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

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sjl333
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Family member has one million in one stock , doesn't want to cash out

Post by sjl333 »

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.
Last edited by sjl333 on Tue Sep 08, 2020 1:11 pm, edited 2 times in total.
Goal33
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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 Goal33 »

give up
Jags4186
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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 Jags4186 »

Seems like your father has made some great investing decisions (well, maybe not GE) and I doubt you'll be able to convince him to sell stocks which have more than significantly outperformed the market overall.
mptfan
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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 mptfan »

sjl333 wrote: Mon Aug 31, 2020 1:13 pm Can anybody provide some advice on what I should tell him to convince him otherwise ?
My advice is to mind your own business. Unless he asks for your advice (and it does not sound like he did) you should not offer it.

I wish I had bought Tesla years ago.
sailaway
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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 »

Leave him alone. He may have a different investing philosophy than you, but you have said nothing to indicate mental decline or much chance of him ending up destitute.
retired@50
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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 retired@50 »

You could agree in advance to buy the beer.

Either you two will be celebrating when he finally sells for $3 million, or he'll be crying in his beer and you'll be consoling him about what might have been.

Regards,
This is one person's opinion. Nothing more.
stimulacra
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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 stimulacra »

Seems like he's doing ok, all things considering.

What's your track record investing and wealth building?
luckyducky99
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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 luckyducky99 »

I would drop it. He's a grown man entitled to make his own mistakes (or not -- maybe he'll keep crushing it). Best not to double down on a disagreement with family, especially about money.
Last edited by luckyducky99 on Mon Aug 31, 2020 1:20 pm, edited 1 time in total.
Kookaburra
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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 Kookaburra »

retired@50 wrote: Mon Aug 31, 2020 1:18 pm You could agree in advance to buy the beer.

Either you two will be celebrating when he finally sells for $3 million, or he'll be crying in his beer and you'll be consoling him about what might have been.

Regards,
“There’s a tear in my beer...” - Hank Williams Jr
crake
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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 crake »

How would you feel if your dad cashed out of Tesla and then it doubled in value? How would that affect your relationship?

It sounds like like your Dad has done well for himself. Advice on this forum is generally to stay out of others people finances unless they are asking you for help or are actively being taken advantage of. If you insist on trying to advise your Dad I'd recommend you simply buy him an investing book as a gift. I believe it is better to give someone the information and let them make their own decision rather than telling them what to do.
GMT-8
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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 GMT-8 »

He's 60 and you are 30 or 35? He has $1 million in Tesla and Elon Musk has $100 billion.
That's like me telling my college roommate he's wise to cash out of Qualcomm at $35, or my friend to get out of Apple at $100.
Or me inducing my Apple-owning friend to join me in an investment (we were about 30) where we both lost 100% of what we put in (about $30k)
I would stay out of it because you can't win and you won't want to spoil his experience either win or lose.

Sorry,

GMT
Last edited by GMT-8 on Mon Aug 31, 2020 1:23 pm, edited 1 time in total.
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 »

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.

I guess though, in all fairness to him, he was able to hold on to Tesla for this long. Which, is kind of amazing considering how volatile it's been over the last several years. So, he probably feels quite proud of himself at the moment for holding on for so long. That's probably the case with a lot of people sitting on a large Tesla holding at the moment.
Problem is that they could just as easily see the value of their shares plummet dramatically overnight if something spooks everyone. No one knows what will happen next, so it's really anyone's guess.
Last edited by hightower on Mon Aug 31, 2020 1:39 pm, edited 1 time in total.
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arcticpineapplecorp.
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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 arcticpineapplecorp. »

I would say two things (one about if he has enough or not and the other about market timing)

#1. this was said better than I could say it...by Larry Swedroe:
Each investor needs to decide at what level of wealth his unique utility-of-wealth curve starts flattening out and begins bending sharply to the right. Beyond this point there's little reason to take incremental risk to achieve a higher expected return. Many wealthy investors have experienced devastating losses that could easily have been avoided if they had the wisdom to know what author Joseph Heller knew, as this story Kurt Vonnegut told about Heller shows:

"Heller and I were at a party given by a billionaire on Shelter Island. I said, 'Joe, how does it make you feel to know that our host only yesterday may have made more money than your novel "Catch-22" has earned in its entire history?' Joe said, 'I've got something he can never have.' And I said, 'What on earth could that be, Joe?' And Joe said, 'The knowledge that I've got enough.'"

