Struggling Over whether to Sell my Tesla Stock

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Keenobserver
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Re: Struggling Over whether to Sell my Tesla Stock

Post by Keenobserver »

JS-Elcano wrote: Fri Oct 16, 2020 8:48 am Maybe calculate how much that investment would have grown had you invested it in the index stock fund of your choice in your Roth. Sell that much of your Tesla stock and transfer it into your index fund. Rinse and repeat every year. That way you never have to worry that you would have done better investing in the index instead of having bought an individual stock.
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Orbuculum Nongata
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Re: Struggling Over whether to Sell my Tesla Stock

Post by Orbuculum Nongata »

Know when to quit. Take the win and go home.
I think I can > I believe I can > I did
FoolMeOnce
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Re: Struggling Over whether to Sell my Tesla Stock

Post by FoolMeOnce »

Oranjin wrote: Thu Oct 15, 2020 10:44 pm So I'm in pretty much the exact same situation.

Tesla was literally my first stock purchase. I said to myself, "I'm going to buy 1/2 stocks a week until it hits 1k - this was in decemeber - march of last and this year." Once the stock hit 1k I decided I wasn't going to buy anymore. The reason I bought it was because I read about the tranche earning plan that EM had set up for himself, and I figured if he's willing to put so much on the line, and only earn if he's successful, and he was/is a successful guy, then I didn't see much of a risk in putting some money in there.

As of today, I think my investment is 3x (and I'm thinking I'm some kind of financial wizard all the sudden as I'm watching this, lol) now. When I stopped buying, I said I'll keep this for 5/10 years and then sell it.

My investment is not core to my financial well being, so if the stock went down tomorrow to 0, I'd be in the same situation I'm in now.

What I'm asking is; I guess, I set up a rule around which I'd sell in advance. That rule was; hold on to the stock for 5/10 years (NO matter what happens!) and then I'd sell. Now I don't know a lot about finance, which is part of the reason I'm here, but I imagine for someone who is more sophisticated than me financially, that this is a fairly arbitrary and abstract rule upon which to sell. Do I hold on to the rule? I imagine if I knew more things, I could sell the stock, and then invest those earnings in something else that would earn more money over the same period than the Tesla stock will accrue in the next 5 years. it seems especially prudent to me to hold onto the rule given my relative financial immaturity. If not, should I define another rule?
Sorry, but you didn't really have a plan to sell in the first place. Five to ten years? What happens at year five? How to you decide to sell or hold for another day, month, or year or five?
FoolMeOnce
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Re: Struggling Over whether to Sell my Tesla Stock

Post by FoolMeOnce »

Nice idea. In all the posts about when to sell play money stock picks that take off, I've never seen that strategy suggested.
mortfree
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Re: Struggling Over whether to Sell my Tesla Stock

Post by mortfree »

Thanks for selling.

Here’s hoping that your move means the stock goes up from here. (When I buy, stocks dip)
knowledge
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Re: Struggling Over whether to Sell my Tesla Stock

Post by knowledge »

If I were in your shoes, I'd think about how much it matters. Does it matter if TSLA went back down to $50? How about if it 10x'ed to $5,000? Sounds like you're going to be in good shape no matter what happens - so would those outcomes change your strategy? If it doesn't then do whatever that keeps you in zen.
KlangFool
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Re: Struggling Over whether to Sell my Tesla Stock

Post by KlangFool »

Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
aristotelian
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Re: Struggling Over whether to Sell my Tesla Stock

Post by aristotelian »

KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
What if your valuation of the stock has tripled based on new information? You took the risk with the initial investment. You are not taking more downside risk by staying in it. Presumably you still have X amount still in bonds and Y in diversified index funds. From a risk standpoint, I see no reason not to let it ride and go for the moonshot (I also see no reason not to cash out). Either way you are making a speculative bet. Of course, cashing out is the safe choice.
KlangFool
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Re: Struggling Over whether to Sell my Tesla Stock

Post by KlangFool »

aristotelian wrote: Fri Oct 16, 2020 9:47 am
KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
What if your valuation of the stock has tripled based on new information? You took the risk with the initial investment. You are not taking more downside risk by staying in it. Presumably you still have X amount still in bonds and Y in diversified index funds. From a risk standpoint, I see no reason not to let it ride and go for the moonshot (I also see no reason not to cash out). Either way you are making a speculative bet. Of course, cashing out is the safe choice.
aristotelian,

<<What if your valuation of the stock has tripled based on new information? You took the risk with the initial investment. You are not taking more downside risk by staying in it.>>

When it triples, I sell half. That was my plan. I stick to it. And, for the remaining half, I do the same again.

