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

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tesuzuki2002
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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 tesuzuki2002 »

sailaway wrote: Fri Sep 04, 2020 12:43 pm
tesuzuki2002 wrote: Fri Sep 04, 2020 12:31 pm
FireFool wrote: Thu Sep 03, 2020 7:33 pm
tomtoms wrote: Tue Sep 01, 2020 10:22 am People here need to stop saying index is the only way to make money. The truth is indexing is one of the ways to make money.
It's been said that indexing is a way of PROTECTING wealth, while individual investments create wealth. But I agree different people will have different investment approaches and needs, which are also largely dependent on the size of their portfolio and their withdrawal rate needs.
This is so so true.... indexing will never produce WEALTH. It is a protection mechanism once you have won the game...
Are y'all using one of those blow it out of the park, filthy rich definitions of wealth?
I would consider a definition between rich and wealth to be around $500M I suppose we all have different definitions.
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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 »

7eight9 wrote: Fri Sep 04, 2020 5:25 pm
sjl333 wrote: Fri Sep 04, 2020 5:17 pm
7eight9 wrote: Fri Sep 04, 2020 4:56 pm This probably won't be welcome news for Tesla holders.

Tesla Didn’t Join the S&P 500, but Three Others Did
https://www.barrons.com/articles/tesla- ... 1599255574
Do you know thw criteria of which companies get in and booted out ? Why wasn't tesla pikced ? Because it dropped in valuation ?
Companies must be U.S. based, and listed on either the NYSE, the Nasdaq or the Cboe. They also must have a market cap of more than $8.2 billion, and report four straight quarters of profit as determined by U.S. generally accepted accounting principles (GAAP).

Even if a company meets these criteria as well as the other stipulations, that does not guarantee inclusion in the index. The committee meets on a quarterly basis to rebalance the index, but companies can be added or removed from the S&P at any time.


https://www.cnbc.com/2020/09/04/tesla-f ... maker.html
Thanks. Dad wants to sell now. He's scared
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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 CZjc1330 »

You are a good son. You tried.
Now drop by with a jug of his favorite refreshment. Have a few swigs yourself; if offered. Talk about other things. Forget it.
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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 »

7eight9 wrote: Fri Sep 04, 2020 4:56 pm This probably won't be welcome news for Tesla holders.

Tesla Didn’t Join the S&P 500, but Three Others Did
https://www.barrons.com/articles/tesla- ... 1599255574
Ouch. Down 6% after hours. Pretty surprising exclusion.
tibbitts
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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 tibbitts »

jajlrajrf wrote: Fri Sep 04, 2020 1:52 pm ... not one person in the history of Bogleheads.org has ever told those people "butt out, it's not your business." Curious.
You must have been reading a different Bogleheads.org. I find Bogleheads advising family members to butt out all the time. Sometimes even when they're asked for advice. I did in fact butt out when my mother's investments significantly underperformed any reasonable benchmark for decades, at a cost of well over 2% in annual fees. If you're saying recommendations are based on a relative being male or female, I haven't seen any evidence of that.
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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 »

sjl333 wrote: Fri Sep 04, 2020 5:38 pm Thanks. Dad wants to sell now. He's scared
Investing can be simple, but it is not easy. People without an overall plan tend to move between fear and greed. Even with a plan emotions hit us all. Individual stocks can be a real rollercoaster.
Oregano
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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 Oregano »

CardinalRule wrote: Fri Sep 04, 2020 6:34 pm
7eight9 wrote: Fri Sep 04, 2020 4:56 pm This probably won't be welcome news for Tesla holders.

Tesla Didn’t Join the S&P 500, but Three Others Did
https://www.barrons.com/articles/tesla- ... 1599255574
Ouch. Down 6% after hours. Pretty surprising exclusion.
Why is it a surprise? Why would the committee play into the hands of traders who are trying to game the index in such an obvious manner?

The committee is also well aware that TSLA has fraudulent accounting. They probably still plan to add it to the index at a later date, but maybe they're hoping the house of cards collapses before they need to do that.
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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 abuss368 »

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 have you Dad excellent advice because you care. Now I would simply not continue or argue with him or any family. Give him The Bogleheads books or Jack Bogle’s “The Little Book of Common Sense Investing”.
John C. Bogle: “Simplicity is the master key to financial success."
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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 abuss368 »

I recently recommended to family to engage Vanguard PAS and they did just that. Could not be happier with the Vanguard Four Fund Portfolio.

