Dumped my last stock [edited to show how much this cost me]
Dumped my last stock [edited to show how much this cost me]
Hi,
As of this morning I dumped my last stock. I have held Tesla for about 3 years and had a lot of fun watching the wild rides. I woke up this morning and thought about it for a bit. It occurred to me that I wouldn't be any happier if the price went back to $380. It also occurred to me that I wouldn't be much sadder if the price fell to $280. And so I dumped it. The $30K is now solidly invested in VTI and I will forget about things for a bit. Since it doesn't really matter in the short term and the risk is (according to even Elon) pretty high, I just wanted out. Now, I am going to read and screw around on things that really matter.
Regards,
Bampf
Edit: This lost me about $500K
As of this morning I dumped my last stock. I have held Tesla for about 3 years and had a lot of fun watching the wild rides. I woke up this morning and thought about it for a bit. It occurred to me that I wouldn't be any happier if the price went back to $380. It also occurred to me that I wouldn't be much sadder if the price fell to $280. And so I dumped it. The $30K is now solidly invested in VTI and I will forget about things for a bit. Since it doesn't really matter in the short term and the risk is (according to even Elon) pretty high, I just wanted out. Now, I am going to read and screw around on things that really matter.
Regards,
Bampf
Edit: This lost me about $500K
Last edited by bampf on Tue Oct 26, 2021 9:09 am, edited 3 times in total.
Nescio
Re: Dumped my last stock
A solid move.
One mind-shift would be that you still own Tesla (and 3,590 other stocks) in VTI.
VTI holds 2,836,742 shares with a value of $1,025,794,275
Want more Tesla? Buy more VTI. Get an itch to scratch and want to buy more XYZ, buy more VTI.
Add VXUS and you get 6,166 international stocks. Some Nestle and Samsung and Royal Dutch.
One mind-shift would be that you still own Tesla (and 3,590 other stocks) in VTI.
VTI holds 2,836,742 shares with a value of $1,025,794,275
Want more Tesla? Buy more VTI. Get an itch to scratch and want to buy more XYZ, buy more VTI.
Add VXUS and you get 6,166 international stocks. Some Nestle and Samsung and Royal Dutch.
Re: Dumped my last stock
bampf wrote:Hi,
As of this morning I dumped my last stock. I have held Tesla for about 3 years and had a lot of fun watching the wild rides. I woke up this morning and thought about it for a bit. It occurred to me that I wouldn't be any happier if the price went back to $380. It also occurred to me that I wouldn't be much sadder if the price fell to $280. And so I dumped it. The $30K is now solidly invested in VTI and I will forget about things for a bit. Since it doesn't really matter in the short term and the risk is (according to even Elon) pretty high, I just wanted out. Now, I am going to read and screw around on things that really matter.
Regards,
Bampf
Good move. I did the same with Apple stock and invested proceeds ind Fidelity's total stock. Watching Apple was fun, but now just want funds.
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Re: Dumped my last stock
87.5:12.5, EM tilt — HODL the course!
- arcticpineapplecorp.
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Re: Dumped my last stock
interesting. Have you seen what Elon Musk said today?bampf wrote:Hi,
As of this morning I dumped my last stock. I have held Tesla for about 3 years and had a lot of fun watching the wild rides. I woke up this morning and thought about it for a bit. It occurred to me that I wouldn't be any happier if the price went back to $380. It also occurred to me that I wouldn't be much sadder if the price fell to $280. And so I dumped it. The $30K is now solidly invested in VTI and I will forget about things for a bit. Since it doesn't really matter in the short term and the risk is (according to even Elon) pretty high, I just wanted out. Now, I am going to read and screw around on things that really matter.
Regards,
Bampf
But then he just backtracked that:Exactly. Tesla is absurdly overvalued if based on the past, but that's irrelevant. A stock price represents risk-adjusted future cash flows.--Elon Musk
http://www.cnbc.com/2017/07/17/elon-mus ... lieve.htmlI should clarify: Tesla stock is obviously high based on past & present, but low if you believe in Tesla's future. Place bets accordingly.--Elon Musk
Wonder if your sale of Tesla today had anything to do with the stock dropping today? Probably not. But they do hang on every word out of Elon's mouth. Congratulations on further diversifying. And as they say, if you own the market...you still own Tesla.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions |
Re: Dumped my last stock
Absolutely certain my sale had nothing to do with the fall of the stock today. Generally things rise after I sell them! That being said, the short term anxiety ridden markets are not interesting to me any longer. I would very much prefer just to sit back and watch my money grow over time. But not too closely. I still check every day even though I know I should not. Will be nice when I can just do my end of month measurement and walk away...
Nescio
Re: Dumped my last stock
I have 2% of my investments in a separate speculation brokerage account.
It's up 50%, now which is fun. I'm annoyed when I lose money on a stock.
And it has minimal impact on my retirement.
It's up 50%, now which is fun. I'm annoyed when I lose money on a stock.
And it has minimal impact on my retirement.
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Re: Dumped my last stock
bampf:
Congratulations!
You have stopped gambling.
Best wishes.
Taylor
Congratulations!
You have stopped gambling.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: Dumped my last stock
The only way to beat the game is to not play.
Re: Dumped my last stock
TSLA is great but this way, you can own all the car companies around the world. As long as the industry as a whole does well, you benefit. No need to pick horses since you are betting simply that some horses will make it to the finish line.
70% Global Stocks / 30% Bonds
Re: Dumped my last stock
Great! Now you can get on with the business of life. Isn't that why we invest, and not the other way around?
