Trading Tesla stock

[TrendTrader007]

after 59.9% decline over 13 months and today most likely being end of this bear market that started in November 2021, i aim to take advantage of Tesla stock volatility and attempt to generate as high a return as possible. this thread is more of a record of my own personal trading ideas and is not meant to be a trading advice of any kind. i strongly and clearly caution anyone against using any information that i write as any kind of trading or investing advice. this is a thread where i will very frequently be posting my own thoughts about tesla stock price action and is not intended for anyone else to use as basis for making any financial, trading or investing decisions. please keep in mind that i am and will be wrong most of the time and if anyone uses anything i post on this thread to make any kind of financial or investment decisions they are strongly advised not to do so since all the information i post is just my personal opinions and if followed by anyone else may cause loss of all your trading/investing capital. i could not be any more clear than this. i am not a financial advisor. please consult your own financial advisor for any financial or investment decisions. i am doing this solely for my own amusement and could not care less whether or not anyone reads or participates in this thread. in fact, less viewers/ participants the better. this is more of my own trading diary than anything else and i intend to do zero promotion.

 

[TrendTrader007]

Tesla is so volatile it is a trader's dream come true. while baseline rate of return for simple buy and hold is very high in range of 50 to 65% and at worst well north of 30%, with highly selective trading it is possible to accomplish much much higher returns. all with great risk, of course

 

[TrendTrader007]

I do believe that when in doubt and for most of the time it’s wise to stay long Tesla stock to take advantage of its baseline high level return
However, there are frequent occasions when Tesla runs up way too much way too fast and it’s prudent to engage in very short term to intermediate term staying out of the stock and going 100% cash to take advantage and increase share count. for some of big shareholders it's pretty much impossible to make any significant headway in raising #shares without such a maneuver. it is fraught with great risk, clearly and unless i am prepared to be wrong and buy it back at a much higher price it would be imprudent to engage in any such trading strategy.
clearly, now is not the time to do anything crazy like that. this is time to simply hold since tesla stock most likely bottomed right before thanksgiving at $166.18 and likely to go much higher from here

 

[TrendTrader007]

Happy December! This bear market is over. Period. End of story.

 

[CLK350]

I do believe that when in doubt and for most of the time it’s wise to stay long Tesla stock to take advantage of its baseline high level return
However, there are frequent occasions when Tesla runs up way too much way too fast and it’s prudent to engage in very short term to intermediate term staying out of the stock and going 100% cash to take advantage and increase share count. for some of big shareholders it's pretty much impossible to make any significant headway in raising #shares without such a maneuver. it is fraught with great risk, clearly and unless i am prepared to be wrong and buy it back at a much higher price it would be imprudent to engage in any such trading strategy.
clearly, now is not the time to do anything crazy like that. this is time to simply hold since tesla stock most likely bottomed right before thanksgiving at $166.18 and likely to go much higher from here

All great comments, but to make it more real, maybe post a model portfolio or 3 ( low, say $500K, medium $5M, high $40M ) with TSLA / TSLA derivatives/ cash / other Goog/AAPL/NVDA/ AMD ... Bio etc with revisions as they are executed

 

[TrendTrader007]

Tesla looks great from technical standpoint
Patience will be rewarded
Not a good time to do anything except sit tight

 

[TrendTrader007]

50% per year would be just fine
More will be better
At 50% ARR 7.5X in 5 years and 57.6X in 10
At 60% ARR 14X in 5 and 201X in 10
I’ve accomplished 210X in 24 years which is 24% ARR
one year ago it was 840X which was 33% or so
So lofty goal
What’s different now
Need to avoid negative drawdowns or negative compounding

 

[jeewee3000]

50% per year would be just fine
More will be better
At 50% ARR 7.5X in 5 years and 57.6X in 10
At 60% ARR 14X in 5 and 201X in 10
I’ve accomplished 210X in 24 years which is 24% ARR
one year ago it was 840X which was 33% or so
So lofty goal
What’s different now
Need to avoid negative drawdowns or negative compounding

Are you just HODLIing now or going for leaps, short term calls, bull call spreads, ...?

 

[TrendTrader007]

Are you just HODLIing now or going for leaps, short term calls, bull call spreads, ...?

All my tax free portfolio is 100% Tesla common stock
All my taxable portfolio is 100% January 2025 $150 calls
Holding for now for much higher prices which are coming over next several weeks to months

 

[CLK350]

All my tax free portfolio is 100% Tesla common stock
All my taxable portfolio is 100% January 2025 $150 calls
Holding for now for much higher prices which are coming over next several weeks to months

Thanks for sharing - interesting - some questions:
why not have the Jan 2025 calls (or at least some) in the tax free account? If you are certain that long term TSLA will go up, less taxes paid.
And how does it work to have LEAPS in the taxable portfolio - keep rolling them till you are in a lower tax bracket?

 

[TrendTrader007]

Thanks for sharing - interesting - some questions:
why not have the Jan 2025 calls (or at least some) in the tax free account? If you are certain that long term TSLA will go up, less taxes paid.
And how does it work to have LEAPS in the taxable portfolio - keep rolling them till you are in a lower tax bracket?

so tax free account is not to be risked into any calls-anymore. once upon a time i had 100% of my tax free account in LEAPS but i am thankfully at a place in life where simply holding Tesla common stock in my tax free account is sufficient to meet my investment goals. there is no need to add additional risk.
i ended up in Tesla LEAPS by default, not as a matter of choice. for the longest time i was able to maintain 180 to 190 % leverage through margin. then came a point where i did not wish to deal with stress of Tesla's daily extreme volatility and potential risk of a margin call. for the record, i have never ever had a margin call in all my 24 years of trading, but just the mere spectre of margin call on a 180 to 225% leveraged common stock position can be a bit stressful.
i figured the odds of Tesla staying below $150 over next 2 years are fairly low so i rolled the dice and am able to leverage 200% or almost 200% with Jan 2025 $150s. there is always potential risk of losing it all if tesla goes south (seems fairly unlikely at this point). i am not worried about taxes because i have in excess of $13.5 million in short term losses for 2022 which i can offset my taxable gains against.
i have never ever rolled any call options. i don't think i will need to.
As George Soros said, paying taxes is a high class problem. USA is the greatest country in the world and i owe all my success to America. i love paying taxes-millions and millions and some day i hope to pay billions in taxes. keep the American dream alive by paying taxes and preserve democracy.

