October 31, 2021

The big (or continued) events of this past week were focused on Tesla and China.  Tesla’s founder, Elon Musk, galloped well into the lead of world’s richest person, now worth almost $300 billion after these stock returns in just the past month:

The primary reason for the huge gains was a 100,000 new car order from Hertz, which is somewhat ironic given that Hertz filed for bankruptcy earlier this year themselves.

On the other side of the ledger are bonds tied to real estate in China.  Buying those securities today could produce a 20% return, which is incredibly high compared to other fixed-rate instruments, but do realize that purchasers of them four months ago have lost almost 15% (also incredibly high compared to other fixed-rate instruments).

  • A higher potential return for a new bond investor today means a loss for an existing bond investor yesterday.