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seeking advice

Discussion in 'TSLA Investor Discussions' started by clmason, Jul 10, 2013.

  1. clmason

    clmason Member

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    Hi All,

    I'm looking for advice from the experts on board.

    Do any of you have suggestions on how to invest pre-and-post Q2 announcement? If you had a nice round $100K on the sidelines, how would you deploy it over the next 6 months?


    Appreciate your thoughts. Thanks!
     
  2. DaveT

    DaveT Searcher of green pastures

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    Can you clarify a few questions?
    1. How "disposable" is the $100k? (ie., do you have other savings, etc)
    2. Do you want to be invested in Tesla long-term?
    3. Are you open to higher risk/reward with options? Or do you prefer lower risk/reward with just stock?
    4. Is the money in a tax-deferred retirement account? Or a regular account?
     
  3. blakegallagher

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    If I was not in at all I would probably either buy 50k now in shares or 25k now and 25k after announcement if you are unsure about announcement. I would then keep other cash handy to buy long or short term calls on big dips. I am leaning more towards Dec options now after I got burned on some short term options .... that being said over the past year options 6 months out have been a Golden Goose. I have stopped expecting a giant pullback but if there is one I think Dec options give you plenty of time to recover. The stock for me is the easiest play ... 1-2 years from now it wont much matter if you bought it at 100 , 110 or 130 .... when its sitting at 250 all of those entry points looks great.



    P.S. If you look at my results I might be considered an expert if you look at my decisions I am very amateur :) TSLA has been a great place to learn stocks/options. April 2012 was my first entry into the stock market but there is my 2 cents... Goodluck !
     
  4. clmason

    clmason Member

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    Dave,
    Let me provide more info. I invested at average cost of $24/share, sold 1/4 of of holdings during the run up and pulled out my cost basis. Now i'm convinced and ready to triple down...
    1) Assume the $100K is very disposable, if Tesla goes to zero i'm fine.
    2) Yes, long term, I have been a proponent since the Roadster and believe Tesla is going to $50B market cap.
    3) Yes, I'm open to options. I setup the account with my broker for full access to all kinds of trades. To date i have not bought/sold any.
    4) Money is in a regular investment account.
     
  5. DaveT

    DaveT Searcher of green pastures

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    A couple more questions:
    5) Are you in a low, mid, or high income tax bracket? (for short-term capital gains tax implications)
    6) Are you willing to use margin on your $100k as well? Or not?
     
  6. clmason

    clmason Member

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    5) As a married couple we are in the middle bracket
    6) Yes, but not certain I understand the implications. I thought my trading power is a function of my overall account value?
     
  7. DaveT

    DaveT Searcher of green pastures

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    Yeah I was just trying to gauge if you're open to using margin or not. Some are and others aren't.

    I'll defer to others for now as I think about this one.
     
  8. surfside

    surfside Member

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    given you were obviously following tesla from early on, i'm curious as to why you are "convinced" now (e.g. why did you sell on the way up; why invest $100k now and not some of that money before).

    surfside
     
  9. sleepyhead

    sleepyhead Active Member

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    Here is a semi-safe strategy that you might consider since you expect the stock to double in a couple of years:

    Buy $100,000 worth of shares that you will hold as your core investment. Then on every 10% dip buy some mid/long term options using margin. If the dip continues to 20% then buy some more options but this time shorter term options 1-3 months (this is trying to catch a falling knife so it is very risky part, so don't spend too much money here).

    Be cognizant of the fact that if we hit a recession then the stock can easily go down 50% or even more. That is the major risk I see in this strategy. In the short run though the bull market is in its early stages and will continue for at least another year (based on Today's data).
     
  10. clmason

    clmason Member

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    #10 clmason, Jul 10, 2013
    Last edited: Jul 10, 2013
    I believed the post q1 run up was a squeeze an that price would quickly come back to earth. I sold hoping to buy back in on the correction. Too greedy maybe. My plans were ruined when Musk raised cash at 92, effectively turning the squeeze into a bull run.

    Here I am sitting on my original investment and then some. Been waiting for a correction only to see prices climb.

    As my personal inflection point/why I'm convinced... Production numbers are high enough to prove to me they are scaling to large quantities. That was my big fear, that the factory would not come online in volume. More units in one quarter than the entire roadster program...
     
  11. DaveT

    DaveT Searcher of green pastures

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    The safest option to invest in TSLA would be to buy stock. If you ending up choosing this option, then the next question is when (which is a much more difficult question because exact timing is so hard).

    To add some moderate risk/reward then you can buy January 2015 options (LEAPs). I'd consider something out-of-the-money about $20-30. If you want more risk/reward, you can go further out of the money like $40-50 over current stock price. If you want less risk/reward, then you can go closer to the current stock price or buy in-the-money LEAPs (strike price lower than current stock price).

    To add significant risk/reward, you can buy short to medium term options (like Sept 13 or Jan 14). The shorter the term, the more risk and the more involvement it will take from you to be confident about the timing because you won't have a big margin of safety. The longer the term, you have a bigger margin of safety to reach your price targets. However, whatever gains you realize will be taxed as short-term capital gains (ie., income tax rate) unless you manage to exercise the options.

    I like sleepyhead's suggestion because it balances the low risk position of $100k stock and yet weaves in the potential of reaping some of the risk/rewards from LEAPs/options (via using margin).

    Another question (and you don't need to answer this if you're not comfortable) is how big is your current stock position? Is it more than $100k? The reason I'm asking is if your current position is significant enough then you might not need an additional core position of stock, but rather could use the $100k directly into LEAPs. And if you choose, you could even buy more LEAPs/options with margin later on dips as well.
     
  12. Convert2013

    Convert2013 Member

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    I have decided to not give anyone investment advice. I don't do options, etc.. rather look out for news and indicators that may signal action on my part to sell (I did that for Apple) in case I need to. Production volume as you mentioned is THE key indicator I've been sniffing for as well.. so far all indications are they are higher than last quarter so I'm smiling for now :).
     
  13. EV2BFREE

    EV2BFREE Member

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    Personally I am holding some options into the earnings call. A blowout and I will profit handsomely. If the stock dips after the ER I will have cash on standby to pickup as many shares as I can. Good luck to you.
     
  14. clmason

    clmason Member

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    Thanks for the ideas everyone.

    I did make a move today with options. I sold Jan '15 Puts to cover the cost of Aug '13 Calls. It cost me nothing out of pocket and if we have good news this quarter i'll have some exposure. If we have bad news no loss and i'll be buying stock on the dip.

    Anyone else who wants to chime in, i'm all ears!

    Thanks
     
  15. Mitthrawnuruodo

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    This is close to what I am doing. I have such little experience I won't give "advice" But I am going to buy a 5 to 1 August Call/Put Spread ( I think that's describing it accurately) That way if earnings is simply neutral (no way they will miss estimates) and the stock does a large correction/sell off my puts should keep my loss pretty low, then I will buy up the stock on the dip like I have nothing else to spend money towards. I don't like weekly calls its a little too scary for me.
     

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