Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

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tj
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by tj »

er999 wrote: Tue Nov 22, 2022 6:27 pm You have 8 million and you want to stay single stock? Going from 8 million to 1 million would be a way worse change in your life than going from 8 million to 64 million so protect the downside.
+1. You already won the game. Why would you throw millions into Tesla? What makes Tesla a better bet than say VOO or VTI ?
a
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by a »

Admire your honesty.
Kookaburra
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by Kookaburra »

Wow- A really fascinating 3 year journey it has been.
TwstdSista
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by TwstdSista »

Thank you so much for the update - I was anxious on your behalf the entire time I was reading this thread! (hindsight being 20/20 and all)

I wish you good luck moving forward, and congratulations! You have, indeed, won the game.
Escapevelocity
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by Escapevelocity »

Just because Tesla made you rich, you shouldn’t feel like you owe it any loyalty. At the very least you need to get Tesla down below 25% of your portfolio. The idiosyncratic risk of being so concentrated is just bonkers.
FishTaco
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by FishTaco »

Props to OP for continuing to update this thread. Thanks.
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Stinky
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by Stinky »

a wrote: Tue Nov 22, 2022 10:35 pm Admire your honesty.
+1

Very few folks who are down by over $4 million in less than a year, mostly in a single stock, would have the “guts” to post back on the Forum.

It’s been a fascinating journey for you. Thanks for sharing it with us.
Retired life insurance company financial officer who sincerely believes that ”It’s a GREAT day to be alive!”
j9j
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by j9j »

Just came across this thread. Very interesting journey. Thanks for posting the update. 2022 has been pretty rough compared to the last 10 years.
goblue100
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by goblue100 »

As another poster suggested, which impacts you more:
Riding Tesla from 8 million down to 1 million?
Riding Tesla from 8 million to 24 million?

I get that you wouldn't have gotten to where you are without an appetite for risk, but at some point risk can show up in a really big way.
I'm reminded of a Larry Swedroe article written after the 2008 market collapse. The headline was something like "To make money they didn't need they risked money they couldn't afford to lose".
I also appreciate your willingness to allow us to share vicariously in your journey.
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns
Escapevelocity
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by Escapevelocity »

goblue100 wrote: Wed Nov 23, 2022 9:27 am As another poster suggested, which impacts you more:
Riding Tesla from 8 million down to 1 million?
Riding Tesla from 8 million to 24 million?

I get that you wouldn't have gotten to where you are without an appetite for risk, but at some point risk can show up in a really big way.
I'm reminded of a Larry Swedroe article written after the 2008 market collapse. The headline was something like "To make money they didn't need they risked money they couldn't afford to lose".
I also appreciate your willingness to allow us to share vicariously in your journey.
Well said. Just to build on that, it doesn't need to be an all or nothing deal. You can still have a major concentration in a single stock like maybe 25% of your portfolio without going to such an extreme.
RonSwanson
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by RonSwanson »

What has already happened doesn't matter, what you think will happen doesn't matter, and what your "break even point with a BH portfolio" is certainly doesn't matter either.

What does matter is the size and composition of your portfolio today. The size matters (hehe) because this what actually affects your life. The composition matters because this affects the size in the future. Right now you have MASSIVE concentrated risk which means that the future size could be much lower or much higher than it is currently.

You have a life changing amount of wealth right now. You can comfortably retire in your 40s. From what I understand, you achieved this wealth through risky bets that luckily paid off. Please correct me if I am wrong, but you did not achieve this via some repeatable skill, i.e. your career. If you lose this wealth, the odds of getting back to this point anytime soon are astronomically small.

Think about the size of your portfolio in terms of life changing events that it can support. A rough abbreviated example:

$1M = Maybe retire someday. In the meantime, somebody else owns your time.
$2M = Maybe retire with a nice standard of living someday. In the meantime, somebody else owns your time.
$4M = Retire now, but frugally. You sacrifice spending in order to own your time.
$8M = Retire now and maintain previous standard of living. This is HUGE.
$15M = Buy something fancy like a nice house while being retired.
$30M = Fund your own startup
$100M = Rent fancy yachts
$1B = Buy fancy yachts

You get the picture.

You are much closer to a life changing wealth event on the downside than you are on the upside. If this happens, you may never recover financially and will spend many more years working for somebody else.

I suggest you figure out how much wealth is necessary for you to live the style of life that you actually want. If you are currently above this amount, do your best to preserve it by diversifying into other assets.
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MillennialFinance19
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by MillennialFinance19 »

Please get out of these positions! You’re literally being inducted into the TSLA options hall of fame, and somehow it isn’t good enough?! To quote Chris Berman, “C’mon man!”
VTI and chill until 57...
an_asker
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Re: Retiring in 6 months (off TSLA options); 11/22/22 Update - It Ain't Pretty

Post by an_asker »

roguewarrior0 wrote: Tue Nov 22, 2022 5:36 pm 11/22/22 - Update

So I wanted to provide an update. The update highlights success and mistakes that I hope everyone can learn from. Please be gentle in your responses to my mistakes as they are as you would expect due to my non-BH tendencies. I won't rehash everything but here is a quick summary.

Portfolio Value Summary
06/01/19 - $2.396m
06/01/20 - $4.027m
06/01/21 - $9.335m
06/01/22 - $9.777m
01/01/22 - $11.810m
11/22/22 - $7.626m
[...]
I will create a new plan on 1/2/23. Roughly my break-even point (where my portfolio is the same as if it were the BH portfolio since 1/1/22) is when TSLA hits $225. That will put me back @ $9.740m.

Honestly, I am not sure what my exit strategy is yet in my new scenario. Right now I am just focused on selling Covered Calls to get off margin. Also, I am not thinking about taxes at this stage as that ship has sailed.

thanks,
RW
Your net worth is at least two times - if not three times - what would be more than sufficient for a comfortable retirement. So, I don't understand why folks are picking on you and/or why you're saying it's not pretty. Yes, compared to your top, I agree. But by that token, none of our net worths is currently in the "pretty" category lol.
invest2bfree
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by invest2bfree »

roguewarrior0 wrote: Tue Nov 22, 2022 6:14 pm I may very well close my TSLA position or at least reduce it, but likely not before 12/30/22. I am trying not to panic sell just because it is down. Zooming out, my portfolio is up from both 2019 and 2020 levels, although down from all-time highs.

You are right about living off of 3%, which in my case $8m is the magic number. However, ultimately it boils down to do I believe TSLA is a good investment at these levels?

