Elon Musk’s big pay day, trade war jitters + Apple & IBM call for regulation in tech. What’s it all mean for investors? (3:24 min read)

This information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.

 

1. Elon Musk’s gigantic pay deal

Tesla has announced a handsome compensation package for CEO Elon Musk.

He could pocket over $50 billion from the pay deal – all Musk has to do is meet some “laughably impossible” targets for Tesla’s market valuation, revenue, and profit.

If anyone can do it, it’s the guy who wants to put millions on Mars, and save us from robots (among other things).

What does this mean if you’re invested in Tesla shares?

Tesla will grant Musk the entire pay package if ambitious targets are met in the next 10 years.

One of which includes bringing Tesla’s market value up to US$650 billion.

If he pulls it off, Tesla shareholders will also benefit since US$650 billion is over 10 times the recent market value of Tesla.

In the meantime, Elon Musk doesn’t take a cash salary despite being legally entitled to minimum wage – he just doesn’t take the cash that’s paid.

What does this mean if you’ve invested money with AtlasTrend?

AtlasTrend’s managed funds are not invested in Tesla. However, it is a potential investment if we launch a new trend focused on clean disruption.

While Musk has the potential to become the richest person on Earth, we don’t believe Musk is driven by it.

We believe he is what psychologists refer to as “profoundly gifted”, with an unrelenting drive to solve the world’s problems.

Money (and lots of it) is simply a means for him to achieve this goal. Chances are he will probably hit these goals, as Musk has a greater purpose beyond personal wealth.

 

 2. Markets react as Trump’s trade war continues

When Trump announced $60 billion of new tariffs on China, the markets got spooked.

This was not long after he announced tariffs on the import of steel and aluminium.

What does this mean if you’re invested in the stock market?

Unsurprisingly, stock markets around the world didn’t warm to Trump’s new tariffs. The news caused more volatility over fears of a prolonged trade war between the world’s two largest economies.

However, China’s mellowed things out with their proposed tariffs on US good products amounting to only US$3 billion; helping to ease fears of an all-out trade war.

What does this mean if you’ve invested money with AtlasTrend?

Any material trade war that might arise between the US and China could negatively impact companies in those countries – particularly those exporting products.

We continue to keep a close eye on our portfolio of companies for their exposure to Trump’s tariffs. More specifically, large Chinese technology companies that sell to the US.

On the positive side, our managed funds are also invested in European companies, which are potential beneficiaries if Trump continues to negatively impact US trade with China.

 

 3. IBM & Apple vouch for regulation amidst Facebook crisis

Leaders of the world’s leading technology companies are calling for more regulation and data transparency – namely Apple’s Tim Cook, and IBM’s Ginni Rometty.

They’ve both weighed in on how some “measured, well-crafted” regulation is needed following Facebook’s data breach.

What does this mean if you’ve invested money in large technology shares?

Tech companies openly acknowledging issues with customer data and privacy is a step in the right direction.

It’s useful to start having constructive dialogue with regulators on protecting user since technology is evolving so rapidly.

Users are increasingly focused and wary of how these tech giants use their data, so it’s in the best interests of companies like Apple, IBM, Facebook to start alleviating these concerns.

Shareholders of large tech stocks should closely follow developments in this area, as it’s likely to heat up in the next 12 months.

What does this mean if you’ve invested money with AtlasTrend?

Increasing regulation is a certainty, but we don’t think it will materially hamper growth prospects of top technology companies.

We believe what is even more important is maintaining users’ trust. If that’s lost, then a technology company is likely to really suffer.

That is where we are focusing our efforts in relation to the technology companies in AtlasTrend’s managed funds. We are pleased to see the likes of Apple and IBM come out on the front foot to say more regulation is needed – it will help build trust with users.

  

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About Kent Kwan

Kent Kwan is a Co-Founder of AtlasTrend, an online investment platform that makes it easy for anyone to learn and invest in trends transforming our world. Kent has over 15 years experience in financial markets including as Chief Investment Officer at Arowana International Limited, and roles at JP Morgan and Macquarie.