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buy TSLA stock or Model 3?

Discussion in 'TSLA Investor Discussions' started by prius_prime, Aug 19, 2018.

  1. prius_prime

    prius_prime New Member

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    I recently bought a Prius Prime, my first foray into the world of EV. Now I understand the addictive nature of driving an electric vehicle. I don't like it when I run out of EV range on the Prius and it switches to the ICE, it's just a feeling that you don't want to go back to.

    I was considering selling the Prius and instead buying a Model 3. However, I'm also considering keeping the Prius and spending the difference on buying TSLA stock for a long term hold - dollar cost averaging in over time.

    I am leaning more towards buying the TSLA stock, as it a given that the Model 3 will eventually depreciate over time. I don't really "need" a Model 3, the 35 miles of EV range on the Prius does meet most of my commuting needs. The potential upside of stock, is certainly greater than buying a car, even though the price of stock can certainly go down too.

    Anyone else doing the same?
     
  2. neroden

    neroden Model S Owner and Frustrated Tesla Fan

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    This is very much not investment advice.

    I'd get the car because you'll enjoy the car. A car isn't an investment at all, but life is short, and quality of life is worth a lot.

    On the other hand, you *just* got the Prius Prime, and it seems a waste to sell it so soon, so maybe wait a couple of years and *then* get the Model 3.

    The warning: You may not be able to dollar cost average into TSLA for long. It's very likely to go private within the next year or two. Musk wants to let small investors continue with him into going private, but if you do, the stock will be illiquid, and you probably won't be able to buy any more. And you may not even be able to follow it into private status (it may be limited to people with large investments; see other threads here), so you may be automatically cashed out.

    Anyway, things to consider.
     
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  3. prius_prime

    prius_prime New Member

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    Thanks, I agree that I would feel wasteful selling a car just after buying it. The only reason I felt some urgency was due to the incentives being cut in half next year. It would be more sensible to wait a few years though.

    With that being said, I'll keep doing my due diligence and buying gradually while the price is under the 200MA. I don't invest in many individual stocks, but I enjoy speculating on things that I believe have good long term potential.
     
  4. SpudLime

    SpudLime Member

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    What do you want more? Instant gratification by driving a model 3 or hanging the long run for a reward without stressing over the day to day volatility?
     
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  5. UnknownSoldier

    UnknownSoldier Unknown Member

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    Well I mean a car is a depreciating asset but you gain actual utility from it, the act of driving it every day. If you hate the Prius, and I don't know any Prius drivers who actually love their car, then get the Model 3 which is a car owners love and look forward to driving every day.

    A bunch of stock is an investment, you gain nothing from it except the possibility of your wealth growing down the road. You can neither drive a stock nor do you look forward to seeing what it's doing every day, in fact if it's TSLA you dread what will happen to it the next day because of it's incredible amounts of volatility.

    So really you're asking about two completely different things here. Other than both supporting the mission, they are apples and oranges.
     
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  6. anticitizen13.7

    anticitizen13.7 Not posting at TMC after 9/17/2018

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    From a purely financial perspective, keep the Prius and buy TSLA stock.

    Selling an almost-new Prius and buying a Model 3 is a double financial hit: you'll take a big loss on depreciation from the Prius, and you'll be incurring the cost of a much pricier Model 3.

    The environmental benefit of going to a Model 3 is also marginal, because most of the time, you are operating the Prius in EV mode.

    I bought an iPod for $399+tax in May of 2005. AAPL was then trading at $2 in today's shares. AAPL is trading at $218 today. If I had bought AAPL stock instead of the iPod, I would have well over $90,000 in AAPL stock today. Instead, I am now looking at that busted iPod which hasn't worked in 10 years, collecting dust on a shelf.


    However, if you are a car enthusiast...

    ... there may be a compelling reason to buy the Model 3 if you love to drive, and love to experience the latest and most advanced technology. By almost all accounts, Model 3 is a superb "driver's car". If you can afford it, and would enjoy it, why not?

    But if you simply want a car to commute, I would say keep the Prius.
     
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  7. prius_prime

    prius_prime New Member

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    I don't *hate* the Prius at all, I think I just underestimated the feeling of driving an electric car. I think I will keep the Prius for now.

    As a newcomer to this community I appreciate the replies! Thanks for the feedback.
     
    • Like x 2
  8. MXWing

    MXWing Active Member

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    Sell $60,000 worth of puts and use the proceeds to buy a Model 3.

    :D
     
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  9. Darren Donovan

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    What if OP buys TSLA at the current price of $305, and he'll get bought out at the expected price of $420. That's a gain of 38%! Very nice, no?
     
  10. Tam

    Tam Active Member

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    $420 is a speculation, not a fact as funding is being researched by the board of directors and not documented by any kind memorandum of understanding either verbally or written.

    Even when funding is secured by Saudi Arabia, will the U.S. government allow the takeover from a foreign country?