The lesson about knowing when enough is enough can be learned from the following incident. In March of 2003, I was in Rochester, Minn., for a seminar based on my book, "Rational Investing in Irrational Times, How to Avoid the Costly Mistakes Even Smart People Make." During my visit, I met with a 71-year old couple with financial assets of $3 million. Three years earlier their portfolio was worth $13 million.

The only way they could have experienced that kind of loss was if they had held a portfolio that was almost all equities and heavily concentrated in U.S. large-cap growth stocks, especially technology stocks. They confirmed this. They told me they had been working with a financial advisor during this period -- demonstrating that while good advice doesn't have to be expensive, bad advice almost always costs you dearly.

I asked the couple if, instead of their portfolio falling almost 80 percent, doubling it to $26 million would have led to any meaningful change in the quality of their lives? Their response was a definitive no. I told them the experience of watching $13 million shrink to $3 million must have been very painful, and they probably had spent many sleepless nights. They agreed.

I then asked why they had taken the risks they did, knowing the potential benefit was not going to change their lives very much but a negative outcome like the one they experienced would be so painful. The wife turned to the husband and punched him, exclaiming, "I told you so!"

Some risks are not worth taking. Prudent investors don't take more risk than they have the ability, willingness or need to take. Think about it this way: If you've already won the game, why still play?

source: https://www.cbsnews.com/news/asset-allo ... -you-need/
#2. Next I would say if he's so good at market timing, then why doesn't he play the market timing game with fake money rather than real money and see if he's really as good as he thinks he is.:

https://www.prudential.com/cdn/tools/ou ... oolcta=OFF
https://engaging-data.com/market-timing-game/
https://qz.com/487013/this-game-will-sh ... right-now/

now if he didn't beat the market with those games, even though he was playing with known, past data, what makes him think he'll be better with unknown, future data??

that being said, my father never listened to me when I talked with him about index funds. he thought is was better to lose his money gambling with individual stocks and options. to each his own.
Last edited by arcticpineapplecorp. on Mon Aug 31, 2020 1:33 pm, edited 1 time in total.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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ResearchMed
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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 ResearchMed »

He's still competent, mentally, right?

And he's doing very well, financially, right? (even if you don't agree about this holding, etc.)

And IF this holding tanks, to 1/2 or even 1/10 of it's current value, it doesn't seem that he'd be needing to live under a bridge or move in with you. Seems he'd still be quite comfortable, right?

So I'd suggest letting it go, and "pick your fights carefully", in case there is something in the future about finances or healthcare, etc., where it might be a major life concern.
You might want to re-consider risking your relationship with your father over this particular issue.

In a way, you are fortunate to have a father with a financial "problem" like this one.
Many others worry about parents being in really dire straits...

RM
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retiredjg
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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 retiredjg »

sjl333 wrote: Mon Aug 31, 2020 1:13 pm Can anybody provide some advice on what I should tell him to convince him otherwise ?
Drop it. You've said your piece. It's really none of your business unless he is senile and there is a different solution for that.

Obviously you are just looking out for him, but how would you feel if he told you to sell all your index funds and buy Tesla instead because you are doing it all wrong? Assuming you are an adult, it's not really any of his business, is it?
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 »

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.
Why do you recommend cashing out instead of hedging with puts?
Escapevelocity
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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 Escapevelocity »

Whatever you do, do not say "I told you so" after a drop in the price. Maybe he could put in a stop-loss to protect his downside.
ponyboy
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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 ponyboy »

In a year, he'll have $5 million in tesla.
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 »

chinchin wrote: Mon Aug 31, 2020 1:32 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.
Why do you recommend cashing out instead of hedging with puts?
That's a good point. I think if I were in a position such as this, I'd probably take a large chunk of money out so that my principle plus some is protected, then I'd keep the rest either invested as is, or do as you said with stock options. Seems like a safe way to protect yourself when so extremely vulnerable with a single stock.
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camillus
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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 camillus »

sjl333 wrote: Mon Aug 31, 2020 1:13 pm I told him to
And I told him he should
I told him its

Can anybody provide some advice on what I should tell him...?
Stop “telling him” things. He’s worth 5 mil.
Carol88888
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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 Carol88888 »

I am curious. When did he buy his GE stock? If he has held it for decades and watched it dwindle it might work to point out that this is what can happen to a company.

Or you might print out for him the top ten companies in the S&P 500 over the last say 20 years. (easily found with google) This will show him how the "winners" constantly evolve through time. The most beloved companies - remember jds uniphase and cisco? - can and do fall from grace.

