Dave, it might also be good to learn about the thought process of morons such as myself. I drank the Kool Aid back in 2013 yet, at the start of the recent TSLA runup, only had a relatively small position while sitting on over 400k in uninvested cash. I'd like to understand why I had the conviction but failed to deploy.
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Talking with 50-100x TSLA investors...
- Thread starter DaveT
- Start date
Like many here, I'm more a 15x investor. But it would be great to hear the experiences of those especially from around the IPO. Was it easy to weather the ups and downs in the $100-$200 pre-split range because you were already way in-the-money? Were there any times when you almost lost your conviction? At what times did you add to your position and why?
adiggs
Well-Known Member
I've been in since $5.47 (post-split). That particular account hasn't had any new TSLA shares added, so I do actually have a position that show >10,800% gain. It's actually becoming a thing for my wife and I to not add any shares in that account, because seeing that % gain is fun for us
. In my investment horizon, seeing that turn into a 100,000% gain isn't off the table.For me at least, it's been easy to weather all of the ups and downs along the way. And there have been a lot, such as the window you mention (though that window mostly came and went very quickly; it was the 180-280 trading range it seemed like we were in forever).
It's been easy for me, specifically because my investment horizon was 10+ years back in 2012, and it's been updated to be 10+ years now as 2021 dawns. Actually, my expectation is that I'll go to my grave having willed those shares to a charity, and that (I hope) is more like 4 decades (or more!) away. I also realize that I can't have reasonable line of sight further out than 10+ years, so that's as far out as I ever have an investment horizon.
On a 10+ year investment horizon, with an expectation of a 5 to 10x increase over that decade, the price today becomes irrelevant. Whether today's price was $200, $600, or $1000; for a long term buy and hold investor, they are equally irrelevant. Except maybe for those with cash who add shares at such a drastic sell off as $200 ($1000 pre-split; a huge price just a year ago).
With the very long term investment horizon, it has continued to be easy to never question my conviction. Actually, the long term investment horizon plus my shift to an income + growth mindset, selling options has (perversely?) made it easy for me to continue with this viewpoint of long term buy and hold. I have "enough" shares, and with the ability to generate an income from the positions, I am able to replace job income and continue holding.
It's also been easy to continue holding through big ups and downs, as I still remember people in that original 30 to 180 run that sold at 60 or 90; lock in gains, with the plan to buy back in later. Some of those never bought back in (too expensive) and some did buy back in after missing out on $30 gains or more. Going through that has made it easy to learn from their example, and is actually my biggest source of worry -- I get out at a local peak, that turns out to be a stopping point on a 5x + gain journey.
And no HODLing required. HODL to me sounds like something a short term investor does when they decide they should hold shares for a long term. They are watching the daily price gyrations when they're irrelevant to the long term. And those daily gyrations lead to elation and despair, causing them to think about whether to continue holding or not (and thus HODLing, where they keep talking themselves into continuing to hold). Mere buy and hold does the trick.
We have added to the position along the way. We first added at 160, when the shares were busy falling from 180 to 130. Really caught a falling knife there
. It was admittedly a much more fun position later when the shares were over $200.I think the rest of our additions were in the 300s; roughly 320 to 350 at varying times (we went up and down through that range a lot, so lots of opportunities to get in around there). I think our overall cost basis, in total, is about 7-10% from the original position, and 90%+ positions added since. The later positions are roughly 2/3rds as many shares as the original.
The reason why for each acquisition - 10+ year investment horizon, 10x + gains expected, and not yet "enough" shares so we were still in growth mode and there was no alternative investment that looked equal, much less better.
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@adiggs, it's interesting that you say that you never waivered in your conviction. To be honest, I almost wavered on the pedo tweet. It took me a day or so to process whether Musk was going the way of Howard Hughes and to contemplate a Tesla without Musk. This psychological pressure was there because I had invested what I considered to be a very substantial sum. I have always wondered what somebody who was already looking at 5x or more would think about that. Would they feel the pressure?
The 10-year "event horizon" is a conundrum of investing in growth for the long term. It is most likely true. But on the other hand, at these growth rates, most of the current price in a discounted cash-flow model is determined by what is expected to happen in year 10+.
The 10-year "event horizon" is a conundrum of investing in growth for the long term. It is most likely true. But on the other hand, at these growth rates, most of the current price in a discounted cash-flow model is determined by what is expected to happen in year 10+.
I've returned over 80x my initial investment, but that was only $24k, because I'm poor and didn't have any investment savings before.
wait, maybe i didn’t.
100% = 1. So 800% would be 8x.
