Family member has one million in one stock , doesn't want to cash out

[bog007]

Too much in one stock. Sell half

[palanzo]

Stay the Course! Nobody Know Nuthin! If he had invested $1 in US stocks at the signing of the Constitution, his net worth would be greater today than that of the entire US and EU combined. Warren Buffet says the proper holding time for stocks is forever. Never time the market. The market knows more than you do.
Any other BH truisms I forgot to parrot?

That would have been difficult as there was no US stock exchange in existence on June 21, 1788. Do you have a reference for the net worth greater than the entire US and EU combined?

History is important.

There was a Wall on Wall Street though... Or maybe the Wall was gone by 1788... That was more of a 1688 thing maybe, when it was still New Amsterdam, and they needed a Wall to keep the Indians from attacking.

Edit: Hey, I was right on the money... Wrote the above, then looked it up.

Wall Street was originally known in Dutch as "de Waalstraat" when it was part of New Amsterdam in the 17th century, though the origins of the name vary. An actual wall existed on the street from 1685 to 1699.

Yes you were!

[EnjoyIt]

You know, everyone out there telling you to stay out of it is right....But, I would still try one at least one explanation and then stay out of it. Consider putting it in writing and sharing some of your thoughts. Start off congratulating him, talk about goals, then talk about winning the game and taking unnecessary risk. Next mention how you know you should mind your own business, but you can't help sharing your unwanted 2 cents. Discuss maybe how most money managers fail at timing the market, discuss maybe some options such as taking half off.

Agree with this idea, with the caveat that you make sure to send it certified mail, so you know he received it and can prove it. Should he say he didn’t read it you can always cite the reference number and show that’s not the case

Were you mocking me with the certified mail? I get it if you were, I think. I would just hand it to him or send an email. I don’t know about you or OP, but I care very much for my parents and I want them to travel and and enjoy their retirement years as much as possible. I would have hated seeing their wealth get destroyed via taking too much concentrated risk in 1 company. My parents have enough money to be very comfortable but losing half would eliminate that comfort. While adding significant gains would add very little. OP parents appear to be in a much better situation and maybe can tolerate a large loss.

[LiveSimple]

Another option is to suggest if Tesla equity goes over One million sell that and invest in index funds. Kind of a bucket strategy to keep one million in his favorite stock.

[EfficientInvestor]

I'll echo what others have said regarding put options. He could take it a step further and use a collar strategy in which he would sell calls against his holdings in order to fund the purchase of the put options. Assuming he wants to limit himself to a 10% loss...he could sell Sep 2021 calls at the 600 strike for around $125/share and buy Sep 2021 puts at the 450 strike for around $124/share. This would limit him to "only" a 20% gain above the current price of almost 500/share, but it would limit his loss to 10%. FWIW...it's amazing how skewed the options pricing is towards the call side right now due to the number of speculators bidding up the price.

[260chrisb]

Assuming he hasn't or won't ask for your advice or even take it if he does why try and convince him of anything? He's a 60 year old grown man, he's done well, and has his own beliefs even if they don't mirror what many see as best. Mind your own business. Even if Tesla goes belly up tomorrow he's still going to be okay.

[balbrec2]

Hello all,

My dad just told me he has surpassed one million in Tesla . He's 60 years old , 5 years left to retirement. Has a total portfolio of 3 million and RE worth 2 million.

His portfolio holdings consist of individual companies such as Tesla , apple, Nvidia , AMD , GE and some other companies.

I told him to cash out , or at least cash out 50% and diversify to sp500. He is playing with fire and I told him he should cash his chips while he's running good. He told me he thinks he can time the market and will cash out before it crashes. I told him its very hard to time the market like that.

Can anybody provide some advice on what I should tell him to convince him otherwise ?

Thanks.

If he didn't ask for your advice, butt out. If he did, it's completely up to him to utilize it.

