Elon Musk Talks His Book While Tesla Buys $1.5 Billion In Bitcoin2 min read
It was announced within the past 24 hours that Tesla has used $1.5 Billion of its “cash that is not required to maintain adequate operating liquidity” to buy Bitcoin. The company stated it had done so in order to “maximize returns on our cash,” as stated in the company’s most recent 10-K filing with the SEC. The filing revealed that in addition to the massive purchase of Bitcoin, the company also expects to start accepting Bitcoin as payment for its automobiles “in the near future.”
Bitcoin quickly responded to the news and rose to a new all time high of $44,900 within an hour of the announcement.
We observe that Elon is guilty of “talking his book.”
What is “talking your book?”
An decade-plus old article from Abnormal Returns, titled “Everybody talks their book, everybody” explains it this way:
Talking your book is a phrase used to describe what portfolio managers are doing when they discuss their portfolio holdings. It is generally assumed that this discussion is to create interest (and buyers) of these securities.
This will ultimately benefit the price of the security and the manager’s portfolio. The more cynical out there might see any sort of stock rise as an opportunity to exit a position as well.
Even that might be too simple an explanation. A manager might take the opposite tack an bad mouth a position hoping for a drop in price to allow further accumulation.
To summarize and simplify the above quote, “talking your book” basically means that a money manager will talk glowingly about an asset he wants to sell (in order to get the highest price possible), and conversely will talk negatively about an asset he is in the process of buying (in order to drive the price down to provide a better entry price).
Did Elon do that?
It certainly seems that way to us. Have a look at his tweet from December 20, 2020:
Bitcoin is BS?
Yes, so says Elon when he is trying to buy.
And after his purchase is complete, then he adds Bitcoin to his twitter profile, his car company announces it has bought a gigantic amount of Bitcoin, and will be taking the cryptocurrency as payment for its autos in the near future.
It seems Bitcoin is only BS to the wealthy when they’re trying to buy it.