Re: Dumped my last stock
Congrats! I'm super bullish on Tesla and Musk and thought about buying some shares when they were at $180ish back in late 2017, but resisted the desire due to the discipline of not owning individual stocks.bampf wrote: ↑Mon Jul 17, 2017 10:51 am Hi,
As of this morning I dumped my last stock. I have held Tesla for about 3 years and had a lot of fun watching the wild rides. I woke up this morning and thought about it for a bit. It occurred to me that I wouldn't be any happier if the price went back to $380. It also occurred to me that I wouldn't be much sadder if the price fell to $280. And so I dumped it. The $30K is now solidly invested in VTI and I will forget about things for a bit. Since it doesn't really matter in the short term and the risk is (according to even Elon) pretty high, I just wanted out. Now, I am going to read and screw around on things that really matter.
Regards,
Bampf
Having said that, you still own Tesla shares indirectly now and you get the piece of mind with market return so you are solid!
Re: Dumped my last stock
Worth replying to myself on this. I did the calculations and my smug "dumped" my last stock post has cost me $480K. I had about $30K in Tesla in June or so of 2017. I put it into VTI and it is now worth about $63K. It would have been worth $545K or roughly $480K.
I am a true believer that one should invest in low cost index funds and buy and hold for the long haul. And I am worth less than I would have been. I have tried to reconcile that and honestly I am ok with the decision although I regret not having that money.
1. I sold because the realization was that the growth or loss of that money didn't really matter to me one way or the other. I made a mistake in that the thought was incomplete. I should have said, the reasonable growth of that stock didn't really matter. The totally loss of that stock didn't really matter. The explosive growth that we have seen matters a great deal.
2. I rationalize that the $500K is totally artificial. Given my intense focus on the stock back then, I can't imagine I would have held until it arrived at the point it has arrived at. In fact I likely would have sold at substantially less valuation and posted another smug "I'm out message.." I sold because of behavioral issues and I wouldn't have fixed those issues if I hadn't sold.
3. The anxiety of being out of the market individual stocks was greatly reduced. There is no way I could have known tsla did what it did.
4. I doubled my money in 4 years time which is amazing.
So I am left with the following thought:
If you can stand it, having a certain amount of money in a play account is probably worthwhile. If you can afford to lose it and not really care, then why not put a bit of a bet out there? I have seen some BH people say 5% is a good number. I don't know what my number is, but, maybe I have a number now. I would also say that the structural behavior issues still exists. I don't think I want to care about the individual stock price. My total portfolio gives me much more satisfaction. I also don't know that I would have been happy sitting on $500K of tsla (wouldn't mind finding out tho!~). So, if I do "gamble" I suppose it will be in such a way that I don't buy with the intention of selling anytime soon, regardless of the performance. Its complex. I am happy that I have a long term successful boring portfolio that has roughly doubled in 4 years. I am sad that I don't have $500K more. I am happy that I don't worry about an individual stock. I am sad that I am going to work in 19 minutes because I didn't put $150K into tsla in June of 2017.
Actionable? Knowing what you know now, will you have a 5% (or some number) play money portfolio?
--bampf
I am a true believer that one should invest in low cost index funds and buy and hold for the long haul. And I am worth less than I would have been. I have tried to reconcile that and honestly I am ok with the decision although I regret not having that money.
1. I sold because the realization was that the growth or loss of that money didn't really matter to me one way or the other. I made a mistake in that the thought was incomplete. I should have said, the reasonable growth of that stock didn't really matter. The totally loss of that stock didn't really matter. The explosive growth that we have seen matters a great deal.
2. I rationalize that the $500K is totally artificial. Given my intense focus on the stock back then, I can't imagine I would have held until it arrived at the point it has arrived at. In fact I likely would have sold at substantially less valuation and posted another smug "I'm out message.." I sold because of behavioral issues and I wouldn't have fixed those issues if I hadn't sold.
3. The anxiety of being out of the market individual stocks was greatly reduced. There is no way I could have known tsla did what it did.
4. I doubled my money in 4 years time which is amazing.
So I am left with the following thought:
If you can stand it, having a certain amount of money in a play account is probably worthwhile. If you can afford to lose it and not really care, then why not put a bit of a bet out there? I have seen some BH people say 5% is a good number. I don't know what my number is, but, maybe I have a number now. I would also say that the structural behavior issues still exists. I don't think I want to care about the individual stock price. My total portfolio gives me much more satisfaction. I also don't know that I would have been happy sitting on $500K of tsla (wouldn't mind finding out tho!~). So, if I do "gamble" I suppose it will be in such a way that I don't buy with the intention of selling anytime soon, regardless of the performance. Its complex. I am happy that I have a long term successful boring portfolio that has roughly doubled in 4 years. I am sad that I don't have $500K more. I am happy that I don't worry about an individual stock. I am sad that I am going to work in 19 minutes because I didn't put $150K into tsla in June of 2017.
Actionable? Knowing what you know now, will you have a 5% (or some number) play money portfolio?
--bampf
Nescio
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Re: Dumped my last stock
In a way, funny money is tough business because:
a) it can go south
b) it can go too well and one ends up slashing prematurely
both a) and b) pose issues. I don't think there's a solution to be honest, one would have to be determined to sit tight and hold through.
a) it can go south
b) it can go too well and one ends up slashing prematurely
both a) and b) pose issues. I don't think there's a solution to be honest, one would have to be determined to sit tight and hold through.
Re: Dumped my last stock
Good for you. I'm still holding onto 4 stocks. I think about selling them nearly every day, but keep holding off to avoid the tax hit.
