The key difference between Elon Musk and Warren Buffett

Posted on October 30, 2022 by Peter McGuthrie

Tesla’s Elon Musk has made a fortune buying and creating companies, and scaling their products for the public. However, he considers himself no “Warren Buffett,” according to recent statements on what his future plans were for his businesses.

Above: Both Warren Buffett and Elon Musk have made the cover of Fortune magazine for their EV efforts, BYD and Tesla (Source: Fortune)

Musk noted a key difference between himself and Warren Buffett in Tesla’s recent Q3 earnings call, as shared by Fortune earlier this month. During the call, Musk emphasized his engineering- and manufacturing-focused approach to business — something he considers a far cry from billionaire Buffett’s investment mindset.

“I’m not Warren Buffett,” said Musk on the earnings call. “I’m not an investor. I am an engineer and manufacturing person and a technologist.”

The statement came in response to an analyst asking if Musk planned to incorporate all of his ventures under a single parent corporation. Musk currently runs Tesla, SpaceX, the Boring Company, Neuralink and now Twitter, and he’s built a fortune running his companies hands-on with little crossover from one to the next.

“It’s not clear to me what the overlap is. It’s not zero, but I think we’re reaching,” Musk said.

Alternatively, Buffett’s firm Berkshire Hathaway has created one of the world’s largest investment portfolios, owning several companies across industries including Dairy Queen, Duracell, Geico, Fruit of the Loom and many, many more. Ironically, Buffett does actually own a stake in China-based EV-maker, BYD.

Musk, however, hardly considers himself a shareholder at all, despite holding some shares in each of his own companies. Instead, Musk says he’s focused on creating the very products created by his businesses.

“I actually work and design and develop products,” he said. “We’re not going to have a portfolio of investments or whatever.”

Now, Musk has acquired Twitter and he’s off to a hands-on start running the company — even having let go of some of the social media platform’s top executives. Despite now being Twitter’s largest investor in history, Musk is undeniably more than a financier. Fortune also argues that Musk qualifies more as a “maker” than a “taker,” reminiscent of much discussion in the 2010s around building products as investors.

Musk has built companies from the ground up and he has also invested in them partway through their histories. With a net worth floating around $204 billion, Musk is worth nearly double that of Buffett, though both fall within the top 10 richest people in the world.

In any case, there’s something to be said for the path Musk has carved out for himself, and for the products that he’s created along the way.

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Source: Fortune

Posted in Elon Musk, Q3 Earnings Call, SpaceX, Tesla, Warren Buffett


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