Is TSLA at $170 a buy or sell? I believe if I were all cash, I would buy. So accordingly, I will hold for now. On 12/30/22, I will decide if I want to risk hold into the next Deliveries and/or Earnings report.

thoughts?
TSLA is one bad news away from getting cut in half.

What happens to expensive cars in a recession?

People will stop buying them.

Elon Musk is selling TSLA stock and diversifying his positions.

You need listen to this song and take it to heart.

https://youtu.be/7hx4gdlfamo
IzItBo
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Re: Retiring in 6 months (off TSLA options); 11/22/22 Update - It Ain't Pretty

Post by IzItBo »

roguewarrior0 wrote: Tue Nov 22, 2022 5:36 pm 11/22/22 - Update
...
Just wanted to pop in to wish you luck!

My journey started on 4/1/19 when I pulled the plug from working at Megacorp. At the time, I had about 90% of my portfolio in Megacorp stocks. Before pulling the plug, I divested all tax advantaged accounts into the S&P 500. Still had about 30% in taxable accounts. Had I kept my Megacorp stocks, I would have hit my number @15mil today. Even though I still think that is the right decision, vvery now and the I still kick myself a little bit.
invest2bfree
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Re: Retiring in 6 months (off TSLA options); 11/22/22 Update - It Ain't Pretty

Post by invest2bfree »

IzItBo wrote: Wed Nov 23, 2022 3:15 pm
roguewarrior0 wrote: Tue Nov 22, 2022 5:36 pm 11/22/22 - Update
...
Just wanted to pop in to wish you luck!

My journey started on 4/1/19 when I pulled the plug from working at Megacorp. At the time, I had about 90% of my portfolio in Megacorp stocks. Before pulling the plug, I divested all tax advantaged accounts into the S&P 500. Still had about 30% in taxable accounts. Had I kept my Megacorp stocks, I would have hit my number @15mil today. Even though I still think that is the right decision, vvery now and the I still kick myself a little bit.
What you did is absolutely right.

FOMO is real, Buffet said this about Long Term Capital Management guys “TO MAKE MONEY THEY DIDNT HAVE AND DIDNT NEED THEY RISKED MONEY THEY DID HAVE AND DID NEED”
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roguewarrior0
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by roguewarrior0 »

I appreciate everyone's feedback. I particularly like IzItBo's.

I realize I still have life altering wealth. As of today (up day for TSLA), I crossed back over $8m. I am taking all the feedback and learning even if I am not following all of the wealth of information. I know you are right that if I sell now, I will remain wealthy vs if I hold I might be more wealthy or I might be back a square one.

However, I fundamentally believe TSLA is undervalued at these prices, which is why I am against getting out. I plan to reevaluate on 12/30.

I will sell 9600sh (~24%) @215 or above in my taxable, but will continue to monitor.

Today's action places my 11/25 $175 Calls In-the-Money.
My intention is to Roll them 12/2 @ $180 for $0.10 credit/sh.

I am continuing to post so you can see plus's/minus's of the trading. 2022 is down thus far, but I wanted to give a true accounting. Hopefully you guy's aren't watching a train wreck live.

For better or for worse, I expect to close out my TSLA positions north of $10m, but that is not an absolute target. Here is how I think I get there using the $7.6m yesterday.
  • Sell weekly covered calls 5 more weeks x $100k/wk = $500k
  • Every $10/sh Price Appreciation = $400k
  • $50 Price Increase (28% increase) = $230 price
  • YTD High = $361 (3/28/22)
  • 10/24/22 = $224
I believe $230 is more likely than $130 and have bet $7.6m on it.


There are headwinds but the company is highly profitable ($3b in FCF for Q3), Growing by over 30% YoY, Growing Margins and demand. Headwinds are erratic genius CEO (blessing/curse) and China risk. I don't perceive competition as real, because while Tesla marketshare is growing they ownership of EV Profits is absolute. You want to own Apple or Nokia? Nokia sells more phones the Apple and are taking "marketshare" but they make no money. Where Tesla is making more money on each cars YoY.

Today's action places my 11/25 $175 Calls In-the-Money, so the discussion could be moot.
er999
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by er999 »

Good luck! Hope it works out for you and sounds like you are aware of the risk. I’d personally make a different decision but that’s also why I don’t have 8 million. Out of curiosity how much did you initially invest? Is it a 10x return or a 40x return or more?
privateer79
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22/22 Update - It Ain't

Post by privateer79 »

Lawrence of Suburbia wrote: Tue Nov 22, 2022 5:47 pm I'd say invest your remaining funds in Bitcoin, fast
....
haha, the counter point to the OP's story is my very clever Bitcoin strategy that helped me avoid all the major crashes since I first heard of bitcoin in 2011...
the strategy,... never invest in it. :oops:


thanks OP for the honesty! it sounds like you're still up and still have done well... I hope you heed the warnings to at least take something off the table.
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roguewarrior0
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by roguewarrior0 »

er999 wrote: Wed Nov 23, 2022 5:29 pm Good luck! Hope it works out for you and sounds like you are aware of the risk. I’d personally make a different decision but that’s also why I don’t have 8 million. Out of curiosity how much did you initially invest? Is it a 10x return or a 40x return or more?
Portfolio Value Summary
06/01/19 - $2.396m
06/01/20 - $4.027m
06/01/21 - $9.335m
06/01/22 - $9.777m
01/01/22 - $11.810m
11/22/22 - $7.626m

I started in TSLA in July 2020 and put in roughly $3m. The other $1m was ironically in BND. As BND underperformed so I eventually got rid of all BND to go more heavy into TSLA on any dips. I also sold a lot of CC on TSLA so it did cap my upside somewhat. But can can't complain on the ride. I know this isn't BH thinking and I am trying to get there.
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calmaniac
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by calmaniac »

roguewarrior0 wrote: Wed Nov 23, 2022 4:16 pm However, I fundamentally believe
Thank you to roguewarrior0 for posting this introspective investing journey and thanks to those Bogleheads posting for keeping the discussion from getting caught up in snark.

As time has gone on and I've been fortunate to be on the positive side of some good lifestyle, vocational, and investing decisions, I've come to realize that most of those early investing decisions were random luck. I've become more data driven and less gut driven, and stopped investing in individual stocks. I still own legacy AAPL that I bought in 1993 and it has made a substantial contribution to our net worth. However, I don't believe in any one stock or company, I believe in the market demonstrating a premium relative to other investments. That belief is based on data. As such, I continue to sell off AAPL shares most years and reinvest in broad based index funds.
roguewarrior0 wrote: Wed Nov 23, 2022 4:16 pm My intention is to Roll them
Dice?

