2017 Investor Roundtable:General Discussion

[dc_h]

The same basic software with additional features enabled.

Technically the same basic software is running on the car regardless of what package you buy.

 

[Intl Professor]

The usually excruciatingly frustrating American political system works when it matters.

Agreed, but as Churchill must have said, "after trying everything else first." We shall see if McConnell, for example, reaches out to Dems to seek needed changes in Obamacare, not abolition.

 

[anticitizen13.7]

I can't figure out how to say this diplomatically but I think that the exact opposite is correct.

Only a fool would bet on index mutual funds, particularly given the option,of investing in TSLA.

My portfolio is structured for fault tolerance, much like the Falcon 9 rocket octaweb and the Model S/X battery pack. A failure in one part of the system won't cause the entire device to collapse. That's the basic philosophy behind my design.

20 years ago I might have put all my chips on TSLA, but 20 years ago I didn't have even 5k in assets to my name or any other financial responsibilities besides myself. I've seen too many people wiped out in '01 and '08 to bet almost everything on one company, no matter how promising.

This investment advice on index funds versus picking individual "winners" comes up periodically. I think investing strategies work on a case by case basis that includes factors such as age, risk tolerance, dependents etc.
Certainly, successful guys like Mark Cuban recommend investing in only a few companies (ok... not one company), and I would say that the guys who pick winners experience more dramatic gains than index funds. The posts on this forum from 2013 seem to verify that observation.

With regards to risk tolerance, I believe that "peace of mind" has no price tag. If I lose out on gains in my IRA, I'm ok with that. I even think it probable in the long run. I just don't need the stress of having everything in 1 basket when I have enough other things to deal with.

 

[ValueAnalyst]

I continue to note a surge in public awareness of Elon Musk and his companies.

The number of people who mention the words "Elon Musk" "The Boring Company" "that train thingy" is increasing at an exponential rate.

My response always is:

"Just wait for July 28."

"Why, what's gonna happen on July 28?"

"Just wait for July 28."

 

[MitchJi]

I can't figure out how to say this diplomatically but I think that the exact opposite is correct.

Only a fool would bet on index mutual funds, particularly given the option,of investing in TSLA.

Clarification. I said that in response to your statement that only a fool would do the opposite, which is what I'm doing.

My portfolio is structured for fault tolerance, much like the Falcon 9 rocket octaweb and the Model S/X battery pack. A failure in one part of the system won't cause the entire device to collapse. That's the basic philosophy behind my design.

20 years ago I might have put all my chips on TSLA, but 20 years ago I didn't have even 5k in assets to my name or any other financial responsibilities besides myself. I've seen too many people wiped out in '01 and '08 to bet almost everything on one company, no matter how promising.

I don't agree that your strategy decreases your risk. It's fine if you want to believe that and invest accordingly but I don't believe it's foolish to disagree with that strategy. I agree with Marc Cuban who said that diversification is "for idiots ". I'm not saying that you are an idiot, but I think it's foolish to believe that anyone who disagrees with you is a fool.

With regards to risk tolerance, I believe that "peace of mind" has no price tag. If I lose out on gains in my IRA, I'm ok with that. I even think it probable in the long run. I just don't need the stress of having everything in 1 basket when I have enough other things to deal with.

First of all I believe that it's important to understand that happiness and well being are not dependent upon the amount of money in our portfolio.

If you believe that diversification is inherently less risky that investing in TSLA that makes sense. But I disagree with that basic assumption.

Having almost 100% of our portfolio in TSLA doesn't increase my stress.

 

[22522]

It is difficult for me to criticize someone else's investment strategy without knowing everything about their situation.

With me, it is pretty simple. I am obsessive about meeting commitments. I consider the Model 3 deposit a commitment - look at all the suppliers who have lined up to support that. That work needs to honored.

In April, I discovered no way to meet that commitment i.e. If everything goes according to plan, the result is failure to meet. The plan had to change...

Tesla sells stock as well as cars. The stock is supposed to appreciate. If the share price is $384 next May I can honor.
So buying the stock is my way of asking for help.

"Hey Elon, I need 17% appreciation in a year."

That seems like a lot to ask, But I saw no other path.

... Maybe I should find a job that pays more.