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Re: Dumped my last stock
it depends on how you look at it. In my view it is one of the biggest speculative bubbles of all time and that will burst sometime - probably with the broader market. Even if EV becomes dominant, and that isn't certain as there are huge problems to mass adoption - cost, availability of raw materials (lithium, rare metals etc. - and the cost of these skyrocketing as well as they are in short supply), electric grid support just isn't there.
The problem with EV is that it's very small right now but it does not scale up to a mass adoption model well at all unless something radically changes. But with finite resources I can't see EVs developed on an economical scale. Also if prices have to radically fall it will not be profitable.
Finally even let's assume EV does succeed, there is virtually no guarantee TSLA will be the dominant player. The other manufacturers aren't trying hard enough now not because they cannot, the truth is that it simply isn't too profitable of a business model.
With TSLA and the speculations being made to justify the current value of the stock, I see a clear parallel to the way some companies were discussed in the dot com era.
The problem with EV is that it's very small right now but it does not scale up to a mass adoption model well at all unless something radically changes. But with finite resources I can't see EVs developed on an economical scale. Also if prices have to radically fall it will not be profitable.
Finally even let's assume EV does succeed, there is virtually no guarantee TSLA will be the dominant player. The other manufacturers aren't trying hard enough now not because they cannot, the truth is that it simply isn't too profitable of a business model.
With TSLA and the speculations being made to justify the current value of the stock, I see a clear parallel to the way some companies were discussed in the dot com era.
Re: Dumped my last stock
This was really less about TSLA and more about should you have a small portfolio of stocks that you speculate with. For the record however, I disagree with you on the viability of EVs. And, considering Hertz just purchased 100K vehicles, I disagree with you on whether Tesla will be the dominate player. They clearly are now and I think catching up is hard to do.stocknoob4111 wrote: ↑Tue Oct 26, 2021 8:40 am it depends on how you look at it. In my view it is one of the biggest speculative bubbles of all time and that will burst sometime - probably with the broader market. Even if EV becomes dominant, and that isn't certain as there are huge problems to mass adoption - cost, availability of raw materials (lithium, rare metals etc. - and the cost of these skyrocketing as well as they are in short supply), electric grid support just isn't there.
The problem with EV is that it's very small right now but it does not scale up to a mass adoption model well at all unless something radically changes. But with finite resources I can't see EVs developed on an economical scale. Also if prices have to radically fall it will not be profitable.
Finally even let's assume EV does succeed, there is virtually no guarantee TSLA will be the dominant player. The other manufacturers aren't trying hard enough now not because they cannot, the truth is that it simply isn't too profitable of a business model.
With TSLA and the speculations being made to justify the current value of the stock, I see a clear parallel to the way some companies were discussed in the dot com era.
Nescio
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Re: Dumped my last stock [edited to show how much this cost me]
I have a similar position in tsla (and snap) and a very long one in aapl. What I have done with tsla this year (and (aapl) over the last decades) is sell half or in tsla's case %35. Then you make back your initial investment and can put that back in an index to grow more slowly. The psychological benefit is if the stock tanks you've more than broken even and if the stock soars you only have a small tinge of guilt for selling. If the stock really tanks you buy more. Assuming this is all in a fun account.
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Re: Dumped my last stock [edited to show how much this cost me]
I think this is how one would find their risk tolerance / comfort levels. The OP listed reasons to dump TSLA and they were valid reasons for their circumstances then.
It's easy to look at the price today and say this and that, but I'm 100% certain the OP would have sold before Oct 2021 even if they didn't sell in July 2017.
For example, TSLA went from 183.48 to 72.24 (-60%) last March. B&H isn't easy even if you had a golden ticket.
It's easy to look at the price today and say this and that, but I'm 100% certain the OP would have sold before Oct 2021 even if they didn't sell in July 2017.
For example, TSLA went from 183.48 to 72.24 (-60%) last March. B&H isn't easy even if you had a golden ticket.
Re: Dumped my last stock [edited to show how much this cost me]
I didn’t buy Tesla and now curse my luck that I didn’t. But lucky me I bought AAPL in 2010 and now it’s a fifteen-bagger or something like that. But I bought it in taxable and so now I don’t want to sell due to capital gains taxation. That was also lucky in a way as it “forced” me to hold all this time or I would’ve sold by now! (It’s 25% of my portfolio). But when to sell? That’s always the conundrum.
Re: Dumped my last stock [edited to show how much this cost me]
These are no win scenarios.
Let's say the OP did hold this entire time.
What percentage of the portfolio would $500k be at that point?
Not only would there have been many opportunities to sell at $400, $500, $600, etc which would have been tough, the only 5% or only 10% play money rule would be overrun.
Plus out of the gain, a good chunk of taxes would be owed so take 25-30% off the gains. Also tax is very painful for some to pay, so that prevents them from selling even over a number of years.
Best to not even do the "shoulda, coulda, woulda" scenarios. I coulda bought Amazon at $20. I could had bitcoin at $100. This scenario for Tesla was real, but the odds of hodling on through all the record highs is slim. Oh well.
Let's say the OP did hold this entire time.
What percentage of the portfolio would $500k be at that point?
Not only would there have been many opportunities to sell at $400, $500, $600, etc which would have been tough, the only 5% or only 10% play money rule would be overrun.
Plus out of the gain, a good chunk of taxes would be owed so take 25-30% off the gains. Also tax is very painful for some to pay, so that prevents them from selling even over a number of years.