Or you might print out what his 3 million portfolio would be worth if put into S&P 500 and held for 25 years. When he sees the eye-popping returns he might be persuaded that it's a lot less mind-racking to go the index route. (this last argument is what got me on board after trying to beat the market for many years.)

And if nothing works, well, he's probably not that bad at it or he would have given up by now. And anyway, you tried.
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celia
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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 celia »

Rejoice with him! :sharebeer He is an adult. This is his money.

If he stops talking to you about investments, would you be ok with that (since that is where you are heading)?

I wish my dad had 1 million in Tesla!
Last edited by celia on Mon Aug 31, 2020 1:56 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 »

Advice?

Tell him to start a newsletter on his stock picks. I'll buy one for $20 based on that track record! And otherwise listen to him when he says 'butt out'
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Brianmcg321
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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 Brianmcg321 »

It’s the diaper rule. It’s hard for someone to take the advice of someone they used to change their diapers.

I never suggest to anyone on individual stocks. If you tell them to sell it doubles in value. You tell them to hold, they go Enron.

When people ask I tell them what I do and what I’m comfortable with. That I don’t do individual stocks.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
mak1277
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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 mak1277 »

I'd actually ask his advice on what to invest in next.
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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 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.
You could point out he didn't time GE correctly and cash out...

But the right answer is to just let it go.
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.”
GAAP
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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 GAAP »

Tell him "Let's agree to disagree -- and not discuss it again". Then, make sure you both leave it alone. "I told you so" from either party will not help your relationship.
“Adapt what is useful, reject what is useless, and add what is specifically your own.” ― Bruce Lee
hulburt1
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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 hulburt1 »

I'm 67 and bought $250000 of Apple, also sold 100000 of face book today :sharebeer . I no what I can lose and still be very well off. In 3 years I'll get SS. I have over a 1m in the stock market most in S&P. I'm having fun.
jajlrajrf
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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 jajlrajrf »

I feel like maybe there's a little... I don't know the term…reverse ageism going on here? The replies to OP are defensive to a ridiculous degree ("mind your own business", etc.)

His dad has ONE THIRD of his portfolio in a SINGLE stock. That is an incredibly risky position and "You should take some profit and reduce your exposure to this one stock" is superb, uncontroversial, and perfectly bogleheadish advice. So I'm shocked here to see the number of people saying "Leave the old man 5 years from retirement alone, he's an investing genius and you shouldn't be sounding an alarm about his potentially self-destructive behavior."

The dad won on the roulette wheel. That's great. Telling Advising him to take some of his winnings off the table is completely correct.

EDIT: And I'd be willing to bet a six-pack of beer that if the post was about the OP's 60-year old MOM having 1/3rd of her life savings in a single stock, nobody would be saying "Awwww, leave her alone, she knows better than you."
Last edited by jajlrajrf on Mon Aug 31, 2020 2:04 pm, edited 1 time in total.
Domadosolo
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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 Domadosolo »

Up 12% today... share a beer then put a stop loss order
sailaway
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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 »

jajlrajrf wrote: Mon Aug 31, 2020 2:00 pm I feel like maybe there's a little... I don't know the term…reverse ageism going on here? The replies to OP are defensive to a ridiculous degree ("mind your own business", etc.)

His dad has ONE THIRD of his portfolio in a SINGLE stock. That is an incredibly risky position and "You should take some profit and reduce your exposure to this one stock" is superb, uncontroversial, and perfectly bogleheadish advice. So I'm shocked here to see the number of people saying "Leave the old man 5 years from retirement alone, he's an investing genius and you shouldn't be sounding an alarm about his potentially self-destructive behavior."

The dad won on the roulette wheel. That's great. Telling him to take some of his winnings off the table is completely correct.

EDIT: And I'd be willing to bet a six-pack of beer that if the post was about the OP's 60-year old MOM having 1/3rd of her life savings in a single stock, nobody would be saying "Awwww, leave her alone, she knows better than you."

I would and have given the exact same advice when people ask about their Mom: if your elders aren't going to be destitute or showing signs of dementia, let it go. Not everyone is a boglehead.
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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 »

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?
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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 »

HomerJ wrote: Mon Aug 31, 2020 1:57 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.
You could point out he didn't time GE correctly and cash out...

But the right answer is to just let it go.


He got in GE after it crashed. I believe he got in when it was $7, $8 ...not sure ?

