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

[MP3Mike]

Hate to butt in; should that not be 'subtract from the principal' ?

Nope:

principal [ˈprinsəpəl]
ADJECTIVE

1. first in order of importance; main.
   "the country's principal cities"
   synonyms:
   main · chief · primary · leading · foremost · first · most important ·
   [more]
2. (of money) denoting an original sum invested or lent.

Nope, the principal is the amount of money you borrowed. And if you don't pay your monthly interest expense they just add it to the principal amount that you owe.

 

[adiggs]

I'm confused on the math. $420,000 = approximately 700 shares. Pre-split, that's 140. The stock price back then was around $200. So 140 X $200 = $28,000! I didn't know they charged that much for FSD back then ;-)

The reality is it was $3,000 above EAP back then at time of purchase, and $4,000 if you bought it after. But your point is valid, that if you put the $4,000 into Tesla stock at $200/share, it'd be worth $60,000!!!

BTW, it's gone up 15x since the $200 stock price pre-split, so just take your car purchase, your vacation costs, etc. and times it by 15, and then start crying...

I do get the logic here, but I also see it as flawed.

You can use this logic to talk yourself out of continuing to live indoors (omg - all those mortgage payments that could have been buying TSLA instead), or owning a car of any kind (those car and insurance payments that I could have replaced with a monthly bus pass!), or even eating.

After all, you can always eat more cheaply - get a 25lb bag of beans and rice, and you might get your meal costs under $0.50, even if those meals start getting monotonous or even not so healthy for you.


From my own experience, I consider buying a Tesla about the best investment that a long term buy and hold investor can make. Because it will be a daily reminder of just how awesome and fun these products are, and any time you think about selling that Tesla in the driveway will remind you of what you're selling. That might help you question the wisdom of selling the shares, and over even a smallish number of shares and a long enough investment horizon, that car will pay itself back with a lot of interest instead of costing you.

I can use that argument to say the $80k used roadster in my avatar bought me financial independence and retirement 8 years later.

 

[SeaNile]

I do get the logic here, but I also see it as flawed.

You can use this logic to talk yourself out of continuing to live indoors (omg - all those mortgage payments that could have been buying TSLA instead), or owning a car of any kind (those car and insurance payments that I could have replaced with a monthly bus pass!), or even eating.

After all, you can always eat more cheaply - get a 25lb bag of beans and rice, and you might get your meal costs under $0.50, even if those meals start getting monotonous or even not so healthy for you.


From my own experience, I consider buying a Tesla about the best investment that a long term buy and hold investor can make. Because it will be a daily reminder of just how awesome and fun these products are, and any time you think about selling that Tesla in the driveway will remind you of what you're selling. That might help you question the wisdom of selling the shares, and over even a smallish number of shares and a long enough investment horizon, that car will pay itself back with a lot of interest instead of costing you.

I can use that argument to say the $80k used roadster in my avatar bought me financial independence and retirement 8 years later.

Makes me want to buy 200k of TSLA.....

 

[EVCollies]

Since some of you have reached out to me around my new margin rate, here goes:

I've been with E*trade for 8 years, mostly with a company stock plan, but in the past couple years a small margin trading account and very recently a rollover IRA. Once I started to use margin consistently, I realized I needed to research how to lower my cost on it - that's when I found Interactive Brokers and their advertised rate that was about 5.5% lower. I tried to negotiate with E*trade to no avail and so I've decided to move both accounts over to IB and it was a painless and very smooth process (via ACATS transfer, took about 4-5 business days).

Please note that you will NOT be able to trade from start of transfer till end or even +1 business day.
You might want to wait until Jan with this move, considering TSLA's upcoming party.

A couple days later, an E*trade consultant reached out to me from the Cupertino office via phone call AND email and suggested we have a chat about the move. I told him my primary concern was margin rate, and secondary was customer service wait times. He suggested that we try to get an approval for a rate he got for a client recently (1.94%) and I was excited to do that. A week later, the margin rate got approved and I'm in the process of moving the funds back. IB is blocking the transfer for another week and then should be okay. He is in constant touch with me via email and he suggested we discuss a line of credit on my margin account also, once all is resolved (at supposedly a MUCH better rate than 1.94% on the LoC)....