A lot to be thankful for this year.
≈63yo. AA 75/25: 30% TSM, 19% value (VFVA/AVUV), 18% foreign LC, 8% emerging, 25% GFund/VBTIX. Fed pensions now ≈60% of expenses. Taking SS @age 70--> pension+SS ≈100% of expenses. What me worry?
cashheavy18
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by cashheavy18 »

I would be interested in hearing more about the impact of the ups/downs in the past one year of your retirement:
  • Have you changed your spending at all and/or are there plans to change?
  • You are in your late 40s - how are you handling medical insurance?
  • How involved is your spouse in the planning/managing of the investment strategy?
  • If your spouse isn’t that involved, what is their reaction to the large fluctuation and dependency on one stock?
  • As you mentioned, you have a high tolerance for risk, has this caused any stress? Or do you go with the flow, since you’re still up significantly from your initial investment?
Thank you for taking the time to provide updates and respond to questions. I’ve been following since you originally posted and I find the whole behavioral aspect of your decisions quite interesting.

Wishing you the best!
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HomerJ
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by HomerJ »

roguewarrior0 wrote: Wed Nov 23, 2022 4:16 pm However, I fundamentally believe TSLA is undervalued at these prices, which is why I am against getting out.
"The market can remain irrational longer than you can stay solvent."
- John Maynard Keyes, in the 1930s...

In the 1930s.

People, very smart people, have been doing what you're doing for a hundred years... Heck, really since markets existed.

There are always some willing to gamble. Some win, some lose.

Aren't your calls time-dependent? This isn't a long-term play, where you can be proven right if you just hold on long enough, right?

You have to be right about the price AND the timing. You can be 100% right that TSLA is undervalued, but it can easily remain undervalued for a few months or a few years. That happens all the time for many stocks. It can certainly go lower before going higher.
I believe $230 is more likely than $130 and have bet $7.6m on it.
Gambling is the right term.

Good luck...

This may indeed be a very smart bet. But even if the odds are really low, snake-eyes do get rolled at times.
Today's action places my 11/25 $175 Calls In-the-Money, so the discussion could be moot.
If you've won, take the winnings. if you continue to stand at the table and roll the dice over and over and over and over, I guarantee you WILL roll snake-eyes sooner or later. And if you're betting 70%-80% of your bank-roll on each roll of the dice, that one time will damage you terribly.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
theorist
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by theorist »

Interesting thread! I’m glad the OP has updated it through both winning and losing hands on his high conviction informed bet / gambling (depending on your viewpoint).

OP, given your situation now, I’d look up “diminishing marginal utility of money” (or income, or wealth). This is a quick way of saying I agree with many of the other posters. Take enough off the table to give yourself a solid, comfortable future through investment in diversified funds or safe assets. Leave a million or two as a large scale bet on Tesla, if you must.

Congratulations on your success so far, either way!
Minderbinder
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by Minderbinder »

Options are great, but in my experience people get into trouble when they start thinking of option premium as income and projecting it forward instead of just the fair current price of a decaying asset.

It's difficult enough to get direction right, projecting a certain amount of income requires you to be correct on the path as well. EG monetizing covered calls requires the price to go up but not TOO up too quickly or else you'll lose the shares.

Good luck!
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roguewarrior0
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by roguewarrior0 »

cashheavy18 wrote: Wed Nov 23, 2022 10:43 pm I would be interested in hearing more about the impact of the ups/downs in the past one year of your retirement:
  • Have you changed your spending at all and/or are there plans to change?
  • You are in your late 40s - how are you handling medical insurance?
  • How involved is your spouse in the planning/managing of the investment strategy?
  • If your spouse isn’t that involved, what is their reaction to the large fluctuation and dependency on one stock?
  • As you mentioned, you have a high tolerance for risk, has this caused any stress? Or do you go with the flow, since you’re still up significantly from your initial investment?
Thank you for taking the time to provide updates and respond to questions. I’ve been following since you originally posted and I find the whole behavioral aspect of your decisions quite interesting.

Wishing you the best!
cashheavy18 wrote: Wed Nov 23, 2022 10:43 pm I would be interested in hearing more about the impact of the ups/downs in the past one year of your retirement:
  • Have you changed your spending at all and/or are there plans to change?
  • You are in your late 40s - how are you handling medical insurance?
  • How involved is your spouse in the planning/managing of the investment strategy?
  • If your spouse isn’t that involved, what is their reaction to the large fluctuation and dependency on one stock?
  • As you mentioned, you have a high tolerance for risk, has this caused any stress? Or do you go with the flow, since you’re still up significantly from your initial investment?
Thank you for taking the time to provide updates and respond to questions. I’ve been following since you originally posted and I find the whole behavioral aspect of your decisions quite interesting.

Wishing you the best!
#1 is really the hardest to be honest. If you have been a saver/investor, then it becomes hard to just draw down from your portfolio. You'd be surprised how hard it is to "sell an investment" to buy stuff for daily life. All of us are used to paying for "stuff" from our paychecks and don't touch the portfolio. Honestly I still struggle with that. This is part of the reason I keep selling Covered Calls for a little more. I rolled out some of my Calls from TSLA $500 September 22' to $500 December 22' in the summer to collect $40k in premiums to pay son's college tuition. Then I rolled some more to buy a 2023 Tesla Y (ironic huh). Then I rolled my $800 September 22' to December 22' to pay for Solar Panels & Tesla Powerwall. So Day-to-Day expenses have not changed from pre-retirement. A few big purchases illustrated above. But paying for the spending has been mentally paid for by Selling Covered Calls, where in the past it would have been budgeted from paychecks.

Medical Insurance. I retired in January and have been using Cobra to maintain my insurance. For a family of 4, that amount is about $2,500/month. My Cobra expires June 30, 2023. So starting in January I will begin exploring Private insurance through the portal. Health Insurance is the scariest part of early retirement. Health Insurance is what gives me the most anxiety. How much will private insurance be? What will be the Quality of Care? How impactful will moving to HMO (all private insurance is HMO) vs my PPO now be?

I talk to wife all of the time. She understands and does worry about the potential risks but is ok with it (literally just talked again about it), but she is patient and trusting in me. Part of moving to Boglehead 2 fund was to simplify so she could manage it should I get hit by the proverbial bus. Our original goal was to be all out of TSLA by end of year and have everything into Revocable Trusts. January I am scheduled to start teaching her how I manage all the finances: Investments, Bill Pay, Cash flow, Insurance shopping, RMD for aging mom, property taxes, income taxes....etc. I have no desire to teach her Options strategy. Hypocritical I know that I don't want her messing with Options, while I trade them weekly.

