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

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bmelikia
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by bmelikia »

hightower wrote: Mon Aug 31, 2020 1:22 pm
sjl333 wrote: Mon Aug 31, 2020 1:13 pm 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.
Lol, 1/3 of his portfolio in Tesla and he doesn't want to cash out now? If he doesn't see the foolishness of this now, he never will.
To be fair. . .it may be 1/3 of his portfolio now. . .because it has increased so much. I assume the money invested was a significantly smaller percentage of his overall portfolio
"I would rather die with money, than live without it...." - Bogleheads member Ron | | "The greatest enemy of a good plan, is the dream of a perfect plan." | -Bogle
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wander
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by wander »

jajlrajrf wrote: Mon Aug 31, 2020 2:11 pm
wander wrote: Mon Aug 31, 2020 2:07 pm 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.
Stay away from it. If he listens to his son and the stock keeps going up, it's going to ruin the Thanksgiving dinner. :D
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whodidntante
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by whodidntante »

Some people just like to gamble, and I'm very glad for them. While I believe that Tesla is overvalued, you aren't going to get a hundred bagger anytime soon buying the S&P 500. You've already shared your thoughts and he rejected your views. I would start working on something you can control.

Your dad is pretty old and people suffer from significant mental and physical decline as they age. He already has 3 million dollars. Why does he continue to work? Unless he derives major satisfaction from his work, he probably shouldn't make time for that at this stage of life.
alfaspider
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by alfaspider »

whodidntante wrote: Mon Aug 31, 2020 2:32 pm Some people just like to gamble, and I'm very glad for them. While I believe that Tesla is overvalued, you aren't going to get a hundred bagger anytime soon buying the S&P 500. You've already shared your thoughts and he rejected your views. I would start working on something you can control.

Your dad is pretty old and people suffer from significant mental and physical decline as they age. He already has 3 million dollars. Why does he continue to work? Unless he derives major satisfaction from his work, he probably shouldn't make time for that at this stage of life.
Agreed. The time to have an intervention is when gambling type behaviors start becoming a serious threat to financial wellbeing. While putting so much into Tesla is not something I would do, and I agree it's overvalued, OPs father will be well-off even if the investment goes to zero.
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HomerJ
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by HomerJ »

bmelikia wrote: Mon Aug 31, 2020 2:27 pm
hightower wrote: Mon Aug 31, 2020 1:22 pm
sjl333 wrote: Mon Aug 31, 2020 1:13 pm 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.
Lol, 1/3 of his portfolio in Tesla and he doesn't want to cash out now? If he doesn't see the foolishness of this now, he never will.
To be fair. . .it may be 1/3 of his portfolio now. . .because it has increased so much. I assume the money invested was a significantly smaller percentage of his overall portfolio
Yeah, you guys don't understand gamblers.

Maybe he had $1.5 million a year ago... He's up to $3 million with $1 million in a single stock, but even if that one stock went to ZERO, he'd still feel like a winner.

He doesn't see himself with $3 million to protect. He is probably anchored at his starting point.

Now me, I would "rat-hole" chips at casinos. Once I doubled my money during a good run, I would take a good chunk (say 30% of my winnings) and take it off the table and put into my pocket.

Then I'd play without fear down to my original stake, knowing I'd walk away up no matter what.

But I still would have lost from my high point. But up from my starting point.

Maybe you can get your Dad to at least take his original stake out of Tesla. If he invested $200,000, have him sell that much (or maybe $300,000 to be guaranteed a win), and then let the other $800,000-$900,000 ride.

Telling him to walk away from the table, cash it all out, and go play penny slots is NEVER going to work.

Besides, he has $2 million in real estate (creating income, right?), Social Security coming (maybe a pension?), and even if all his holdings dropped 50%, he'll probably still be fine.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
JHU ALmuni
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by JHU ALmuni »

Looks like your dad knows what he's doing. His initial investment in tsla is probably under 200K. I'd let him do what wants and consult him on individual stocks picking :)
illumination
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by illumination »

I'm always careful with this, my brother asked my opinion on Tesla, I said I thought it was a bubble, he sold most of it about a year ago.
Another friend said he was going to put every penny he had in Apple stock, I talked him out of it (but I did say I thought it was a good speculative bet for a small position) I said it was reckless to put his whole family nest egg in it and should buy a diversified index fund with most of his investment funds. That was several years ago. :oops:

I don't think any of this was bad advice, but when someone could have won big and you were the voice of reason, people aren't going to be happy.