<<Presumably you still have X amount still in bonds and Y in diversified index funds. >>


I know that I am not gambling on my main portfolio.


<<From a risk standpoint, I see no reason not to let it ride and go for the moonshot (I also see no reason not to cash out).>>


That is the PROBLEM without a plan. My family member lost 10 million in the Telecom Bust with this mind set.

It takes certain kind of mentality to gamble. If you cannot stop yourself, you will lose eventually.


KlangFool
superbobbyg
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Re: Struggling Over whether to Sell my Tesla Stock

Post by superbobbyg »

Had same situation with Apple stock. As approaching retirement I decided to sell a portion to purchase dividend growth stocks for retirement income. You may want to determine how much income you want to generate and allow some of the TSLA proceeds to contribute. That way you force a rebalance that will benefit you long-term and keep the rest( I know it is hard to part with such a winner).

All the advice of "sell half", "set a price", etc. sound good in theory; but when put into practice it takes a lot of discipline.

Another thought, if you have children over 24 years old you can gift at their tax rate. I did this with my daughter while she was in law school. Since she had zero income she got an immediate 60k relief on taxes.

My 2c.

Bob
mortfree
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Re: Struggling Over whether to Sell my Tesla Stock

Post by mortfree »

KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
Back in 2007 I had no idea Apple stock would split 7:1 in a few years and then 4:1 just recently.

How can I assume a stock will 3x?

Genuine question.

I’m just holding on to Apple at this point. Taxable and roth accounts. And kids accounts.
KlangFool
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Re: Struggling Over whether to Sell my Tesla Stock

Post by KlangFool »

mortfree wrote: Fri Oct 16, 2020 4:17 pm
KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
Back in 2007 I had no idea Apple stock would split 7:1 in a few years and then 4:1 just recently.

How can I assume a stock will 3x?

Genuine question.

I’m just holding on to Apple at this point. Taxable and roth accounts. And kids accounts.
mortfree,

I only buy the stock that has the possibility of going up to 10X to 30X. I would not hold or buy the Apple stock. It does not pass my test.

<<How can I assume a stock will 3x?>>

In this case, why are you holding the Apple stock? It has to beat your portfolio's return by a substantial margin in order for you to hold this stock.

In my case, the answer is the stock must have the potential to go up to 10X to 30K in order for me to hold the stock. What is your answer? Why take the individual stock RISK when the reward is not SUBSTANTIAL?

Don't invest in an individual stock if you do not know why you are buying it.

KlangFool
mortfree
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Re: Struggling Over whether to Sell my Tesla Stock

Post by mortfree »

KlangFool wrote: Fri Oct 16, 2020 4:33 pm
mortfree wrote: Fri Oct 16, 2020 4:17 pm
KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
Back in 2007 I had no idea Apple stock would split 7:1 in a few years and then 4:1 just recently.

How can I assume a stock will 3x?

Genuine question.

I’m just holding on to Apple at this point. Taxable and roth accounts. And kids accounts.
mortfree,

I only buy the stock that has the possibility of going up to 10X to 30X. I would not hold or buy the Apple stock. It does not pass my test.

<<How can I assume a stock will 3x?>>

In this case, why are you holding the Apple stock? It has to beat your portfolio's return by a substantial margin in order for you to hold this stock.

In my case, the answer is the stock must have the potential to go up to 10X to 30K in order for me to hold the stock. What is your answer? Why take the individual stock RISK when the reward is not SUBSTANTIAL?

Don't invest in an individual stock if you do not know why you are buying it.

KlangFool
Cost basis: $5644
Gain: $52,437

Don’t want to pay taxes on that.
KlangFool
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Joined: Sat Oct 11, 2008 12:35 pm

Re: Struggling Over whether to Sell my Tesla Stock

Post by KlangFool »

mortfree wrote: Fri Oct 16, 2020 4:55 pm
KlangFool wrote: Fri Oct 16, 2020 4:33 pm
mortfree wrote: Fri Oct 16, 2020 4:17 pm
KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
Back in 2007 I had no idea Apple stock would split 7:1 in a few years and then 4:1 just recently.

How can I assume a stock will 3x?

Genuine question.

I’m just holding on to Apple at this point. Taxable and roth accounts. And kids accounts.
mortfree,

I only buy the stock that has the possibility of going up to 10X to 30X. I would not hold or buy the Apple stock. It does not pass my test.

<<How can I assume a stock will 3x?>>

In this case, why are you holding the Apple stock? It has to beat your portfolio's return by a substantial margin in order for you to hold this stock.

In my case, the answer is the stock must have the potential to go up to 10X to 30K in order for me to hold the stock. What is your answer? Why take the individual stock RISK when the reward is not SUBSTANTIAL?