My dad is an all in type of guy. He had one million in Nvidia and lost 30-40% of it then sold..(when covid hit). look at Nvidia now...doing amazing. he then bought back in recently.

He's not a great stock picker as he think he is.

I told him since he is close to retirement not sure why he's playing with fire like this. He should be trying to coast with some bonds and some equity exposure such as the sp500... But at age 60 with large holdings in individual companies... The last thing I want to see is another meltdown from what he experienced losing hundreds of thousands in Nvidia when covid first hit.
Last edited by sjl333 on Mon Aug 31, 2020 2:14 pm, edited 1 time in total.
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Leif
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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 Leif »

Perhaps he can sell 1/2? Or even 1/4? Tesla PE ratio as of Aug. 28 was 1,153. Ridiculous and unsustainable. And I'm an owner (of the car, not stock) and a fan.

Elon said one time that if anyone hacked their server and directed a bunch of cars under autopilot that would be the end of Tesla. Tell him he has done very well, but don't be greedy.
Last edited by Leif on Mon Aug 31, 2020 2:15 pm, edited 2 times in total.
Outer Marker
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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 Outer Marker »

Good luck with that! TSLA up 11% today. Maybe Dad should open a hedge fund.
MotoTrojan
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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 MotoTrojan »

hightower wrote: Mon Aug 31, 2020 1:22 pm I guess though, in all fairness to him, he was able to hold on to Tesla for this long. Which, is kind of amazing considering how volatile it's been over the last several years.
I would be curious to know when OP's father made the purchase. How may drawdowns have they experienced?
J295
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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 J295 »

You have provided your perspective. Now stand down and support your dad.
jajlrajrf
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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 jajlrajrf »

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.
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CardinalRule
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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 CardinalRule »

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'm assuming your dad has a big gain on TSLA and didn't spend $950,000 on that million-dollar position. :happy As mentioned, buying puts are a possibility, but they are costly. To hedge against a decline on TSLA, assuming that we are talking about 2,000 shares or so, one would need to buy 20 put contracts. Assuming a current price of $495 and a desire to protect against a decline of more than 15%, your dad could buy a January 2021 430 put. But the 20 contracts would cost perhaps $130,000, based on the prices I looked up a moment ago. Pretty pricey 5-month earthquake insurance.
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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 bogledogle »

What price did you dad buy in at? You cannot convince people who have successfully picked stock to quit. Assuming TSLA drops by 50% in value, will he still come out in the green when compared to S&P 5000 or Total Market index?

His 1M because 1.1M just today and it is still going up :happy

I have a friend who bought TSLA at 28 and he has more in TSLA stock than his home value. You cannot convince people who have lucked out like that to get out or diversify. Simply not happening.
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Tamarind
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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 Tamarind »

Try to temper your expectations. You're right but that doesn't mean your dad will listen to you.

My dad still believes he can time the market. He is certain he was brilliant in 2008, because he didn't keep any records of his trades or performance. But he has gone from 100% play money to 5% play money.

How did I do it?

I sat down with my mom. Then she convinced him (and stopped letting him time with her 401k, which also helped). He grumbles and we bicker good naturedly about it, but I feel like I achieved my goal which was derisking the years of their retirement most subject to sequence of returns risk.

My point is that you should be very clear what your goal is. (Don't let your goal be convincing your dad he is wrong.) Take into account what you know about your dad and how he makes decisions.

If you get frustrated, make sure your own ducks are in a row and you aren't counting on an inheritance.
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CardinalRule
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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 CardinalRule »

Tamarind wrote: Mon Aug 31, 2020 2:14 pm
If you get frustrated, make sure your own ducks are in a row and you aren't counting on an inheritance.
Maybe the son should buy the puts :wink:
GAAP
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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 GAAP »

jajlrajrf wrote: Mon Aug 31, 2020 2:00 pm I feel like maybe there's a little... I don't know the term…reverse ageism going on here? The replies to OP are defensive to a ridiculous degree ("mind your own business", etc.)

His dad has ONE THIRD of his portfolio in a SINGLE stock. That is an incredibly risky position and "You should take some profit and reduce your exposure to this one stock" is superb, uncontroversial, and perfectly bogleheadish advice. So I'm shocked here to see the number of people saying "Leave the old man 5 years from retirement alone, he's an investing genius and you shouldn't be sounding an alarm about his potentially self-destructive behavior."

The dad won on the roulette wheel. That's great. Telling him to take some of his winnings off the table is completely correct.