My wife isn't super worried. Not sure if it is because of blinding trust or just naive to how much risk is in being 90% in TSLA. She worries more about the kids eating healthy and getting enough sleep than she does about investment risks. We divide and conquer (married 22+ years). I manage finances, house and yard and she manages kid's and we split everything else. Also, honestly our lifestyle (spending habits) didn't change regardless of net worth for the last 10 years (outside of recent large purchases). So now being 7.6m vs 10+m vs 4m hasn't had a real impact. She views it as funny money. Profit is meaningless until you sell.

I am still going with the flow and just adjusting. I am less stressed now then when I was working and had $10+m, but that likely has to do more with not working. Now retirement and seeing 4m decrease hasn't increased in anxiety. It has just made me continue seeking more opinions, because I know I don't know. In some ways I am more excited because of the 1st time in years I am completely "uncovered" and have the full upside should TSLA move upwards.

This blog is therapeutic because before I retired and we bought Tesla's we were stealth wealth. No one realizes we have the money we do. We live in our 1st home that we bought for $190k 20 years ago. I drove an old Jeep before the Tesla. My sons got my old Jeep. So the risk doesn't bother me too much because I think I can adjust. The BH blog lets me layout to others (anonymously) what I am thinking and get opinions. Otherwise honestly, who would I discuss this with. Neighbors? Family? Just too many complications and judgements to discuss wealth. People realize we are well off enough to retire in my 40's, but no one knows our net worth beyond my wife and sons.

By the way this last entry is starting to move me more towards closing my position.....just writing down that we don't notice the difference in lifestyle when we had $10+m vs now makes me pause. Why do I want to wait for TSLA to recover? The likely answer is I don't like selling investments to pay for stuff. I will sleep on it.

Happy Thanksgiving to All!!!
tj
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by tj »

I don't understand why there is an aversion to sell investments to pay for stuff. That's what your investments are for!
RonSwanson
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by RonSwanson »

This is not funny money! You can convert your TSLA stock directly into cash and use it to buy things. I think the funny money concept is a mechanism used by people to feel better about risks they are taking. Sure, the stock value doesn't matter if you cannot sell or there is no liquidity (ie unvested private stock options) but that is not the case here. This is the real deal.

The only entity that needs to care about how much you are "up" is the IRS. How much you are down from your peak is irrelevant.

It sounds like you are using your investment structure to generate some cash that you can justify spending, similar to how people want dividend stocks so they can spend the dividends. This doesn't make sense as you can just convert your stock into cash and spend it. I get it though, I am in a similar position myself and I struggle with it too. We have solved this by paying ourselves a monthly salary from our investment accounts. We will sell whatever makes sense tax and asset allocation wise.

When I came to this forum a few years ago, a piece of advice that stuck out was "it takes awhile to get used to being rich." I'm not sure you fully realize what you have yet, and thus it is difficult to evaluate the risks of it all going away or all going to the moon.

Having your wealth cut in half will be a much bigger impact on your life than having it double.

Reading above, it sounds like you want to diversify once you hit $10M. What can you do with $10M that you can't do at $8M? Is there something material?

Whatever you do, you will need to live with what happens next. Consider regret minimization. Myself personally, needlessly losing 75% would be almost impossible to get over compared to missing out on a 50% gain. In particular because one can't just work harder or longer to make up for it at these wealth levels.
Lucky2Invest
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by Lucky2Invest »

What kind of Delta are you selling on these calls? It seems like you are getting into trouble and having to roll them out too much. Why not sell further out of the money if you’re hell bent on holding the stock?

I’m in a somewhat similar situation as you with Google but much lower value. I sell weekly calls against it but I very very rarely get close to being called away as I keep the delta around .07. This provides more than enough income to be retired.
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HomerJ
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by HomerJ »

roguewarrior0 wrote: Thu Nov 24, 2022 10:24 am My wife isn't super worried. Not sure if it is because of blinding trust or just naive to how much risk is in being 90% in TSLA. She worries more about the kids eating healthy and getting enough sleep than she does about investment risks. We divide and conquer (married 22+ years). I manage finances, house and yard and she manages kid's and we split everything else.
We are the same way in my family, but it's funny that I went the other direction.

I'm actually MORE conservative because the financial stuff is mostly on me.

My goal is not to get MORE rich...

My goal is to NEVER have to turn to my wife, and say "You know all that money I said we had? I lost most of it taking a risk that we didn't need to take".

Also, honestly our lifestyle (spending habits) didn't change regardless of net worth for the last 10 years (outside of recent large purchases). So now being 7.6m vs 10+m vs 4m hasn't had a real impact. She views it as funny money. Profit is meaningless until you sell.

I am still going with the flow and just adjusting. I am less stressed now then when I was working and had $10+m, but that likely has to do more with not working. Now retirement and seeing 4m decrease hasn't increased in anxiety. It has just made me continue seeking more opinions, because I know I don't know. In some ways I am more excited because of the 1st time in years I am completely "uncovered" and have the full upside should TSLA move upwards.
You are rich enough at least to take these chances... Even losing 50% of your money won't destroy your lifestyle.

But, as far as I can tell, you've already won the game, and you keep playing for the excitement. Not the best reason... Your lifestyle has been set for 10 years, it's good lifestyle, you've got it locked in with the money you have today...

Just not sure risking it (even a small risk) is worth it to get MORE.
This blog is therapeutic because before I retired and we bought Tesla's we were stealth wealth. No one realizes we have the money we do. We live in our 1st home that we bought for $190k 20 years ago. I drove an old Jeep before the Tesla. My sons got my old Jeep. So the risk doesn't bother me too much because I think I can adjust. The BH blog lets me layout to others (anonymously) what I am thinking and get opinions. Otherwise honestly, who would I discuss this with. Neighbors? Family? Just too many complications and judgements to discuss wealth. People realize we are well off enough to retire in my 40's, but no one knows our net worth beyond my wife and sons.
Agreed... this site is a great resource, and the one place I can actually talk numbers.
By the way this last entry is starting to move me more towards closing my position.....just writing down that we don't notice the difference in lifestyle when we had $10+m vs now makes me pause. Why do I want to wait for TSLA to recover? The likely answer is I don't like selling investments to pay for stuff. I will sleep on it.