I know nothing about margin trading but wonder if this email from Schwab, which holds my TSLA, is worthwhile? I've never been asked to loan out my shares but probably never owned anything worth sharing before concentrating on TSLA.

"
Earn income for lending securities
Learn about Schwab's Securities Lending Fully Paid (SLFP) program, which may allow you to earn monthly income for lending securities to Schwab that are in high demand by other investors. Your account currently holds securities that may qualify for the SLFP program.

Please note that income paid on a loaned security can fluctuate with changes in demand in the securities lending market.
...
"

 

[adiggs]

Rolling over my 401 and have the option to put it in an IRA account which I can mange. I know better but 100k of TSLA is tempting.

I'm confused - is it the $100k worth of TSLA that is tempting, or is it something else that is tempting you as an alternative to $100k worth of TSLA

 

[adiggs]

I know nothing about margin trading but wonder if this email from Schwab, which holds my TSLA, is worthwhile? I've never been asked to loan out my shares but probably never owned anything worth sharing before concentrating on TSLA.

"
Earn income for lending securities
Learn about Schwab's Securities Lending Fully Paid (SLFP) program, which may allow you to earn monthly income for lending securities to Schwab that are in high demand by other investors. Your account currently holds securities that may qualify for the SLFP program.

Please note that income paid on a loaned security can fluctuate with changes in demand in the securities lending market.
...
"

I was in Fidelity's equivalent program for a few years. At one point, I was being paid 14% to lend out my shares, with most months more like 5 to 8%.

I dropped out when the shares became easy to borrow and were all returned (or might get lent out for <1%).


I found it to be an entirely reasonable way to raise a bit of income from the shares I was going to hold regardless. Then the rate became too low and I haven't bothered researching the new rates. My perception is that TSLA is still cheap to short, thus lending the shares is barely better than US treasuries.

 

[SeaNile]

I'm confused - is it the $100k worth of TSLA that is tempting, or is it something else that is tempting you as an alternative to $100k worth of TSLA

It's either pick from the usual Fidelity funds or go IRA and have the ability to pick stocks as well as funds. Given that option why not put 100k or even 200k into TSLA stock? Hindsight is 20/20, could have bought years ago but I figure I'd be saying the same thing 2-3 years from now. Of course a new car or boat is tempting. LOL

 

[Silent Ludicrosy]

Rolling over my 401 and have the option to put it in an IRA account which I can mange. I know better but 100k of TSLA is tempting.

After I got my Model S in 2018 I bought a couple TSLA shares in a brokerage account, but my Roth IRA only allowed mutual funds. I switched brokerages and rolled over my Roth IRA to go all-in on TSLA in Dec 2018. Best decision I ever made. Thank you to whoever posted about self managed IRAs two years ago, I had no idea that was an option until I read it here.

 

[SeaNile]

After I got my Model S in 2018 I bought a couple TSLA shares in a brokerage account, but my Roth IRA only allowed mutual funds. I switched brokerages and rolled over my Roth IRA to go all-in on TSLA in Dec 2018. Best decision I ever made. Thank you to whoever posted about self managed IRAs two years ago, I had no idea that was an option until I read it here.

Just opened a TD Ameritrade account. I should be able to manage my own IRA at this point starting next week.

 

[Mo City]

Um, no. The lower my debt (it's been zero for decades) the more aggressively I can invest while sleeping soundly. The last three houses I've purchased (and all cars) have been mortgage/debt free. Some things in life are beyond priceless because profit and the amount of wealth you have are not even close to being the most important things in life.

If you ever become fooled into thinking otherwise, you are not wealthy but incredibly poor.

I don't know why a relatively small amount of debt would make it hard for you to sleep. To each his own I guess.

The interest on a car loan doesn't begin to compare with the rate of return of owning TSLA.

Being debt free isn't where one should celebrate. The celebration should start when one has the ability to pay off all debt with no sweat. Again, whichever floats your boat.

I have no idea why you bring up "the most important things in life". Totally irrelevant to what I was addressing.

 

[2virgule5]

Life got in the way so just checked the SP. Man, we just squeaked by. I'd be nervous the whole weekend if I had to buy or god forbid was short.

I’m pretty confident that should you be short TSLA you’d be nervous way longer than a week-end...

