Tesla, the investment

[BCBiker]

The DotCom crash just didn't take down the trash companies, it brought all of them down. The strong ones eventually recovered and the trash ones didn't. It will be similar in the EV space.

I would like nothing better than for the world to think it was the apocalypse. March 2020 took me from previous peak of $1.2M to $300K. And I bought assets then now worth over $6M. Volatility is my friend.

[CordMcNally]

Well the comparison is inevitable. Tesla is a real company with a much larger addressable market and a track record. I’m not sure which company you want to compare them to from dot com crash. Microsoft? Maybe. Pets.com? No. Amazon? Sort of. I’m positioned such that most possibilities will be quite good for me even with a decade stagnation or a boom and bust and boom again. The thing that is most like dot com is that trash ev makers are getting high values with low prospects and no consideration that Tesla went through ************************ to be successful while every other startup with a rendering is getting funded to be like Tesla and all/most are not going to be be around in 5 years.

The DotCom crash just didn't take down the trash companies, it brought all of them down. The strong ones eventually recovered and the trash ones didn't. It will be similar in the EV space.

[fatlittlepig]

What’s your take on NIO.

[BCBiker]

I don't think you do. I know I don't. You can't if you haven't lived through it. "But this time is different"...

Well the comparison is inevitable. Tesla is a real company with a much larger addressable market and a track record. I’m not sure which company you want to compare them to from dot com crash. Microsoft? Maybe. Pets.com? No. Amazon? Sort of. I’m positioned such that most possibilities will be quite good for me even with a decade stagnation or a boom and bust and boom again. The thing that is most like dot com is that trash ev makers are getting high values with low prospects and no consideration that Tesla went through ************************ to be successful while every other startup with a rendering is getting funded to be like Tesla and all/most are not going to be be around in 5 years.

[CordMcNally]

I was in high school and not aware. I get the sentiment. I fully anticipate a pullback on TSLA and market in general but there are key differences. This stock run is driven buy cheap, cheap money and no returns on cash/ cash equivalents.

Tesla will take some time to grow into valuation and the price now is really based on 2025 expectations. That is fine with me since I own so much now and so may h Ashe opportunity to get more if there is any market concerns related to execution.

I agree that all traditional metrics mean it is overvalued but no company has had such a huge runway on such a large/challenging addressable market and they are so far ahead that it is possible no one will catch them.

They also have built everything in house which means no one can get their tech from suppliers. And they own their distribution, service, and fueling network. People comparing them to car manufacturers are so clueless it hilarious. I didn’t get to more speculation on self driving and grid solutions but those are cherries on top.

I don't think you do. I know I don't. You can't if you haven't lived through it. "But this time is different"...

[BCBiker]

I say that people screaming 'not bubble' don't know what they're talking about. Out of my curiosity, were you around and an investing participant during the DotCom bubble? I wasn't but there's a lot of people who lived through that and get very similar feelings.

I was in high school and not aware. I get the sentiment. I fully anticipate a pullback on TSLA and market in general but there are key differences. This stock run is driven buy cheap, cheap money and no returns on cash/ cash equivalents.

Tesla will take some time to grow into valuation and the price now is really based on 2025 expectations. That is fine with me since I own so much now and so may h Ashe opportunity to get more if there is any market concerns related to execution.

I agree that all traditional metrics mean it is overvalued but no company has had such a huge runway on such a large/challenging addressable market and they are so far ahead that it is possible no one will catch them.

They also have built everything in house which means no one can get their tech from suppliers. And they own their distribution, service, and fueling network. People comparing them to car manufacturers are so clueless it hilarious. I didn’t get to more speculation on self driving and grid solutions but those are cherries on top.

[fatlittlepig]

If I didn’t have this huge position I would be buying TSLA whenever I can. I still have an auto investment in TSLA that is quite minimal relative to overall investment, around $2500 per month in taxable from checking that I consider to be part of regular cash outflow along with mortgage and living expenses.

Every dollar in tsla today is $50 plus over a 30 year investment period. I love that people consider it overpriced because I consider it cheap compared to vti or voo. I throw all that I can in 403(b) in traditional funds and have a good early career diversified stock/bond portfolio.

if I had $7-8m in cash what percentage would I go tsla? Not 100% given the 100% run since November but I would probably do $1M per quarter up to $5M. I also have options strategy that makes this more valuable which I would not know had I not got here with options.

some day I’ll make a video or mega post on how this works.

this is great. Kind of like watching a slow motion train wreck or you will be an incredibly rich baron. Keep posting.

[CordMcNally]

The operation efficiency from a low base is poor but at 5M vehicles with high margin software sales and exponentially growing energy business; people screaming bubble just don’t know what they are talking about.

I say that people screaming 'not bubble' don't know what they're talking about. Out of my curiosity, were you around and an investing participant during the DotCom bubble? I wasn't but there's a lot of people who lived through that and get very similar feelings.

