Tesla Investor's General Macroeconomic / Market Discussion

[bdy0627]

they tried calling me but could not reach me. I had $7.2 million margin loan and they told me the amount was too large for them to wait
so they liquidated well over half of my position at a loss. sadly, I had bought even more stock just before the ER
I ended up liquidating all of my Tesla stock at the open today for a total loss of $5.3 million since all my buying before ER had pushed up my cost basis steeply.
I only have less than 10% of my original capital left. I lost over 90% of my total capital. I am shell shocked and have never ever taken these kind of huge losses before
I will stay on the sidelines and hope for a pullback to $280 before I can gather the courage to pull the trigger on TSLA again
let this be a cautionary tale for all those who go on margin
I will never go on margin ever again and maybe stay out of the stock market for the rest of the year

Thanks for being open about this and sharing it with us. That took a huge amount of courage. I feel awful for you. Best wishes for a return to safer investing in the not too distant future.

 

[TrendTrader007]

Thanks for being open about this and sharing it with us. That took a huge amount of courage. I feel awful for you. Best wishes for a return to safer investing in the not too distant future.

Thanks

 

[TrendTrader007]

TT007, I'm so so very sorry to hear this. I've been crushed for 60% of my portfolio, but never for a sum as large as this. I hope you're able to recover mentally as well as financially to rejoin us. Best wishes.

Thanks

TT007, I'm so so very sorry to hear this. I've been crushed for 60% of my portfolio, but never for a sum as large as this. I hope you're able to recover mentally as well as financially to rejoin us. Best wishes.

thanks

 

[TrendTrader007]

Very sorry to hear it. The good news, as I understand it, is that you are relatively young, smart, have a well-paying job and a woman who loves you. Nothing about this loss should stop you from being happy, healthy, and retiring as a multi-millionaire. I’m sure it pushes the date back a bit, but that isn’t important.

Best of luck!

Thanks

 

[TrendTrader007]

Man. This SUCKS. I'm sorry you have to go through this. I know, because I've been there.

I'm going to say a few things I learned from that experience. This is not necessarily directed at you, TrendTrader007. The inferno you're going through right now cannot be helped by some words on a message board. I don't claim that my experience matches anyone else's, either. However, it might, and maybe it will be of use to at least one person out there who wants to avoid a similar fate.

I learned two types of things: stuff about trading/investing/capital management, and stuff about myself. The former can be absorbed from books, lectures, and such. The latter... you kinda have to be there.

When one evaluates a set of trading choices, based on an underlying theory of the company, the stock, and the macro context, one visualizes the consequences of what could go wrong, and balances those against the imagined wins if things go right. When the mind is clear of emotion, that simulation is going to be as good as it's going to get for that particular trader given his level of skill. The outcomes over the long run will be primarily driven by the accuracy of the model of reality that the trader is capable to articulate.

Let's say you are him and you prove to be pretty astute, as confirmed by the market several times in a row. You guessed the price movements better than most for a while, putting a number of wins in your column. Let's further assume those wins are outsized. If you are like most people, the first thing that will happen is that you will experience a strong high. Simultaneously, the following will cross your mind:

1. "I really nailed this, more than once, which means I kinda know what I'm doing."

2. "To win big, one must risk big. I could take a third (or a quarter, or a half) of my latest gains and make these really big bets. If I lose, it won't matter; in fact, I'll still be ahead. But if I'm right one or two more times, a life-changing number will materialize on my account statement and I will cross over to the other side. I won't have to do this ever again."

3. Next, you run the simulation in your head as you always do. You compare the various scenarios, visualizing the potential losses against the possible gains. But a funny thing happens: the ocean of endorphins, or adrenaline, or dopamine, whatever, that flooded your senses after your recent wins are masking the pain that you are supposed to feel when you imagine the possible losses. At the same time, the imagined wins enhance your current high. You are not thinking clearly, just as people who've fallen hard in love are not thinking clearly. Desirable outcomes seem more likely and blissful than they really are, while undesirable ones seem less likely and less painful. This leads to making bad bets. It is the same process as that which underlies the behaviour of high-stakes compulsive gamblers.

Six months earlier, if you tried to imagine what it would be like to lose $100k, you would have said "Ouch! better sit this one out". Right now, however, that same imagined loss of $100k feels like "Meh. I'll still have all this other loot to play with". Moreover, the likelihood that you'll make $500k rather than lose $100k will seem so much higher than it should, because it has actually happened in the very recent past! It's very easy to imagine it will happen again; you can practically smell it.

In other words, you are on drugs. It doesn't matter how skilled you are or you proved to be in the past, because that skill is not what is driving your trades anymore. Soon, reality catches up with you.

The best thing to do after really big wins is nothing. You take a break for as long as it takes for your high to wear off. And I guarantee you, it should be longer than you think. A small number of people can handle certain drugs and function just fine, but for every one of them there are a hundred others who think they can, but actually can't. Margin and leverage are powerful but dangerous weapons having strong psychological impact on those who use them. Maintaining a clear mind is paramount, but doing so is much harder than it looks.