[keystone]

Although I'm in the "stay out of it camp" I can't help but wonder how different the majority of responses would be if the OP said that his dad has $1 million invested at Edward Jones.

[sailaway]

Although I'm in the "stay out of it camp" I can't help but wonder how different the majority of responses would be if the OP said that his dad has $1 million invested at Edward Jones.

Same response: you said your piece, let it go.

My parents bought an annuity at retirement and keep their IRAs in CDs that they are constantly moving around for better rates. I am not going to keep pestering them to invest differently unless I see signs of cognitive decline, and even then, I just want them to simplify because there has been some confusion about which CDs are Roth vs traditional.

[keystone]

Although I'm in the "stay out of it camp" I can't help but wonder how different the majority of responses would be if the OP said that his dad has $1 million invested at Edward Jones.

Same response: you said your piece, let it go.

My parents bought an annuity at retirement and keep their IRAs in CDs that they are constantly moving around for better rates. I am not going to keep pestering them to invest differently unless I see signs of cognitive decline, and even then, I just want them to simplify because there has been some confusion about which CDs are Roth vs traditional.

I'm in a somewhat similar boat - parent invests in a way that is somewhat at odds with Boglehead philosophies - invests in sectors, does not really look at portfolio as a whole, sometimes times the market, too much individual company risk, etc. I feel like as long as there is no issue with being destitute and no significant cognitive decline, it's all good.

[NotWhoYouThink]

Since he isn't interested in your investing advice, talk to him about his other life choices. How is his diet? Too many processed foods? Does he get enough exercise? Maybe his drinking has increased during the pandemic, ask him if he's considered cutting back.

[sailaway]

Since he isn't interested in your investing advice, talk to him about his other life choices. How is his diet? Too many processed foods? Does he get enough exercise? Maybe his drinking has increased during the pandemic, ask him if he's considered cutting back.

While you are at it, be sure to tell him how to vote and question his religious practices.

[Papago]

Let him be. Some people just need to learn the hard way.

There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest of them have to pee on the electric fence for themselves. - Will Rogers

[EnjoyIt]

Let him be. Some people just need to learn the hard way.

There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest of them have to pee on the electric fence for themselves. - Will Rogers

I sure would hate for my dad to pee on an electric fence if I can at least warn him. After being warned if he still chooses to pee, then who am I to stop him?

[TheTimeLord]

Hello all,

My dad just told me he has surpassed one million in Tesla . He's 60 years old , 5 years left to retirement. Has a total portfolio of 3 million and RE worth 2 million.

His portfolio holdings consist of individual companies such as Tesla , apple, Nvidia , AMD , GE and some other companies.

I told him to cash out , or at least cash out 50% and diversify to sp500. He is playing with fire and I told him he should cash his chips while he's running good. He told me he thinks he can time the market and will cash out before it crashes. I told him its very hard to time the market like that.

Can anybody provide some advice on what I should tell him to convince him otherwise ?

Thanks.

He is a grown man who seems to have the financial assets to care for his needs as he ages. Unless you were asked your opinion then IMHO you crossed a line big time. What you should do is congratulate him and give him a big hug and perhaps say I don't know how you do it, if it was me I would have to take some money off the table after being on a streak like. No one likes a know-it-all, especially your elders.

[tomtoms]

People here need to stop saying index is the only way to make money. The truth is indexing is one of the ways to make money.

[jason2459]

People here need to stop saying index is the only way to make money. The truth is indexing is one of the ways to make money.

You're on a site dedicated to indexing... You may want to get stock tips somewhere else.

[Luckywon]

When my dad was in his late eighties I convinced him to put the vast majority of his savings in fixed income. Over the next years, before he died, the s&p 500 went up significantly. I know he noticed this and probably thought I had given him bad advice (though he never said anything). My point is you should consider how you think your relationship with him would be effected if you took your advice and Tesla went up a lot. If you think this would not be a big deal, I would continue to try to persuade him to tone down the risk, because i think the risk he is taking is terrifying.