I'm a lousy investor. I buy high and sell low. Not intentionally. Unlike some folks, I cannot predict when it's at a high and when it's at a low. That's why my "real" investments are conservative low-cost mutual funds that pay dividends and interest. TSLA has been a wild exception for me. I didn't buy it with any expectations of making money. I bought it because I loved my Roadster. Then I bought some SCTY and some Solar Bonds because I wanted to support green energy. Then my SCTY shares became some more TSLA shares.
I don't trade my shares. I bought in back around $35. Foolishly sold about 1/3 (the shares that came from the SCTY conversion) at $1,610 because that just seemed so wildly overpriced, which proved that I don't know beans about investing. And now I'm back to just sitting on the rest.
Xepa777
Banned
Your old "should I sell all my shares" thread just got bumped today to haunt you bro lol.
I saw that, and replied there. Short version: I sold 1/3 of my shares at half the current price, but I still have 2/3 and the compensation for having sold low is that Tesla is succeeding and building electric cars hand over fist. (Odd expression, that!)
I'm up about 120x today at $622. Purchased the bulk of my shares at ~5 post-split.
Originally was going to buy two Model S sedans. After touring the Fremont factory prior to the release of the S, we decided to cancel the reservations and put the reservation money plus more (but in total, less than 100K) into TSLA. Been holding since.
It has been interesting, to say the least. Still don't own a Tesla.
Originally was going to buy two Model S sedans. After touring the Fremont factory prior to the release of the S, we decided to cancel the reservations and put the reservation money plus more (but in total, less than 100K) into TSLA. Been holding since.
It has been interesting, to say the least. Still don't own a Tesla.
If helpful, feel free to add me to the list of someone open to private interview. I definitely don't meet the criteria of a person who put in 100k, but I definitely got 100X of my initial investment (and bought more along the way). Here are some salient points about me/my TSLA investment if the perspective is needed.
1) To start, I wouldn't classify myself as an "investor." Or at least not a skilled one. I was (am) a buy and hold guy, who initially cobbled together money and put it into mutual funds, trying to save money for retirement. Had a big belief in environmental causes, and made a number of small (and generally losing) investments into some Env funds, as well as some solar companies directly (one of the reasons I stayed away from Solar City -- I was so snake bitten on solar by that point).
2) When the ~2008 downturn hit, I decided to invest all the cash I had (though limited) for the eventual recovery, and put them into individual stocks (I had only dabbled in individual stocks before). Divided among AAPL (good choice), GE and C (bad choice). While I did some "research" (Kiplinger's, on-line, etc.) ironically, only AAPL was my "kick the tires" investment. GE and C I thought were bellwethers for the economy and would bounce back. And that GE even had wind divisions, etc. AAPL, I just knew I liked the product, it was a singular CEO, etc. Was late to the party on AAPL, but that's what set me up for TSLA later.
3) I made my first batch of investments into TSLA circa 2012/13. My initial buy-in share price ranged from 27 to 32 (pre-split, obviously). I bought in a couple of tranches, as cash became available. I never sold anything else to move into TSLA. It was just cash as became available. This was my second "kick the tires" investment. The Model S wasn't released yet, but the Roadster, the Mission, the CEO, etc. I *believed.* And aspired to own the car. Shortly thereafter, I also discovered this board. Where I generally still remain a lurker.
4) At some point the stock ran to 90 (pre split). This was basically a quick 3X. Not what I was expecting, and wondered if I should sell. No plan. Just because -- hey it tripled. A wise person on here (luvb2b?) gave some great advise and I held.
5) I've bought more shares along the way. Cost-averaged UP?... Every time I would run the numbers, and try to figure out a way to buy an S (and then later, easier way to buy the 3), I would always decide NOT to buy the car, but instead buy more stock.
6) I must have been vocal about Tesla/TSLA because everyone knew I had it. I've had SOOO many people advise me to sell along the way. From my wife (who had a co-worker, whose husband allegedly had inside knowledge on Tesla and kept saying it was a sham) to my sister (who works at a broker and reached out during one of the f*re FUD times). To another big investor I knew, to friends, Etc. "Take the profits."
7) I actually did sell some shares ONE time (but later bought them back). I outsmarted myself. Thought I had recognized a pattern. It was when would would run up to 280 (pre-split), and then drop down. And then repeat. I feel like that happened 3x. So the fourth time, I sold a quarter of my position at 260, figuring I would buy back more shares when it dropped lower. But then it broke through the resistance and went up into the 300's. I was kicking myself. But, eventually (maybe a year later), the stock dropped back to 260, I had kept the cash on hand, and bought those shares back. I have been buy and hold ever since. (fyi -- did the same thing with AAPL. Thought I had figured out the pattern, sold at the same time, bought back where I had sold a year later.)