That is my new line with family and friends: hire Vanguard PAS. Thus far in a couple of examples the result has been a very positive one. I no longer ask, get involved when asked, or try to get involved. In my opinion this is a much better strategy all the way around.
John C. Bogle: “Simplicity is the master key to financial success."
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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 »

Oregano wrote: Fri Sep 04, 2020 7:04 pm
CardinalRule wrote: Fri Sep 04, 2020 6:34 pm
7eight9 wrote: Fri Sep 04, 2020 4:56 pm This probably won't be welcome news for Tesla holders.

Tesla Didn’t Join the S&P 500, but Three Others Did
https://www.barrons.com/articles/tesla- ... 1599255574
Ouch. Down 6% after hours. Pretty surprising exclusion.
Why is it a surprise? Why would the committee play into the hands of traders who are trying to game the index in such an obvious manner?

The committee is also well aware that TSLA has fraudulent accounting. They probably still plan to add it to the index at a later date, but maybe they're hoping the house of cards collapses before they need to do that.
I wasn't judging the merits of including them or not. But based on the after-hours activity, at least some investors were surprised that such a high-profile company, that had met many of the criteria, won't be going into the S&P 500 soon.

Aside from whether it was a surprise or not (which I don't particularly care about), it is astounding to think about how many TSLA shares would have had to have been purchased by index funds - like 120 million shares, according to CNBC. :shock:
Oregano
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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 Oregano »

CardinalRule wrote: Fri Sep 04, 2020 7:22 pm
Oregano wrote: Fri Sep 04, 2020 7:04 pm
CardinalRule wrote: Fri Sep 04, 2020 6:34 pm
7eight9 wrote: Fri Sep 04, 2020 4:56 pm This probably won't be welcome news for Tesla holders.

Tesla Didn’t Join the S&P 500, but Three Others Did
https://www.barrons.com/articles/tesla- ... 1599255574
Ouch. Down 6% after hours. Pretty surprising exclusion.
Why is it a surprise? Why would the committee play into the hands of traders who are trying to game the index in such an obvious manner?

The committee is also well aware that TSLA has fraudulent accounting. They probably still plan to add it to the index at a later date, but maybe they're hoping the house of cards collapses before they need to do that.
I wasn't judging the merits of including them or not. But based on the after-hours activity, at least some investors were surprised that such a high-profile company, that had met many of the criteria, won't be going into the S&P 500 soon.

Aside from whether it was a surprise or not (which I don't particularly care about), it is astounding to think about how many TSLA shares would have had to have been purchased by index funds - like 120 million shares, according to CNBC. :shock:
The stock has been trading over 100 million shares a day quite a lot lately, so it's not as big a deal as one might think.

Listen, speculative traders decided that they wanted to front run a 5-10% bump on S&P 500 inclusion by running up the stock by 150% since early June. If you're on the S&P committee, do you want to vote in favor of being manipulated like that? If you own an S&P 500 index fund, do you want the committee to turn you into a bagholder as the stock eventually collapses back to reality? There are a lot of institutional investors who would start looking at alternatives to the S&P 500 if they think the committee is making bad decisions. S&P makes a lot of money on licensing it's indices; the less money managed to them, they less they get. They are incentivized to be somewhat decent stewards of their indexes.
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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 »

jajlrajrf wrote: Fri Sep 04, 2020 1:52 pm
Leif wrote: Fri Sep 04, 2020 1:30 pm I really don't understand the criticism I'm reading directed to the OP. Anywhere from "not your business" to questioning his motives.
I
He is his dad. He wants to offer good advice. Advice the I believe most Bogleheads would agree with. I would do the same if I faced the same situation.
Yeah, I've noticed and commented to that effect also. It's a VERY strange dynamic that would not be in play in almost any other situation. Being a dad doesn't (and shouldn't) make you somehow immune from being told you're doing a dumb thing.

The forum is full of people who stop in and say "What advice should I give my aged mom about her portfolio"; not one person in the history of Bogleheads.org has ever told those people "butt out, it's not your business." Curious.
This is a very weird post. I’ve seen plenty of threads with advice to not offer unsolicited advice to family. Mothers and fathers. And if you insist on still offering unsolicited advice and get rebuffed, I’d say the bogleheads collective advice would be to again not offer repeated unsolicited advice. Mothers and fathers.
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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 retire2022 »

abuss368 wrote: Fri Sep 04, 2020 7:17 pm I recently recommended to family to engage Vanguard PAS and they did just that. Could not be happier with the Vanguard Four Fund Portfolio.