Don't invest in an individual stock if you do not know why you are buying it.

KlangFool
Cost basis: $5644
Gain: $52,437

Don’t want to pay taxes on that.
mortfree,

You have a choice:

A) Pay tax and harvest your gain.


B) Bet that the Apple stock can beat your portfolio return substantially.


My family member lost 10 million in the Telecom Bust because he could not sell and harvest his gain. He was counting on a few hundred thousands of gain everyday until it collapses.


If you cannot sell a stock, do not buy it.

KlangFool
JS-Elcano
Posts: 94
Joined: Wed Jun 10, 2020 7:29 pm

Re: Struggling Over whether to Sell my Tesla Stock

Post by JS-Elcano »

KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
And then that half you put where? VTSAX?

Do you also have a rule for when to buy a stock again after selling half of it when it triples? Or do you only buy it once and wait for it to triple again? [just saw you answered this up thread already]
Last edited by JS-Elcano on Fri Oct 16, 2020 5:53 pm, edited 1 time in total.
KlangFool
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Joined: Sat Oct 11, 2008 12:35 pm

Re: Struggling Over whether to Sell my Tesla Stock

Post by KlangFool »

JS-Elcano wrote: Fri Oct 16, 2020 5:44 pm
KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
And then that half you put where? VTSAX?

Do you also have a rule for when to buy a stock again after selling half of it when it triples? Or do you only buy it once and wait for it to triple again?
JS-Elcano,

<<And then that half you put where? VTSAX?>>


My 60/40 portfolio.

<<Do you also have a rule for when to buy a stock again after selling half of it when it triples? >>

No. I limit my gambling on all individual stocks to about 5K to 10K of my money.


<<Or do you only buy it once and wait for it to triple again?>>

I only buy until I used up all my 5K to 10K of gambling money.


KlangFool
TravelforFun
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Joined: Tue Dec 04, 2012 11:05 pm

Re: Struggling Over whether to Sell my Tesla Stock

Post by TravelforFun »

JS-Elcano wrote: Fri Oct 16, 2020 5:44 pm
KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
And then that half you put where? VTSAX?

Do you also have a rule for when to buy a stock again after selling half of it when it triples? Or do you only buy it once and wait for it to triple again?
Warren Buffett has owned Coca Cola since 1989.

TravelforFun
TravelforFun
Posts: 2186
Joined: Tue Dec 04, 2012 11:05 pm

Re: Struggling Over whether to Sell my Tesla Stock

Post by TravelforFun »

JS-Elcano wrote: Fri Oct 16, 2020 5:44 pm
KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
And then that half you put where? VTSAX?

Do you also have a rule for when to buy a stock again after selling half of it when it triples? Or do you only buy it once and wait for it to triple again?
Warren Buffett has owned Coca Cola since 1989.

TravelforFun
JS-Elcano
Posts: 94
Joined: Wed Jun 10, 2020 7:29 pm

Re: Struggling Over whether to Sell my Tesla Stock

Post by JS-Elcano »

KlangFool wrote: Fri Oct 16, 2020 5:51 pm
JS-Elcano wrote: Fri Oct 16, 2020 5:44 pm
KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
And then that half you put where? VTSAX?

Do you also have a rule for when to buy a stock again after selling half of it when it triples? Or do you only buy it once and wait for it to triple again?
JS-Elcano,

<<And then that half you put where? VTSAX?>>


My 60/40 portfolio.

<<Do you also have a rule for when to buy a stock again after selling half of it when it triples? >>

No. I limit my gambling on all individual stocks to about 5K to 10K of my money.


<<Or do you only buy it once and wait for it to triple again?>>

I only buy until I used up all my 5K to 10K of gambling money.


KlangFool
Thanks! A very sensible way of investing in individual stocks to scratch the itch without putting your ultimate goal at risk.
KlangFool
Posts: 17683
Joined: Sat Oct 11, 2008 12:35 pm

Re: Struggling Over whether to Sell my Tesla Stock

Post by KlangFool »

TravelforFun wrote: Fri Oct 16, 2020 5:52 pm
JS-Elcano wrote: Fri Oct 16, 2020 5:44 pm
KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
And then that half you put where? VTSAX?

Do you also have a rule for when to buy a stock again after selling half of it when it triples? Or do you only buy it once and wait for it to triple again?
Warren Buffett has owned Coca Cola since 1989.

TravelforFun

A) It should be obvious to all of us that we are not Warren Buffett.


B) Do you own any BRK.A or BRK.B?


