Musk predicts that the United States will experience a “stormy” recession, but that Tesla would overcome “stock market madness” to become the “most valuable corporation on Earth.”

Stagflation, a recession, “a version of another Great Depression”: forecasts for the US economy this year have been less than optimistic, and Elon Musk has been a leading voice sounding the alarm.

“It does appear that we’re on the verge of a recession here in 2023,” Musk said in an episode of the “All-In Podcast” released last week. “My best judgment is that we’ll experience stormy weather for the next year to year and a half.” While Musk believes a recession is on the road, he is certain that Tesla will survive and emerge stronger than ever—at least, that’s what he’s telling his employees.

“Long-term, I think very strongly that Tesla will be the most valuable company on Earth!” the billionaire CEO wrote in an email to Tesla staff on Wednesday, according to Reuters, amid a month in which the electric vehicle maker is on track for its worst year ever in the markets.

Tesla shares rose almost 8% on Thursday, continuing their remarkable performance after breaking a seven-session losing run on Wednesday. However, the stock is still down over 70% this year, and several experts have cautioned that supply challenges, rising borrowing rates, and increased competition in the EV industry may cause even more problems next year.

Even Wedbush analyst Dan Ives, a well-known Tesla supporter, reduced his ambitious price objective for the firm last week from $250 to $175, citing supply difficulties.

“The reality is that, following a Cinderella story demand climate since 2018, Tesla is facing some severe macro and company specific EV competitive headwinds until 2023 that are beginning to materialize both in the US and China,” he said. “Tesla is lowering prices, and inventory is beginning to grow globally in anticipation of a global slump.”

Tesla recently halted production at its Shanghai factory and instituted vehicle discounts in the United States and China. And the stock has plunged more than 30% this month alone as a result of Musk’s $44 billion purchase of Twitter.

Investors are concerned that Musk is “asleep at the wheel from a leadership standpoint” because he is too engaged with Twitter, according to Ives. Musk, on the other hand, encouraged his employees last week not to be “too worried by stock market hysteria” or analyst expectations.

“As we continue to display good performance,” he said, instead asking employees to focus on scaling up deliveries at the end of current quarter. “Please go all out for the next three days and volunteer to help deliver if at all possible. It will make a significant difference!”

And the company’s devoted base of retail investors continues to embrace Musk. According to Vanda Research, net purchases of Tesla shares in the fourth quarter—and in December—reached new highs.

At the same time, Musk warned investors to brace themselves for a fall and avoid making too many hazardous wagers in the stock market during these hard times.

On the “All-In Podcast,” he added, “Hope for the best, prepare for the worse.” “Don’t get too daring. Keep your powder dry in terms of money.”

Musk also advised investors to avoid margin borrowing when trading in volatile markets (debt used to buy stocks).

It’s an intriguing piece of advise given Musk has experience with margin loans, having used a $12.5 billion margin lending facility to purchase Twitter, saddling the firm with $1.2 billion in interest payments over the next year alone. The billionaire, who recently lost his status as the world’s richest man due to Tesla’s collapse, has used margin loans for years, with so much of his wealth dependent on the performance of his companies in the equity markets.

Musk was obliged to sell billions of dollars in Tesla stock to pay his Twitter acquisition and margin loan debt. He advises regular investors to take a more cautious approach.

“In a turbulent stock market, I strongly advise individuals not to carry margin debt,” he said last week. “If the stock market is in a state of panic, you must be extremely cautious regarding margin debt.”

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