If someone is up big on a position, tell them to put a trailing stop loss on at least a portion of it. That's a good way to split the difference. There is no way I could sleep well at night with a million in Tesla, I'd ring the cash register and pay the taxes on a large chunk of it. I still think it's a bubble, it's just a bigger bubble now.
Helo80
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by Helo80 »

sjl333 wrote: Mon Aug 31, 2020 1:13 pm Can anybody provide some advice on what I should tell him to convince him otherwise ?

His money. His business.

Then again, some parents don't know boundaries and will expect you to help them out financially when their portfolio/retirement goes to trash.
hightower
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by hightower »

illumination wrote: Mon Aug 31, 2020 2:55 pm I'm always careful with this, my brother asked my opinion on Tesla, I said I thought it was a bubble, he sold most of it about a year ago.
Another friend said he was going to put every penny he had in Apple stock, I talked him out of it (but I did say I thought it was a good speculative bet for a small position) I said it was reckless to put his whole family nest egg in it and should buy a diversified index fund with most of his investment funds. That was several years ago. :oops:

I don't think any of this was bad advice, but when someone could have won big and you were the voice of reason, people aren't going to be happy.

If someone is up big on a position, tell them to put a trailing stop loss on at least a portion of it. That's a good way to split the difference. There is no way I could sleep well at night with a million in Tesla, I'd ring the cash register and pay the taxes on a large chunk of it. I still think it's a bubble, it's just a bigger bubble now.
Your advice to your friends was correct. It would be reckless to put an entire family nest egg in one stock.
At least your friends didn't actually lose anything they worked for.
The downside of missing out on a run up is not as bad as the downside to losing all your hard earned savings. Things could have just as easily went very poorly for them if they had invested a bunch of money in those stocks.
I think what we're seeing right now is a lot of stock market euphoria from people who have never lived through tough times. I would be willing to bet that people who lost a lot of cash in prior stock market bubbles are not the ones buying up Tesla right now. This has all the markings of another bad bubble.
tiburblium
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by tiburblium »

He made 150k today, give him a high five. I am sure it will be up big again tomarrow too.

It’s like bitcoin, so it could go up 10x from here
Last edited by tiburblium on Mon Aug 31, 2020 3:24 pm, edited 1 time in total.
Godot
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by Godot »

sjl333 wrote: Mon Aug 31, 2020 1:13 pm 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's 60 and an adult and can make his own decisions.
Estragon: I can't go on like this. | Vladimir: That's what you think. | ― Samuel Beckett, Waiting for Godot
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by 123 »

sjl333 wrote: Mon Aug 31, 2020 1:13 pm ... He told me he thinks he can time the market and will cash out before it crashes...
How well did he clear his accounts of equities before the March 2020 swoon in the market, or did he hold on knowing it would be higher by August?

There is not much you can do. Maybe buy him a case of canned beans for Christmas with a note that it's something he might be able to use when he fails to anticipate an individual stock's decline.
The closest helping hand is at the end of your own arm.
Prettyfrtnt
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by Prettyfrtnt »

Tell him to hold until post split price of 10000...

Be nice to him, you’re likely going to have a gigantic inheritance.

And ya you can lead a horse to water but you can’t make them drink.
burritoLover
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by burritoLover »

Just tell him you sold your index funds and went all-in on Tesla as he convinced you it was the right move. Then he might feel guilty about it since your success (or failure) is now linked to him. If he sells, then you tell him you also sold and went back to index funds. Problem solved. 8-)
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ddurrett896
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by ddurrett896 »

I could care less what my parents do with their money.

