Have 10K to invest- TSLA good long term play?

[srthomas21]

Disclaimer: I am not an active investor. Half the stuff you guys talk about (options etc) is over my head. I know the stock has been volatile. I've tried to read through some of the threads but they are HUGE. Bulls and Bears opinions welcome

 

[GoTslaGo]

Same here. Clueless when it comes to reading the investor thread, but thoroughly enjoy it. I'm long TSLA (first individual stock I've ever owned) because (IMHO):

1) The car is compelling. Beautiful and great to drive.
2) The network is developing, and Tesla is creating it (this makes adoption of BEV by the masses easier).
3) The Model 3 is coming out. Model X is amazing.
4) Autopilot is awesome and updates (other carmakers have autopilot features, but none get better over time once you buy it).
5) If you read the Youtube comments on Tesla videos, most are young/kids, your future buyers.
6) Gigafactory coming online means better and cheaper batteries. Profit margin should improve as well as the car. Also less Forex risk.
7) Eventually the Chinese market will move to EVs, and kill ICEs (pollution, cost of gas, etc...).

Caveat, I know nothing about how to accurately value companies (got the books, but haven't had a chance to read them). I bought the stock and have chosen NOT to use stop/loss. If it goes to zero, my investment in Tesla goes to zero. I am confident it will not, and I believe going into 2018 it will approach 400 (valuation I pulled out of my butt).

I will let the bears rebut.

PS--

I forgot. Future buyers of cars (kids now) are all much more computer savvy than me, for instance. They understand and expect things they own to update and get better. Unless legacy car builders learn to embrace technology, I suspect these future buyers will shun their products. Tesla understands this and rewards hackers as oppose to trying to ignore or fight them. Thus the product will be more safe (IT as well as NHSTA wise) than your typical legacy car (ICE or EV).

 

[ggr]

Disclaimer: I am not an active investor. Half the stuff you guys talk about (options etc) is over my head. I know the stock has been volatile. I've tried to read through some of the threads but they are HUGE. Bulls and Bears opinions welcome

Yes. At least I think so, and have put money where my belief is.

 

[duke_of_ev]

Go for it. In the comping years auto industry will be transformed by two major events: electrification and autonomy. Shifts like that always give new players an opening to become new leaders. Look how Apple took advantage of dumbphone to smartphone transition. Nokia went from 50%+ marketshare to less than 2%. I expect something like that to happen in the auto industry. Tesla is the leader in both electrification and autonomy so it's poised to grow. Tesla is also taking advantage of transition to renewable energy with their energy storage solution -- the upside there is huge. Current $27 bln market cap is too small for company that important event though short-term metrics like P/E ratio look unattractive.

 

[Gerardf]

My 2 cents as someone relatively new to stocks and invested in TSLA as a long-long :


- Tesla share price is relatively high, it has important future successful execution already priced in. I feel the success will be (much) bigger than is already priced in, but success is not exactly guaranteed. Tesla still has some formidable challenges to overcome the next years.

- Be prepared to see your investment go up 50% and go down 50% in a mater of a few months, even in case nothing happens at Tesla, but just as a result of the general market.

- Even (specially) during at a strong dive, you should be able not to make an emotional decision to sell. Those who sold (or were forced to sell) early-February must regret that now.

- You should have the patience to wait this one out to 2018, or better 2020, and only invest money you can afford to loose.

 

[ZachShahan]

What Gerardf said.

(As well as the others, but I'd say that's the key advice for you emotionally and practically.)

 

[Auzie]

Disclaimer: I am not an active investor. Half the stuff you guys talk about (options etc) is over my head. I know the stock has been volatile. I've tried to read through some of the threads but they are HUGE. Bulls and Bears opinions welcome :smile:

It is difficult to answer your question without having more insight into your personal circumstances.


For some people, $10k is a pocket money, for others $10k might be a substantial amount.


If you wish to invest, my suggestion is to learn a bit about investing, at least enough to be able to form an independent opinion on each investment opportunity. Such personal independent opinion can then be greatly enhanced by checking/discussing with peers on this and similar forums.


If such personal evaluation capability is lacking and investor relies on someone else's opinion, their investment risk skyrockets.


Investing in TSLA will make for a quick learning, but be ready to pay the price for your lack of experience, invest only if you can afford to lose.

If you are serious about investing, then educate yourself, take few courses until you are able to confidently form opinions on particular opportunities, without needing others to tell you what to do.

 

[ohmman]

If you have $10k to invest, and haven't invested much else, I don't recommend TSLA as a core holding. I recommend a broad based index ETF - QQQ, SPY, IWM, etc. For a little fun and flavor, you can put $1k of it in TSLA just for something to watch. But in general, putting all your eggs in a volatile basket will probably turn out scrambled eggs.

 

[srthomas21]

If you have $10k to invest, and haven't invested much else, I don't recommend TSLA as a core holding. I recommend a broad based index ETF - QQQ, SPY, IWM, etc. For a little fun and flavor, you can put $1k of it in TSLA just for something to watch. But in general, putting all your eggs in a volatile basket will probably turn out scrambled eggs.

