[I can relate from my own witnessing of similar..]...
I've a sneaking suspicion she was better off making them work for her--
...
respect
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My Holding + Trading Approach
- Thread starter TradingInvest
- Start date
I've a sneaking suspicion she was better off making them work for her--
...
respect
This morning, after Tesla missed the Model 3 production goal, I increased to 105% (of my total Tesla allocation). In my view it's a good buying opportunity. I plan to reduce other assets and allocate more to Tesla.
Tesla is not a normal value or growth stock. It's on it's way to become the largest company in the world.
Tesla is not a normal value or growth stock. It's on it's way to become the largest company in the world.
A few thoughts:
I have a large part of my net allocated to hold and trade TSLA. When I say 100% in TSLA, I mean that part is all in, doesn't mean my total net or 100% of my whole stock account.
I planed 80% for long term holding (at least 2025, maybe 2030), 40% for trading. The trading portion could get into LEAPs. So my 105% is much more than 105%. For trading, I never buy high sell low. (but never say never, I do have stop loss for extreme situations).
Long term trading has advantages against short term trading.
1. I have a better success rate with longer term.
2. Long term gain has lower tax.
3. Even if I am temporarily wrong, I can move the LEAPs to the next year.
4. If the market gives me lemon, I can turn it into lemonade (long more or short more) for long term position. If I hold short term position I might have to take a loss.
I have a large part of my net allocated to hold and trade TSLA. When I say 100% in TSLA, I mean that part is all in, doesn't mean my total net or 100% of my whole stock account.
I planed 80% for long term holding (at least 2025, maybe 2030), 40% for trading. The trading portion could get into LEAPs. So my 105% is much more than 105%. For trading, I never buy high sell low. (but never say never, I do have stop loss for extreme situations).
Long term trading has advantages against short term trading.
1. I have a better success rate with longer term.
2. Long term gain has lower tax.
3. Even if I am temporarily wrong, I can move the LEAPs to the next year.
4. If the market gives me lemon, I can turn it into lemonade (long more or short more) for long term position. If I hold short term position I might have to take a loss.
Two friends each had $100k in their stock accounts. One of them, John, bought TSLA at $220, now at $355. He sits on paper gain of 61%. If the stock goes to $2200 in a few years, he will have one million dollars, and owe a small percentage of tax if he decides to sell.
John's friend Robert decided to trade instead of invest. He wants to stay ahead of the game, but trading is a zero sum game. So Robert spent a lot of time searching/reading/posting on the internet. He did well that now he has $120k in his account. After short term tax is paid, he is basically back to square one, while the stock has gone up 61%. Robert decides to continue the trading game with full energy. What he doesn't know is some market participants have a lot of resources, they also use media to influence the market. In the end, by the time TSLA reaches $2200, Robert probably will have $150k in his account, maybe $130k after the final year's tax is paid.
If you have been in the market for a long time, you should know if you are really good at trading. Even if you did ok on paper, after short term tax, you probably are not doing nearly as good as long term holders. Think about those who bought @$20 and still sitting on the stock.
Those who buy at every bottom with high leverage can gain many folds in a year. That's not trading every little ups and downs.
It's all about knowing what's right what's wrong, and don't do the wrong things.
John's friend Robert decided to trade instead of invest. He wants to stay ahead of the game, but trading is a zero sum game. So Robert spent a lot of time searching/reading/posting on the internet. He did well that now he has $120k in his account. After short term tax is paid, he is basically back to square one, while the stock has gone up 61%. Robert decides to continue the trading game with full energy. What he doesn't know is some market participants have a lot of resources, they also use media to influence the market. In the end, by the time TSLA reaches $2200, Robert probably will have $150k in his account, maybe $130k after the final year's tax is paid.
If you have been in the market for a long time, you should know if you are really good at trading. Even if you did ok on paper, after short term tax, you probably are not doing nearly as good as long term holders. Think about those who bought @$20 and still sitting on the stock.
Those who buy at every bottom with high leverage can gain many folds in a year. That's not trading every little ups and downs.
It's all about knowing what's right what's wrong, and don't do the wrong things.
Some people want to use leverage to gain more. I will explain the pros and cons based on my experience:
1. You should carefully consider the tax implication. You can hold shares for 15 years without tax. Rolling LEAPs will need to pay tax every year. It's not simply double exposure double the gain.
2. I think buying Calls at the bottom has the best potential reward. Big money is made buying Calls at the bottom. But you need to be able to tell when the bottom comes. Always have a backup plan, what do you do if the stock drops another 20% from the "bottom"?
3. When you are not sure about the future price, don't force yourself to gamble. You can wait for a better opportunity; or sell options instead buy; or do spread instead of pure calls or puts. Gamble at 50:50 weighted winning chance will not do you any good, look for 90:10 or better.