 

[Mo City]

It's either pick from the usual Fidelity funds or go IRA and have the ability to pick stocks as well as funds. Given that option why not put 100k or even 200k into TSLA stock? Hindsight is 20/20, could have bought years ago but I figure I'd be saying the same thing 2-3 years from now. Of course a new car or boat is tempting. LOL

10 months ago (2 months before getting furloughed due to COVID) I rolled my entire Fidelity 401K to an IRA.

It's been amazing.

 

[Xepa777]

Tesla Facts: "I believe much of the TSLA volume on December 18 is going to happen on the "Nasdaq Closing Cross" at 4:00pm - a special end of the day auction process where those willing to sell TSLA shares and those buying them can negotiate a single closing price."

Thoughts @FrankSG and others? We screwed?

 

[Singuy]

I do get the logic here, but I also see it as flawed.

You can use this logic to talk yourself out of continuing to live indoors (omg - all those mortgage payments that could have been buying TSLA instead), or owning a car of any kind (those car and insurance payments that I could have replaced with a monthly bus pass!), or even eating.

After all, you can always eat more cheaply - get a 25lb bag of beans and rice, and you might get your meal costs under $0.50, even if those meals start getting monotonous or even not so healthy for you.


From my own experience, I consider buying a Tesla about the best investment that a long term buy and hold investor can make. Because it will be a daily reminder of just how awesome and fun these products are, and any time you think about selling that Tesla in the driveway will remind you of what you're selling. That might help you question the wisdom of selling the shares, and over even a smallish number of shares and a long enough investment horizon, that car will pay itself back with a lot of interest instead of costing you.

I can use that argument to say the $80k used roadster in my avatar bought me financial independence and retirement 8 years later.

Plus this is hindsight 20/20 talk. If a crystal ball exist, then yes a sane people would dump ever cent into Tsla as it prints them a 10x return in a year's time. But what if wall street decided, nope...the earnings are not good enough and we are stuck at a 10% return instead?

 

[Brian121]

I just got 1.94% margin interest with etrade. Negotiate your rate down!

Just a simple question. Is this a fixed rate, or is it somehow changes every month based on some benchmark rate, like bank overnight borrow rate?

Thanks.

 

[Hock1]

It's either pick from the usual Fidelity funds or go IRA and have the ability to pick stocks as well as funds. Given that option why not put 100k or even 200k into TSLA stock? Hindsight is 20/20, could have bought years ago but I figure I'd be saying the same thing 2-3 years from now. Of course a new car or boat is tempting. LOL

I've been out of the brokerage business for a while, but I'm pretty sure one still cannot hold a boat or a car in a retirement account.

 

[Rockster]

Just opened a TD Ameritrade account. I should be able to manage my own IRA at this point starting next week.

I'm with TDA and I self-manage my rollover IRAs and Roth IRAs no problem whatsoever.

 

[CyberDutchie]

Not sure if it was mentioned before, but on December 21st, the stars are aligned for TSLA to enter the S&P 500... literally

For the first time in nearly 800 years, Jupiter and Saturn will align in the winter solstice sky to become what will be known as the "Tesla Star" on Dec. 21. The last time this rare celestial event, called the "great conjunction," was observable was March 4, 1226.

To observe, watch the South Eastern sky on Dec 21, 45 min before what will temporarily be called “Musk” instead of dusk.

 

[SeaNile]

Thoughts on this philosophy on options, etc?

It depends on your account size but no way would I go all in on any stock. Elon Musk goes into the looney bin or something more serious happens to him and it could tank and take years to get your money back. A safer bet might be to buy something like January (or any month) 2021 calls at maybe a $1000 strike price. Right now you can buy those for about $580 each contract. If it gets to $1000 before then I would guess you'd be up a few hundred % so maybe triple your money. If you bought 5 of them the most you could lose would be about $2900 ($580x5). If it triples like I mentioned you could possible make $10,000. With simple calls and puts you cannot lose more than you pay. If you buy next weeks $700 calls for $4.00 ($400 for 1 contract) and don't sell them and it only gets to maybe $600 then you lose the whole $400 you paid as they will expire worthless.

 

[Words of HABIT]

View attachment 614816 View attachment 614817Weekend OT: Watching Ohio St vs Michigan St and a commercial comes on for Monster Wax. Low and behold, they're applying it on a new red Model 3! Talk about product placement!

Awesome, It's Mothers Wax and a Model Y, but still awesome.