Best to not even do the "shoulda, coulda, woulda" scenarios. I coulda bought Amazon at $20. I could had bitcoin at $100. This scenario for Tesla was real, but the odds of hodling on through all the record highs is slim. Oh well.
Re: Dumped my last stock [edited to show how much this cost me]
25% of my portfolio in one stock would terrify me. I would absolutely not be able to sleep at night. Indeed, the challenge is when to sell. I would absolutely be unwinding my risk portfolio and I am super aggressive. 95% of my liquid net worth is tied up in equity (VOO, VTI and VGT mostly).Nicolas wrote: ↑Tue Oct 26, 2021 10:42 am I didn’t buy Tesla and now curse my luck that I didn’t. But lucky me I bought AAPL in 2010 and now it’s a fifteen-bagger or something like that. But I bought it in taxable and so now I don’t want to sell due to capital gains taxation. That was also lucky in a way as it “forced” me to hold all this time or I would’ve sold by now! (It’s 25% of my portfolio). But when to sell? That’s always the conundrum.
Nescio
Re: Dumped my last stock [edited to show how much this cost me]
I agree sort of. Meaning that no one knows nothing. Meaning that behavioral investing is just that, behavioral. Meaning that the serenity of living with your choices is important. However, if the risk is limited and the upside is enormous, and you can control your tendency to take risk, then having a bet on a "15 bagger" can pay off enormously.bloom2708 wrote: ↑Tue Oct 26, 2021 10:45 am These are no win scenarios.
Let's say the OP did hold this entire time.
What percentage of the portfolio would $500k be at that point?
Not only would there have been many opportunities to sell at $400, $500, $600, etc which would have been tough, the only 5% or only 10% play money rule would be overrun.
Plus out of the gain, a good chunk of taxes would be owed so take 25-30% off the gains. Also tax is very painful for some to pay, so that prevents them from selling even over a number of years.
Best to not even do the "shoulda, coulda, woulda" scenarios. I coulda bought Amazon at $20. I could had bitcoin at $100. This scenario for Tesla was real, but the odds of hodling on through all the record highs is slim. Oh well.
I reduce my exposure to risk by holding the broad market. I reduce my necessity to pay attention to the market by being comfortable with what the market gives me. I also buy a lottery ticket when the payoff is stupid. Why wouldn't you take a chance on half a billion dollars if all it costs you is $10?
It would have been just as easy to construct the scenario where I lost my entire $30K. Then my post would be then "I should have pulled out, it cost me $60K (base plus growth of voo over 4 years)". That is an uninteresting loss in that it doesn't change my life at all. $500K wouldn't necessarily change my life, but, it has a whole lot better chance of changing my life. The flip side is that enough $30K losses would change my life.
I am still 95% broad market indexes. I don't really see that changing much. But maybe I make 5% bet and forget about it for 5 years. I dunno really.
Nescio
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Re: Dumped my last stock [edited to show how much this cost me]
I am a walking "murphy's law" of the stock market, which is why I'm grateful for index funds. I have a few stocks remaining I'm dying to get rid of, but my demonstrated talent for selling at precisely the wrong time has me procrastinating. Every friggin' time I sell a stock I've faithfully held for years, it skyrockets AFTER I sell - several were barely break even. Others were sold at losses and the companies rumored near bankruptcy (which is why I sold in the first place - poor fundamentals) until they suddenly weren't, of course.
I can move past losses...if I didn't have to see them soar shortly after.
I can move past losses...if I didn't have to see them soar shortly after.
Re: Dumped my last stock [edited to show how much this cost me]
I'm sure you thought of this phrase "Let your winners run" . I bought NVDA at $30, sold at $280, made $250K on a $30K investment, would have been a million if I held. Can say the same with Netflix, Facebook and TSLA.
It is not a sin to buy individual stocks.
It is not a sin to buy individual stocks.
Outside a dog, a book is man's best friend, inside a dog, it's too dark to read - Groucho
Re: Dumped my last stock [edited to show how much this cost me]
This is a fascinating thread, as it encapsulates the epic sweep of Tesla's rise and the regrets related to buying, selling, or staying on the sidelines. Nowadays, the itch to buy individual (often tech-based) stocks is powerful. I've never done so myself, but watching these companies' share prices skyrocket induces horror and attraction in equal measure.
50% VTSAX | 25% VTIAX | 25% VBTLX (retirement), 25% VTEAX (taxable)
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Re: Dumped my last stock [edited to show how much this cost me]
Wow - sorry man missing out on Teslas insane run would be tough to stomach. I respect your honesty to bump this. I regret missing Tesla but I just thought seriously about buying some 5 years ago but never actually held it. Sometimes investing is just a brutal game.
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Re: Dumped my last stock [edited to show how much this cost me]
25% of your portfolio is one way to look at it but it is not the only way.bampf wrote: ↑Tue Oct 26, 2021 12:10 pm25% of my portfolio in one stock would terrify me. I would absolutely not be able to sleep at night. Indeed, the challenge is when to sell. I would absolutely be unwinding my risk portfolio and I am super aggressive. 95% of my liquid net worth is tied up in equity (VOO, VTI and VGT mostly).Nicolas wrote: ↑Tue Oct 26, 2021 10:42 am I didn’t buy Tesla and now curse my luck that I didn’t. But lucky me I bought AAPL in 2010 and now it’s a fifteen-bagger or something like that. But I bought it in taxable and so now I don’t want to sell due to capital gains taxation. That was also lucky in a way as it “forced” me to hold all this time or I would’ve sold by now! (It’s 25% of my portfolio). But when to sell? That’s always the conundrum.
