Jay Leno on Electric Cars, Hydrogen Fuel, Space Travel—and His Recent Accident
The comedian and car lover has been very happy with the EVs he has bought. He is less interested in leaving Earth, though.
The comedian and car lover has been very happy with the EVs he has bought. He is less interested in leaving Earth, though.
Two years ago, we invited Jay Leno to write about his love of cars, and his thoughts about driving during the pandemic. In that article, he also talked about his fondness for electric cars.
A lot has happened in those two years, with technology companies, auto makers and governments betting a lot of money on electric vehicles as the transportation of the near future. So we thought it was time to check in with Mr. Leno, who is back performing at comedy clubs after his accident in which he suffered severe burns while working on one of his cars. He has new material from the accident, he says.
Here is what Mr. Leno had to say, as told to The Wall Street Journal.
They had electric cars before they had gas cars back in the early 1900s. But at the time, what they didn’t have was electricity, at least in homes. I mean wealthy people had it, which is why wealthy Wall Street types bought electric cars for their wives, because they could putt around town and not get on your hands and knees and crank it and get dirty and set the choke and get gasoline on your hands and that kind of thing.
So electric vehicles were always quite popular for that reason. I’ve said this before, but for new technologies to succeed, it can’t be equal. It has to be superior on every level and to other forms.
I’ve got a 1909 Baker Electric and I’ve got a 1914 Detroit Electric that we’ve converted to modern electrics. We put air conditioning and Bluetooth and all kinds of things in the Detroit Electric. My 1909 Baker Electric has not needed any service in the 30 years that I’ve had it. I’ve replaced the batteries because they’re basically like golf-cart batteries, deep cycle six volts. And they last about 12 years. They’re not lithium ion. You could change to lithium ion if you wanted to, but it’s an antique vehicle.
I’m quite proud of American manufacturing.
The new electric Ford F-150 is unbelievable. I drove it as a work vehicle. It is eminently practical. You can you go 240 miles on it, and you can power your house for three days with it if you lose power.
When they had the big freeze down there in Houston last year and people had no electricity for days, dealers, in one of the most brilliant public-relations moves, just gave the trucks to people, and people powered their houses for days—making them, if not customers, certainly fans.
I thought a car that was just brilliant was the Chevy Volt. I had one for seven years. It’s a hybrid and you got 40 miles electric free without using any gas. It didn’t seem like much, but I put 90,000 miles on that car, only 3,800 of it was gasoline-powered. I used it at my shop: We’d plug it in, then we’d go to lunch in it, go run an errand and do some chores, which is 25 to 30 miles around Los Angeles. We’d come back, plug it in, and you go back to work for a couple of hours.
I was never having to switch over to the gas part of it. Once a year, every Dec. 7, not for any particular political reason, just every Dec. 7, I’d fill up the tank.
When the Volt stopped that they went to the Bolt, which is pure electric because in a lot of states now you can’t get the tax break or anything with a hybrid.
I think it makes perfect sense that you use your electric car during the week. To sit in traffic on the 405 freeway in bumper to bumper, in something that gets 7 to 9 miles a gallon, really doesn’t make a lot of sense. I used to have a Jaguar; it had a big V-8 engine that was supercharged, and that was $125 a week in gas. And I didn’t feel like I was going anywhere. I switched to the Tesla, and now it costs about the same as a cooking a turkey.
I think the electric car will be the great savior of the classic-car industry and gasoline cars. Remember, in the early 1900s, 500 tons of horse manure were dumped into the streets of New York City every day. Suddenly, the car comes along, and a puff of blue smoke in your face wasn’t so bad. Horses became something people loved, and used for show and racing.
That’s what will happen with the gas car. Sitting in L.A. traffic with a Ferrari going 8 miles an hour is nobody’s idea of fun. So you use an electric car during the week, and on the weekend you drive up in the mountains and use the Ferrari for what it was made for. Or maybe you have a ’65 Mustang. Now it is something to be restored and treasured.
