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Requests for advice (getting advice or not, either way it's your own responsibility)

Discussion in 'TSLA Investor Discussions' started by mikeschuld, Sep 24, 2013.

  1. mikeschuld

    mikeschuld Member

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    Advice / Thoughts on my current long position

    As stated in my title. I have some questions about my current long position and what some of you fellow Tesla investors think about my situation. I'll skip straight to the details:

    I am 28 years old.
    I currently invest 3% (the company match) of my pre tax income in our company IRA.
    I also invest about 14% of my post tax income in a separate self managed Roth IRA.

    All of the positions in my Roth account (other than a few things like TSLA that I buy for their own reasons) are buy and hold stocks with 3%-5% dividends that automatically reinvest.
    So far, this buy and hold with DRIPS has worked out very well for me and I don't plan on changing this strategy any time soon. Currently the account is floating at around $40.5K.

    On to my specific TSLA question:

    I bought 50 shares of TSLA at 20.75 in my Roth IRA as early as I could afford to after their IPO.
    My TSLA position is now up over 770% and is worth over $9k, which makes up a very significant portion of my Roth IRA (22.4% right now)

    My risk tolerance is fairly high based on the fact that I still have 35-40 years before retirement, but even with that I feel like having so much of my IRA sitting on one stock is a pretty bad idea.

    I obviously have a lot of possibilities to deal with the situation but wanted to get a few ideas from others in case I may have missed something or simply don't know about some things I could be doing.

    My current plan is to just sell the number of shares to make up the initial capital investment for the shares + fees ($1057.48, or about 6 shares) and re-balancing to other positions and leaving the rest of my TSLA in a long position, as I am fairly confident (like many of you) that Tesla is just getting started. Is there anything else I should be considering alongside this plan or in place of it that might be a better option for me in the long run?

    Thanks.
     
  2. Causalien

    Causalien Reaper of Trolls

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    Mike. $9k is nothing when compared with 30 years in time.
    When you get older. You probably earn that in 1 month. Just putting it in perspective for you.
     
  3. hershey101

    hershey101 Member

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    If you can take adv. of options in your self-managed acc't, I would use them as a leveraging tool for trading and compound your income. It takes a while to get good at options trading (I have been trading them since I was 14, and still have a lot to learn), but if you can then it will make a world of difference. I have been fairly conservative with my investments but was still able to use the leverage that options provide to get a 2000% return in ~5 months (although that sounds cool, I only started with $1500 so its not a lot of money :()
     
  4. mikeschuld

    mikeschuld Member

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    I am fully aware that the actual number is not very large, what I am asking about is more the % of my total account that this represents. Everything I know about investing (which is admittedly not a lot) tells me I should be keeping my account much more balanced than this. This is also why I am asking though, as there may be things more important at this stage than balance that I just don't know about.
     
  5. dha

    dha Member

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    My personal philosophy is that if you don't have a lot of eggs, go ahead and put them all in one basket. Especially if you believe in the company and have a reason for investing. You seem to have a long, long outlook and probably believe, like the rest of this board, that Tesla has a very bright future through the rest of this decade. It seems that you are able to tolerate some volatility in the short and medium term.

    Basically, don't diversify just because it's the common wisdom and you feel like you ought to. Thats my two cents, at least.
     
  6. Causalien

    Causalien Reaper of Trolls

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    It's just one way of thinking. Comparable to those who decide to join a startup vs a stable company like IBM.
    There are success stories in any type of investment style. So become unbound by what other people tell you, think about who you are and why you invest, decide what is your investment style and go for that.

    For example, a guy in a Startup might want to have a diversified portfolio because the Startup already represented enough risk and he has no time to manage money. Some other superman might be in a Startup AND do something that is against conventional wisdom in stock, because he is an adrenaline junkie. In both cases, there are those who fail and those who win.

    Probably for you, there hasn't been enough history in your life yet to know which style has earned you the most money so far. Cause that's the style that best suits you.
     