Sorry if this was already written above but I'm curious whether his investment in a retirement account. Or would he have to pay capital gains if he sold?

Good luck to both of you!

[tomtoms]

People here need to stop saying index is the only way to make money. The truth is indexing is one of the ways to make money.

You're on a site dedicated to indexing... You may want to get stock tips somewhere else.

Why do we need a forum just for the sole purpose of indexing? The concept is easy to understand and execute.

If you read some of the older posts...again and again, don’t buy Tesla stocks, do not become a landlord. Only invest in index funds. I think we can conclusive say those advices were disastrous.

I am all for indexing but I know there are also other ways to make good money. I think that is the main difference between me and some members on this forum.

[jason2459]

People here need to stop saying index is the only way to make money. The truth is indexing is one of the ways to make money.

You're on a site dedicated to indexing... You may want to get stock tips somewhere else.

Why do we need a forum just for the sole purpose of indexing? The concept is easy to understand and execute.

If you read some of the older posts...again and again, don’t buy Tesla stocks, do not become a landlord. Only invest in index funds. I think we can conclusive say those advices were disastrous.

Many forums have a main theme to them in which a community forms. Many times there are split opinions in which sub sections get created to discuss those topics. However, individual stock picking is not one of those which is popular enough in this community to afford a subsection on its own.

And it could be argued the recommendations were not wrong. Just do not meet your point of view.

[Vanguard Fan 1367]

Stay the Course! Nobody Know Nuthin! Warren Buffet says the proper holding time for stocks is forever. Never time the market. The market knows more than you do.
Any other BH truisms I forgot to parrot?

Yes: "Don't look for the needle in the haystack. Buy the haystack."

[sailaway]

If you read some of the older posts...again and again, don’t buy Tesla stocks, do not become a landlord. Only invest in index funds. I think we can conclusive say those advices were disastrous.

You think someone is a pauper because they didn't buy Tesla or become a landlord?

Anyone who invested in index funds is doing just fine, so no, not disastrous advice.

[gmaynardkrebs]

Stay the Course! Nobody Know Nuthin! Warren Buffet says the proper holding time for stocks is forever. Never time the market. The market knows more than you do.
Any other BH truisms I forgot to parrot?

Yes: "Don't look for the needle in the haystack. Buy the haystack."

Good one.

[wander]

If you read some of the older posts...again and again, don’t buy Tesla stocks, do not become a landlord. Only invest in index funds. I think we can conclusive say those advices were disastrous.

You think someone is a pauper because they didn't buy Tesla or become a landlord?

Anyone who invested in index funds is doing just fine, so no, not disastrous advice.

+1. I am fine without Tesla stocks. But, Tesla is included in S&P 500 anyway.

[TheTimeLord]

If you read some of the older posts...again and again, don’t buy Tesla stocks, do not become a landlord. Only invest in index funds. I think we can conclusive say those advices were disastrous.

You think someone is a pauper because they didn't buy Tesla or become a landlord?

Anyone who invested in index funds is doing just fine, so no, not disastrous advice.

+1. I am fine without Tesla stocks. But, Tesla is included in S&P 500 anyway.

I believe Tesla is in QQQ but not the S&P 500 (VOO, SPY, IVV) yet.

[TimeTheMarket]

Tesla is tremendously overvalued, but as long as there are people who don't know that, they will keep bidding it up. And could do it for years. I almost bought some a few years ago but would not touch it now.

[wander]

If you read some of the older posts...again and again, don’t buy Tesla stocks, do not become a landlord. Only invest in index funds. I think we can conclusive say those advices were disastrous.

You think someone is a pauper because they didn't buy Tesla or become a landlord?

Anyone who invested in index funds is doing just fine, so no, not disastrous advice.

+1. I am fine without Tesla stocks. But, Tesla is included in S&P 500 anyway.

I believe Tesla is in QQQ but not the S&P 500 (VOO, SPY, IVV) yet.