I love reading future stuff. You look at the year 1900, and they said by the year 1950, women would be sitting in bars, smoking and drinking just like men. It showed women in hoop skirts with one leg in the air and they’re smoking cigarettes and they have a bottle of whiskey in the hand. They never even foresaw women having voting rights, women becoming senators, women having equality with men. They only saw it as they would pick up the bad habits of men.
Nobody ever thinks that far ahead.
Everybody predicted flying cars. But that never happened.
Nobody predicted when I was a kid that we’d be carrying a phone. When I was in the fifth grade, a guy from a Bell phone company came to our classroom, and he said by the time we were grown up, no American would be further than one mile from a phone, no matter where they were in the United States. And we just thought that was unbelievable. The idea of carrying a phone with you never ever occurred to anybody. A Star Trek communicator? That was hundreds of years in the future. But it has happened already.
The other great one for cars is hydrogen. Hydrogen can be a real player in the future and I would not rule it out.
I like hydrogen because the more alternatives you have, the better. During World War II, when there was a gasoline shortage, a lot of people pulled out their old Stanley Steamer cars. And people converted their cars. There used to be a thing called a gasifier. They would put it so it looks like a big stove in the back seat of the car and they would burn wood or coal, they would run a tube to the carburetor and the car would run on the methane from the burning of the wood or coal just like with gas. It was inconvenient, yes. It was messy, it was dirty, but it did provide transportation when gasoline was not available.
In case of some sort of natural disaster where, oh, our lines of fuel are shut off, we have electricity, we have hydrogen, we even have steam if necessary.
I demonstrated a hydrogen car back onstage in 2001. I said, “Give me a glass.” So I took a glass and I started up the hydrogen car on the stage, and I put the glass under the tailpipe and I went back to the talk. The byproduct of hydrogen is water. After 20 minutes, the glass filled up with water, and I drank it and people were astounded. It wasn’t the best-tasting water, but there was nothing harmful about it. Hydrogen is a viable fuel because the only byproduct is water. I think hydrogen is a sleeper.
Last year, I sold my old Tesla and bought a new one, the Tesla Plaid. That’s the latest version, and at least as of this date, it’s the fastest-accelerating car you could buy with the exception of the $2.5 million Rimac. If you’re looking for performance at a reasonable price, it’s a pretty good deal. My other Tesla was seven years old. I got $95,000 for it. It held its value. The battery dropped maybe 3% to 5%. As a first-generation Tesla, you got about 228 miles on a charge. When I sold it, it was 223, maybe. I never went to the Tesla shop for anything other than a flat tire.
I realized I am not an out-of-the-box thinker. I remember talking to Elon Musk years ago about his high-speed train. And I asked, “You’re building this high-speed train to go like 200 mph.” He said, “Oh no, 800.” How can it be? He told me something like 800 mph, because it’s not a train, it’s a vacuum tube. And I realized he’s thinking on a level I’m not.
I have no interest in going into space. I see why he’s fascinated with it. But there’s nothing there. Imagine, you’re now on Mars. Todd? Susan? Anybody here? I don’t get it. I have no desire to perform in an empty auditorium. I gravitate toward cities. I don’t go to a mountain for three weeks by myself.
Eight days later, I had a brand new face. And it’s better than what was there before.
But really, it was an accident, that’s all. Anybody who works with their hands on a regular basis is going to have an accident at some point. If you play football, you get a concussion or a broken leg. Anything you do, there’s a risk factor.
You have to joke about it. There’s nothing worse than whiny celebrities. If you joke about it, people laugh along with you.
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Equities are often seen as expensive after promising start to 2023
A new trading year kicked off just weeks ago. Already it bears little resemblance to the carnage of 2022.
After languishing throughout last year, growth stocks have zoomed higher. Tesla Inc. and Nvidia Corp., for example, have jumped more than 30%. The outlook for bonds is brightening after a historic rout. Even bitcoin has rallied, despite ongoing effects from the collapse of the crypto exchange FTX.