That is my new line with family and friends: hire Vanguard PAS. Thus far in a couple of examples the result has been a very positive one. I no longer ask, get involved when asked, or try to get involved. In my opinion this is a much better strategy all the way around.
My free PAS 45 minute interview did not go so well, I suspect op's dad is a strong alpha male, I was very opinionated on my investments, and my PAS person tactfully implied I was not their customer. In reality, an accountant and estate planning attorney is all one really needs along with three fund portfolio. I see no reason for PAS for myself. Me 60 years old, single, 1.9 million was in 2 Million club for two days, but not first time I lost money. I am okay with it. Pension 66K projected and SS at 70 38K.
davidsorensen32
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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 davidsorensen32 »

No not surprising at all. SP500 excluded Berkshire Hathaway for 40 years !!!!!!!!!
CardinalRule wrote: Fri Sep 04, 2020 6:34 pm
7eight9 wrote: Fri Sep 04, 2020 4:56 pm This probably won't be welcome news for Tesla holders.

Tesla Didn’t Join the S&P 500, but Three Others Did
https://www.barrons.com/articles/tesla- ... 1599255574
Ouch. Down 6% after hours. Pretty surprising exclusion.
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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 abuss368 »

retire2022 wrote: Fri Sep 04, 2020 9:57 pm
abuss368 wrote: Fri Sep 04, 2020 7:17 pm I recently recommended to family to engage Vanguard PAS and they did just that. Could not be happier with the Vanguard Four Fund Portfolio.

That is my new line with family and friends: hire Vanguard PAS. Thus far in a couple of examples the result has been a very positive one. I no longer ask, get involved when asked, or try to get involved. In my opinion this is a much better strategy all the way around.
My free PAS 45 minute interview did not go so well, I suspect op's dad is a strong alpha male, I was very opinionated on my investments, and my PAS person tactfully implied I was not their customer. In reality, an accountant and estate planning attorney is all one really needs along with three fund portfolio. I see no reason for PAS for myself. Me 60 years old, single, 1.9 million was in 2 Million club for two days, but not first time I lost money. I am okay with it. Pension 66K projected and SS at 70 38K.
Makes sense and the Three Fund Portfolio is excellent. Vanguard adds international bonds for a Four Fund Portfolio. Do you own something else that PAS was not on board with.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by Helo80 »

Oregano wrote: Fri Sep 04, 2020 7:44 pm The stock has been trading over 100 million shares a day quite a lot lately, so it's not as big a deal as one might think.

Listen, speculative traders decided that they wanted to front run a 5-10% bump on S&P 500 inclusion by running up the stock by 150% since early June. If you're on the S&P committee, do you want to vote in favor of being manipulated like that? If you own an S&P 500 index fund, do you want the committee to turn you into a bagholder as the stock eventually collapses back to reality? There are a lot of institutional investors who would start looking at alternatives to the S&P 500 if they think the committee is making bad decisions. S&P makes a lot of money on licensing it's indices; the less money managed to them, they less they get. They are incentivized to be somewhat decent stewards of their indexes.


I think you're reasoning resonates a lot with me. Between the stock split and long discussion of S&P500 inclusion, I think a lot are hoping to bank on said inclusion and greater "affordability" for smaller investors. Though, I fear if my assumptions are true, that means the card house will collapse and TSLA will go back to being more appropriately valued. I guess I own TSLA thru VTSAX, but I'm not buying individual shares.
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by Helo80 »

sjl333 wrote: Fri Sep 04, 2020 5:38 pm Thanks. Dad wants to sell now. He's scared

Oh good. He made a decent profit on TSLA thus far.
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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 retire2022 »

abuss368 wrote: Sat Sep 05, 2020 6:36 am
Makes sense and the Three Fund Portfolio is excellent. Vanguard adds international bonds for a Four Fund Portfolio. Do you own something else that PAS was not on board with.
The PAS person did not indicate directly, but it was possibly because I was not fully entertain passive index funds, and 65% of my funds were active, I had small position in 11% in international which was passive.

Since then, I am currently no longer in International, no longer in Wellington VWENX, and Vanguard Strategic Equity (VSEQX) which was in my Roth IRA.