You are correct. I meant SCHX and VTI which I hold.

[Leif]

Wow, 7th largest company in the US on market cap. Musk is now the 3rd richest person in the US based on his ownership of Tesla shares. Now a 5 billion capital raise, with a balance sheet already at 8 billion in cash. Building a new factory in Texas and Germany. I hope they can continue to accelerate the move to sustainable transportation and energy. But, you really need to have guts to own Tesla stock today. You also need guts to short it.

[CardinalRule]

Tesla is tremendously overvalued, but as long as there are people who don't know that, they will keep bidding it up. And could do it for years. I almost bought some a few years ago but would not touch it now.

I almost bought some as recently as early April, when it was at about a split adjusted $100. I wouldn't have bought much anyway, but wow, what a run.

Not touching it now either, but it will be interesting to watch.

[EnjoyIt]

People here need to stop saying index is the only way to make money. The truth is indexing is one of the ways to make money.

You're on a site dedicated to indexing... You may want to get stock tips somewhere else.

Why do we need a forum just for the sole purpose of indexing? The concept is easy to understand and execute.

If you read some of the older posts...again and again, don’t buy Tesla stocks, do not become a landlord. Only invest in index funds. I think we can conclusive say those advices were disastrous.

I am all for indexing but I know there are also other ways to make good money. I think that is the main difference between me and some members on this forum.

You have been a member here since 2013. How many other stocks were discussed over the last 7 years that did not pan out like Tesla? No one remembers the losers.

[fwellimort]

You have been a member here since 2013. How many other stocks were discussed over the last 7 years that did not pan out like Tesla? No one remembers the losers.

I honestly think the past 10 years have been quite something. Tech companies have been talked about through and through and they all pretty much became winners.
People kept talking about Apple. Google (Alphabet). Facebook. Amazon. Microsoft.
And those are... doing quite well for themselves

No one really knows the future. It might seem dead obvious looking back what stocks were going to do well but when it comes to putting money on the table, everything feels different.

That said, if my father were to do this, I would seriously recommend my father to cash out cause he pretty much won the 'game' regardless. But to each his own.

[Cam894]

Sounds like he is a more skilled investor than you. You index because you can't/don't want to time the market. He does not feel the same.

Most bogleheads will repeat the work "luck" till they are blue in the face. But the reality is that he sounds fairly competent on investing matters. He saw potential and rode out incredible volatility. Tesla aside he is doing pretty well on the money side of things. So I would stay out of his business.

He probably doesn't want to take advice from a 30 year old whose indexes haven't done anything in 2 years. You could try telling him to sell his principal and play with house money.

I love indexing but not everybody shares our opinion.

[tomtoms]

People here need to stop saying index is the only way to make money. The truth is indexing is one of the ways to make money.

You're on a site dedicated to indexing... You may want to get stock tips somewhere else.

Why do we need a forum just for the sole purpose of indexing? The concept is easy to understand and execute.

If you read some of the older posts...again and again, don’t buy Tesla stocks, do not become a landlord. Only invest in index funds. I think we can conclusive say those advices were disastrous.

I am all for indexing but I know there are also other ways to make good money. I think that is the main difference between me and some members on this forum.

You have been a member here since 2013. How many other stocks were discussed over the last 7 years that did not pan out like Tesla? No one remembers the losers.

It is not just stocks. Imagine if you had bought rental properties in the last 7 years.

[oldfort]

Put yourself in his shoes. Would you listen to your son's advice what to do with your money if you are a millionaire with a net worth of 3 million dollar?

I mean...yes?

Would I just follow my son's instructions and do what he says unconditionally? Certainly not. But assuming my kid is adult and has good judgment, if he came to me expressing a concern about how I was allocated, I'd certainly hear him out and might change my position if he made a good case. This dude came here asking for help making the case; I think it's weird that the response to him is "butt out" rather than helping him make the case when literally the entire basis of Bogleheads is making the case that the dad's position is unreasonably risky even when it happens to have made money.