Another way to look at it is to completely wall off the bet from the rest of your portfolio and consider it a locked-up windfall that you would withdraw at a certain point in time. Basically consider the initial investment “lost” and not consider it part of your net worth at all until X years into the future or $Y target. It’s as if you purchased an expensive long-dated lottery ticket - would you consider that part of your net worth or portfolio? Of course not, it’s more like a consumption good which might or might not turn into anything.
This is I think the best way to get over the behavioral tendency to sell early.
Re: Dumped my last stock [edited to show how much this cost me]
If you hadn’t sold your Tesla back then what would its percentage be now of your current portfolio, as much as 25%? And if so would you be selling it now?bampf wrote: ↑Tue Oct 26, 2021 12:10 pm25% of my portfolio in one stock would terrify me. I would absolutely not be able to sleep at night. Indeed, the challenge is when to sell. I would absolutely be unwinding my risk portfolio and I am super aggressive. 95% of my liquid net worth is tied up in equity (VOO, VTI and VGT mostly).Nicolas wrote: ↑Tue Oct 26, 2021 10:42 am I didn’t buy Tesla and now curse my luck that I didn’t. But lucky me I bought AAPL in 2010 and now it’s a fifteen-bagger or something like that. But I bought it in taxable and so now I don’t want to sell due to capital gains taxation. That was also lucky in a way as it “forced” me to hold all this time or I would’ve sold by now! (It’s 25% of my portfolio). But when to sell? That’s always the conundrum.
Re: Dumped my last stock [edited to show how much this cost me]
I said the following in the note I posted that reanimated this thread:Nicolas wrote: ↑Tue Oct 26, 2021 4:58 pmIf you hadn’t sold your Tesla back then what would its percentage be now of your current portfolio, as much as 25%? And if so would you be selling it now?bampf wrote: ↑Tue Oct 26, 2021 12:10 pm25% of my portfolio in one stock would terrify me. I would absolutely not be able to sleep at night. Indeed, the challenge is when to sell. I would absolutely be unwinding my risk portfolio and I am super aggressive. 95% of my liquid net worth is tied up in equity (VOO, VTI and VGT mostly).Nicolas wrote: ↑Tue Oct 26, 2021 10:42 am I didn’t buy Tesla and now curse my luck that I didn’t. But lucky me I bought AAPL in 2010 and now it’s a fifteen-bagger or something like that. But I bought it in taxable and so now I don’t want to sell due to capital gains taxation. That was also lucky in a way as it “forced” me to hold all this time or I would’ve sold by now! (It’s 25% of my portfolio). But when to sell? That’s always the conundrum.
2. I rationalize that the $500K is totally artificial. Given my intense focus on the stock back then, I can't imagine I would have held until it arrived at the point it has arrived at. In fact I likely would have sold at substantially less valuation...
So I think what that means is that I would probably not have sat on 500K or even close to that. But, I also think it means that today I might. Because I understand the issues I was dealing with, fear, loss, uncertainty, I may place a bet and just let it run. If the loss doesn't matter, why not swing for the fences? It is sort of what caused me to reopen this thread.
Will I? Dunno. If I do, will I hold for a sufficiently long time? Very likely. Today, if I place a bet and it grows to 25% of my portfolio, thats very likely a very good problem to have. That wasn't the case in 2017.
Things to think about, but, not too hard.
Nescio
Re: Dumped my last stock [edited to show how much this cost me]
I can empathize. Back in the summer of 2014 after Apple's 7 for 1 stock split I had 2100 shares. By the following spring I had sold it all - that was my last stock sale. I realized a few weeks ago if I had held onto it it would now be worth about $1 million more than I sold it for. (And it was in my Roth IRA, so it would have been tax free.)
The reasons I sold it haven't changed, though, so even if I hadn't sold when I did it's highly unlikely I would have kept it the last seven years. I felt I was getting close to retirement (I did, 2 years later) and at the time that stock was somewhere between 20% and 25% of my retirement savings, which I was no longer comfortable with - especially after AAPL lost almost half its value in late 2012 & early 2013 and took until the fall of 2014 to recover. If I still had that stock now it would be over half my savings, which makes me wince a little just to think it.
It's a bit risky looking back at what might have been, especially if you're unhappy with where you are now. I have a pretty comfortable retirement, so I can contemplate missing out on that profit with only a tiny bit of regret. And my Roth IRA hasn't been standing still in the last 6.5 years, so I'm not a million dollars poorer than I would have been. I really don't know what I would do with most of that extra money if I had it now - probably spend it on stuff I don't really need.
Last edited by Gryphon on Wed Oct 27, 2021 4:47 am, edited 1 time in total.
Re: Dumped my last stock
bampf wrote: ↑Tue Oct 26, 2021 7:44 am Worth replying to myself on this. I did the calculations and my smug "dumped" my last stock post has cost me $480K. I had about $30K in Tesla in June or so of 2017. I put it into VTI and it is now worth about $63K. It would have been worth $545K or roughly $480K.
I am a true believer that one should invest in low cost index funds and buy and hold for the long haul. And I am worth less than I would have been. I have tried to reconcile that and honestly I am ok with the decision although I regret not having that money.
1. I sold because the realization was that the growth or loss of that money didn't really matter to me one way or the other. I made a mistake in that the thought was incomplete. I should have said, the reasonable growth of that stock didn't really matter. The totally loss of that stock didn't really matter. The explosive growth that we have seen matters a great deal.