8) I've dabbled in calls, but never play them right. I always sell out too soon. My biggest mistake: I bought a Jan 2021 415 (presplit) Leap circa Oct 2019. I sold out about a year ago for an 8k gain. Obviously, would have been worth a TON more now, had I held.
9) Through the years, I've slowly rotated out of my other positions (sold the mutual funds, etc) through the years and am basically now 80% TSLA, 20% AAPL. I plan on holding onto TSLA at least until 2030, unless facts change or needs change.
10) My biggest regret is not buying more, of course. Specifically, during the pandemic drop, and a year earlier, when it dropped to 137 (pre-split, going by memory) because of the bad press, the talk about closing stores, then opening them again, etc. While those events didn't scare me into selling, particular when the stores were closing, I was concerned about what was going on.
11) Along the way, I feel I've become a different type of investor, and I will be curious to see myself, how I apply investing to other companies (when that time comes). I feel I learned a TON about Tesla along the way, and that I learned a ton *from* TSLA... and this board! (in fact, I regret not spending more time here, or I would have made more money, particularly during the dark days.
I don't know if my experience is much different than anyone else's, but I appreciate all you do Dave, and happily share, in case of any value.
1) To start, I wouldn't classify myself as an "investor." Or at least not a skilled one. I was (am) a buy and hold guy, who initially cobbled together money and put it into mutual funds, trying to save money for retirement. Had a big belief in environmental causes, and made a number of small (and generally losing) investments into some Env funds, as well as some solar companies directly (one of the reasons I stayed away from Solar City -- I was so snake bitten on solar by that point).
2) When the ~2008 downturn hit, I decided to invest all the cash I had (though limited) for the eventual recovery, and put them into individual stocks (I had only dabbled in individual stocks before). Divided among AAPL (good choice), GE and C (bad choice). While I did some "research" (Kiplinger's, on-line, etc.) ironically, only AAPL was my "kick the tires" investment. GE and C I thought were bellwethers for the economy and would bounce back. And that GE even had wind divisions, etc. AAPL, I just knew I liked the product, it was a singular CEO, etc. Was late to the party on AAPL, but that's what set me up for TSLA later.
3) I made my first batch of investments into TSLA circa 2012/13. My initial buy-in share price ranged from 27 to 32 (pre-split, obviously). I bought in a couple of tranches, as cash became available. I never sold anything else to move into TSLA. It was just cash as became available. This was my second "kick the tires" investment. The Model S wasn't released yet, but the Roadster, the Mission, the CEO, etc. I *believed.* And aspired to own the car. Shortly thereafter, I also discovered this board. Where I generally still remain a lurker.
4) At some point the stock ran to 90 (pre split). This was basically a quick 3X. Not what I was expecting, and wondered if I should sell. No plan. Just because -- hey it tripled. A wise person on here (luvb2b?) gave some great advise and I held.
5) I've bought more shares along the way. Cost-averaged UP?... Every time I would run the numbers, and try to figure out a way to buy an S (and then later, easier way to buy the 3), I would always decide NOT to buy the car, but instead buy more stock.
6) I must have been vocal about Tesla/TSLA because everyone knew I had it. I've had SOOO many people advise me to sell along the way. From my wife (who had a co-worker, whose husband allegedly had inside knowledge on Tesla and kept saying it was a sham) to my sister (who works at a broker and reached out during one of the f*re FUD times). To another big investor I knew, to friends, Etc. "Take the profits."
7) I actually did sell some shares ONE time (but later bought them back). I outsmarted myself. Thought I had recognized a pattern. It was when would would run up to 280 (pre-split), and then drop down. And then repeat. I feel like that happened 3x. So the fourth time, I sold a quarter of my position at 260, figuring I would buy back more shares when it dropped lower. But then it broke through the resistance and went up into the 300's. I was kicking myself. But, eventually (maybe a year later), the stock dropped back to 260, I had kept the cash on hand, and bought those shares back. I have been buy and hold ever since. (fyi -- did the same thing with AAPL. Thought I had figured out the pattern, sold at the same time, bought back where I had sold a year later.)
8) I've dabbled in calls, but never play them right. I always sell out too soon. My biggest mistake: I bought a Jan 2021 415 (presplit) Leap circa Oct 2019. I sold out about a year ago for an 8k gain. Obviously, would have been worth a TON more now, had I held.
9) Through the years, I've slowly rotated out of my other positions (sold the mutual funds, etc) through the years and am basically now 80% TSLA, 20% AAPL. I plan on holding onto TSLA at least until 2030, unless facts change or needs change.