A good way to look in the mirror to see if you have a problem is to look for compensating behaviors. Denial is really powerful. The presence of compensating behaviors cuts right through that... Really powerful.

Thanks for sharing. I have some work to do!

 

[Intl Professor]

I'm still thinking about moving to CA. I really like how the state has turned around its finances and how it leads with BEV/Solar/FSD.

One advantage is size and life-style options. Depends a great deal where you settle. Probably the best for progressives is Portland, Oregon, but I prefer the dryer weather here in Sacramento. Now home prices make that almost unthinkable--which is starting to happen here as people flee San Francisco. I've lived here since 1964 when it was really dullsville, unless you were into local politics (or CA politics since we are in the capital). Now we have lots of good places to eat. Early on, and today, traffic is like LA North, but not nearly as bad as LA or San Francisco, but it will be unless as some expect on these pages owning a car will become obsolete.

You also have foothill life, like in Mariposa, on the way to Yosemite. The town is damn near encircled by a wildfire at the moment--and evacuated. Next month is our hottest and in the coming years.... (My wife is presently visiting in Thailand--cloudbursts almost every day because of Monsoon. We could use a bit of that now.)

I know this is a Christian site so bringing up sex is a no-no. But since you're in the dating game, beware reproduction can soon follow. (I've forgotten how that is done for homo sapiens, but still....) If wee ones are in the offing, the public colleges and universities are terrific and relatively cheap. On average, K-12 is terrible unless you're wealthy like you are or will be, and elect to live in Palo Alto or environs. Some great private colleges, too. I remember at Jay Stratton's inauguration the President of Cal Tech saying we have one great technical university with a branch on the East Coast, and another on the West. But I'm biased. Frankly, I'd rather be in Cambridge or Boston, despite the weather, but by the end of the century both will be under water. On Boston area weather, the great polar explorer Admiral Byrd used to say the walk across the Harvard bridge from Boston to Cambridge was the coldest walk in the world. (He exaggerated, I took it daily from my fraternity to class, although once I noticed an unknown litterer had thrown a refrigerator over the side of the bridge in winter and it landed on the ice without cracking it.)

 

[MitchJi]

Mitch, He is doing both. He is employing a good (IMO) strategy of ensuring a retirement with a more conservative investment and being more aggressive with TSLA that potentially will fund his kid's education.

While TSLA has afforded me a more comfortable living/retirement I would never invest more than 25% of my stock/bond portfolio in TSLA.
We all have different situations and if I were 30, single, living within my means with a steady income I would come at TSLA differently but given his description it seems to be a great strategy.

It is difficult for me to criticize someone else's investment strategy without knowing everything about their situation.

I wasn't criticizing his strategy. I was responding to his statement that anyone who does not diversify is foolish.

I believe that the opposite is true in the case of comparing investments in TSLA with index mutual funds.

 

[AlMc]

I wasn't criticizing his strategy. I was responding to his statement that anyone who does not diversify is foolish.

I believe that the opposite is true in the case of comparing investments in TSLA with index mutual funds.

Ok. Point taken.

I also hope your prediction of an SP of close to $400 very soon after ER is true.
If I do buy some protective puts for ER I will happily watch them go to '0'.
I don't agree, but hope I have another ER where being overly cautious is the wrong strategy

 

[Esme Es Mejor]

I can't figure out how to say this diplomatically but I think that the exact opposite is correct.

Only a fool would bet on index mutual funds, particularly given the option,of investing in TSLA.

I think it depends on your goals. I used to engage in riskier investments when I was younger, but now that I have enough to retire, there's no benefit to me to take those same risks. Nearly 20% of my net worth is in TSLA, but the rest is highly diversified, high-dividend, and about as safe as you can make an investment.

 

[MitchJi]

Ok. Point taken.

I also hope your prediction of an SP of close to $400 very soon after ER is true.
If I do buy some protective puts for ER I will happily watch them go to '0'.

I don't agree, but hope I have another ER where being overly cautious is the wrong strategy

I would not recommend that you skip your purchase of puts based on my opinion for the post ER SP.

I have a much greater confidence of the SP being over $400 by February-May.

 

[Matias]

The M3 unlike any other car (ever) has a paid waiting list/reservation/demand propelling it ahead of everyone. Did Model Ts have a similar demand?