Currently my line up is 1.921 million, it was 2,025 million on Wednesday 9/2/2020

457- 28% active, Vanguard PrimeCap (VPMAX), 19% BlackRock SP500 Collective Investment Trust (CIT), 19% Blackrock Russell 2500 (CIT)

ROTH IRA- 29% Vanguard Information Technology VGT,

2% of Apple (aapl) taxable/inherited IRA

But not to derail the op dad, I agree the three fund portfolio with less than 10% or maximum 30% risky bet is acceptable in my book. My large position in VGT is offset with 457 account which is less aggressive.
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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 »

Did he get out?
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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 Texanbybirth »

Oregano wrote: Fri Sep 04, 2020 7:44 pm
CardinalRule wrote: Fri Sep 04, 2020 7:22 pm
Oregano wrote: Fri Sep 04, 2020 7:04 pm
CardinalRule wrote: Fri Sep 04, 2020 6:34 pm
7eight9 wrote: Fri Sep 04, 2020 4:56 pm This probably won't be welcome news for Tesla holders.

Tesla Didn’t Join the S&P 500, but Three Others Did
https://www.barrons.com/articles/tesla- ... 1599255574
Ouch. Down 6% after hours. Pretty surprising exclusion.
Why is it a surprise? Why would the committee play into the hands of traders who are trying to game the index in such an obvious manner?

The committee is also well aware that TSLA has fraudulent accounting. They probably still plan to add it to the index at a later date, but maybe they're hoping the house of cards collapses before they need to do that.
I wasn't judging the merits of including them or not. But based on the after-hours activity, at least some investors were surprised that such a high-profile company, that had met many of the criteria, won't be going into the S&P 500 soon.

Aside from whether it was a surprise or not (which I don't particularly care about), it is astounding to think about how many TSLA shares would have had to have been purchased by index funds - like 120 million shares, according to CNBC. :shock:
The stock has been trading over 100 million shares a day quite a lot lately, so it's not as big a deal as one might think.

Listen, speculative traders decided that they wanted to front run a 5-10% bump on S&P 500 inclusion by running up the stock by 150% since early June. If you're on the S&P committee, do you want to vote in favor of being manipulated like that? If you own an S&P 500 index fund, do you want the committee to turn you into a bagholder as the stock eventually collapses back to reality? There are a lot of institutional investors who would start looking at alternatives to the S&P 500 if they think the committee is making bad decisions. S&P makes a lot of money on licensing it's indices; the less money managed to them, they less they get. They are incentivized to be somewhat decent stewards of their indexes.
This is very well said.

I hope OP's dad is okay.
“The strong cannot be brave. Only the weak can be brave; and yet again, in practice, only those who can be brave can be trusted, in time of doubt, to be strong.“ - GK Chesterton
FarmWife
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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 FarmWife »

Can he sell enough to take his initial investment plus a small profit and the remainder is just house money? That might help him step out of it slowly.
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sjl333
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by sjl333 »

All,

I know people told me not to say to my dad "I told you so".

But I did yesterday. Signs were very obvious he should have gotten out when he had a chance.

He sold half today and is going to ride with the other half in Tesla still , basically broke even on the stock , maybe a slight profit ? But minimal compared to if he had sold it at 510 515 when I told him too.

Let me preface by saying I don't think I'm a great market guru or anything , but signs like to these are pretty obvious, as we have seen this story play out many times ... Look up tulip mania back in the 1800s I believe ?

Long story short my dad was heavy in Nvidia back in January this year probably holding 1+ million ... Once covid hit Nvidia dropped quite a bit down to 205. He was holding other stocks as well... I told him *DO NOT SELL*, when the the stock market collapses based off artificial means (artificial in my opinion at least), you just ride out the storm . We will get past this covid and the world is not going to end. Nvidia is a strong company and will do well long term . I told him to hold but he sold and got back in wayy to late. Basically got back in near when the market recovered. He basically lost out on 100% gains on the stock. I hate to say it but I told him I was right back then and I was right about tesla , he didn't listen to any of my advice. He told me he got "scared". And he still thinks he is a "good stock picker" and can "time the market well". I can't change his ways he has gone down to deep in his own ways of thinking.
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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 flaccidsteele »

sjl333 wrote: Tue Sep 08, 2020 11:35 am I know people told me not to say to my dad "I told you so".
You should definitely tell him “I told you so”