I could lose the 10K and it would not hurt me financially. I have a lot of my other money invested based on recommendations of a financial advisor and all of it has been a pretty crap investment. I am probably down a few points over the last couple years. My skill set is in building businesses and I should have taken the money and invested it in my own company as I would have had better results.

I like Tesla as a disruption company and believe in their products which is why I want to invest. Looking at the last 2 years of data it looks a decent time to get in.

 

[anticitizen13.7]

I could lose the 10K and it would not hurt me financially. I have a lot of my other money invested based on recommendations of a financial advisor and all of it has been a pretty crap investment. I am probably down a few points over the last couple years. My skill set is in building businesses and I should have taken the money and invested it in my own company as I would have had better results.

I like Tesla as a disruption company and believe in their products which is why I want to invest. Looking at the last 2 years of data it looks a decent time to get in.

For your 10k, if you can afford to lose it, TSLA might be a good investment. Be prepared to hold the stock for 5-10 years though, because it can be extremely volatile. A few weeks ago shares were in the 140's and now they are above 200. Your 10k is going to go for a roller coaster ride. That's the only thing I'm certain of. There's a lot of risk, but a lot of potential reward too.

Financial advisers are a gamble. I recommend broad-based index funds (like what Vanguard offers) for the vast majority of people, because they tend to outperform active management over the long haul, and have much lower management costs. The $ you have invested on advice, probably belongs in index funds.

 

[blakegallagher]

Its one of the best long term investments out there imho. The group of people working at tesla is amazing and because of how many people want to work there the interview process is pretty insane and results in top notch hires. I think scty might be a better investment at these levels and I will be able to tell you for sure which was a better choice in about 10 years gl.

 

[CanadaEV]

If you wish to invest, my suggestion is to learn a bit about investing, at least enough to be able to form an independent opinion on each investment opportunity. Such personal independent opinion can then be greatly enhanced by checking/discussing with peers on this and similar forums.

I agree with this - learn enough to rely on your own judgement. However, i'd add to this that TSLA might be as different an investment as Tesla is a different company. By that, I mean I often see, especially the bears, chiding Tesla investors that it has a 'ridiculous' capitalization in the same ballpark as major automakers that produce as many cars in a week as Tesla makes in a year.

I believe that those bears are not able to see the company for what it is, and therefore they can't see the stock for what it is. They expect the company to behave like established carmakers and they expect the same of the stock. But, neither Tesla nor its stock is 'old school' in any way.

Therefore, follow up your investment learning especially with learning everything possible about Tesla. If you do that, you will 'know' that is is in a league of its own. To that extent, all of your learning about investment, most of which is based on old school thinking, has to be learned with flexibility to appreciate new, disruptive principles.

And to this I have to add one important insight: Many new Tesla owners are so impressed with their purchase that they feel compelled to learn everything possible about their car and its background, which of course includes the company. These new owners obviously have the financial resources to purchase a Tesla. Being in that financial category, many of them are inherently intrigued by solid investment opportunities - and their mindset is not 'old school', after all, because they did buy the car. So now we see that type of person, not anymore in just 1,000s per quarter, but in 10s of 1,000s per quarter, and growing, swelling the ranks of extremely committed Tesla enthusiasts, and they have money to invest. To me, this means that there is now and will continue to be a constantly growing, relentless demand for the stock.

 

[sub]

I had never been active in the market prior to 2013 when my wife and I test drove a Model S. We got back in our car and within a block of leaving the store we had decided we were investing in TSLA. I quickly opened an account and put over 40k in, that decision turned out well. I've since spent an insane amount of time learning the market and trading. IMO you can almost ignore the "numbers" when it comes to Tesla, to me it's that obvious what this company will be in the future. The Bears are in two camps, oil loving republicans or old school invest by the numbers. I'm not including the paid schills. If you can put 10k in and literally kiss it goodbye, meaning don't panic when tesla drops $30 in a day and sell, odds are extremely high that it will be a great long term investment. I currently don't own shares in my margin acct (wife has some in her 401k), all I have are options currently.

 

[ohmman]

I could lose the 10K and it would not hurt me financially. I have a lot of my other money invested based on recommendations of a financial advisor and all of it has been a pretty crap investment. I am probably down a few points over the last couple years. My skill set is in building businesses and I should have taken the money and invested it in my own company as I would have had better results.

Sure, if it's play money, then go ahead and play. If you're looking for confirmation of a decision you've already made, there are plenty here who will back you.

Have fun...

 

[srthomas21]

Thanks guys. Good advice. I'll post my decision when I make it.

 

[The Blue Owl]

To belatedly throw in my 2 cents: there is nothing that sharpens the mind like losing money. It's the only way investing lessons stick. If you make money in the market as a beginner, especially if you make a lot of money, it's easy to get the wrong idea about your abilities.

The same is (even more) true about trading, which I find vastly more challenging, especially with options. Long term investing vs. options trading is like ballroom dancing vs. mixed martial arts. Mistakes in the former may cost you your date, but if you get it wrong in the latter you can get killed.

If you can afford to lose 10k, use it to learn. Don't lose it on purpose, obviously I mean, be deliberate about your actions, and take a long term view.