[CordMcNally]

Every dollar in tsla today is $50 plus over a 30 year investment period. I love that people consider it overpriced because I consider it cheap compared to vti or voo.

It's not just people who think it is overpriced. It's overpriced by basically every metric used to value a stock. But again, money can be made in these situations but it'd really help to know when things are going to normalize.

[BCBiker]

From a value investing stand point it has a PE ratio greater than 1400. It can keep going up, but the justification just isn’t there. Maybe this is reminiscent of the dot com boom?

P/E is a poor metric when a company has just hit profitability and is doubling capacity every 12-18 months.

The operation efficiency from a low base is poor but at 5M vehicles with high margin software sales and exponentially growing energy business; people screaming bubble just don’t know what they are talking about.

[BCBiker]

Sometimes it is hard to comprehend, but I think you are 100% correct taking a hard look at the tax impacts of your strategies.

I do question your long term decisions. Not from Tesla or the options. From a behavioral finance perspective.
Counter intuitive behavioral reactions are commonly illustrated with the Sunken Cost Fallacy.
https://www.behavioraleconomics.com/...-cost-kfallacy/

Attachments and experience lead to actions that aren’t based on ones own critical thinking skills and analysis. I would seriously suggest introspection.

Do you have a Sunk Gain Fallacy?

If you backed up to a 100% cash position, would you make the same investment choices? Is that the best use and risk assumptions for $7m new cash?

If this is the choice, tell me all your new and continuing FI funds are going into the same strategy. There is no difference between dollars invested in the future. Sure your risk capacity has risen and you can do this. Seems like recent success is coming into play.
Suggest not setting your goal as number of shares. Best choice is managing value.
Just a bias that may or may not exist.

If I didn’t have this huge position I would be buying TSLA whenever I can. I still have an auto investment in TSLA that is quite minimal relative to overall investment, around $2500 per month in taxable from checking that I consider to be part of regular cash outflow along with mortgage and living expenses.

Every dollar in tsla today is $50 plus over a 30 year investment period. I love that people consider it overpriced because I consider it cheap compared to vti or voo. I throw all that I can in 403(b) in traditional funds and have a good early career diversified stock/bond portfolio.

if I had $7-8m in cash what percentage would I go tsla? Not 100% given the 100% run since November but I would probably do $1M per quarter up to $5M. I also have options strategy that makes this more valuable which I would not know had I not got here with options.

some day I’ll make a video or mega post on how this works.

[CordMcNally]

From a value investing stand point it has a PE ratio greater than 1400. It can keep going up, but the justification just isn’t there. Maybe this is reminiscent of the dot com boom?

It can certainly go much higher. I think a majority of people feel it is incredibly overvalued (it's already way past when Musk tweeted that it was overvalued) but you can still make a lot of money in bubbles. The question is when will it come back down to earth? Next week...next year? Nobody knows. It's going to make some people a lot of money and it's going to end up making some people lose a lot of money.

[BTC]

From a value investing stand point it has a PE ratio greater than 1400. It can keep going up, but the justification just isn’t there. Maybe this is reminiscent of the dot com boom?

[Tim]

Sometimes it is hard to comprehend, but I think you are 100% correct taking a hard look at the tax impacts of your strategies.

I do question your long term decisions. Not from Tesla or the options. From a behavioral finance perspective.
Counter intuitive behavioral reactions are commonly illustrated with the Sunken Cost Fallacy.
https://www.behavioraleconomics.com/...-cost-fallacy/

Attachments and experience lead to actions that aren’t based on ones own critical thinking skills and analysis. I would seriously suggest introspection.

Do you have a Sunk Gain Fallacy?

If you backed up to a 100% cash position, would you make the same investment choices? Is that the best use and risk assumptions for $7m new cash?

If this is the choice, tell me all your new and continuing FI funds are going into the same strategy. There is no difference between dollars invested in the future. Sure your risk capacity has risen and you can do this. Seems like recent success is coming into play.
Suggest not setting your goal as number of shares. Best choice is managing value.
Just a bias that may or may not exist.

[CordMcNally]

Ya. Basics are 50% to taxes 50% to margin until margin gone.

I don’t really care about short term pull backs. Only care about share count. Sure there could be a huge pull back but I am not going to try to time it. Also I’m not going to do anything before March and pay stcg on my current gains because then I would need 54% pull back. If we are at $2000 per share in March I will reconsider but that would mean I keep rolling up selling otm options so that would push me out a long time horizon.

Honestly, a 54% pullback still wouldn't justify the price but we're obviously in a short term situation where nothing matters or makes sense as far as prices go. The stimulus checks don't appear to be a slam dunk like they did previously since a Senator from WV will arguably be the most important person in government for a while.