Results need to be confronted with reality
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
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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 harikaried »

sjl333 wrote: Tue Sep 08, 2020 11:35 amNvidia is a strong company and will do well long term . I told him to hold but he sold and got back in wayy to late.
Did he just keep the Nvidia money in cash until buying back after it went up? Is he doing the same thing with Tesla? Did you tell him to at least diversify after he sold in either case?
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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 ccf »

sjl333 wrote: Tue Sep 08, 2020 11:35 am Long story short my dad was heavy in Nvidia back in January this year probably holding 1+ million ...
oh gosh, it wasn't just Tesla. Nvidia too.

investing in the hot stocks du jour is.... pretty risky for 5 years from retirement!
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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 GoldenGoose »

sjl333 wrote: Tue Sep 08, 2020 11:35 am All,

I know people told me not to say to my dad "I told you so".

But I did yesterday. Signs were very obvious he should have gotten out when he had a chance.

He sold half today and is going to ride with the other half in Tesla still , basically broke even on the stock , maybe a slight profit ? But minimal compared to if he had sold it at 510 515 when I told him too.

Let me preface by saying I don't think I'm a great market guru or anything , but signs like to these are pretty obvious, as we have seen this story play out many times ... Look up tulip mania back in the 1800s I believe ?

Long story short my dad was heavy in Nvidia back in January this year probably holding 1+ million ... Once covid hit Nvidia dropped quite a bit down to 205. He was holding other stocks as well... I told him *DO NOT SELL*, when the the stock market collapses based off artificial means (artificial in my opinion at least), you just ride out the storm . We will get past this covid and the world is not going to end. Nvidia is a strong company and will do well long term . I told him to hold but he sold and got back in wayy to late. Basically got back in near when the market recovered. He basically lost out on 100% gains on the stock. I hate to say it but I told him I was right back then and I was right about tesla , he didn't listen to any of my advice. He told me he got "scared". And he still thinks he is a "good stock picker" and can "time the market well". I can't change his ways he has gone down to deep in his own ways of thinking.
It seems like you are reasonable good at "judging" the market. You would go better by being more active with your investments. To each his own.
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Re: My dad has 1 million in Tesla, I told him to cash out, he doesn't want too

Post by 123 »

ccf wrote: Tue Sep 08, 2020 12:15 pm
sjl333 wrote: Tue Sep 08, 2020 11:35 am Long story short my dad was heavy in Nvidia back in January this year probably holding 1+ million ...
oh gosh, it wasn't just Tesla. Nvidia too.

investing in the hot stocks du jour is.... pretty risky for 5 years from retirement!
+1 Oh but think of the advantages, instead of being 5 years from retirement now he could be 10 years, maybe 15 years away, investing in hot stocks du jour can make you keep working forever, you may never have to be concerned about retiring...
The closest helping hand is at the end of your own arm.
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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 »

GoldenGoose wrote: Tue Sep 08, 2020 12:22 pm
sjl333 wrote: Tue Sep 08, 2020 11:35 am All,

I know people told me not to say to my dad "I told you so".

But I did yesterday. Signs were very obvious he should have gotten out when he had a chance.

He sold half today and is going to ride with the other half in Tesla still , basically broke even on the stock , maybe a slight profit ? But minimal compared to if he had sold it at 510 515 when I told him too.

Let me preface by saying I don't think I'm a great market guru or anything , but signs like to these are pretty obvious, as we have seen this story play out many times ... Look up tulip mania back in the 1800s I believe ?

Long story short my dad was heavy in Nvidia back in January this year probably holding 1+ million ... Once covid hit Nvidia dropped quite a bit down to 205. He was holding other stocks as well... I told him *DO NOT SELL*, when the the stock market collapses based off artificial means (artificial in my opinion at least), you just ride out the storm . We will get past this covid and the world is not going to end. Nvidia is a strong company and will do well long term . I told him to hold but he sold and got back in wayy to late. Basically got back in near when the market recovered. He basically lost out on 100% gains on the stock. I hate to say it but I told him I was right back then and I was right about tesla , he didn't listen to any of my advice. He told me he got "scared". And he still thinks he is a "good stock picker" and can "time the market well". I can't change his ways he has gone down to deep in his own ways of thinking.
It seems like you are reasonable good at "judging" the market. You would go better by being more active with your investments. To each his own.
I've been a boglehead ever since I got out of college 9 years ago. I've been following this forum ever since, and gained much wisdom from people on here. I understand my limitations and realize I know nothing. I don't like to invest in things I don't fully understand , trying to follow the boglehead principle . I don't like to spend time researching on a daily basis. I don't like the stress involved with holding a large amount in one stock , especially if it tanks. I'd rather spend time working OT and enjoyjng my hobbies. Furthermore , if warren buffett and jack bogle say go with index funds , I just listen to them and take their advice.