Happy Thanksgiving to All!!!
Instead of keeping it all or selling it all, why not sell enough to have $5-6 million set aside, and play around with the other $1-2 million?

Happy Thanksgiving to you too!
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
chiliagon
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by chiliagon »

Congratulations on doing so well up to this point. Now please sell all but 1-2 million of the Tesla stock. This is not a hard decision for an impartial outsider to advise you on. Yes, your instinct that Tesla stock will go up more from here is probably correct. But it’s obviously not worth the risk. And when I say “obviously” I mean “really, really obviously.”
donwmc_987
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by donwmc_987 »

Very fascinating read, and appreciate the transparency

I came to add only one thought to consider, on whether TSLA is coming off the high. The auto market worldwide is targeting 80-90% EV by 2030. The competition for TSLA in the next 3-4 years is completely new. Traditional automakers world wide are entering the market that TSLA had cornered .. and these guys, know how to build cars. TSLA has not had to “win” against much competition, this is completely changing and for that alone, I’d reconsider your position.

So my recommendation - don’t just study TSLA — study their competition and see if you still feel you want to be all in w/ TSLA
goblue100
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by goblue100 »

roguewarrior0 wrote: Thu Nov 24, 2022 10:24 am The likely answer is I don't like selling investments to pay for stuff.
Annuity for part of the Tesla money? Don't have to worry about selling to get money, be a lot like getting a paycheck. Just a thought. I guess you are pretty young for an annuity.
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns
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roguewarrior0
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by roguewarrior0 »

donwmc_987 wrote: Thu Nov 24, 2022 9:33 pm Very fascinating read, and appreciate the transparency

I came to add only one thought to consider, on whether TSLA is coming off the high. The auto market worldwide is targeting 80-90% EV by 2030. The competition for TSLA in the next 3-4 years is completely new. Traditional automakers world wide are entering the market that TSLA had cornered .. and these guys, know how to build cars. TSLA has not had to “win” against much competition, this is completely changing and for that alone, I’d reconsider your position.

So my recommendation - don’t just study TSLA — study their competition and see if you still feel you want to be all in w/ TSLA
Ironically, I have been studying the competition, which is why I am so bullish on Tesla. It looks like we agree that EV Market will be huge between now and 2030.

On Tesla, I see the current competition and upcoming competition confirming my beliefs in Tesla, rather than discouraging me.

Example:
  • Tesla Auto Margin as Q3 22' = 27.9% -
  • Ford Auto Margin = 4.3%
  • GM Auto Margin = 14%
  • Toyota Auto Margin = 17%
If anything, this actually underscores Tesla advantage. The other automakers are less profitable. But if you compare strictly EV's, for most of these guys they lose money on every car or barely break even.

Also, I am not impressed by them. When was the last time someone said, I gotta get me that GM car? Same goes for Ford. Ford F150 is there best seller, but totally different market appeal.

I believe the legacy car vendors will struggle to maintain a legacy car business while launching a EV segment. While they gain marketshare away from Tesla, what they won't get is profits.

What kind of phone do you guys have? iPhone....anyone still out there with Palm? Blackberry? Motorola? Nokia? When iPhone re-invented the segment, there were lots of copycats. Apple no longer is the marketleader (Android), but the lead the market in profits. Outside of Samsung, most other brands are low-end that don't make money on it. Other brands may come out with EV, but they will discover that can't do it profitably. Check out Rivian and Ford attempting to raise prices to cover.

Amazon was also scoffed as just a book seller that would get destroyed by Barnes & Nobles and Borders once they opened a ECom site, as yet poof...gone.

I am still quite bullish on TSLA (been wrong before). I still think Apple/iphone analogy most closely mirrors the TSLA situation.

I agree with you guys that I am overexposed on Tesla and will reduce my exposure. I just disagree on the timing. I am still thinking about when. Right now I am planning to re-evaluate on 12/30 or when TSLA reaches $215. @ $215 I will sell 9,600sh.
Minderbinder
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by Minderbinder »

roguewarrior0 wrote: Fri Nov 25, 2022 12:26 am
donwmc_987 wrote: Thu Nov 24, 2022 9:33 pm Very fascinating read, and appreciate the transparency

I came to add only one thought to consider, on whether TSLA is coming off the high. The auto market worldwide is targeting 80-90% EV by 2030. The competition for TSLA in the next 3-4 years is completely new. Traditional automakers world wide are entering the market that TSLA had cornered .. and these guys, know how to build cars. TSLA has not had to “win” against much competition, this is completely changing and for that alone, I’d reconsider your position.

So my recommendation - don’t just study TSLA — study their competition and see if you still feel you want to be all in w/ TSLA
Ironically, I have been studying the competition, which is why I am so bullish on Tesla. It looks like we agree that EV Market will be huge between now and 2030.

On Tesla, I see the current competition and upcoming competition confirming my beliefs in Tesla, rather than discouraging me.

Example:
  • Tesla Auto Margin as Q3 22' = 27.9% -
  • Ford Auto Margin = 4.3%
  • GM Auto Margin = 14%
  • Toyota Auto Margin = 17%
If anything, this actually underscores Tesla advantage. The other automakers are less profitable. But if you compare strictly EV's, for most of these guys they lose money on every car or barely break even.

Also, I am not impressed by them. When was the last time someone said, I gotta get me that GM car? Same goes for Ford. Ford F150 is there best seller, but totally different market appeal.

I believe the legacy car vendors will struggle to maintain a legacy car business while launching a EV segment. While they gain marketshare away from Tesla, what they won't get is profits.

What kind of phone do you guys have? iPhone....anyone still out there with Palm? Blackberry? Motorola? Nokia? When iPhone re-invented the segment, there were lots of copycats. Apple no longer is the marketleader (Android), but the lead the market in profits. Outside of Samsung, most other brands are low-end that don't make money on it. Other brands may come out with EV, but they will discover that can't do it profitably. Check out Rivian and Ford attempting to raise prices to cover.

Amazon was also scoffed as just a book seller that would get destroyed by Barnes & Nobles and Borders once they opened a ECom site, as yet poof...gone.

I am still quite bullish on TSLA (been wrong before). I still think Apple/iphone analogy most closely mirrors the TSLA situation.

I agree with you guys that I am overexposed on Tesla and will reduce my exposure. I just disagree on the timing. I am still thinking about when. Right now I am planning to re-evaluate on 12/30 or when TSLA reaches $215. @ $215 I will sell 9,600sh.