I'm fairly dogmatic about the bogleheads investment strategy, but I don't see it as my job to be a bogleheads missionary. I might give my opinion if asked, but don't see it as my job to try to convert anyone else to the bogleheads strategy.

[EnjoyIt]

People here need to stop saying index is the only way to make money. The truth is indexing is one of the ways to make money.

You're on a site dedicated to indexing... You may want to get stock tips somewhere else.

Why do we need a forum just for the sole purpose of indexing? The concept is easy to understand and execute.

If you read some of the older posts...again and again, don’t buy Tesla stocks, do not become a landlord. Only invest in index funds. I think we can conclusive say those advices were disastrous.

I am all for indexing but I know there are also other ways to make good money. I think that is the main difference between me and some members on this forum.

You have been a member here since 2013. How many other stocks were discussed over the last 7 years that did not pan out like Tesla? No one remembers the losers.

It is not just stocks. Imagine if you had bought rental properties in the last 7 years.

Yeah, imagine if you bought rental properties in NYC.

[bugleheadd]

He should sell way out the money tsla calls every week for income. Like tsla 1000 expiring in a week. I wonder how much premium you'd collect with $1m worth of tsla shared

Edit: ok maybe not tsla 1000, only goes up to 800. Could sell 15 contracts of tsla 600 expiring next Friday for around $10,000. Or tsla $700 for $4000, less likely to getting assigned.

[Pomegranate]

Hello all,

My dad just told me he has surpassed one million in Tesla . He's 60 years old , 5 years left to retirement. Has a total portfolio of 3 million and RE worth 2 million.

His portfolio holdings consist of individual companies such as Tesla , apple, Nvidia , AMD , GE and some other companies.

I told him to cash out , or at least cash out 50% and diversify to sp500. He is playing with fire and I told him he should cash his chips while he's running good. He told me he thinks he can time the market and will cash out before it crashes. I told him its very hard to time the market like that.

Can anybody provide some advice on what I should tell him to convince him otherwise ?

Thanks.

Do you have a crystal ball to give this kind of advice

[EnjoyIt]

Put yourself in his shoes. Would you listen to your son's advice what to do with your money if you are a millionaire with a net worth of 3 million dollar?

I mean...yes?

Would I just follow my son's instructions and do what he says unconditionally? Certainly not. But assuming my kid is adult and has good judgment, if he came to me expressing a concern about how I was allocated, I'd certainly hear him out and might change my position if he made a good case. This dude came here asking for help making the case; I think it's weird that the response to him is "butt out" rather than helping him make the case when literally the entire basis of Bogleheads is making the case that the dad's position is unreasonably risky even when it happens to have made money.

I'm fairly dogmatic about the bogleheads investment strategy, but I don't see it as my job to be a bogleheads missionary. I might give my opinion if asked, but don't see it as my job to try to convert anyone else to the bogleheads strategy.

I fully agree with you. He needs to make his case with tact so as to not offend, express his position, and then let it go.

[sailaway]

Put yourself in his shoes. Would you listen to your son's advice what to do with your money if you are a millionaire with a net worth of 3 million dollar?

I mean...yes?

Would I just follow my son's instructions and do what he says unconditionally? Certainly not. But assuming my kid is adult and has good judgment, if he came to me expressing a concern about how I was allocated, I'd certainly hear him out and might change my position if he made a good case. This dude came here asking for help making the case; I think it's weird that the response to him is "butt out" rather than helping him make the case when literally the entire basis of Bogleheads is making the case that the dad's position is unreasonably risky even when it happens to have made money.

I'm fairly dogmatic about the bogleheads investment strategy, but I don't see it as my job to be a bogleheads missionary. I might give my opinion if asked, but don't see it as my job to try to convert anyone else to the bogleheads strategy.