Only caveat is if they mismanage and blow all of their money, don't come knocking on my door for help.
Vanguard Fan 1367
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by Vanguard Fan 1367 »

sjl333 wrote: Mon Aug 31, 2020 1:13 pm 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.
I think he should consider taking John Bogle's advice and sell the Tesla and buy Vanguard's Total Stock Market ETF. I don't know if your dad has read "The Little Book of Common Sense Investing." There are YouTube Videos of Bogle and others recommending low fee index funds if dad isn't into reading.

I don't know if Tesla will go up or down but your wanting your dad to sell makes me think of "There's room for the bulls and the bears. But there is no room for the pigs." Dad has certainly done well as of today with Tesla. That may not continue for the future. I have done much better with my investing going the Bogle way rather than try to pick stocks.
Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."
TSWNY
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by TSWNY »

Let him be. Some people just need to learn the hard way.
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Doom&Gloom
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by Doom&Gloom »

mptfan wrote: Mon Aug 31, 2020 2:18 pm
jajlrajrf wrote: Mon Aug 31, 2020 2:11 pmThis 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 don't think it's weird at all and I think you are missing a very important point. Yes, it's true, the Boglehead philosophy does not advise holding a single stock as a large portion of your portfolio. On that point you are correct. But here is the part you are missing... wise Bogleheads also know that it's not a good idea to meddle in other people's finances or offer advice about other people's investments, especially when that advice was not solicited, and that includes competent adults of any age, including parents, children or any other family members. And this has nothing whatever to do with age-ism, most Bogleheads would say the same about any competent adult of any age. That is why the consensus is to butt out. It would have been different if the OP was asking about his own portfolio, but he was not.
+1

People posting on this site are here by their own choice. OP's dad is presumably not a member here. He is presumably not interested in "The Boglehead Way." That's ok. He seems to be doing all right. And if he is refraining from LHAO at his son or daughter, he might even be a candidate for Father of the Year.
Last edited by Doom&Gloom on Mon Aug 31, 2020 7:27 pm, edited 1 time in total.
k b
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by k b »

Some options:
  • sell enough to recover “house money” that he originally invested
    Buy rolling put options
    Stop loss orders at different prices for small portions of his holdings
    Give up trying to change him :D
chinchin
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by chinchin »

Good day for Dad, he made about $126k today from TSLA! :greedy :moneybag
cogito
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by cogito »

I definitely wouldn't tell him to cash out, but, boglehead in me be darned, I'm gonna give in and start buying puts once the madness eventually makes its way to a Trillion in market cap.
moneywise3
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by moneywise3 »

Maybe he is able to time the market. Maybe he did time the market. There is a small %age of people that do it successfully, although not always but with some of their investments. I can not.
austin757
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by austin757 »

Don't take this the wrong way, but is part of your concern for him related to an inheritance you would be expecting someday? Perhaps you see a potential million dollar loss as, in some way, your money too.
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sjl333
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by sjl333 »

austin757 wrote: Mon Aug 31, 2020 7:10 pm Don't take this the wrong way, but is part of your concern for him related to an inheritance you would be expecting someday? Perhaps you see a potential million dollar loss as, in some way, your money too.
Absolutely not. I'm looking out for him and his future retirement. He's already been burned before don't want him to get burned again. Also if he left me nothing , used all his money , or gave it all away to charity I wouldn't mind. I will forge my own path.
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willthrill81
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by willthrill81 »

Probably the only thing you might be able to persuade your dad to do is to place a stop-loss on the stock, which would likely effectively 'lock in' most of his gains.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
000
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by 000 »

One could consider protective puts or stop loss.
memcpy
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by memcpy »

If he thinks he can beat the market...he would have been a multi billioner by now... just leave him alone.... market will beat him😄
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Robert T
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by Robert T »

.
Risk = probability of occurance * consequence of occurance

Important to try to understand both parts (on the downside). And as El Erian says - try to avoid mistakes you can't afford to make.
.
EnjoyIt
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by 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 the table and continue doing what he believes he does well. Finish off with an apology for giving an unrequested discussion and that you won't bring this again.

This way you get to get what you think off your chest and the rest is up to him to decide what to do.