EDIT: And I'd be willing to bet a six-pack of beer that if the post was about the OP's 60-year old MOM having 1/3rd of her life savings in a single stock, nobody would be saying "Awwww, leave her alone, she knows better than you."
Many people are quite successful doing things that aren't "bogleheadish". My mom was around 90% stocks -- mostly individual stocks -- when she died at 87. She started with a small life insurance payment at age 54, helped two kids through college, paid off a mortgage, and was still able to grow that initial amount without taking a job, with no pension benefits (dad too young), and with a tiny Social Security income. I would never have told her how to manage her money at any age.

Until and unless OP is a conservator for his father, he has no business telling him what to do. He can certainly make suggestions, like he has done -- but once he got a clear negative response, the topic is closed. Revisiting that topic will not help their relationship. There is no good way for this to end unless both people leave it alone. If it works out, and dad mentions it, then congratulate him. If it doesn't, and dad mentions it, then console him. Anything else will damage something that is far more important than 20% of a large portfolio (Real Estate counts too).
“Adapt what is useful, reject what is useless, and add what is specifically your own.” ― Bruce Lee
jajlrajrf
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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 jajlrajrf »

OP: Maybe instead of describing this to your dad as "cash out", describe it in terms of "taking gains off the table" or "locking gains in", while still leaving a portion in TSLA to take advantage of future gains (or losses). You can also point out that this gives him some cash to invest to try to find the next TSLA (since it sounds like he won't be taking your index fund advice).
Savermom
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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 Savermom »

Delete
Last edited by Savermom on Mon Aug 31, 2020 2:22 pm, edited 1 time in total.
mptfan
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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 mptfan »

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.
Last edited by mptfan on Mon Aug 31, 2020 2:21 pm, edited 2 times in total.
delamer
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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 delamer »

jajlrajrf wrote: Mon Aug 31, 2020 2:00 pm I feel like maybe there's a little... I don't know the term…reverse ageism going on here? The replies to OP are defensive to a ridiculous degree ("mind your own business", etc.)

His dad has ONE THIRD of his portfolio in a SINGLE stock. That is an incredibly risky position and "You should take some profit and reduce your exposure to this one stock" is superb, uncontroversial, and perfectly bogleheadish advice. So I'm shocked here to see the number of people saying "Leave the old man 5 years from retirement alone, he's an investing genius and you shouldn't be sounding an alarm about his potentially self-destructive behavior."

The dad won on the roulette wheel. That's great. Telling Advising him to take some of his winnings off the table is completely correct.

EDIT: And I'd be willing to bet a six-pack of beer that if the post was about the OP's 60-year old MOM having 1/3rd of her life savings in a single stock, nobody would be saying "Awwww, leave her alone, she knows better than you."
What your post apparently missed is that the adult child already gave the father the standard Boglehead advice, and the father refused ro take it.

Which means that “drop it” is a reasonable response. Parent or no, adults don’t get to hound other adults about their decisions.
Savermom
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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 Savermom »

You are right, but people like this won’t listen to you. My dad is like this. Plus, you could tell him to get out and then it keeps going up.

If your dad is not criticizing you for the way you invest,
just be thankful for that. My dad criticized me the other day for not being “aggressive” enough.

And what is so obnoxious is that every time I see my dad, he has to mention what the price is of his stock that has soared (but says nothing on down days). Hopefully your dad does not do this.
Last edited by Savermom on Mon Aug 31, 2020 3:22 pm, edited 1 time in total.
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Leif
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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 Leif »

CardinalRule wrote: Mon Aug 31, 2020 2:15 pm
Tamarind wrote: Mon Aug 31, 2020 2:14 pm
If you get frustrated, make sure your own ducks are in a row and you aren't counting on an inheritance.
Maybe the son should buy the puts :wink:
There were some posts a year or two ago that said they were shorting Tesla. Have not heard much from them. Perhaps they cannot afford a internet connection anymore.
whereskyle
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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 whereskyle »

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.
Yikes. I mean, you'll always be able to tell him "told you so" after the fact. If I had won on individual stocks that amazingly, I'd say the same thing he is sayin. But from my perspective, knowing that he has a 1/3 of his money on a car company with meager profits and outrageous valuations makes me downright sick.

The time to get out is now. I like the Socratic method. Ask him if he can explain to you what indicator would tell him to exit each position. Ask him whether the price will have already fallen by the time other investors become aware of that indicator. Either he has to see the indicator before everyone else does, or the price has already fallen.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
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