2. I rationalize that the $500K is totally artificial. Given my intense focus on the stock back then, I can't imagine I would have held until it arrived at the point it has arrived at. In fact I likely would have sold at substantially less valuation and posted another smug "I'm out message.." I sold because of behavioral issues and I wouldn't have fixed those issues if I hadn't sold.
3. The anxiety of being out of the market individual stocks was greatly reduced. There is no way I could have known tsla did what it did.
4. I doubled my money in 4 years time which is amazing.
So I am left with the following thought:
If you can stand it, having a certain amount of money in a play account is probably worthwhile. If you can afford to lose it and not really care, then why not put a bit of a bet out there? I have seen some BH people say 5% is a good number. I don't know what my number is, but, maybe I have a number now. I would also say that the structural behavior issues still exists. I don't think I want to care about the individual stock price. My total portfolio gives me much more satisfaction. I also don't know that I would have been happy sitting on $500K of tsla (wouldn't mind finding out tho!~). So, if I do "gamble" I suppose it will be in such a way that I don't buy with the intention of selling anytime soon, regardless of the performance. Its complex. I am happy that I have a long term successful boring portfolio that has roughly doubled in 4 years. I am sad that I don't have $500K more. I am happy that I don't worry about an individual stock. I am sad that I am going to work in 19 minutes because I didn't put $150K into tsla in June of 2017.
Actionable? Knowing what you know now, will you have a 5% (or some number) play money portfolio?
--bampf
Thank you for the honest reflection.
If you had certain goals, with methods to achieve those goals, and you achieved the goal, be happy. If you did not achieve your goals, something needs to change.
Years ago, I set what at the time were outlandish goals. I moved in and out of the market in various vehicles too much, my results suffered. My reflections suggested to me that I needed to hold great companies over the long term, painfully demonstrated by the 20-30M I do not have as a result of selling both Apple and Netflix way too soon.
A potential issue with the BH way is that the goal is average and mediocre. This is good for many people. In order to invest in individual stocks, especially with the size required for monumental success, one has to go ones own way and ignore the well meaning wisdom here.
And, everyone has to sell to the sleeping point!
Pale Blue Dot
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Re: Dumped my last stock [edited to show how much this cost me]
When looking back and dwelling on past decisions it might be helpful to tease apart a few different aspects:
1. what was the decision you made? did it seem like a sensible decision with the limited information you had at the time?
2. what are the other outcomes that seemed plausible based on what you knew at the time, that might have happened, but didn't turn out happening?
3. what was the actual outcome?
4. is there anything you would adjust about your decision making in future, if faced with a somewhat similar, but not identical, situation? e.g. were you too hasty in making the decision without collecting enough information? or too slow to seize the moment? do you now realise your choice was heavily biased in one direction by something you misunderstood?
The easiest thing to focus on is the actual outcome -- but that in itself isn't very informative -- it's probably the least useful thing to think about, compared to thinking about the decision making process or all the things that didn't happen but could have. Good decisions can have terrible outcomes, and poor decisions can have fantastic outcomes. Focusing solely on the outcome instead of the decision making process won't help you improve decision making in future.
Maybe there was truly something like a 20% chance that TSLA turned out to be a great bet, and we're just seeing that 20%, instead of the 80% chance of the other possible ways 2018 -- 2021 could have evolved, where the stock floundered or went bankrupt or so on.
People who make a living placing bets sometimes write popular books about this kind of thing -- poker players (Annie Duke) and traders (Nassim Taleb) and so on.
1. what was the decision you made? did it seem like a sensible decision with the limited information you had at the time?
2. what are the other outcomes that seemed plausible based on what you knew at the time, that might have happened, but didn't turn out happening?
3. what was the actual outcome?
4. is there anything you would adjust about your decision making in future, if faced with a somewhat similar, but not identical, situation? e.g. were you too hasty in making the decision without collecting enough information? or too slow to seize the moment? do you now realise your choice was heavily biased in one direction by something you misunderstood?
The easiest thing to focus on is the actual outcome -- but that in itself isn't very informative -- it's probably the least useful thing to think about, compared to thinking about the decision making process or all the things that didn't happen but could have. Good decisions can have terrible outcomes, and poor decisions can have fantastic outcomes. Focusing solely on the outcome instead of the decision making process won't help you improve decision making in future.
Maybe there was truly something like a 20% chance that TSLA turned out to be a great bet, and we're just seeing that 20%, instead of the 80% chance of the other possible ways 2018 -- 2021 could have evolved, where the stock floundered or went bankrupt or so on.
People who make a living placing bets sometimes write popular books about this kind of thing -- poker players (Annie Duke) and traders (Nassim Taleb) and so on.
Re: Dumped my last stock [edited to show how much this cost me]
It's tough because the human condition makes losses (or missing out) feel much worse than winning. So, we play the what-if game over and over again when things "could" have gone another way. But, I think you've rationalized it well. There are so many things that could have gone differently and ultimately, would you really have held? You basically already said the chances are you would have sold.
I am a fan of the "play account" concept for this very reason. The truth is that for every Tesla, there are hundreds of "Lordstown Motors". The game is too hard to win continually when trying to pick individual stocks. But, it's not impossible to win. That is the kicker. We all know logically how difficult it is to pick stocks, but then, there are folks out there (some on this board), that picked well and have done significantly better than market returns over a few year period. So, that makes us all think (even for a moment), why can't that be us? I think the play account helps with that a little bit. Maybe you win with it, but if you lose (and chances are high you'd lose long term), it won't have a significant impact on your portfolio.
