Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[traxila]

In all fairness, I am having a hard time wrapping my head around the gains involved here.

How does one preserve huge returns on skyrocketing shares? Buying puts sounds like burning money.

I am looking at a 37% or so tax rate on anything I sell, and the unrealized gains are huge. In many of the instruments I own, the gains would be 95% or greater of the overall sale proceeds.

I am not complaining here.

Does anyone have recommendations on how to go about protecting profits without actually liquidating? Is the only way to become someone that does not absolutely suck at the timing needed to both buy and sell puts at the right time?

To be clear, I am not interested in selling and see TSLA at 10,000 or so in five to ten years, if not next Tuesday.

Any input greatly appreciated. Thanks to all and congrats!

 

[Tslynk67]

Ditto. And NOT by "buying the dip and HODLing"

11x holding (4,5 years), 230x trading (11 months)

 

[astrotoy]

In all fairness, I am having a hard time wrapping my head around the gains involved here.

How does one preserve huge returns on skyrocketing shares? Buying puts sounds like burning money.

I am looking at a 37% or so tax rate on anything I sell, and the unrealized gains are huge. In many of the instruments I own, the gains would be 95% or greater of the overall sale proceeds.

I am not complaining here.

Does anyone have recommendations on how to go about protecting profits without actually liquidating? Is the only way to become someone that does not absolutely suck at the timing needed to both buy and sell puts at the right time?

To be clear, I am not interested in selling and see TSLA at 10,000 or so in five to ten years, if not next Tuesday.

Any input greatly appreciated. Thanks to all and congrats!

What wealthy people do (I think Elon does) is borrow to live on with your stock as collateral on the loan. The interest costs (particularly now) are very low, and you continue to roll over the debt. Definitely a good strategy if your gains are short term, since you can wait to pay off the loans until they become long term. Some just keep on borrowing and not repay the loan, as long as the interest cost is lower than than growth in the asset and you are providing sufficient collateral for the loan.

 

[traxila]

11x holding (4,5 years), 230x trading (11 months)

Definitely something to brag about on the trading part. Not a decamillionaire yet? Sounds like you cannot possibly be far off.

 

[M|S|M MYP]

In all fairness, I am having a hard time wrapping my head around the gains involved here.

How does one preserve huge returns on skyrocketing shares? Buying puts sounds like burning money.

I am looking at a 37% or so tax rate on anything I sell, and the unrealized gains are huge. In many of the instruments I own, the gains would be 95% or greater of the overall sale proceeds.

I am not complaining here.

Does anyone have recommendations on how to go about protecting profits without actually liquidating? Is the only way to become someone that does not absolutely suck at the timing needed to both buy and sell puts at the right time?

To be clear, I am not interested in selling and see TSLA at 10,000 or so in five to ten years, if not next Tuesday.

Any input greatly appreciated. Thanks to all and congrats!

No real way to avoid the taxes if you sell...its just going to be either short term or long term gains. I have no advice on how to protect profits...i just think to myself 'why does it matter if your timeline is 5+ years?' I have to admit that looking at the gains makes me a little giddy, even though it's just on paper

 

[RobStark]

We interrupt all the cheerleading/bad analyst knocking for something investor-related: Autogefühl has a new review of the Raven X Performance, and it's... extremely positive.

I've followed Autogefühl for several years, and specifically their head reviewer Thomas (who is the person conducting this review, and has handled their prior Tesla reviews). They and he are very thorough and fair, and the fact that he's noting so many improvements and is so positive is another great sign that Tesla's manufacturing prowess is in fact improving.

I have always liked Thomas. Even though I only understand 90% of what he is saying.

 

[NicoV]

OT: Grinning with excitement? Watch the visualization of the last few weeks below:

TeslaMotorsClub makes an appearance

$TSLA: Are you not entertained? : wallstreetbets

I can’t believe I just watched an 11 minute meme, and even worse, I’m reading the comments!

 

[traxila]

What wealthy people do (I think Elon does) is borrow to live on with your stock as collateral on the loan. The interest costs (particularly now) are very low, and you continue to roll over the debt. Definitely a good strategy if your gains are short term, since you can wait to pay off the loans until they become long term. Some just keep on borrowing and not repay the loan, as long as the interest cost is lower than than growth in the asset and you are providing sufficient collateral for the loan.

Thought about that, but as Tesla mad as I am, I have always kept plenty of cash (Obviously an error . Is OK. Have family and need to sleep) on hand to fund my life, and do not have a need right now for the money. If I did, I would arrange for the loan definitely.

What I am more interested in is preserving the gains if the market and the stock go south hard, for whatever reasons happen to be decided upon at the time. (In TSLA’s case most likely to be simply profit taking on this crazy run which is definitely not over. But I could see hitting 3200 and then collapsing to 2000 or lower just off of this dynamic.)

 

[M|S|M MYP]

Thought about that, but as Tesla mad as I am, I have always kept plenty of cash (Obviously an error . Is OK. Have family and need to sleep) on hand to fund my life, and do not have a need right now for the money. If I did, I would arrange for the loan definitely.