 

[TrendTrader007]

my current approach is that i have tuned out pretty much everything that may cause distractions. i got rid of my twitter account several days ago and have no cause or desire to clutter my mind with useless noise. i had deactivated my face book several years ago and have zero social media presence. i am not even reading much at all on TMC. for news i simply see headlines about tesla on my brokerage account, CNBC website-not TV (which is pernicious) and do occasionally look at Electrek. that's it. Zero watching you tube videos. my main source for news is Times and Sunday Times of UK even though i am an American living stateside. i am using this thread as my investment diary.
point is to focus on charts primarily and just listen to Tesla earnings calls and press releases. i did not even watch Semi unveiling.
Laser focus on trading in weekly to monthly time frames, Tesla exclusively. Taking advantage of Tesla volatility to increase total #shares and goal is to hit billionaire status within 10 years although 5 years will not be bad either. will do my best to avoid stupid mistakes and try not to outsmart self. Extremely high compounding of net worth is the objective.
charts, charts, charts

 

[TrendTrader007]

right now tesla charts look great. who cares what happens tomorrow or day after. short term forecasting is a fool's errand. just from TA perspective count me extremely optimistic. i believe tesla is on cusp of starting a big rally imminently which will likely last over next several weeks to months.
idiots will jump ship trying to trade tesla short term. good luck with that. i am doing zero trading. sitting tight, waiting for a big up move
i will trade if and when i am almost 100% certain that i need to act, not a day earlier.
big risk here is missing out on a big up move and very real risk of action causing outsmarting self.

 

[TrendTrader007]

so what's the best way to trade Tesla stock- i would submit it is over a period of 2 months or so, sometime more, sometime less
let's test this hypothesis and see what happens
keep in mind, back testing is an inadequate and often misleading way to trade since a stock's character can always change with zero notice.
i am doing my chart reading on a continual basis, sounds like after stock rallies big for 2 months or so, it usually has a pullback
is it consistent enough to get an edge.
also begs the question as to why would anyone share their edge on a public forum
in my opinion, and experience, most individuals are skeptical and it is not lack of knowledge that keeps them from making money but instead lack of faith.
most important word in investing that is critical to lasting success, actually 2 most important words are:
Faith and belief

 

[TrendTrader007]

another huge question i should ask myself: do i really "need" to trade Tesla stock?
well, the very obvious and extremely clear answer is: NO
why? because Tesla has a very high Internal rate of return on invested capital so unless i am extremely confident, actually 99.999% certain that i can beat that rate of return, i should refrain from trading
so even though this thread is titled "trading Tesla stock" it may end up making extremely compelling arguments as to why not to trade tesla stock for most part
i certainly do not want to be the guy who, in the process of doing short term trading, misses out on a 10X gain in a few years
if trading tesla was so easy, we would have scores of centi-millionaires or billionaires
not easy at all
so, when it doubt, hold
even if i have to suffer -60% nominal and -75% actual drawdowns
in the end it will all pay off, big time

 

[TrendTrader007]

Tesla right now looks fairly similar to amazon in january 2015 or apple/amazon in early 2009 or tesla in february 2016 or tesla in december 2016
right or wrong, this is my current default hypothesis
unless and until proven wrong
time to study those charts

 

[TrendTrader007]

another way to make great returns possibly is to sit tight and trade tesla in following manner:
for example low was $166.19 recently: 2X of $166.19 is $332.38. so i'll watch for tesla to hit that price point or vicinity over next several months or exceed that. does not mean that i will blindly sell tesla stock at any arbitrary price point but will watch closely to daily price action to see if i can get any possible advantage and increase my position in tsla.
suppose i do that and i am wrong: like i fall flat on my face. i sell tsla at $340 or so and next thing it is trading north of $500 in short order
no problems! i have made money, actually quite significant returns by selling a stock and then buying the same stock much, much higher
does not bother me at all
why? bc at end of day it is all about compounding
what percentage return i get in each trade
makes zero difference is tesla races from $194 to $500 within a year
i can still make money by trading rallies and avoiding effect of negative compounding by smart market timing
so this is the counter arguement to last post
either ways, win win

 

[TrendTrader007]

to keep things interesting, i like to make my own hypotheses and fun to see exactly how far removed from reality i get
so, in that spirit, i suspect major rally in tsla shares in december 2022.
as of this sunday evening tsla closed at $194.86
i would bet it closes at or better than $240 by end of december 2022.
let's see what happens
just a theoretical exercise to see if i have my pulse on tesla stock price

 

[TrendTrader007]

Tesla rumors like this morning china 20% cut only have one purpose: to scare and shake out weak hands
i pay zero attention to these
this may all be recovered by end of trading day today or at worst in a few days
no big deal

 

[TrendTrader007]

pretty certain we are exploring depths of bottom and it is more a process of testing and retesting bottom
nothing to do except sit on my hands and wait out inevitable bottoming out process- could be days or weeks
i stay optimistic