I am a fan of the "play account" concept for this very reason. The truth is that for every Tesla, there are hundreds of "Lordstown Motors". The game is too hard to win continually when trying to pick individual stocks. But, it's not impossible to win. That is the kicker. We all know logically how difficult it is to pick stocks, but then, there are folks out there (some on this board), that picked well and have done significantly better than market returns over a few year period. So, that makes us all think (even for a moment), why can't that be us? I think the play account helps with that a little bit. Maybe you win with it, but if you lose (and chances are high you'd lose long term), it won't have a significant impact on your portfolio.
Re: Dumped my last stock [edited to show how much this cost me]
Thanks for posting and bumping it. This would kill me. It would occupy my thoughts way too much. Both making the decision and then living with it.
Really confirms how much better suited to index investing my brain is.
Really confirms how much better suited to index investing my brain is.
55% VUG - 20% VEA - 20% EDV - 5% BNDX
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Re: Dumped my last stock [edited to show how much this cost me]
Ouch, that is a big number! My venture in to individual stocks cost me much less. I learned that I do not want to be consumed by the movement of an individual stock. In addition, if it gained or lost hundreds it was insignificant in regards to my investing performance and goals.
So I sold at a loss, and learned I do not desire to bother with individual stocks. My play money percentage is zero.
Curious as to why you got out with sound judgement, but now feel maybe you should allocate a small percentage for “play” money. The game is not fun win or lose.
If you held on to Tesla you would have more money, but you could have lost thousands on some other stock. Having a huge win on one stock could make you believe you are a stock picking genius and margin accounts are the way to go!
Lastly, you may have experienced the one win pick of your lifetime, with the rest being a rollercoaster of disappointment.
So I sold at a loss, and learned I do not desire to bother with individual stocks. My play money percentage is zero.
Curious as to why you got out with sound judgement, but now feel maybe you should allocate a small percentage for “play” money. The game is not fun win or lose.
If you held on to Tesla you would have more money, but you could have lost thousands on some other stock. Having a huge win on one stock could make you believe you are a stock picking genius and margin accounts are the way to go!
Lastly, you may have experienced the one win pick of your lifetime, with the rest being a rollercoaster of disappointment.
Fools think their own way is right, but the wise listen to others.
Re: Dumped my last stock [edited to show how much this cost me]
One interesting takeaway I have from this thread is the following: if you want to buy an individual stock (and you probably shouldn't do that), have the grit to hold onto it through the ups and downs. That's the only way to achieve stock-picking glory.
50% VTSAX | 25% VTIAX | 25% VBTLX (retirement), 25% VTEAX (taxable)
Re: Dumped my last stock [edited to show how much this cost me]
I got out because small growth or loss didn't matter. It still doesn't. I don't know if I will allocate a small percentage for play, but maybe. Totally disagree on the game not being fun if you win. If I win $500K, that is pretty darn fun. That being said, it would have to be, for me, a set and forget investment. Buy some tsla, come back in ten years and see if I won. Not interested in tracking the price or the day to day movement. Too much effort.
Nescio
Re: Dumped my last stock [edited to show how much this cost me]
Yep. Kind of what I have arrived at. If I dabble, it will be a long term dabble. No in and out stuff. Too much work and I will be totally wrong with every trade.
Nescio
Re: Dumped my last stock [edited to show how much this cost me]
I still wouldn't buy individual stocks myself--but, yes, buy and hold (on for dear life) applies there too.
50% VTSAX | 25% VTIAX | 25% VBTLX (retirement), 25% VTEAX (taxable)
Re: Dumped my last stock [edited to show how much this cost me]
These hypotheticals are useless. Are you assuming now is the time to sell? How would you know? How would you feel if you had $500k of TSLA now and sold it and watched it go to $5M in the next 4 years? How would you feel if you held it watched it go to $50k in the next 4 years? You would have had to ask and answer these questions every day between 2017 and now. It's a losers game and no way to invest.
Last edited by mall0c on Wed Oct 27, 2021 10:07 am, edited 1 time in total.
FIRE'd. Mid-40s.
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Re: Dumped my last stock [edited to show how much this cost me]
One stock I dumped if I had just bought and held to today would be 16M on about a 5K investment. Another would be 4M on about a 48k investment, a third $1M on about a 10K investment. Doesnt effect my life though, so I've moved on. Turns out I was a pretty good stock picker.
My dad never sells stock. His philosophy is that only a dividend is 'spendable' and he has done very well. He has held onto the second of my examples I recommended to him and has a $2M position in one stock and a $1M in another that we will inherit some day (along with siblings), whatever its at at the time. Individual stocks held forever are a fine strategy and before low cost index funds may have been the best choice, assuming enough diversification. There are many worse things to buy, and I personally prefer that strategy over high fee managed funds. I have managed to get him to buy some amount of bond and stock index funds, but they are the minority of his portfolio.
My dad never sells stock. His philosophy is that only a dividend is 'spendable' and he has done very well. He has held onto the second of my examples I recommended to him and has a $2M position in one stock and a $1M in another that we will inherit some day (along with siblings), whatever its at at the time. Individual stocks held forever are a fine strategy and before low cost index funds may have been the best choice, assuming enough diversification. There are many worse things to buy, and I personally prefer that strategy over high fee managed funds. I have managed to get him to buy some amount of bond and stock index funds, but they are the minority of his portfolio.
