WienerG wrote: ↑Wed Nov 25, 2020 5:00 am
herbert_21 wrote: ↑Sun Nov 22, 2020 1:47 pm
Maverick3320 wrote: ↑Sun Nov 22, 2020 7:20 am
I don't understand the point of the original post. You come on Bogleheads, of all places, and then discuss your strategy to borrow money to purchase a single stock.
Then when people say your move is foolish, you get upset. The small minority that says "do what you want", you thank them. If you are so much smarter than the Boglehead masses, why bother to stoop to our level and post here? Isn't being an expert stock picker and knowing something about Tesla that apparently no one else knows enough for you?
What is the purpose of your post?
Who said it's foolish? Those guys that compare Tesla with Wirecard?
Sorry. There were friendly comments, helpful comments, critical comments and worthless comments. I read all of them.
I was wondering if talking about a taboo (investing on margin) is acceptable, and then I decided to give it a go. As I wrote in the opening post, I don't really have a lot of friends to discuss the topic. I thought that a Bogle forum could be the place to discuss this, and my personal situation.
P.S. Better comparison to Wirecard is Nikola.
No one compared Wirecard to Tesla - if that is what you understood, then you are wildly mistaken. We indicated in clear terms that by investing in single companies you have an increased risk when compared to diversified index funds. Wirecard is an example of a fintech that suddenly disappeared after posting very strong results. Take Volkswagen and the exhaust fume scandel - such an event could wipe out Tesla. We were purely warning you in no uncertain terms that investing in single companies carries a significant risk. And borrowing to do so adds to that risk. The consensus is that you are speculating (very risky). I have seen many get burnt doing what you're doing.
If you feel this advice is worthless (as is your right), then I do not understand why you posted here in the first place. If you only want to hear confirmations of your risky investment approach, then you are in the wrong place - this is a site focussed on diversification and long term gains and constructively challenges any post. Let's agree to circle back to your portfolio on 31.12.2050 to see how well you did compared to others here. I for one will be happily retired and sleeping well at night.
I honestly wish you well in your endevours.
The "comparing Wirecard to Tesla" thing is known in English as a "straw man argument
". Create an argument that you allege the other side is making, that is extreme, and then knock it down.
Because schools no longer teach rhetoric and reasoning (or so it seems) we are deficient in understanding how arguments are deployed and their flaws. We can see that with "fake news" -- this tendency to fail to interrogate sources, eg on F-book posts -- failure to check snopes.com for example (I now give regularly to snopes.com). You see it in the widespread belief in various conspiracy theories. I certainly did not learn this in my high school nor undergraduate education, mostly.
Perhaps Continentals are better educated in school and this is an Anglo-Saxon problem? When you add an understanding of behavioural economics - of how humans reason in the real world, and what our predictable biases (see Dan Arielly "Predictably Irrational") are, then it can become quite powerful.
I agree the problem for a thinly capitalized company like Tesla is it lacks deep reserves to overcome a major product flaw or other accident (pun
). It is like a thin very fast growing plant coming out of the undergrowth. Also there is Musk's tendency to engage in complex corporate deals with companies that he has a stake in, when the commercial logic with Tesla itself is weak. And his random personality (calling one of the cave rescuers a "pedo" etc).
I also agree re justification of a decision already taken. To be fair to Herbert21 he seems genuinely to be listening to the arguments we make but only he could know what, inside himself, would actually change his mind.
But it's not an approach we would endorse here. On the main US investing board, there's been good discussions of the possibilities of leveraging up at a young age to buy more equities (as suggested in a book by Yale U professor Barry Nalebuff. I don't know what Robert Shiller, also of Yale, thinks of that idea). Indeed there was an epic thread with poster "market timer" about his experiences doing same in 2008-09, right during the Crash. (FWIW, he now has a very conservative portfolio with something like 25%+ cash).