Quote · My First Million
Brutally honest guide to not losing money in the market
Where this was said
Elon's foray into PE
At 39:53 · chapter starts 36:16
Shaan Puri pivots to a biographical anecdote from Elon Musk's early career. As a young intern at Scotiabank in Canada, Musk cold-called his way into a finance job and went deep on Latin American Brady bonds — US-government-backed debt trading at $0.20 on the dollar despite having a floor of at least $0.50. [1] — Shaan Puri "As a young intern at Scotiabank, Elon Musk spotted US-government-backed Brady bonds trading at $0.20 with a floor of at least $0.50. The ba…" 36:00 He pitched the CEO as a no-lose proposition. The CEO told him to find out how much volume they could do. Musk called the trading desk — they could buy $50 million if he wanted. He brought the trade back. It was rejected: too much existing Latin American debt. Musk concluded that logical arguments can get shot down for illogical reasons in big institutions, decided he'd never work for anyone again, and developed a 'healthy disrespect for the financial industry' that gave him the audacity to eventually build what became PayPal. Ritholtz adds a parallel: Jim Simons, his own math department chair at Stony Brook, went on to found Renaissance Technologies — the most successful hedge fund in history — but would have looked completely unremarkable at the time of his departure. The chapter is a meditation on how hard it is to spot future greatness in the present.
A young Elon Musk identified Brady bonds trading at $0.20 on the dollar despite being US-government-backed with a floor of at least $0.50, a trade Scotiabank rejected because they already had too much Latin American debt.