I was in the same boat as you a few years ago. My father had 100% of his investments in single stocks. About 7 or so. None of them where heavy hitters like Tesla, but he did all right. The difference is, is that my parents had no other investments, where to get SS, no pension, and I know my dad has had a few big misses over the years. To be honest, I every so often over about 3 years just threw pieces of information out there to help change his mind and decrease risk. To be honest, I got very lucky because at the end of 2019 He sold 95% of his individual stocks and converted to a 60/40 VOO/BND portfolio. If he did not make this transition he would have had huge losses because about 45% of his holdings were in GE that he had for a small gain back in 2019. Frankly, we got lucky because not only did we protect his portfolio, we got to see a very rare run up in the bond portion when covid hit the fan. Plus we got lucky and rebalanced in March.

My advice I know is wrong, but how can you not at least share your views?
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jello_nailer
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by jello_nailer »

Goal33 wrote: Mon Aug 31, 2020 1:15 pmgive up
+1^
He has GE and he doesn't understand what you're trying to tell him? Heck, he lived it in real time with GE.
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sjl333
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by sjl333 »

jello_nailer wrote: Mon Aug 31, 2020 9:08 pm
Goal33 wrote: Mon Aug 31, 2020 1:15 pmgive up
+1^
He has GE and he doesn't understand what you're trying to tell him? Heck, he lived it in real time with GE.
He bought into GE after it crashed like at $7 $8
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willthrill81
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by willthrill81 »

sjl333 wrote: Mon Aug 31, 2020 9:11 pm
jello_nailer wrote: Mon Aug 31, 2020 9:08 pm
Goal33 wrote: Mon Aug 31, 2020 1:15 pmgive up
+1^
He has GE and he doesn't understand what you're trying to tell him? Heck, he lived it in real time with GE.
He bought into GE after it crashed like at $7 $8
Those who buy individual stocks should, IMHO, absolutely, positively have a defined exit strategy before they ever buy in the first place in order to help stave off massive losses.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by JonnyDVM »

Seen a few of these posts lately. Your dad has made more money investing than any strategy espoused on this forum would have returned him. Why should he listen to you?
I’d trade it all for a little more | -C Montgomery Burns
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by drk »

bmelikia wrote: Mon Aug 31, 2020 2:27 pm To be fair. . .it may be 1/3 of his portfolio now. . .because it has increased so much. I assume the money invested was a significantly smaller percentage of his overall portfolio
That's an important assumption that many in this thread are making. As far as I can tell, OP never said when pops bought in. Granted, at this point, buying even two weeks ago would have returned some ungodly amount.
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by sailaway »

drk wrote: Mon Aug 31, 2020 9:29 pm
bmelikia wrote: Mon Aug 31, 2020 2:27 pm To be fair. . .it may be 1/3 of his portfolio now. . .because it has increased so much. I assume the money invested was a significantly smaller percentage of his overall portfolio
That's an important assumption that many in this thread are making. As far as I can tell, OP never said when pops bought in. Granted, at this point, buying even two weeks ago would have returned some ungodly amount.
Buying this morning returned an impressive amount.
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gmaynardkrebs
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by 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?
Last edited by gmaynardkrebs on Mon Aug 31, 2020 9:58 pm, edited 1 time in total.
RickyAZ
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by RickyAZ »

Trailing stops.

He could lose 90% of it and still be fine. He's lived through the 70s, Black Monday, the Dot Com Bust and Great Financial Crisis. Give him some credit.

You should be asking him for tips or run some of your $.

Different strokes, it's what makes a market.

Cheers
palanzo
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by palanzo »

gmaynardkrebs wrote: Mon Aug 31, 2020 9:40 pm 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.
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by xraygoggles »

Why would he cash out on the stock? His cost basis was likely 1/5 or 1/10 or even 1/100 the price, depending on when he bought the shares.