1. You should carefully consider the tax implication. You can hold shares for 15 years without tax. Rolling LEAPs will need to pay tax every year. It's not simply double exposure double the gain.
2. I think buying Calls at the bottom has the best potential reward. Big money is made buying Calls at the bottom. But you need to be able to tell when the bottom comes. Always have a backup plan, what do you do if the stock drops another 20% from the "bottom"?
3. When you are not sure about the future price, don't force yourself to gamble. You can wait for a better opportunity; or sell options instead buy; or do spread instead of pure calls or puts. Gamble at 50:50 weighted winning chance will not do you any good, look for 90:10 or better.
I like this, and agree. Especially point #1 about taxes. I feel like people don't spend nearly enough energy considering their long term effect on your portfolio. My only disagreement is that you never know 90:10 or better, and I would argue that if you think you do, you are missing some big risks.
This has biased me towards straight-up shares, but I realized recently that although that was right for after-tax accounts -- it was wrong for Roth IRAs, where you don't need to pay tax at all. I have an emotional attachment to the shares I bought outright in my Roth and haven't been able to convince myself to convert them to LEAPS, though.
With options, I mostly sell deep-below-the-money puts, and I secure them with cash which I expect to need to spend soon. (Because I need to spend it soon, if I put it into stock I would have to sell the stock soon, so I wouldn't get the tax deferral from long-term stockholding.) So I'm not using them for leverage, I'm using them as a substitute for CDs or for not investing the money at all. On most stocks this wouldn't gain you enough money to be worthwhile, but on TSLA there are so many people who think it will go to zero that the premiums are substantial.
+1
RothIRA in (DITM)LEAPS specifically for that (15-25%+ advantage) reason;
Recently there has been a big effort trying to push TSLA lower: many class action law suits, several downgrades, hedge fund managers' bearish talks......
For me, stay with fundamentals, I think Model 3 production issue will be solved soon; sell-driving development is on track. I wait for opportunity to add another percent.
For me, stay with fundamentals, I think Model 3 production issue will be solved soon; sell-driving development is on track. I wait for opportunity to add another percent.
This morning I added more around $318. The news said Tesla is cutting parts ordering from 5k to 3k, that news mislead lots of people. Tesla already has a lot of parts on hand. There is a decent chance we hit $700 before the end of 2018, and $1800 before the end of 2020.
Risk is high too because this is a capital intensive business. I believe the Tesla team can handle a few surprises.
Risk is high too because this is a capital intensive business. I believe the Tesla team can handle a few surprises.
Well, looking like I missed the bottom again. Too busy reading this forum, by the time I got to put in my buy limit order, the moment had passed. Funny thing is that I had an original buy limit order at 318 and change, which I converted to market yesterday. Just got new capital today and re-established that buy limit order... too late. Well, I’ll keep it active (and maybe move it around, depending how the SP & TAs look)... figure the FUDsters will spin things badly for ER and may get another chance at it.
Today I added some shares around $302.
This paragraph is from Tesla's Q3 conference call: "We continue to update our Autopilot software and recently made significant improvements to the Autosteer function. The Tesla AI team, which is fundamental to achieving full autonomy, strengthened dramatically this year, with a number of the world’s best AI engineers and researchers joining our company. We plan to continue building Tesla AI until it is one of the best teams in the world, not just in automotive, where Tesla is already the leader, but across all industries. This applies to both software and hardware."
Tesla wants to become a world leader in AI software and hardware. I think all signs show that Tesla has been developing AI chips, and they are using a new approach. This is the first time they officially acknowledged they want to become a leader in AI hardware. Pretty sure they are testing their first sample chips at this time. Seeing how they interrupted other industries, I think there is a high chance they will achieve their goal in the AI field. How to value a leading AI company? none of the traditional matrix matters.
If for whatever reason TSLA goes down another leg, I will add more at that time.
This paragraph is from Tesla's Q3 conference call: "We continue to update our Autopilot software and recently made significant improvements to the Autosteer function. The Tesla AI team, which is fundamental to achieving full autonomy, strengthened dramatically this year, with a number of the world’s best AI engineers and researchers joining our company. We plan to continue building Tesla AI until it is one of the best teams in the world, not just in automotive, where Tesla is already the leader, but across all industries. This applies to both software and hardware."
Tesla wants to become a world leader in AI software and hardware. I think all signs show that Tesla has been developing AI chips, and they are using a new approach. This is the first time they officially acknowledged they want to become a leader in AI hardware. Pretty sure they are testing their first sample chips at this time. Seeing how they interrupted other industries, I think there is a high chance they will achieve their goal in the AI field. How to value a leading AI company? none of the traditional matrix matters.
If for whatever reason TSLA goes down another leg, I will add more at that time.
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