  7. ElSupreme

    ElSupreme Model S 03182

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    My rollover 401(k) I imagine has the same sort of 'balance' problem as yours does too. It is my high risk retirement account, as I also have RothIRA, Roth401(k), and a regular 401(k).

    Unless you can make your retirement goal by just growth (not contributions), and your risk tolerance is still high, don't worry about your 'balance' much right now. Just concentrate on yield, and risk.
     
  8. ggr

    ggr Roadster R80 537, SigS P85 29

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    I agree with this. You didn't cause the imbalance, Tesla did! And for all the right reasons. Over time, invest new contributions in a balanced way (possibly including some in Tesla), but let the current imbalance run.
     
  9. ongba

    ongba Member

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    +1. A lot of financially successful people, when interviewed, state that they made the majority of their wealth in 1 stock or business. With investing, this has been proven time and time again, with stocks such as MSFT, intc, aapl, dell, Cisco, and IBM. Of course, there are many failures as well (pets.com, jdsu, mci world com). The caveat is you must be sure to do your homework and invest in the right company, but I agree with the adage "concentrate your money in order to create wealth, then diversify in order to protect it".
     
  10. DaveT

    DaveT Searcher of green pastures

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    Here's my two cents.

    There are a lot of different approaches to investing, but I think in your case there are only two that are probably relevant to you right now:
    1. Diversified, slow-growth investing.
    2. Focused, fast-growth investing.

    It seems like you're following #1 and that's fine especially if you don't have the time and skills to evaluate individual companies on your own. However, you've run into a fast-growth company like TSLA and you see its potential but you're trying to fit in in the #1 box. This means you'll need to trim your TSLA position (as it's overweight currently). But by doing so, you'll likely going to miss out on a lot of gain if/when TSLA continues to grow.

    I would consider separating your investment portfolio approach between diversified (slow-growth) and growth-investing (fast growth).

    Since you're young if you're able to find a fast-growth company that you're very comfortable with understanding it's market, business model, and management, then I would put the majority of your money into this company (or companies). But the key is that you need to be comfortable and confident with understanding the company, market and business model. If this is the case for TSLA and you are very bullish on the future, then you'd be wise to put a very large % of your money into TSLA as a growth investment and hold for a very long time.

    Now for the diversified (slow-growth) part of your portfolio, if there aren't any growth investment opportunities that you're really comfortable with then this is a decent, sound strategy to grow assets albeit more slowly than growth investing (but growth investing can be difficult and risky).

    I think it all depends how confident you are with TSLA's growth prospects. If you are very bullish, then rather than trimming your TSLA position you should be adding.

    For some resources, videos, books on growth investing, check out Growth investment videos, books, resources, and insights
     
  11. sleepyhead

    sleepyhead Active Member

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    Mike, let me just say that I am a little older than you and have a little more money in my 401(k) and I have 70% of my 401(k) invested in one stock CSIQ.

    You are too young to be investing in dividend paying companies. I would look at putting 100% of your money in TSLA. Your $40k will most likely turn into $400k in 10 years. Your dividend stocks at best will turn $40k into $100k.

    Even if TSLA goes bankrupt and you lose that $40k it will not put a big dent into your retirement planning. On the other hand $400k will make a big difference.
     
  12. sleepyhead

    sleepyhead Active Member

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    Mike - I also started with a lot less money at the beginning of the year in my 401(k) than you have now, and now I have a lot more than you (this is a long only, no options, no shorting, no margin account). If we hit a recession next year then you will probably have more money than me with this strategy though. So there is a lot of risk, but if you can spot the recession coming in advance (very hard to do) then you can still cash out with minimal losses.

    I am not bragging here, just trying to show you the power of focused investing that DaveT has been talking about.

    It is not for everyone and I am not saying that you should do this, but do your research on this topic and especially on TSLA. Instead of diversifying away from TSLA I would rather have you do a lot of research on Tesla and then decide whether 22% of your portfolio is too much TSLA. You might be surprised with your findings and decide that 22% of TSLA is nowhere near enough exposure. TMC is a great place to learn about the company.

