Welcome to the weekend, friends. Phil Rosen here — today I’m excited to share my conversation with a high-profile Tesla shareholder who recently campaigned for a board seat at Elon Musk’s company.
Ross Gerber is the cofounder and CEO of Gerber Kawasaki Wealth and Investment Management, and holds 420,000 shares of Tesla stock, or about $74 million based on Tesla’s current stock price. This conversation has been lightly edited for length and clarity.
Phil Rosen: What was your takeaway on Musk at this week’s annual shareholder meeting?
Ross Gerber: Elon had his mojo back. Seeing his energy and enthusiasm, him being around the people who love him and he loves, you can see he’s clearly happy.
He came out swinging pretty hard with the business plan, $25,000 car, Cybertruck, self-driving — then he followed it with a mainstream media interview, which he killed.
It was literally the best PR day for Tesla since the Twitter disaster began.
Musk appointed a new CEO of Twitter on May 12, days before the shareholder meeting. How did these two events impact your investment view on the stock?
RG: You gotta own Tesla in your portfolio with Elon re-focused on Tesla.
Over the first quarter I was a net seller. I went from 440,000 shares to 420,000, but now I’m back to a buy.
I went from a hold and somewhat bearish, to a buy and somewhat bullish. The only thing keeping me from outright bullishness is the broader economy.
What do you want to see the EV company do next to get to the next level?
RG: It comes down to service and quality. Tesla needs a quality and service czar whose job it is to make sure customers are having good experiences.
Tesla needs to understand that they have millions of users, and someone has to be in charge of the user experience, not just updating software. They’re very good with the tech side, but they need to be better with human interaction for customers.
What do you think of Gerber’s outlook on Tesla? Let me know.
And here are the top stories from markets this week:
1. Ray Dalio said politicians will likely avoid a default, but whatever deal they make will bode poorly for the future. Any potential decision by lawmakers probably won’t be the most viable long-term solution, the billionaire said. He warned that repeatedly raising the debt ceiling will “eventually lead to a disastrous financial collapse.”
2. A whistleblower said the investment arm of the Mormon church operated like a “clandestine hedge fund.” The Church of Jesus Christ of Latter-day Saints has a portfolio topping $100 billion, and that includes $46.2 billion parked in stocks. Here are the top 10 holdings.
3. This investment chief oversees $100 billion. He said the stock rally isn’t painting the whole picture of what’s really happening. These are the the three corners of the market that he likes for the short- and long-term.
4. RH stock plunged after Warren Buffett’s Berkshire Hathaway dumped its entire stake. The conglomerate had started to build its position in the third quarter of 2019, and it was last worth about $575 million. Shares of RH have plunged 67% from their post-pandemic high — but Buffett still likely made a profit on the bet.
5. Taylor Swift showed her financial savvy when she avoided a deal with failed crypto exchange FTX. The popstar puts her money in a niche type of mutual fund, according to Boaz Weinstein: “For many reasons, it’s hard not to be a Swifty.”
6. “Big Short” investor Michael Burry piled into First Republic, PacWest, and other ailing bank stocks last quarter. His firm, Scion Asset Management, more than doubled the dollar value of its portfolio to $107 million to start the year. Full details.
7. Hedge fund billionaire Steve Cohen told investors to ride the “big wave” of AI and stop focusing on recession odds. You could miss out on timely opportunities if you get caught up in potential downside, he said at a recent event, sources told Bloomberg: “I’m actually pretty bullish.”
8. The top large-cap fund manager from the past 12 months shared his 13 favorite stocks right now. He broke down his full list, and explained the one change that completely turned around his portfolio performance.
9. Meet the money manager of an award-winning credit fund that has tripled its benchmark since 2014. Sam Reid of River Canyon Total Return Bond Fund shared his strategy for picking winners in the current landscape — and what he’s watching in the credit market.
10. The strength of the US consumer is at risk as 43 million borrowers are set to resume student loan payments. Strategists at Bank of America said millions of Americans could start shelling out up to $400 per month later this year. That could make shareholders for companies like Discover and SoFi winners in this scenario.
Edited by Max Adams (@maxradams) in New York.