I fully agree with you. He needs to make his case with tact so as to not offend, express his position, and then let it go.

According to the title of this thread, he already fumbled that by telling Dad what to do.

[tomtoms]

You're on a site dedicated to indexing... You may want to get stock tips somewhere else.

Why do we need a forum just for the sole purpose of indexing? The concept is easy to understand and execute.

If you read some of the older posts...again and again, don’t buy Tesla stocks, do not become a landlord. Only invest in index funds. I think we can conclusive say those advices were disastrous.

I am all for indexing but I know there are also other ways to make good money. I think that is the main difference between me and some members on this forum.

You have been a member here since 2013. How many other stocks were discussed over the last 7 years that did not pan out like Tesla? No one remembers the losers.

It is not just stocks. Imagine if you had bought rental properties in the last 7 years.

Yeah, imagine if you bought rental properties in NYC.

Imagine if you had bought in the other 99.9% neighborhood.

I don’t get why some people think index is the only way to make good money. Factors like age, income, experience and risk tolerance should also be taken into consideration.

[EnjoyIt]

Why do we need a forum just for the sole purpose of indexing? The concept is easy to understand and execute.

If you read some of the older posts...again and again, don’t buy Tesla stocks, do not become a landlord. Only invest in index funds. I think we can conclusive say those advices were disastrous.

I am all for indexing but I know there are also other ways to make good money. I think that is the main difference between me and some members on this forum.

You have been a member here since 2013. How many other stocks were discussed over the last 7 years that did not pan out like Tesla? No one remembers the losers.

It is not just stocks. Imagine if you had bought rental properties in the last 7 years.

Yeah, imagine if you bought rental properties in NYC.

Imagine if you had bought in the other 99.9% neighborhood.

I don’t get why some people think index is the only way to make good money. Factors like age, income, experience and risk tolerance should also be taken into consideration.

No one said it’s the only way. Real Estate is a long proven way if one knows what their doing and willing to put in the effort. I doubt the majority here says otherwise.

[bluquark]

Anyway, this thread helped me understand why Tesla keeps rising so quickly. After the Gen Z robinhood traders bought in as much as they are going to, now the FOMO bug has bit the 60-something dads. And there's a lot more money in the latter group which explains why it's going up at an accelerating pace.

The question then is how many waves of new investors are left from here to sustain the rise.

[CardinalRule]

Tough month so far for TSLA. With today's general selloff, it's down about 18% since August 31 as I write this.

[SovereignInvestor]

Instead of selling none and being concentrated or selling all and leaving gain in table and taking massive tax hit, perhaps selling N%, where 0 < n < 100% is a good idea.

[wilked]

Tough month so far for TSLA. With today's general selloff, it's down about 18% since August 31 as I write this.

I can't tell if it's intended to be tongue in cheek, but calling anything a tough month on the morning of the 3rd is kind of funny, esp considering it's up 30% over the last month (30 days). Might be how it was intended though

[mrtwstr]

Well it is down $40 a share from the open after the split, and $95+ from the high after the split

[7eight9]

Tough month so far for TSLA. With today's general selloff, it's down about 18% since August 31 as I write this.

I can't tell if it's intended to be tongue in cheek, but calling anything a tough month on the morning of the 3rd is kind of funny, esp considering it's up 30% over the last month (30 days). Might be how it was intended though

I'm guessing that the intent was that the month of September has been tough for Tesla. On August 31 (the day this thread started) Tesla closed at $498.32. Right now it is $405.83 -- losing 18.56% in three days is pretty tough. Someone who had a million in Tesla on the 31st of August is now down $185K.

[David Jay]

If he had a million in TSLA yesterday, he has about $904K today.

[eye.surgeon]

Thanks a pretty expensive I told you so conversation you can have with your dad.

[BillWalters]

I’m a firm believer in indexing but this stock was and is obviously absurdly valued. The price could easily double or triple from here before reality sets in but this company is not worth $400 billion. Come on.