    Risk is relative. I believe that there is a lot less risk in investing 100% of your money in TSLA than it is to invest in the S&P 500 index (perfect diversification of US stocks) for a 10-year period. But that is just my personal opinion and a lot of people would disagree with me.
     
  13. mikeschuld

    mikeschuld Member

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    It's interesting that you mention this, because the company I am in actually was still considered a startup until very recently (we really just entered profitability not too long ago.) I definitely don't consider myself a superman or adrenaline junkie though.
     
  14. Sunnyday

    Sunnyday Member

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    Excellent advice on this board. At 28, now's the time to increase your exposure with great companies with high growth prospects. Investing is all about managing risk/reward. The more research you do, the more you can mitigate the risk and maximize the upside. Invest in high-growth companies that target markets positioned to grow dramatically, where that growth will be propelled for many years to come by multiple converging forces for which the direction of change can be predicted with a high level of confidence. Choose visionary management teams who have a proven ability to execute. Vision without execution is folly, but vision + execution is golden. Listen to the earnings conference calls, because you'll learn more there than in the press releases and press stories. Good luck!
     
  15. Causalien

    Causalien Reaper of Trolls

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    People in Startup tend to gravitate towards each other. It's Karma. I had a hunch that you might be in one so used my friend's situation as an example. If you are in a Startup, chances are that when important moves happen in stocks, you are stuck in a meeting and presenting to investors that you can't get out of. The other problem is, your compensation is mostly in stock, so you are already in a situation where it's either sink or swim. Only certain people can face sink or swim situations in two fronts at once. Elon being one of them.
     
  16. NigelM

    NigelM Recovering Member

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    #16 NigelM, Feb 25, 2014
    Last edited: Feb 25, 2014
    Mod Note: This thread was started as a place for folks to posts requests for investing advice. It should be noted that some members may not feel comfortable giving advice based on limited facts and even long-term members may not have an appropriate background in advising others on financial decisions. Whether you receive an answer or not and/or if in doubt, assume that you are completely and fully responsible for your own investment decisions.

    Finally, a reminder of our disclaimer:

     
  17. callnaveen

    callnaveen Member

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    Hello Experts,

    Right now I am holding few June 220 calls and Sep 225 calls, what is the best option to do with these? Is it better to sell these deep in money calls and buy new calls with $250 or $260 or is it better to hold these with out selling?

    I really appreciate your suggestion.
     
  18. Julian Cox

    Julian Cox Banned

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    I cannot comment on the technicalities of options or the personal value you place on locking in gains.

    What I can say is this. Following the gigafactory announcement and the announcement of the funding for it (the latter I strongly suspect is actually happening in the background of today's action in terms of institutional book building and will go through without a flutter in the markets) Tesla will be a much more substantial company with completely revised execution risk profile.

    In other words a new chapter of a story stock with better reasons to continue upward momentum.

    That is a long way of saying that the June and September price of the stock will be higher and not lower than it is at present.
     
  19. ChrisH

    ChrisH Member

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    So I'm a very small time investor compared to most (if not everyone else) on this site but I'm hoping to get some opinions on potential moves to make. I only have 25 shares and I bought in at about $91/share.

    I guess my options here are keep them all and continue to ride this out, sell half and make a small profit, or sell all and take a slightly larger profit.

    My dad's financial guy is suggesting that I sell half or put a stop loss order on for $215/share. I guess my thought is that I keep a close enough eye on the stock that I will notice if it rapidly drops below something like 200-215 so that order may be a waste of commission dollars. But I guess I can't decide if I should take a small profit or keep riding.

    Thoughts?

    Thanks in advance.
     
  20. hobbes

    hobbes Active Member

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    Chris, I think everyone investing in stocks has had just that thought going through his head. I am definitely not very experienced compared to other people here. But what I have learned is that I don´t have a chance of timing the market right. Because I am convinced that Tesla will continue doing very well on the long run, I just keep my shares and save myself a lot of stress.
     

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