The rebound has been driven by renewed optimism about the global economic outlook. Investors have embraced signs that inflation has peaked in the U.S. and abroad. Many are hoping that next week the Federal Reserve will slow its pace of interest-rate increases yet again. China’s lifting of Covid-19 restrictions pleasantly surprised many traders who have welcomed the move as a sign that more growth is ahead.
Still, risks loom large. Many investors aren’t convinced that the rebound is sustainable. Some are worried about stretched stock valuations, or whether corporate earnings will face more pain down the road. Others are fretting that markets aren’t fully pricing in the possibility of a recession, or what might happen if the Fed continues to fight inflation longer than currently anticipated.
We asked five investors to share how they are positioning for that uncertainty and where they think markets could be headed next. Here is what they said:
Cliff Asness, founder of AQR Capital Management, acknowledges that he wasn’t expecting the run in speculative stocks and digital currencies that has swept markets to kick off 2023.
Bitcoin prices have jumped around 40%. Some of the stocks that are the most heavily bet against on Wall Street are sitting on double-digit gains. Carvana Co. has soared nearly 64%, while MicroStrategy Inc. has surged more than 80%. Cathie Wood‘s ARK Innovation ETF has gained about 29%.
If the past few years have taught Mr. Asness anything, it is to be prepared for such run-ups to last much longer than expected. His lesson from the euphoria regarding risky trades in 2020 and 2021? Don’t count out the chance that the frenzy will return again, he said.
“It could be that there are still these crazy animal spirits out there,” Mr. Asness said.
Still, he said that hasn’t changed his conviction that cheaper stocks in the market, known as value stocks, are bound to keep soaring past their peers. There might be short spurts of outperformance for more-expensive slices of the market, as seen in January. But over the long term, he is sticking to his bet that value stocks will beat growth stocks. He is expecting a volatile, but profitable, stretch for the trade.
“I love the value trade,” Mr. Asness said. “We sing about it to our clients.”
For Richard Benson, co-chief investment officer of Millennium Global Investments Ltd., no single trade was more important last year than the blistering rise of the U.S. dollar.
Once a relatively placid area of markets following the 2008 financial crisis, currencies have found renewed focus from Wall Street and Main Street. Last year the dollar’s unrelenting rise dented multinational companies’ profits, exacerbated inflation for countries that import American goods and repeatedly surprised some traders who believed the greenback couldn’t keep rallying so fast.
The factors that spurred the dollar’s rise are now contributing to its fall. Ebbing inflation and expectations of slower interest-rate increases from the Fed have sent the dollar down 1.7% this year, as measured by the WSJ Dollar Index.
Mr. Benson is betting more pain for the dollar is ahead and sees the greenback weakening between 3% and 5% over the next three to six months.
“When the biggest central bank in the world is on the move, look at everything through their lens and don’t get distracted,” said Mr. Benson of the London-based currency fund manager, regarding the Fed.
This year Mr. Benson expects the dollar’s fall to ripple similarly far and wide across global economies and markets.
“I don’t see many people complaining about a weaker dollar” over the next few months, he said. “If the dollar is falling, that economic setup should also mean that tech stocks should do quite well.”
Mr. Benson said he expects the dollar’s fall to brighten the outlook for some emerging- market assets, and he is betting on China’s offshore yuan as the country’s economy reopens. He sees the euro strengthening versus the dollar if the eurozone’s economy continues to fare better than expected.
Even after the S&P 500 fell 15% from its record high reached in January 2022, U.S. stocks still look expensive, said Rupal Bhansali, chief investment officer of Ariel Investments, who oversees $6.7 billion in assets.
Of course, the market doesn’t appear as frothy as it did for much of 2020 and 2021, but she said she expects a steeper correction in prices ahead.
The broad stock-market gauge recently traded at 17.9 times its projected earnings over the next 12 months, according to FactSet. That is below the high of around 24 hit in late 2020, but above the historical average over the past 20 years of 15.7, FactSet data show.
“The old habit was buy the dip,” Ms. Bhansali said. “The new habit should be sell the rip.”