Like others said, put options and/or stop loss is the way to go. That's what I'm doing now that I have a similar windfall in Tesla.
“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”
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gmaynardkrebs
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by gmaynardkrebs »

palanzo wrote: Mon Aug 31, 2020 9:49 pm
gmaynardkrebs wrote: Mon Aug 31, 2020 9:40 pm 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?
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.
Deleted that. Thank you for agreeing with my actual point.
KyleAAA
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by KyleAAA »

If he didn't ask for your advice, drop it.
langlands
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by langlands »

Things don't have to be so binary. Some posters seem to have the view that touching individual stocks is like shooting heroin or something. I don't think you're ever going to get your dad to stop investing in individual stocks. But let's step back and try to remember why individual stocks are "bad" to begin with. Lack of diversification. The SPY ETF is just a bundled package of 500 individual stocks. As long as your dad's portfolio is reasonably diversified, nothing disastrous will happen. A portfolio of 30 well picked stocks (diverse sectors and market caps) is already quite safe. I doubt you'll get him to pick 30 well-diversified stocks. But let's analyze various portfolios with a little nuance:

100% TSLA : Insane. I don't think there's anything to say since it's so obviously risky that such a person must know exactly what he is doing.
50% TSLA/50% AAPL : Pretty risky but already MUCH MUCH less risky. AAPL is a blue chip and 2 stocks is much more diversified than 1.
FANGMAN : Only a bit more risky than QQQ
QQQ
SPY

Your dad's portfolio seems to be somewhere between 50% TSLA/ 50% AAPL and FANGMAN. He seems very heavy on tech. I like the fact that he has GE in his portfolio, so he's willing to look outside of QQQ. His portfolio would benefit massively from just a couple of other non-tech picks, e.g. $1 million TSLA, $1 million NVIDIA/AMD/AAPL, $1 million GE/ WMT / BLK.

Note that WMT and BLK are just examples I give of stocks that would help diversify the portfolio, no opinion whatsoever on their chance of outperformance. But the point is that such a portfolio is honestly not that crazy (I would personally add quite a few more stocks, but obviously your dad likes concentration).
Last edited by langlands on Mon Aug 31, 2020 10:26 pm, edited 1 time in total.
wilked
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by wilked »

EnjoyIt wrote: Mon Aug 31, 2020 7:48 pm 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
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HomerJ
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by HomerJ »

palanzo wrote: Mon Aug 31, 2020 9:49 pm
gmaynardkrebs wrote: Mon Aug 31, 2020 9:40 pm 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.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
000
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by 000 »

wilked wrote: Mon Aug 31, 2020 10:25 pm
EnjoyIt wrote: Mon Aug 31, 2020 7:48 pm 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
Send certified mail to your parents so you can provably say "I told you so"? :shock:
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sjl333
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by sjl333 »

All if anybody is wondering when he got in. He got in when it was at $1500. That means he put in around 600k in Tesla in one shot.
000
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by 000 »

sjl333 wrote: Mon Aug 31, 2020 10:36 pm All if anybody is wondering when he got in. He got in when it was at $1500. That means he put in around 600k in Tesla in one shot.
Sounds like he has "diamond hands" as the WSBers would say.

I don't think you can stop him.
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HomerJ
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by HomerJ »

sjl333 wrote: Mon Aug 31, 2020 10:36 pm All if anybody is wondering when he got in. He got in when it was at $1500. That means he put in around 600k in Tesla in one shot.
Well, tell him to sell $600k when he hits $1.2 million (tomorrow?). Then he's totally playing with house money.

The gambler in him will like that idea.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
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JoMoney
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by JoMoney »

I don't know anything about Tesla's stock prospects.
I wouldn't have advised him to get into the position, and I wouldn't fault him for ignoring my opinion on getting out of it, I don't know anything about it. He obviously has a different view on stock investing then I do.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
NMBob
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by NMBob »

as several have mentioned, i would just say hey, you have taken measures to lock in a hunk of your gains right?

https://www.investopedia.com/terms/t/trailingstop.asp

A trailing stop is a modification of a typical stop order that can be set at a defined percentage or dollar amount away from a security's current market price. For a long position, an investor places a trailing stop loss below the current market price. For a short position, an investor places the trailing stop above the current market price.

A trailing stop is designed to protect gains by enabling a trade to remain open and continue to profit as long as the price is moving in the investor’s favor. The order closes the trade if the price changes direction by a specified percentage or dollar amount.
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