The HODL mentality
You almost need a zen like mentality to be a long term investor in TSLA. There will be ups and downs.Try to not look at the stock price on a daily basis if you can. I
Brilliant stuff.
I wanted to add on to this particular piece. I understand the idea behind HODL (Hand On for Dear Life). However, I think it carries the wrong connotation, with that wrong connotation leading to why this can be hard, and why one needs a zen mentality to be a long term investor.
If you see the product, strategy, and execution of the company as I do, then you've got a 10+ year investment horizon. On that scale, these quarterly, monthly, weekly, daily, and hourly gyrations are truly irrelevant. Whether the share price today is 1200, 120, or 12,000 is really all the same (I readily admit that somewhere around 3,000 for me, that might no longer be the case
).
They only way they are different is if you think the product, strategy, and/or execution have changed for the worse (relative to the details of your own investment thesis).
So for instance, I don't care about this quarter's deliveries (or next quarter, or last quarter). I really don't, because a car that isn't delivered this quarter is delivered next quarter. The revenue and profit shows up now or later - I care about production. And I don't really care about production quarter to quarter - more at the annual level, and whether the year to year growth is tracking (i.e. - execution).
This is the distinction I make between Tesla (which I follow very closely) and TSLA (which I've begun following more closely this last 4 months or so, due to the option selling I've begun doing, but previously went weeks without knowing the share price). When following Tesla and holding TSLA shares, I care about how the company is executing and what they are doing, not the stock price.
With HODL, it sort of implies that you're watching the day to day (or weekly, monthly, quarterly) price changes, and it matters to you whether the shares are 1200, 1400, or 1700 today. In that case, you need fortification to hold on at 1200 because it's dropping and you could lose a lot. Similarly, at 1700, you need fortification because that's near the all time high and the shares could plummet, but with your HODL mentality, you're going to grit your teeth and ride it out. With buy and hold, it's all paper changes and if your horizon is long enough, they don't matter.
Either up or down, if you're HODLing then you're really operating on a short term mindset (MHO) and you're talking yourself into a long term mindset.
The only thing difficult for me about the drop under $200 last year, was that I wasn't sufficiently aware of it to buy more shares - not that the paper value of my shares had changed to the downside (any more than I care that this year, the paper value of my shares is .. more). I also readily admit that higher and higher shares prices is more fun (and still irrelevant).
My original investment in 2012 had a 10+ year investment horizon. It's 8 years later, and my investment horizon has been updated to be 10+ years. I say 10+ because somewhere out there it's impossible to guess what's going on. My REAL investment in the company is a reasonably strong belief that I'll own my TSLA shares until my wife and I pass from this world, and leave them to a worthy charity of our choice (sort of like Buffet and his Berkshire shares, if on a somewhat different order of magnitude
).
This by the way is also why I've begun learning about option selling - I need cash I can turn into food, shelter, clothing, and maybe a new Roadster in the meantime, and I REALLY don't want to sell the shares, whether they are 200, 1200, 2200, or maybe even 22,000.