That being said , I have been dabbling on invidigidual stocks here and there but it's only 5% of my portfolio.

To each their own. I know my limitations. It's important to stay humble. The market always humbles you .
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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 LadyGeek »

sjl333 - You had changed this thread's title to "Changed title".

You can change the thread's title by editing the Subject: line in Post #1, but the change appears to be done in error. I put it back to the original title.

What would you like the thread title to be? If you need assistance, let me know.
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GoldenGoose
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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 GoldenGoose »

sjl333 wrote: Tue Sep 08, 2020 12:39 pm
GoldenGoose wrote: Tue Sep 08, 2020 12:22 pm
sjl333 wrote: Tue Sep 08, 2020 11:35 am All,

I know people told me not to say to my dad "I told you so".

But I did yesterday. Signs were very obvious he should have gotten out when he had a chance.

He sold half today and is going to ride with the other half in Tesla still , basically broke even on the stock , maybe a slight profit ? But minimal compared to if he had sold it at 510 515 when I told him too.

Let me preface by saying I don't think I'm a great market guru or anything , but signs like to these are pretty obvious, as we have seen this story play out many times ... Look up tulip mania back in the 1800s I believe ?

Long story short my dad was heavy in Nvidia back in January this year probably holding 1+ million ... Once covid hit Nvidia dropped quite a bit down to 205. He was holding other stocks as well... I told him *DO NOT SELL*, when the the stock market collapses based off artificial means (artificial in my opinion at least), you just ride out the storm . We will get past this covid and the world is not going to end. Nvidia is a strong company and will do well long term . I told him to hold but he sold and got back in wayy to late. Basically got back in near when the market recovered. He basically lost out on 100% gains on the stock. I hate to say it but I told him I was right back then and I was right about tesla , he didn't listen to any of my advice. He told me he got "scared". And he still thinks he is a "good stock picker" and can "time the market well". I can't change his ways he has gone down to deep in his own ways of thinking.
It seems like you are reasonable good at "judging" the market. You would go better by being more active with your investments. To each his own.
I've been a boglehead ever since I got out of college 9 years ago. I've been following this forum ever since, and gained much wisdom from people on here. I understand my limitations and realize I know nothing. I don't like to invest in things I don't fully understand , trying to follow the boglehead principle . I don't like to spend time researching on a daily basis. I don't like the stress involved with holding a large amount in one stock , especially if it tanks. I'd rather spend time working OT and enjoyjng my hobbies. Furthermore , if warren buffett and jack bogle say go with index funds , I just listen to them and take their advice.

That being said , I have been dabbling on invidigidual stocks here and there but it's only 5% of my portfolio.

To each their own. I know my limitations. It's important to stay humble. The market always humbles you .
Totally respect that, my friend. Who are we (me and other people) to criticize you? We don't know your ability, your risk tolerance, your goals and your expectations. So do whatever you need to do to achieve your targets. Time the market if you want. Buy CDs if you want. Remember, the higher the risk, the more the reward. Your dad took a gamble with TSLA. He could have won big if he sold when you told him to but he could have as well lost out on more gain if this drop didn't happen and then he would blame you for it. People always seem to have "hindsight" after things already happened.
Church Lady
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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 Church Lady »

sjl333 wrote: Tue Sep 08, 2020 11:35 am All,

I know people told me not to say to my dad "I told you so".

But I did yesterday. Signs were very obvious he should have gotten out when he had a chance.

He sold half today and is going to ride with the other half in Tesla still , basically broke even on the stock , maybe a slight profit ? But minimal compared to if he had sold it at 510 515 when I told him too.

Let me preface by saying I don't think I'm a great market guru or anything , but signs like to these are pretty obvious, as we have seen this story play out many times ... Look up tulip mania back in the 1800s I believe ?