All of what you say can be true. Tesla may be the most profitable car company ever. IPhones may be the most profitable phones ever.

OK, so what does that mean for the value of the company?

Tesla was already priced at over a trillion dollars. That price had it worth more than Amazon currently and worth more than every auto maker on the planet combined. You did not think that was a good enough price to sell and have watched it fall significantly. Fair enough, markets are nothing but the consensus of opinions and you think the shares are worth more.

So what, in your opinion, is tesla worth that has you still holding it? 1 trillion? 5 trillion? 10 trillion? 100 trillion?

IMO "it's growing and it's the future" is inadequate. If you're going to continue on this path, you need to figure out a level you truly believe it's worth. Because there are a lot of people that feel the exact same way you do and tsla price is pretty much already at the "most important auto maker in history" level.
Valuethinker
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by Valuethinker »

roguewarrior0 wrote: Thu Nov 24, 2022 10:24 am
cashheavy18 wrote: Wed Nov 23, 2022 10:43 pm I would be interested in hearing more about the impact of the ups/downs in the past one year of your retirement:
  • Have you changed your spending at all and/or are there plans to change?
  • You are in your late 40s - how are you handling medical insurance?
  • How involved is your spouse in the planning/managing of the investment strategy?
  • If your spouse isn’t that involved, what is their reaction to the large fluctuation and dependency on one stock?
  • As you mentioned, you have a high tolerance for risk, has this caused any stress? Or do you go with the flow, since you’re still up significantly from your initial investment?
Thank you for taking the time to provide updates and respond to questions. I’ve been following since you originally posted and I find the whole behavioral aspect of your decisions quite interesting.

Wishing you the best!
cashheavy18 wrote: Wed Nov 23, 2022 10:43 pm I would be interested in hearing more about the impact of the ups/downs in the past one year of your retirement:
  • Have you changed your spending at all and/or are there plans to change?
  • You are in your late 40s - how are you handling medical insurance?
  • How involved is your spouse in the planning/managing of the investment strategy?
  • If your spouse isn’t that involved, what is their reaction to the large fluctuation and dependency on one stock?
  • As you mentioned, you have a high tolerance for risk, has this caused any stress? Or do you go with the flow, since you’re still up significantly from your initial investment?
Thank you for taking the time to provide updates and respond to questions. I’ve been following since you originally posted and I find the whole behavioral aspect of your decisions quite interesting.

Wishing you the best!
#1 is really the hardest to be honest. If you have been a saver/investor, then it becomes hard to just draw down from your portfolio. You'd be surprised how hard it is to "sell an investment" to buy stuff for daily life. All of us are used to paying for "stuff" from our paychecks and don't touch the portfolio. Honestly I still struggle with that. This is part of the reason I keep selling Covered Calls for a little more. I rolled out some of my Calls from TSLA $500 September 22' to $500 December 22' in the summer to collect $40k in premiums to pay son's college tuition. Then I rolled some more to buy a 2023 Tesla Y (ironic huh). Then I rolled my $800 September 22' to December 22' to pay for Solar Panels & Tesla Powerwall. So Day-to-Day expenses have not changed from pre-retirement. A few big purchases illustrated above. But paying for the spending has been mentally paid for by Selling Covered Calls, where in the past it would have been budgeted from paychecks.

Medical Insurance. I retired in January and have been using Cobra to maintain my insurance. For a family of 4, that amount is about $2,500/month. My Cobra expires June 30, 2023. So starting in January I will begin exploring Private insurance through the portal. Health Insurance is the scariest part of early retirement. Health Insurance is what gives me the most anxiety. How much will private insurance be? What will be the Quality of Care? How impactful will moving to HMO (all private insurance is HMO) vs my PPO now be?

I talk to wife all of the time. She understands and does worry about the potential risks but is ok with it (literally just talked again about it), but she is patient and trusting in me. Part of moving to Boglehead 2 fund was to simplify so she could manage it should I get hit by the proverbial bus. Our original goal was to be all out of TSLA by end of year and have everything into Revocable Trusts. January I am scheduled to start teaching her how I manage all the finances: Investments, Bill Pay, Cash flow, Insurance shopping, RMD for aging mom, property taxes, income taxes....etc. I have no desire to teach her Options strategy. Hypocritical I know that I don't want her messing with Options, while I trade them weekly.

My wife isn't super worried. Not sure if it is because of blinding trust or just naive to how much risk is in being 90% in TSLA. She worries more about the kids eating healthy and getting enough sleep than she does about investment risks. We divide and conquer (married 22+ years). I manage finances, house and yard and she manages kid's and we split everything else. Also, honestly our lifestyle (spending habits) didn't change regardless of net worth for the last 10 years (outside of recent large purchases). So now being 7.6m vs 10+m vs 4m hasn't had a real impact. She views it as funny money. Profit is meaningless until you sell.

I am still going with the flow and just adjusting. I am less stressed now then when I was working and had $10+m, but that likely has to do more with not working. Now retirement and seeing 4m decrease hasn't increased in anxiety. It has just made me continue seeking more opinions, because I know I don't know. In some ways I am more excited because of the 1st time in years I am completely "uncovered" and have the full upside should TSLA move upwards.

This blog is therapeutic because before I retired and we bought Tesla's we were stealth wealth. No one realizes we have the money we do. We live in our 1st home that we bought for $190k 20 years ago. I drove an old Jeep before the Tesla. My sons got my old Jeep. So the risk doesn't bother me too much because I think I can adjust. The BH blog lets me layout to others (anonymously) what I am thinking and get opinions. Otherwise honestly, who would I discuss this with. Neighbors? Family? Just too many complications and judgements to discuss wealth. People realize we are well off enough to retire in my 40's, but no one knows our net worth beyond my wife and sons.

By the way this last entry is starting to move me more towards closing my position.....just writing down that we don't notice the difference in lifestyle when we had $10+m vs now makes me pause. Why do I want to wait for TSLA to recover? The likely answer is I don't like selling investments to pay for stuff. I will sleep on it.

Happy Thanksgiving to All!!!
It's to me almost impossible to believe that someone would make that much money on a single stock and continue to ride it.

That's sort of CEO levels of concentration - and stock is (the major) part of their compensation.

There are so many things that can go wrong with a company - I used to have stakes in a number of private companies and I saw them go through this-- just about every reason for failure or stagnation known to investors. Public companies one just has no visibility of what can go wrong.

Berkshire Hathaway? Maybe. It's big. It's diversified. Buffett treats the company as his own and zealously guards shareholder wealth. But he's old, and it's quite difficult for him to outperform at this point.