    Even after getting the U.S. approval, what if Saudi Arabia will change its mind as it is doing now with Canada?
     
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  11. Chris Fox

    Chris Fox Member

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    Unless Elon was lying, which would be a serious criminal offense, funding at $420 a share is secure. Don’t let FUD wreck your common sense.
     
  12. Tam

    Tam Active Member

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    Elon Musk's phrase of "Funding secured" has a different meaning than what most people understand.

    According to the blog, Saudi Arabia has been showing interest in supporting Tesla going private for the past two years and disappointed that hasn't happened.

    It is not "secured" in a conventional sense because the blog says Saudi Arabia "has also asked for additional details on how the company would be taken private, including any required percentages and any regulatory requirements..."

    That sounds like it is still asking: Out of $70 billion, what is its percentage?

    It sounds more like an exploration phase for the past 2 years and a negotiation phase is still an unknown future.

    The blog also states that it won't need $70 billion because two-thirds current shares will be estimated to roll over into private ones. Again, this is not "secured" in a traditional sense because it is an "estimate" and there's no survey going out to shareholders to get that number either.

    Thus, this $420 price is solid and the funding is secured in a very preliminary estimation. And by the nature of estimation, it is not solid nor secured in this scenario.

    It is like saying "as clear as mud" and by the nature of mud, it is not clear at all in this scenario.
     
  13. bhtooefr

    bhtooefr Member

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    I concur that taking the depreciation hit would be a bad idea at this point, unless the Prius fails to meet your needs. That said, definitely look up the values - some cars don't take the hard depreciation hit right off the lot, especially if they're hard to get. Wait at least until the depreciation curve levels off, unless it hasn't taken the hit yet.

    Also, the Prime should be slightly more efficient in charge depleting mode (255 Wh/mi) than the Model 3 (259 Wh/mi for LR RWD, 289 Wh/mi for LR AWD). Really, though, that's a small difference that's wiped out as soon as the ICE fires up, and if it's actually firing up for you...

    Myself, I own a 2016 Prius Liftback - same car as the Prime, but much smaller battery and no plug - that I plan on keeping at least through the loan term. I actually quite like it, and intend to keep it at least through the loan term. (Toyota improved the handling a lot, although it's still comparatively slow. Throttle response isn't Tesla good, but it's not terrible (worst case is starting the engine in response to a hard throttle application, and that's not any worse than my old Mk4 TDI's turbo lag).)

    The list of cars I was considering originally was, in my case, the Gen 2 Volt, the Prius Prime, and the Model 3... and I bought none of those! (I hated the test drive of the Volt, the Prime wasn't going to be available in my state when I was ready to buy, and the Model 3 wasn't going to be available anywhere when I was ready to buy. And then it turned out that the Model 3 wasn't a liftback... I'm basically down to hoping that the Model Y is one of the modern trend of surprisingly low-riding faux crossovers, or getting a used Model S in a few years (even though I'd prefer a Model 3 LR RWD size/efficiency/handling-wise), if I want a Tesla... but I think Tesla as a company is going in the right direction, so I invest.)

    And, paying the loan off early doesn't make sense, when I get significantly higher interest out of TSLA (even with the volatility) than what I pay on the loan...
     
  14. neroden

    neroden Model S Owner and Frustrated Tesla Fan

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    "Funding secured" doesn't mean "Funding committed". Secured is basically a verbal promise. The Saudis could still be prohibited from investing the money by the US government on national security grounds, or the Saudi government could change their mind, etc.
     
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  15. Hitman007

    Hitman007 Member

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    Either choice is bad and you will lose a lot of cash.
     
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  16. prius_prime

    prius_prime New Member

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    My first buy order went through this AM at $292. Let's go!
     
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  17. Hitman007

    Hitman007 Member

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    #17 Hitman007, Sep 5, 2018
    Last edited: Sep 5, 2018
    Ohh sorry to hear that. Today its $280. You already lost $12 a share. The new target by Goldman is $150 so you will get some more opportunity to buy it at a bargain...
     
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  18. Darren Donovan

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    Pretty sure I've read on this forum where many members are expecting the stock price to be in the thousands, yep, thousands of dollars PER SHARE. I don't remember WHEN that is expected to happen, though. Hopefully that will come true by the time I retire, as I do have TSLA shares in the portfolio.
     
  19. Hitman007

    Hitman007 Member

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    Anything can happen but it looks bad right now. I think Elon may go to jail over the "going private" tweet and the downgrade by Goldman will make it virtually impossible to get new money. the Tesla cheerleaders on this board are enthusiastic but they cant read or understand a profit & loss statement.
     
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  20. Cattledog

    Cattledog Active Member

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    We kun reed butt we kant right or spel. If Elon goz to jael ovur 'goin privet', theil git u nxt fur Jwalkin oar speedun.

    ALL IN!
     
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