Re: Dumped my last stock [edited to show how much this cost me]
If you believe in a company and want to buy the stock, I say go ahead. But don't sell it--don't even check its valuation--until you actually need the money for a purchase. It's all probably still a loser's game, but far more people in this thread appear to regret selling more than buying.mall0c wrote: ↑Wed Oct 27, 2021 9:59 am These hypotheticals are useless. Are you assuming now is the time to sell? How would you know? How would you feel if you had $500k of TSLA now and sold it and watched it go to $5M in the next 4 years? How would you feel if you held it watched it go to $50k in the next 4 years? You would have had to ask and answer these questions every day between 2017 and now. It's a losers game and no way to invest.
50% VTSAX | 25% VTIAX | 25% VBTLX (retirement), 25% VTEAX (taxable)
Re: Dumped my last stock [edited to show how much this cost me]
Even if the stock becomes 25% of your portfolio? 50%? 75%? 99%?mikejuss wrote: ↑Wed Oct 27, 2021 10:10 amIf you believe in a company and want to buy the stock, I say go ahead. But don't sell it--don't even check its valuation--until you actually need the money for a purchase. It's all probably still a loser's game, but far more people in this thread appear to regret selling more than buying.mall0c wrote: ↑Wed Oct 27, 2021 9:59 am These hypotheticals are useless. Are you assuming now is the time to sell? How would you know? How would you feel if you had $500k of TSLA now and sold it and watched it go to $5M in the next 4 years? How would you feel if you held it watched it go to $50k in the next 4 years? You would have had to ask and answer these questions every day between 2017 and now. It's a losers game and no way to invest.
>> far more people in this thread appear to regret selling more than buying
What about the ones not in this thread that were in Pets.com? Telecom stocks? Enron?
FIRE'd. Mid-40s.
Re: Dumped my last stock
This is an important point people often miss. When I had $3k to buy my first stock in 2000 I was going to put it all into Apple. Instead I decided on the BH philosophy and put it into a Vanguard SP500 index fund. Since then, that $3k in the SP500 fund is now $13k. That's over a 4x increase! But, if I had put it into AAPL instead it would be worth $528k. I too "lost" $500k on that decision.bampf wrote: ↑Tue Oct 26, 2021 7:44 am 2. I rationalize that the $500K is totally artificial. Given my intense focus on the stock back then, I can't imagine I would have held until it arrived at the point it has arrived at. In fact I likely would have sold at substantially less valuation and posted another smug "I'm out message.." I sold because of behavioral issues and I wouldn't have fixed those issues if I hadn't sold.
But it ignores the fact that Apple underperformed the market for the first 4 years after I started investing in 2000. That $3k in AAPL would have gone down to $850 three years later. I would have definitely pulled out at some point, certain I made a huge mistake. And even if I somehow didn't, I would have definitely sold well before the the value of the Apple stock ever got close to $500k because I would have felt like it was overperforming and I would have wanted to lock in gains. And then it would have kept going up.
When you buy the index you don't need to do the "coulda/woulda". You don't need to stress about the "right" time to buy or sell. In the end I didn't need the Apple stock anyway. I'm well on my way to retire in a few years, before I even turn 50. All I needed was to keep investing the BH way and it all worked out fine, with a lot less stress.
Re: Dumped my last stock [edited to show how much this cost me]
No, I don't think it's safe to have 99% of one's portfolio in a single stock. I mean if you're using 5% of your portfolio's value to invest in individual stocks, have the resolve to hold them through thick and thin.mall0c wrote: ↑Wed Oct 27, 2021 10:14 amEven if the stock becomes 25% of your portfolio? 50%? 75%? 99%?mikejuss wrote: ↑Wed Oct 27, 2021 10:10 amIf you believe in a company and want to buy the stock, I say go ahead. But don't sell it--don't even check its valuation--until you actually need the money for a purchase. It's all probably still a loser's game, but far more people in this thread appear to regret selling more than buying.mall0c wrote: ↑Wed Oct 27, 2021 9:59 am These hypotheticals are useless. Are you assuming now is the time to sell? How would you know? How would you feel if you had $500k of TSLA now and sold it and watched it go to $5M in the next 4 years? How would you feel if you held it watched it go to $50k in the next 4 years? You would have had to ask and answer these questions every day between 2017 and now. It's a losers game and no way to invest.
>> far more people in this thread appear to regret selling more than buying
What about the ones not in this thread that were in Pets.com? Telecom stocks? Enron?
50% VTSAX | 25% VTIAX | 25% VBTLX (retirement), 25% VTEAX (taxable)
Re: Dumped my last stock [edited to show how much this cost me]
I don't think it is useless to think about behavior and the why and how we invest. Dogma only goes so far. The BH canon is useful and I am very grateful. That being said there are lots of dimensions and there are opportunities to personalize our approach.mall0c wrote: ↑Wed Oct 27, 2021 9:59 am These hypotheticals are useless. Are you assuming now is the time to sell? How would you know? How would you feel if you had $500k of TSLA now and sold it and watched it go to $5M in the next 4 years? How would you feel if you held it watched it go to $50k in the next 4 years? You would have had to ask and answer these questions every day between 2017 and now. It's a losers game and no way to invest.
I think useless is too strong a term. You may not find any value in these discussions, and I appreciate that. You may want to make sure that we don't clutter up the approach with hyperbolic trading schemes. I also see merit in that. This isn't that sort of discussion. I haven't changed a thing about how I invest and I may not. But I am thinking about it.
I said I was comfortable with the decision I made at the time and I still am. That being said, it doesn't mean that there aren't opportunities for reflection and thoughtfulness about the path we are walking. Many roads to Dublin and all that.
Nescio