.
Steph Curry holds the NBA record for the most three-point field goals made in NBA history
Klay Thompson holds the NBA record for threes made in a game at 14
Curry and Thompson set the record for combined three-pointers made in an NBA season
Kevin Durant is 13th in points all time in NBA history, Steph Curry is 38th, Klay Thompson is 177th, and Andre Iguodala is 188th
Iguodala has one All-Star appearance to his name while Curry, Thompson, and Durant combine for 27 All-Star appearances.
The list goes on. These are just a few facts and it is rather clear who the best players on that team are and it is probably a disservice to them to only include so few.
If Max Kellerman is the coach, I don’t think he would actually elect to have Iguodala shoot the last shot nor do I think he wholeheartedly believes in Iguodala taking the last shot. While his statement doesn’t provide truth, what it does provide is clicks. His statement will infiltrate the world of social media and leave people in a frenzy. First take will get increased viewers and it will be heard from everywhere.
Media Today
Unfortunately, this is what much of the media has become. It is not about what is right, it has become about what gets the most clicks or mentions. That is what is heard. Take Jim Cramer, the host of CNBC’s Mad Money, who has populated the airwaves since 2005. He is often trolled for his market predictions but there is a reason why he continues to man the primetime spot for CNBC.
He is a man who creates headlines. It doesn’t matter if he is trolled for his “picks” or predictions as long as he continues to deliver on viewership, he will remain cemented in that spot for CNBC.
The clicks and mentions are what is heard. However, what is heard is often not what is right. The loudest in the room are often the ones who know the least and the quietest often know the most.
Six Levels Down
To further encapsulate this theory, Athenahealth should be pulled to the forefront. Athenahealth provides network enabled healthcare services and point-of-care mobile apps. Todd Park was 24 when he decided to co-found Athenahealth with Mark Bush. It started as a women’s health and birthing center whose sole focus was to help women in pregnancy and by such attention to detail on this stage, it would help to lower health care costs. To start, they began by buying a pregnancy clinic and it began horribly. The premise of the business did not sit well with insurers since they did not want to pay for preventative care and many did not fully understand the basis of their business.
Naturally, other problems arose and the clinic they bought was losing money due to not getting paid for the things they were doing. The insurance billing was a complicated process but they recognized this problem was not specific to them. They quickly realized they were in the wrong business and needed to provide a platform that helped to get doctors and hospitals paid.
To fix their problem, they went to the bottom of a hospital and found Sue Henderson. She was six levels down in the organization chart but had a massive amount of knowledge on hospital billing. They coded her knowledge into Athenahealth. In 2022, Athenahealth sold for $17 Billion.
Sue Henderson was six levels down. Sue Henderson was not shouting from the mountain tops on her knowledge and plastered all over the nightly programming. She was the real expert that needed to be heard. She was only heard because Mark Bush and Todd Park went on a deep excursion to find her.
Hearing the Experts
It is so hard for the real expert to be heard because the people who don’t know are shouting very loudly. ARK Invest and Cathie Wood grab the headlines. ARKK, the ETF associated with ARK that tracks their investments, has been as high as $132.50 over the past two years but has since cratered to $37.63 as of Friday’s close. A 352% depreciation.
Warren Buffett and Charlie Munger are arguably considered to be the greatest investors of all time but a reason exists for why they don’t tout a 1,227% stock appreciation on one of the largest companies globally. This is not to say that a 1,227% appreciation can’t happen, no one can predict the future and Cathie has been right before, but Buffett and Munger have never touted anything close in nature to that in their lives. They don’t speak often and when they do, they do not insist on buying Tesla due to a worldly valuation. We know they are the real experts and when they talk we grasp every one of their words. The real expert is never totally certain and is very quick to say they don’t know.
Max Kellerman could have been quick to say I don’t know but with great certainty he pronounced with the fate of the universe on the line, he wanted Iguodala. He didn’t know and if he did know, if he did truly understand the game of basketball like very few did, he would be paid a large amount of money to be the coach of an NBA team or be part of a front office.
There is a reason why we never hear from Larry Brown. He is considered one of the best NBA coaches of all time. One of the best basketball minds of all time. This can all really be backed up by the fact that he is 82 and is still coaching. He is an assistant coach of the Memphis Tigers and has won both an NCAA championship and NBA championship. The only person to grace this earth and to have accomplished that feat. We hear very little from him but when we do, we listen. He is the real expert.
Parting Words
We need to respect things we don’t know and respect that we will not know everything. To act as if we do, is both wrong and unjust and when we don’t know, we shouldn’t shout loudly, we should listen. Everyone is an expert on something but what they may really be an expert on, may not be what they are shouting about.
When should listen to the experts when they speak. We should seek out those individuals. However, finding those individuals is the hard part. Often, the experts are not in plain sight. They are not plastered over the nightly news, they are not deep in your Tiktok algorithm, and they are not constantly infiltrating the air waves. The real experts live below the surface, six levels down in the org chart.