10) My biggest regret is not buying more, of course. Specifically, during the pandemic drop, and a year earlier, when it dropped to 137 (pre-split, going by memory) because of the bad press, the talk about closing stores, then opening them again, etc. While those events didn't scare me into selling, particular when the stores were closing, I was concerned about what was going on.
11) Along the way, I feel I've become a different type of investor, and I will be curious to see myself, how I apply investing to other companies (when that time comes). I feel I learned a TON about Tesla along the way, and that I learned a ton *from* TSLA... and this board! (in fact, I regret not spending more time here, or I would have made more money, particularly during the dark days.
I don't know if my experience is much different than anyone else's, but I appreciate all you do Dave, and happily share, in case of any value.
adiggs
Well-Known Member
I've been thinking about why it's been so easy for me to hold through the ups and downs.
The first reason, on the ups, is that unless an up is 10x in a short period, then it's as irrelevant as a down in the context of a long term buy and hold with a 10+ year investment horizon. In a really short time period though (like might happen with the inclusion event), then that might trigger a sell / buy at lower price scenario.
I'm so allergic, as is my wife, to selling even a single share though, I doubt we'd do such a thing. (Probably sell some covered calls though at that relatively high share price!)
On the down movements, part of what's made that easy to hold through is owning and driving a Tesla on a daily basis. On a big down move - such as the 350 to 170 move of a year or two back (was it really that recently?) - the investment thesis never changed, and any wavering in the commitment beyond that was easily resolved by getting in and driving the car on a daily basis (I was mostly obvious to the share price, as I have usually been until this summer).
My original investment thesis started with the observation that the product mattered. And this product is so different and better than anything else, just wow. We're starting to see "competition", which just means that we're seeing stuff that might provide serious market competition with 2010 Roadsters or 2012 Model S's, but are so far behind today. On the plus side for that competition, at least they're in the arena now and ONLY 8-10 years behind. Unlike the ICE vehicular world / dinosaur, that hasn't yet figured out it's been shot and is dying.
Product matters, and driving it on a daily basis for 8 years now reinforces that idea. Making it easy (for me) to hold through the downs.
I'm not sure which is harder to hold though. The downs are worrying, at least for some. The problem with the ups is that they tempt some into violating their long term thesis, and selling early. I think it might be the ups that are harder to hold through - that siren call of locking in gains sure does sound reasonable. And it might be the biggest wealth destroyer.
(All in the TSLA context - other companies, a big move down might indicate the investment thesis has broken. I don't have opinions on non_Tesla companies, as I haven't been researching any other company for 8 years).
Sometimes those traders (frequent or occasional) can get back in at a lower price and gain a few shares. But sometimes they're selling into a 6x rally. That's probably my biggest worry, and why I have never done anything with any of the shares (until this summer and CC- but now I'm retiring, and I have new needs).
Regarding the 10+ year comment. You might be right that the long term value is really in year 10. I don't have that strong of an opinion one way or the other on that.
My financial analysis of the company is good enough for me though, to see my way clear to how that value can be realized earlier. Over and above all of the possibilities, there has to be some conversion of possibilities into revenue, and from revenue to cash flow and income.
What I've been thinking about is what Tesla financial looks like at some point down the line when it's generating 1T revenue per year. Our friend Ron Baron thinks that's the run rate by 2030 (easy to see why he's holding).
As the company has grown, it seems pretty obvious that we're starting to see the leverage flowing into the quarterly earnings. By leverage, I mean the conversion of revenue into cash flow and income. The revenue doubles, the material cost rises roughly linearly with the units (no particular leverage - some but not huge), but SG&A might be up 10% or 25% on 100% revenue growth. R&D might also grow at less than the revenue rate, further increasing leverage.
To make up a number I think is directionally accurate - if income is 10% of revenue, then we're looking at $100B annual income by 2030. That looks like $100 earnings per share (1B share assumption). Throw in a 100P/E (seems reasonable for a high growth company, where high growth is more like 20/30%?), and you've got a $10k share price. THAT is a train I want to stay on, not get out of the way of!
This isn't my specific forecast - it's just directional for what I see coming. If I don't need to sell the shares for a big purchase, what other reason would there be for selling? The only other reason I've been able to think of (retirement / living expenses)- I now have an answer for in the form of selling options on TSLA.
Long post - sorry about that. Even now that my TSLA holding are valued at over $1M, I find that I've never had any trouble holding. Even though its >50% of portfolio, and the primary basis for not needing a paycheck any longer. What HAS been a source of great angst is buying options around this inclusion event. I'm still in the running to earn a year or 2 of living expenses in a month or 2, but I'm not sure that it's been worth it. The time, energy, and angst it's created - not good.
When to sell and what to buy in this inclusion event have been FAR more strenuous for me, than the time/energy/angst from all the shares accumulated along the way.
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