What I am more interested in is preserving the gains if the market and the stock go south hard, for whatever reasons happen to be decided upon at the time. (In TSLA’s case most likely to be simply profit taking on this crazy run which is definitely not over. But I could see hitting 3200 and then collapsing to 2000 or lower just off of this dynamic.)

If those projections are post-split SP....i think we'll all be okay with that

 

[astrotoy]

We were early adopters of both Tesla and TSLA. We bought our MS in February 2013 (ordered it in June 2012 - for those who have been fretting about the long waits for delivery) so it fully loaded has none of all the added features, particularly anything that needs cameras besides the rear facing one. We don't drive all that much (less than 60K miles) but as our MS has just celebrated its 7.5 year birthday, we are looking at getting a new Tesla to replace it. We are looking as the FSD feature (particularly as we are getting up in years), but are conflicted about getting a new MS or a new MY or maybe M3.

I don't see a place in TMC where I can get advice about which Tesla to buy. Cost won't be a determining factor. Quality, features, etc. are more important. Can someone point me to the section on TMC to put my query? Thanks.

 

[jerry33]

Does anyone have recommendations on how to go about protecting profits without actually liquidating?

I believe the most recommended way (on this thread) is to take out a loan using the shares as collateral. As long as the shares appreciate substantially more than the interest rate, you can do this forever. It's said that's what Elon does.

 

[M|S|M MYP]

YYYEEEEAH!!!!
it is already down five bucks in after hours....
<----runnning for cover

Uh oh..,,,,

 

[vikings123]

In all fairness, I am having a hard time wrapping my head around the gains involved here.

How does one preserve huge returns on skyrocketing shares? Buying puts sounds like burning money.

I am looking at a 37% or so tax rate on anything I sell, and the unrealized gains are huge. In many of the instruments I own, the gains would be 95% or greater of the overall sale proceeds.

I am not complaining here.

Does anyone have recommendations on how to go about protecting profits without actually liquidating? Is the only way to become someone that does not absolutely suck at the timing needed to both buy and sell puts at the right time?

To be clear, I am not interested in selling and see TSLA at 10,000 or so in five to ten years, if not next Tuesday.

Any input greatly appreciated. Thanks to all and congrats!

Protective puts are almost always like lighting money on fire. Every person's investment goals are different. I think with TSLA most of us are so concentrated that it starts to impact our thinking. I'm not selling any shares, made too many mistakes this year and learned a lot of lessons.

Talking about protective puts I will leave you with this picture. Its a hedge fund that use protective puts as a strategy for 20 years and these are their returns.

 

[Christine69420]

$2170 and climbing.

 

[dl003]

I think Elon is trying to tell us something about BDay.

 

[Unpilot]

Gentlemen and ladies and cat's I salute you!
This retirement brought to us by Tesla is mighty nice indeed.

 

[Big Time]

Love that AH booster

 

[lafrisbee]

I have no idea what you're talking about. If I sell shares with my broker, the cash appears in my account immediately. Why would there we any delay?

And why the hell would you sell them all anyway, to do a little overnight day-trade? That's really risky IMO.

nope NOT overnight. NEVER over night. But I saw macro going down and saw TSLA going with it so I....screwed up. I was going to take it all out and put it back in 20 minutes later....

 

[wipster]

I wish! Although I do admit I'm no longer a Teslanaire, but a multi-Teslanaire, just...

So if I'm not all the way there (but today definitely helped!) does that mean I'm a Semi-Teslanaire or a fractional Teslanaire?

 

[S3XYCARS]

Hello Guys & Gals....I’m looking to find the best way to optimize Tesla gains. I haven’t exercised options before only traded them, so any info on the best way to go about this is much appreciated.

Goal: End up with 100 TSLA shares (pre-split) from the call option gains with enough leftover to pay taxes.

Options; Current Price; Purchase Price
1x Oct 2020 1500c; $696; $62
1x Oct 2020 1800c; $461; $47
1x Nov 2020 1500c; $732; $200
All in taxable brokerage account, assume 32% short-term gains tax rate. Realize these are just paper gains at this point, but a man can dream/plan.

My thoughts:
If we see enough pump with S&P500 inclusion news, Battery Day, Q3 deliveries, Sell Oct 1800c and Nov 1500c and use gains to exercise Oct 1500c for 100 shares.

If SP reaches $2700 by mid-Oct:
Oct 1500c would be worth approx.: 1200
Oct 1800c would be worth approx.: 900
Nov 1500c would be worth approx.: 1200

Scenario 1: Selling two calls and using proceeds to pay taxes and exercise Oct 1500c
Required for exercising options: 150K
Total Value of 2 options: 210K
Taxes on 185K gain: 59.3K
Leftover after taxes: 150.7K

Scenario 2: Selling all Options and using proceeds to pay taxes and buy Shares
Required for 100 Shares: 270K
Total Value of 3 options: 330K
Taxes on 300K gain: 96K
Leftover after taxes: 204K

I approximated a little and it is a lot to ask, but if someone could please check my math and let me know if there is a better option than Scenario 1 or if i'm missing something, I'd be grateful.

Thanks Much!