Tesla CEO Elon Musk became the world’s richest person earlier this month — surpassing Amazon founder and CEO Jeff Bezos’s wealth. While Musk is known for his positive outlook on cryptocurrencies, it’s not Bitcoin or any other cryptocurrency that made him the richest person on the planet. Let’s take a closer look.
Tesla stock made Musk the world’s richest person
Tesla’s shares rose sharply by 743% in 2020 after witnessing years-long roller-coaster ride. The stock has seen a 17% rise in January so far. These gains helped Musk to claim the world’s richest person’s title.
About a couple of years ago, Musk said cryptocurrency “is a far better way to transfer value than pieces of paper” and called the blockchain technology “quite brilliant.” Nonetheless, he has never publicly revealed that he owns any cryptocurrency. And even if he secretly does own any little amount of cryptocurrency, the largest portion of its wealth still undoubtedly came from a sharp rise in his electric car company’s share prices.
Most businesses — including auto companies — faced big challenges last year due to the global pandemic. But surprisingly, the demand for electric cars continued to soar last year. The surging demand for EVs — along with Tesla’s improving fundamentals — triggered a buying spree in its stock.
Stocks are better than Bitcoin
Despite a phenomenal surge in Bitcoin prices last year, the uncertainties about its future remain intact. The world’s most renowned investors — including Warren Buffett — don’t consider Bitcoin or any other cryptocurrency worth investing in. That’s one lesson many new investors and traders learn only after losing a big portion of their hard-earned money, unfortunately. Bitcoin’s 2018 crash was a great example of how small investors can lose billions of dollars in no time.
In contrast, investing in stocks is more sensible when estimating the potential return on investment and assessing risks to your portfolio. Overall, it’s all about investing in the stocks and businesses that have made Musk, Bezos, and Buffett, some of the world’s richest persons.
A great Canadian EV stock to buy now
If you’re thinking of buying Tesla stock, you might have already missed the train as it’s already overvalued. However, Canadian investors still have an opportunity to get Tesla-like returns by investing in some good cheap companies that are betting big on the ongoing EV revolution.
For example, Magna International (TSX:MG)(NYSE:MGA) could be a great investment option right now. The shares of this Aurora-based mobility technology company jumped up by 48% in the fourth quarter. If you invested $2,000 in its stock at the end of Q3 2020, it would have turned into more than $3,000 by now.
Magna International last month partnered with LG Electronics — the South Korean tech giant — to make e-motors, inverters, onboard chargers, and e-drive systems. This partnership is likely to expand Magna’s presence in the fast-growing electric car segment. That’s why I find the company to be well positioned to take advantage of rising EV demand under the leadership of its recently appointed well-experienced CEO, Swamy Kotagiri.
The recent surge in Bitcoin prices might attract you, but it’s extremely risky, and this mistake could cost you dearly. That’s why investing in well-established businesses as well as in good growth companies’ stocks for the long term is a far better and safer way to get rich — just like many of the richest people in the world.