But a single product company?
LFS1234
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by LFS1234 »

OP:

The primary driver of my portfolio has also been stock in a single company, although my period of ownership has been much longer than yours (decades not years). The company has grown over 100-fold during my period of ownership, and consequently, so has its stock. I reasonably believe that the company still has substantial growth ahead of it, but I also know that it theoretically could go to zero. It is not possible to assign accurate probabilities to either of these scenarios. What will happen will happen, but it will never be possible to know in retrospect what the odds of the actual outcome were.

I have found that my personal comfort level is to keep my concentrated stock position from being much more than half of my net worth. When it significantly overshoots 50% of NW, I sell down the excess, pay the capital gains taxes, and reinvest primarily in a more diversified portfolio of publicly traded stocks. If the concentrated stock position continues to do well, I will participate very significantly. If it goes to zero, the setback will be manageable.

Bogleheads tend to think of asset allocation in terms of percentages, but strictly following percentage-based rules of thumb doesn’t always make sense. If you are Sam Walton, you can safely keep 99.9% in a single stock because you can easily live out the rest of your life with the remaining 0.1%.
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ccf
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by ccf »

+1000 to this post. you can still easily lose you ability to fully retire with an amount you are comfortable with.

RonSwanson wrote: . If you lose this wealth, the odds of getting back to this point anytime soon are astronomically small.

Think about the size of your portfolio in terms of life changing events that it can support. A rough abbreviated example:

$1M = Maybe retire someday. In the meantime, somebody else owns your time.
$2M = Maybe retire with a nice standard of living someday. In the meantime, somebody else owns your time.
$4M = Retire now, but frugally. You sacrifice spending in order to own your time.
$8M = Retire now and maintain previous standard of living. This is HUGE.
$15M = Buy something fancy like a nice house while being retired.
$30M = Fund your own startup
$100M = Rent fancy yachts
$1B = Buy fancy yachts

You get the picture.

You are much closer to a life changing wealth event on the downside than you are on the upside.
HeavyChevy
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by HeavyChevy »

Minderbinder wrote: Fri Nov 25, 2022 12:51 am
roguewarrior0 wrote: Fri Nov 25, 2022 12:26 am
donwmc_987 wrote: Thu Nov 24, 2022 9:33 pm Very fascinating read, and appreciate the transparency

I came to add only one thought to consider, on whether TSLA is coming off the high. The auto market worldwide is targeting 80-90% EV by 2030. The competition for TSLA in the next 3-4 years is completely new. Traditional automakers world wide are entering the market that TSLA had cornered .. and these guys, know how to build cars. TSLA has not had to “win” against much competition, this is completely changing and for that alone, I’d reconsider your position.

So my recommendation - don’t just study TSLA — study their competition and see if you still feel you want to be all in w/ TSLA
Ironically, I have been studying the competition, which is why I am so bullish on Tesla. It looks like we agree that EV Market will be huge between now and 2030.

On Tesla, I see the current competition and upcoming competition confirming my beliefs in Tesla, rather than discouraging me.

Example:
  • Tesla Auto Margin as Q3 22' = 27.9% -
  • Ford Auto Margin = 4.3%
  • GM Auto Margin = 14%
  • Toyota Auto Margin = 17%
If anything, this actually underscores Tesla advantage. The other automakers are less profitable. But if you compare strictly EV's, for most of these guys they lose money on every car or barely break even.

Also, I am not impressed by them. When was the last time someone said, I gotta get me that GM car? Same goes for Ford. Ford F150 is there best seller, but totally different market appeal.

I believe the legacy car vendors will struggle to maintain a legacy car business while launching a EV segment. While they gain marketshare away from Tesla, what they won't get is profits.

What kind of phone do you guys have? iPhone....anyone still out there with Palm? Blackberry? Motorola? Nokia? When iPhone re-invented the segment, there were lots of copycats. Apple no longer is the marketleader (Android), but the lead the market in profits. Outside of Samsung, most other brands are low-end that don't make money on it. Other brands may come out with EV, but they will discover that can't do it profitably. Check out Rivian and Ford attempting to raise prices to cover.

Amazon was also scoffed as just a book seller that would get destroyed by Barnes & Nobles and Borders once they opened a ECom site, as yet poof...gone.

I am still quite bullish on TSLA (been wrong before). I still think Apple/iphone analogy most closely mirrors the TSLA situation.

I agree with you guys that I am overexposed on Tesla and will reduce my exposure. I just disagree on the timing. I am still thinking about when. Right now I am planning to re-evaluate on 12/30 or when TSLA reaches $215. @ $215 I will sell 9,600sh.

All of what you say can be true. Tesla may be the most profitable car company ever. IPhones may be the most profitable phones ever.

OK, so what does that mean for the value of the company?

Tesla was already priced at over a trillion dollars. That price had it worth more than Amazon currently and worth more than every auto maker on the planet combined. You did not think that was a good enough price to sell and have watched it fall significantly. Fair enough, markets are nothing but the consensus of opinions and you think the shares are worth more.

So what, in your opinion, is tesla worth that has you still holding it? 1 trillion? 5 trillion? 10 trillion? 100 trillion?

IMO "it's growing and it's the future" is inadequate. If you're going to continue on this path, you need to figure out a level you truly believe it's worth. Because there are a lot of people that feel the exact same way you do and tsla price is pretty much already at the "most important auto maker in history" level.
This. True believers can hit the jackpot or flame out completely. I personally see TSLA at less than 33% of current values as competition in the EV space intensifies and their near monopoly on govt incentives is eroded. But I also wasn’t amazed by their stock run up due to the cultish support that was obvious throughout automotive forums and social media. They could double again, or lose 80 percent of value. Time will tell. Just continue your journey w your eyes truly open.
MoonOrb
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by MoonOrb »

It's hard to reconcile your devotion to TSLA and other single stocks with the statements you've made about stuff like: wanting to stay in the lowest tax bracket in retirement via tennis coaching income, wanting to be able to contribute to Roth IRA with that income, deferring retirement by several months to squeeze in extra medical appointments, etc. I think this is what is meant by "penny-wise, pound-foolish?" It's similarly hard to reconcile your conservatism re withdrawal rate with your gambling now.

A few years ago you had like $2M. Now you have like $7.5M. Even when you had more than enough you kept taking increasingly risky bets because they were potential lottery tickets? Why?!