One reason Ms. Bhansali said the selloff might not be over yet? The market is still underestimating the Fed.
Investors repeatedly mispriced how fast the Fed would move in 2022, wrongly expecting the central bank to ease up on its rate increases. They were caught off guard by Fed Chair Jerome Powell‘s aggressive messages on interest rates. It stoked steep selloffs in the stock market, leading to the most turbulent year since the 2008 financial crisis. Now investors are making the same mistake again, Ms. Bhansali said.
Current stock valuations don’t reflect the big shift coming in central-bank policy, which she thinks will have to be more aggressive than many expect. Though broader measures of inflation have been falling, some slices, such as services inflation, have proved stickier. Ms. Bhansali is positioning for such areas as healthcare, which she thinks would be more insulated from a recession than the rest of the market, to outperform.
“The Fed is determined to win the war since they lost the battle,” Ms. Bhansali said.
Gone are the days when tumbling bond yields left investors with few alternatives to stocks. Finally, bonds are back, according to Niall O’Sullivan of Neuberger Berman, an investment manager overseeing about $427 billion in client assets at the end of 2022.
After a turbulent year for the fixed-income market in 2022, bonds have kicked off the new year on a more promising note. The Bloomberg U.S. Aggregate Bond Index—composed largely of U.S. Treasurys, highly rated corporate bonds and mortgage-backed securities—climbed 3% so far this year on a total return basis through Thursday’s close. That is the index’s best start to a year since it began in 1989, according to Dow Jones Market Data.
Mr. O’Sullivan, the chief investment officer of multi asset strategies for Europe, the Middle East and Africa at Neuberger Berman, said the single biggest conversation he is currently having with clients is how to increase fixed-income exposure.
“Strategically, the facts have changed. When you look at fixed income as an asset class…they’re now all providing yield, and possibly even more importantly, actual cash coupons of a meaningful size,” he said. “That is a very different world to the one we’ve been in for quite a long time.”
Mr. O’Sullivan said it is important to reconsider how much of an advantage stocks now hold over bonds, given what he believes are looming risks for the stock market. He predicts that inflation will be harder to wrangle than investors currently anticipate and that the Fed will hold its peak interest rate steady for longer than is currently expected. Even more worrying, he said, it will be harder for companies to continue passing on price increases to consumers, which means earnings could see bigger hits in the future.
“That is why we are wary on the equity side,” he said.
Among the products that Mr. O’Sullivan said he favours in the fixed-income space are higher-quality and shorter-term bonds. Still, he added, it is important for investors to find portfolio diversity outside bonds this year. For that, he said he views commodities as attractive, specifically metals such as copper, which could continue to benefit from China’s reopening.
Ramona Persaud, a portfolio manager at Fidelity Investments, said she can still identify bargains in a pricey market by looking in less-sanguine places. Find the fear, and find the value, she said.
“When fear really rises, you can buy some very well-run businesses,” she said.
Take Taiwan’s semiconductor companies. Concern over global trade and tensions with China have weighed on the shares of chip makers based on the island. But those fears have led many investors to overlook the competitive advantages those companies hold over rivals, she said.
“That is a good setup,” said Ms. Persaud, who considers herself a conservative value investor and manages more than $20 billion across several U.S. and Canadian funds.
The S&P 500 is trading above fair value, she said, which means “there just isn’t widespread opportunity,” and investors might be underestimating some of the risks that lie in waiting.
“That tells me the market is optimistic,” said Ms. Persaud. “That would be OK if the risks were not exogenous.”
Those challenges, whether rising interest rates and Fed policy or Russia’s war in Ukraine and concern over energy-security concerns in Europe, are complicated, and in many cases, interrelated.
It isn’t all bad news, she said. China ended its zero-Covid restrictions. A milder winter in Europe has blunted the effects of the war in Ukraine on energy prices and helped the continent sidestep recession, and inflation is slowing.
“These are reasons the market is so happy,” she said.
Inspired by some of California’s best known Modernist architecture.