This will hurt like hell, possibly for months or even years. Hang in there. You can come back after this, but only after adopting a different kind of thinking than the one that led to failure in the first place. Stay strong and good luck.

Thanks

 

[TrendTrader007]

I don't understand this. You had said your average buy price was around $240-280 I believe. How could you have lost 90% of your capital when the stock never went below $295 on the latest dip?

I loaded up like crazy at $345 right before ER

 

[Waiting4M3]

I loaded up like crazy at $345 right before ER

I'm sorry you had to go through this TT. I hope you will rejoin us in TSLA at some not too distant future. Given the trajectory that many here see, even a conservative approach will give plenty happy returns for several years to come. There is no need to worry about missing the boat on TSLA, there are plenty coming. Jump back in when you're ready.

 

[pz1975]

I loaded up like crazy at $345 right before ER

Oh okay that makes sense now. I'm really sorry too for what you must be going through. As you always pointed out to us in your posts, it's only money and is just a game. I hope those sentiments remain for you at some level at least.

 

[BornToFly]

I'm sorry for the losses 007. I thought I was brilliant before the ER, selling a lot of naked Jan 19 Puts with SP ranging from 220 to 350. I figured that worse case scenario (being major stock market crash), I lose the money I made selling the calls, (possibly a little more,) or roll to 2020. What I didn't know was the huge amount of Margin I had to have to back those up, especially during the dip to 297. I had to sell 900 shares at a loss and transfer a lot of money from my savings account. I'm still ahead because of the money I made selling the Puts, but that still scared me and I have vowed to not do that again in the future. We all know the stock will be significantly higher than it is today in 2019 when Tesla is selling over 500,000 cars next year alone. The market is just waiting for the ramp to really take off before pouring money into the stock (rumors that production is up instantly drive up the SP, and news that it is delayed keep driving it down). We just need to find a way to be patient and hang in here so we can finally reap the rewards. OTM calls are just really dangerous right now, especially with expiration in the next 6 months, because we just can't trust Elon's timelines. There is no question in my mind that 007 would be UP 10 million if Tesla had managed 5k/week in December, or even March, as originally forecast by Elon. I hope i'm wrong, but I don't think we stay above 360 before August, or October if the ramp is pushed back again.

 

[Johann Koeber]

TT007

Very sorry to hear.
I admire your courage to let us know. I am sure not many would do that - thank you.
There is a very important lesson for us here. Many here admire you and your positive angle.

I wish you well. After stumbling it is time to get up and continue doing what you are good at. The setback just makes you better. Weep for one night (if you need to), learn quickly and be back in the game.

 

[UnknownSoldier]

I loaded up like crazy at $345 right before ER

If there's one thing I've ever learned from r/wallstreetbets, it's that playing earnings is the most dangerous game.

I'm sorry for your losses and hope you can recover quickly and get back in the game. We are all together in this game of trying to make money after all!

 

[DaveT]

I loaded up like crazy at $345 right before ER

I'm sorry to hear about your loss and forced margin call. That majorly sucks.

Curious though how the math works out to lose 90% of your capital. I know you say you loaded up at $345, but still I'd imagine you're cost basis was still around $300 or a bit higher. And you had mostly shares. So, not sure how 90% is gone... do you mean 90% from the peak in terms of value? Or 90% of your initial starting capital is gone?

 

[Jonathan Hewitt]

If there's one thing I've ever learned from r/wallstreetbets, it's that playing earnings is the most dangerous game.

Heck, you could've timetraveled from the future and given me the shareholder letter and a recording of the CC beforehand and I would have been a lot more aggressive going into earnings instead of more cautious and we all know how that would have turned out. We can all list several ERs where this would be true for most of us.

 

[Intl Professor]

It has been suggested by a venerable member of this forum that weakness in the economy is largely self-inflicted. Those who have any cognitive anxiety can get some relief in:

Come the Recession, Don’t Count on That Safety Net

Bottom line for government advice when the next recession hits: "get a job," a mild contradiction in terms but hypocrisy rules our times.

 

[Tslynk67]

That totally sucks TT007, I'm sorry to hear it and wish you the very best.

Can't see why the broker would screw-you-over so much when TSLA is on the cusp of greatness - just need some good M3 ramp news and it should be up-and-away. Mind you, it's do volatile, one never knows...

 

[bobinfla]

Just want to add my condolences TT007. Hope this turns out to be a bump in the road and you are able to overcome it in the not too distant future.

 

[NicoV]

So TT007 got wiped out by a mere 10% drop in share price? There’s only one party to blame for that, and it’s not his broker.

 

[Tenable]

So TT007 got wiped out by a mere 10% drop in share price? There’s only one party to blame for that, and it’s not his broker.

I feel terrible for him, but I don't think anyone on this forum saw data that would justify loading up prior to ER. Blind greed is a killer.

 

[NicoV]

I feel terrible for him, but I don't think anyone on this forum saw data that would justify loading up prior to ER. Blind greed is a killer.

Absolutely true. Been there, done that. Learned my lesson the hard way.

 

[sdtslafan]

So TT007 got wiped out by a mere 10% drop in share price? There’s only one party to blame for that, and it’s not his broker.

Yeah, Elon needs to get his act together.