Long story short my dad was heavy in Nvidia back in January this year probably holding 1+ million ... Once covid hit Nvidia dropped quite a bit down to 205. He was holding other stocks as well... I told him *DO NOT SELL*, when the the stock market collapses based off artificial means (artificial in my opinion at least), you just ride out the storm . We will get past this covid and the world is not going to end. Nvidia is a strong company and will do well long term . I told him to hold but he sold and got back in wayy to late. Basically got back in near when the market recovered. He basically lost out on 100% gains on the stock. I hate to say it but I told him I was right back then and I was right about tesla , he didn't listen to any of my advice. He told me he got "scared". And he still thinks he is a "good stock picker" and can "time the market well". I can't change his ways he has gone down to deep in his own ways of thinking.
In the past 3 months, insiders bought 99K shares but sold 116K shares. Past 6 months, they bought 114K shares but sold 136K shares. Past twelve months, they bought 169K shares but sold 206K shares. The insiders have a bias towards selling. By cashing out half, he's aligned himself with insider trends.

- After today's drop (20% as I type this going into the close). he's gone back to where he was .... 23 days ago. Give or take. It's exactly as if he decided to cash in three weeks ago (barring holding periods, and all that). Sure we look wistfully at that $502 split adjusted top, but it's not like he has been wiped out.

He should not feel bad about taking stock off the table today. It's like he did it 23 days ago. Don't worry about it, either of you.
if he had sold it at 510 515 when I told him
Selling at $515 would have been a neat trick, considering the 52-week split adjusted high is $502 and change. :wink:
I know people told me not to say to my dad "I told you so".

But I did yesterday.
Dude, lighten up! He's human. He made a sub optimal choice. It happens. Some day, it will happen to you. Treat him like you want to be treated when your kids come to you and say, "Dad, you should have <whatever> like we told you!"

Best of luck to you and your Dad!
He that loveth silver shall not be satisfied with silver; nor he that loveth abundance with increase: this is also vanity.
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Leif
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Re: Family member has one million in one stock , doesn't want to cash out

Post by Leif »

Even Jack Bogle reduced his equities prior to the bust of 2000. Market timing on Mr. Bogle's part? Some would say yes.

After the rout I got out of individual stocks and went with broad based index funds, with a tilt to small value. That tilt did help in the '00s, which many people call the lost decade. Not lost for me. Since then not so good, but I prefer a smoother ride over the long term.

Tesla has good prospects. But a 4 digit PE is just totally rediculous. Even for a company with Tesla's prospects.
grettman
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Re: Family member has one million in one stock , doesn't want to cash out

Post by grettman »

After today’s close.... ouch.
liz24
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Re: Family member has one million in one stock , doesn't want to cash out

Post by liz24 »

Hope he is ok today. Tesla down 21%: https://www.cnbc.com/2020/09/08/tesla-s ... -snub.html
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sjl333
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Re: Family member has one million in one stock , doesn't want to cash out

Post by sjl333 »

All , he sold all of his tesla stock to cash. Only got very minor profit. Still plans to hold Nvidia and AAPL.
EnjoyIt
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Re: Family member has one million in one stock , doesn't want to cash out

Post by EnjoyIt »

sjl333 wrote: Tue Sep 08, 2020 4:50 pm All , he sold all of his tesla stock to cash. Only got very minor profit. Still plans to hold Nvidia and AAPL.
What are the odds you can convince him to buy VTI or VOO instead? Maybe get into some bonds at his age.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
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Watty
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Re: Family member has one million in one stock , doesn't want to cash out

Post by Watty »

Just a couple of things to consider;

1) Making bad or reckless financial decisions can be an early sign of dementia.

2) Especially with people being confined with the pandemic some people are using the stock market for gambling, especially if they have a gambling problem.

I am not necessarily suggesting that these are an actual problem based on what I have read but if this is part of bigger pattern then this might be a trigger to recognize that something is going on.