KlangFool
jdb
Posts: 1669
Joined: Wed Dec 05, 2012 8:21 pm

Re: Struggling Over whether to Sell my Tesla Stock

Post by jdb »

Oranjin wrote: Thu Oct 15, 2020 10:44 pm So I'm in pretty much the exact same situation.

Tesla was literally my first stock purchase. I said to myself, "I'm going to buy 1/2 stocks a week until it hits 1k - this was in decemeber - march of last and this year." Once the stock hit 1k I decided I wasn't going to buy anymore. The reason I bought it was because I read about the tranche earning plan that EM had set up for himself, and I figured if he's willing to put so much on the line, and only earn if he's successful, and he was/is a successful guy, then I didn't see much of a risk in putting some money in there.

As of today, I think my investment is 3x (and I'm thinking I'm some kind of financial wizard all the sudden as I'm watching this, lol) now. When I stopped buying, I said I'll keep this for 5/10 years and then sell it.
It’s a good problem to have. I am in similar situation with Zoom. It has gone up 5x since bought in early April. But is in taxable account so need to hold for 12 months to get LTCG. My advice, which I am taking for myself, is if investment in non taxable account or if in taxable and you pay less than 25% tax rate then sell enough to recover investment, but if in taxable account and you are in tax category above 25% wait for the LTCG before selling enough to recover investment. Just my 2 cents. Good luck.
System1
Posts: 18
Joined: Thu Sep 12, 2019 10:08 pm

Re: Struggling Over whether to Sell my Tesla Stock

Post by System1 »

TravelforFun wrote: Fri Oct 16, 2020 5:52 pm
Warren Buffett has owned Coca Cola since 1989.

TravelforFun

"This adjustment was necessary to account for the growing size of Buffett's portfolio, which made it more difficult to take advantage of market inefficiencies; it also hindered active management and reduced the number of opportunities he could consider that would have a meaningful impact on its performance." - https://www.investopedia.com/ask/answer ... -1980s.asp

I believe that the whole nature of this thread and similar topics revolves around people using a small percentage of their portfolio to engage in active management.

Klangfool, thank you for your responses, they have been quite helpful for me.
KlangFool
Posts: 17683
Joined: Sat Oct 11, 2008 12:35 pm

Re: Struggling Over whether to Sell my Tesla Stock

Post by KlangFool »

mortfree wrote: Fri Oct 16, 2020 4:55 pm
KlangFool wrote: Fri Oct 16, 2020 4:33 pm
mortfree wrote: Fri Oct 16, 2020 4:17 pm
KlangFool wrote: Fri Oct 16, 2020 9:31 am Folks,

If you buy an individual stock, you need a plan as to when you want to sell. Or else, you are essentially burying the money. You set up this plan and write it down when you buy the stock. Or else, you may change your mind again.


A) When to sell if you are right? For example, sell half when triple.


B) When to sell if you are wrong? For example, if the stock does not go up by X% in Y years, I will sell.



KlangFool
Back in 2007 I had no idea Apple stock would split 7:1 in a few years and then 4:1 just recently.

How can I assume a stock will 3x?

Genuine question.

I’m just holding on to Apple at this point. Taxable and roth accounts. And kids accounts.
mortfree,

I only buy the stock that has the possibility of going up to 10X to 30X. I would not hold or buy the Apple stock. It does not pass my test.

<<How can I assume a stock will 3x?>>

In this case, why are you holding the Apple stock? It has to beat your portfolio's return by a substantial margin in order for you to hold this stock.

In my case, the answer is the stock must have the potential to go up to 10X to 30K in order for me to hold the stock. What is your answer? Why take the individual stock RISK when the reward is not SUBSTANTIAL?

Don't invest in an individual stock if you do not know why you are buying it.

KlangFool
Cost basis: $5644
Gain: $52,437

Don’t want to pay taxes on that.
mortfree,

Apple market cap is about 2 trillions. US GDP is about 20 trillions. World GDP is about 142 trillions. Global stock market cap is about 90 trillions.


Do you believe that Apple can go up 10X over the next few years?


KlangFool
Shallowpockets
Posts: 1679
Joined: Fri Nov 20, 2015 10:26 am

Re: Struggling Over whether to Sell my Tesla Stock

Post by Shallowpockets »

I have been in and out of Tesla over the last year. I am well on the positive side. I am in it now
I look at it as $ gains and not as percentages. There is no reason for you to not sell it, take your money, unless you are concerned about taxes. You can always go back in.
What do you want from this! More?
It all has to do with your desire for more money or else the psychological triumph of winning on a stock pick.
This is the problem to well off BHs. They don’t need the money, If they sell they need a place to put that now unused slack money. They feel they need to use it. To make more money, which they don’t need.
It’s a rough life.
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