Original Ford Mustang sold 100 000 cars in the first three months and 418 000 in the first year

Ford Mustang - Wikipedia

 

[22522]

Ants don't have a lot of money.

This approach to development kind of works in the negative space. Excavation is the creative tool.

You only have to create one surface. This is half as expensive as creating a two surface self supporting structure.

I think Elon will make the corridor at a good price point.

Ants don't need a lot of money.

 

[anticitizen13.7]

Clarification. I said that in response to your statement that only a fool would do the opposite, which is what I'm doing.

Based on observation and experience I just don't think it is prudent to have a portfolio so heavily dependent on one company. I personally know at least 3 people who sustained loss of a large % of their portfolio (6-7 figure range) in either 2001 or 2008, on investments that they told me would never let them down. While I think this is unlikely with TSLA, I believe that any business has some possibility of failure or long periods of difficulty. I have no direct control or insight as to what goes on inside Tesla, so my forecasts are based on a bit of faith backed up by a record of Tesla defying the odds.

As these things are subjective, I accept that people will disagree and persue strategies I do not recommend.

 

[Matias]

Based on observation and experience I just don't think it is prudent to have a portfolio so heavily dependent on one company. I personally know at least 3 people who sustained loss of a large % of their portfolio (6-7 figure range) in either 2001 or 2008, on investments that they told me would never let them down. While I think this is unlikely with TSLA, I believe that any business has some possibility of failure or long periods of difficulty. I have no direct control or insight as to what goes on inside Tesla, so my forecasts are based on a bit of faith backed up by a record of Tesla defying the odds.

As these things are subjective, I accept that people will disagree and persue strategies I do not recommend.

Yes. It is crazy to bet a farm on single company. Whatever that company is.

 

[ValueAnalyst]

Clarification. I said that in response to your statement that only a fool would do the opposite, which is what I'm doing.


I don't agree that your strategy decreases your risk. It's fine if you want to believe that and invest accordingly but I don't believe it's foolish to disagree with that strategy. I agree with Marc Cuban who said that diversification is "for idiots ". I'm not saying that you are an idiot, but I think it's foolish to believe that anyone who disagrees with you is a fool.


First of all I believe that it's important to understand that happiness and well being are not dependent upon the amount of money in our portfolio.

If you believe that diversification is inherently less risky that investing in TSLA that makes sense. But I disagree with that basic assumption.

Having almost 100% of our portfolio in TSLA doesn't increase my stress.

Definition of risk is important in this discussion.

If risk = volatility (as CFA's and some client-facing portfolio managers define it) then obviously investing 100% of capital in one stock leads to more volatile, hence riskier, portfolio.

The cashier at the grocery store, however, doesn't ask me how volatile my dollar was. He only cares about its face value.

But if risk = probability of losing any portion of invested capital over the next five-year period, then I would argue that the index is risker than TSLA.

To each their own... I try to do keep my head down, my own thing, and not meddle in others' investment strategies. There are more than a few ways to make money in stocks.

 

[Esme Es Mejor]

Yes. It is crazy to bet a farm on single company. Whatever that company is.

Depends on the farm, really.

 

[GoTslaGo]

Just saw this post by @Troy regarding Tesla dropping the RWD option for the S.

Tesla to discontinue cheapest version of Model S (75 RWD) ahead of Model 3 launch

 

[MP3Mike]

It's the same basic software. Any other approach is insane. They might provide less features with the EAP Option, but why would they produce two systems that solve the same basic problems separately?

I think currently EAP and FSD are completely different code bases. EAP is on production cars now, and FSD is only on internal Tesla development cars.

I suspect that once FSD is complete, or close to complete, Tesla will remove the EAP software from the cars and replace it with the FSD software with feature limitations based on what you paid for. This may be part of why EAP isn't where people think it should be; Tesla is putting the majority of their effort into the FSD code base instead.

 

[ValueAnalyst]

I don't think people realize how much impact this DC-NY hyperloop news has made in the northeast. I'm yet to run into anyone who hasn't heard about it, and just a few months ago majority of these people hadn't even heard of Elon Musk...

What a great way to promote the brand going into July 28.