I don't know-I just re-read Thinking, Fast and Slow by Daniel Kahneman recently and your unshakeable belief in TSLA and some of your other decisions really implicates a number of the cognitive biases his book describes.

If in 2019 you had been told, You can quadruple your investment in 3 years, but once you've done that you'll have to sell the stocks that got you there and invest them in something much more diversified, would you agreed to that?

You've won!
snowday2022
Posts: 153
Joined: Sun Jan 16, 2022 2:48 pm

Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by snowday2022 »

Kudos to OP. Please keep updating for next 10-50 years and we will see how this works out.
Topic Author
roguewarrior0
Posts: 96
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by roguewarrior0 »

Lucky2Invest wrote: Thu Nov 24, 2022 12:31 pm What kind of Delta are you selling on these calls? It seems like you are getting into trouble and having to roll them out too much. Why not sell further out of the money if you’re hell bent on holding the stock?

I’m in a somewhat similar situation as you with Google but much lower value. I sell weekly calls against it but I very very rarely get close to being called away as I keep the delta around .07. This provides more than enough income to be retired.
Good question. I am selling weekly Options because I am undecided on how much longer I am going to hold to my TSLA shares. I definitely want to sell them but just don't to sell them when I perceive them to be undervalued.

Today, I Rolled my 11/25 @ $175 to 12/2 @ 177.50 for ~$1.50 Premium.
  • 36,400sh x $1.50 = $55k
Still looking to do this until 12/30. If the share prices reach $215 before then I will sell 9,600 in Taxable account.
secondopinion
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by secondopinion »

If you want to retire, you need to let go of what made you your wealth. For most people, that is their job. Unless you want to spend retirement worrying about TSLA (which you have no control over), it needs to be chopped down. You do not have to give it all up, but 25% is the ETF limit; this is a very generous maximum for any investor. Put it in other stocks; anything to keep from losing all the wealth that was made.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
2pedals
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Re: Retiring in 6 months (off TSLA options); 11/22/22 Update - It Ain't Pretty

Post by 2pedals »

roguewarrior0 wrote: Tue Nov 22, 2022 5:36 pm <------ cut ----->

I will create a new plan on 1/2/23. Roughly my break-even point (where my portfolio is the same as if it were the BH portfolio since 1/1/22) is when TSLA hits $225. That will put me back @ $9.740m.

Honestly, I am not sure what my exit strategy is yet in my new scenario. Right now I am just focused on selling Covered Calls to get off margin. Also, I am not thinking about taxes at this stage as that ship has sailed.

thanks,
RW
When you create a new plan make sure that it is well written and something that you can stick to over a long-term. Evaluate why you were not able to stay with your plan that you started earlier. Make sure you have a plan that you are willing to stick with and try to avoid past mistakes. It's really best to think this through thoroughly. Don't make a plan that you doubt you can stick to in bad/good times or outcomes. Also note that it has been said here frequently that good results should not be confused with someone that has a good plan.

What I find the most troublesome is the fact that you were not able to stick with your plan.
triyoda
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by triyoda »

roguewarrior0 wrote: Tue Nov 22, 2022 6:14 pm I may very well close my TSLA position or at least reduce it, but likely not before 12/30/22. I am trying not to panic sell just because it is down. Zooming out, my portfolio is up from both 2019 and 2020 levels, although down from all-time highs.

You are right about living off of 3%, which in my case $8m is the magic number. However, ultimately it boils down to do I believe TSLA is a good investment at these levels?

Is TSLA at $170 a buy or sell? I believe if I were all cash, I would buy. So accordingly, I will hold for now. On 12/30/22, I will decide if I want to risk hold into the next Deliveries and/or Earnings report.

thoughts?
Scott Galloway who think is very saavy in tech and where markets are going says Tesla is still the most overvalued large stock out there, even with the poor performance this year. Scott also says never go more than 2-5% in anything. I'd listen to Scott. If you want to take risks, I think there is a lot more upside out there than Tesla.

You need to ask yourself if you are too emotionally invested in Tesla and why want to keep taking massive risks with a nearly single stock strategy?
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William Million
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by William Million »

Careful not to mistake luck for skill.

TSLA has been a rollercoaster and you mostly got the best of it. Slightly different timing and you'd be in a very different place.

If you believe fervently, religiously, in a single company, I could see putting up to 10% of a portfolio in that company. More than that, you're playing the slots.
Last edited by William Million on Fri Nov 25, 2022 9:14 pm, edited 1 time in total.
bgf
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by bgf »

i just searched for 'tweet' and got no hits, so i apologize if this has been discussed... but, does it not worry you that literally one tweet could cost you seven figures in an instant? that's technically always been the case, but recently, i think its actually become a substantial enough risk that its worth actual thought.

also, i thought id ask this - does your portfolio bring you joy? does it make you feel good?

it shouldn't. it should be boring as hell and evoke zero emotion from you. if your portfolio makes you 'feel good' its because youre exposed to more risk than you should be.

im a lawyer, and i've always stuck with the rule that if my reply email to something that was confrontational or whatever makes me feel good, i can't send it. the reason it feels good is because its cathartic. and the purpose of my emails shouldn't be catharsis. so rewrite them until they don't evoke anything from me emotionally.

i think one's feelings towards their portfolio should be the same way. its just money. it shouldn't make you feel anything one way or the other. if it does, its going to cause you problems.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"
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HomerJ
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by HomerJ »

bgf wrote: Fri Nov 25, 2022 8:02 pm i just searched for 'tweet' and got no hits, so i apologize if this has been discussed... but, does it not worry you that literally one tweet could cost you seven figures in an instant? that's technically always been the case, but recently, i think its actually become a substantial enough risk that its worth actual thought.

also, i thought id ask this - does your portfolio bring you joy? does it make you feel good?

it shouldn't. it should be boring as hell and evoke zero emotion from you. if your portfolio makes you 'feel good' its because youre exposed to more risk than you should be.

im a lawyer, and i've always stuck with the rule that if my reply email to something that was confrontational or whatever makes me feel good, i can't send it. the reason it feels good is because its cathartic. and the purpose of my emails shouldn't be catharsis. so rewrite them until they don't evoke anything from me emotionally.

i think one's feelings towards their portfolio should be the same way. its just money. it shouldn't make you feel anything one way or the other. if it does, its going to cause you problems.
This.... is a pretty excellent post. :beer
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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Re: Retiring in 6 months (off TSLA options); Plan Review; 11/22 Update - Ain't Pretty

Post by AnotherMike »

This is like watching a movie and hoping for a happy ending, with growing dread that it won’t be so…
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