If half of this is your Mom's money then she really need to be involved with any big financial decisions.
prairieman
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Re: Family member has one million in one stock , doesn't want to cash out

Post by prairieman »

sjl333 wrote: Tue Sep 08, 2020 4:50 pm All , he sold all of his tesla stock to cash. Only got very minor profit. Still plans to hold Nvidia and AAPL.
Funny, but this post makes me think about maybe investing a little bit in Tesla, which is a sure sign that I should log out of this site and ...... stay the course.
“As long as the roots are not severed, all is well.” Chauncey Gardner
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Re: Family member has one million in one stock , doesn't want to cash out

Post by bugleheadd »

sjl333 wrote: Tue Sep 08, 2020 4:50 pm All , he sold all of his tesla stock to cash. Only got very minor profit. Still plans to hold Nvidia and AAPL.
ouch must have hurt from selling today...that 1 million became around 600k
ScaledWheel
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Re: Family member has one million in one stock , doesn't want to cash out

Post by ScaledWheel »

sjl333 wrote: Tue Sep 08, 2020 4:50 pm All , he sold all of his tesla stock to cash. Only got very minor profit. Still plans to hold Nvidia and AAPL.
Based on this, he bought the stock in the last two months? The growth of TSLA's stock price this year has been insane. For reference (for others, not OP), the pre-COVID high in March was $183.48.

I feel like the fact that he bought it after all the hype is more worrying than the fact that he didn't want to sell at $450 or $500/share. Putting this much of your net worth into single stocks, especially with all this volatility, effectively amounts to gambling.

I'm quite bullish on NVidia, their current moat for deep learning/AI applications is quite large from my experience in the field. But I still would never buy their shares outside an index. Though I guess that's why I'm on this forum :D
guyinlaw
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Re: Family member has one million in one stock , doesn't want to cash out

Post by guyinlaw »

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.
Hope he sold the Tesla shares before meltdown.
Time is your friend; impulse is your enemy. - John C. Bogle
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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 »

CardinalRule wrote: Mon Aug 31, 2020 2:12 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.


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.
Those January 430 puts I mentioned have more than doubled in value, if I'm doing the math right. The cost would have been $130,000, and they are now at about $285,000 (for 20 contracts). Still costly insurance, even though they would have paid off. I might have been tempted to do a collar, selling an out-of-the-money calls at the same time.
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Re: Family member has one million in one stock , doesn't want to cash out

Post by alfaspider »

sjl333 wrote: Tue Sep 08, 2020 4:50 pm All , he sold all of his tesla stock to cash. Only got very minor profit. Still plans to hold Nvidia and AAPL.
This is the thing with a lot of people who brag about huge profits on hot stocks. They talk up the hot stocks when they appear to be up big, but tend not to mention that they didn’t get out until after they came back to earth.
frugalecon
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Re: Family member has one million in one stock , doesn't want to cash out

Post by frugalecon »

I wonder if the OP's dad has seen TSLA up about 5% today. I might worry that he will do a round of selling low and buying high.
Rudedog
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Re: Family member has one million in one stock , doesn't want to cash out

Post by Rudedog »

TSLA........in my mind its like gambling
000
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Re: Family member has one million in one stock , doesn't want to cash out

Post by 000 »

TSLA +10.92% today

Looks like he sold at a local bottom.
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Doom&Gloom
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Re: Family member has one million in one stock , doesn't want to cash out

Post by Doom&Gloom »

This thread is like a car wreck: painful to watch but I can't avert my eyes.
an_asker
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Re: Family member has one million in one stock , doesn't want to cash out

Post by an_asker »

I have a good idea to spend $5 on Schwab and create a "stock slice" with the following:

- AAPL
- FB
- AMZN
- NFLX
- GOOGL/Alphabet
- TSLA

If any of them goes up, I'll be happy that I made a penny or two; if not, then too I will be happy because hey, I didn't bet the barn!

PS: Can someone suggest four more stocks? Then I'll have a couple of quarters in each company ;-)
keanoz
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Re: Family member has one million in one stock , doesn't want to cash out

Post by keanoz »

an_asker wrote: Wed Sep 09, 2020 4:09 pm I have a good idea to spend $5 on Schwab and create a "stock slice" with the following:

- AAPL
- FB
- AMZN
- NFLX
- GOOGL/Alphabet
- TSLA

If any of them goes up, I'll be happy that I made a penny or two; if not, then too I will be happy because hey, I didn't bet the barn!

PS: Can someone suggest four more stocks? Then I'll have a couple of quarters in each company ;-)
I could only think of two more but, NVDA & SQ
Impatience
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Re: Family member has one million in one stock , doesn't want to cash out

Post by Impatience »

000 wrote: Wed Sep 09, 2020 3:33 pm TSLA +10.92% today

Looks like he sold at a local bottom.
Predictably. Since when do you sell on the biggest red day in ages? That’s market timing 101. He should have at least waited for the dead cat bounce.

To the Op, it’s WAY too soon to be saying “I told you so”.
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