My main goal* was to build an investment and cash portfolio of $1,120,000* ($1,000,000 to retire on and $120,000 to pay off the house) in 1500 days**, starting from 1/1/2013 and ending in February of 2017. I made my goal in 2016, my 1500 Days are over, and I’ve left my job. In the interest of openness, I’ll continue to share my numbers. For now…
My portfolio can be chaotic place because a quarter of it is consumed by one stock. It gets even crazier when the CEO of that company is controversial. More on that in a moment…
To PE Or Not To PE
The valuation of Tesla is exuberant. Note these price/earning ratios:
Tesla has an aggressive PE because investors are expecting a lot of growth. Perhaps Tesla will:
- Become a dominant auto manufacturer, selling more than 10,000,000 cars per year at a healthy margin
- Grow its energy storage business aggressively
- Solve autonomous driving
Regarding the last point, a self-driving car is worth a lot of money. At one point, Morgan Stanley valued Waymo at $175,000,000,000 (That’s almost 25% of Tesla’s market cap!). Given that Uber has a market cap of $113,000,000,000, this number is not crazy. Eliminate the driver and you get rid of the biggest cost of a rideshare service.
But Tesla has struggled with FSD (full self-driving) for a long time. Back in 2015, Elon Musk stated that Tesla would solve autonomy “in approximately two years.” Elon has missed the mark many more times since. While Tesla’s FSD has improved, it isn’t close to being driverless. At the same time, Tesla investors have been incredibly forgiving and patient.
Now a completely new version (12) of FSD will be released soon and Elon has once again promised that this one is the real deal. It has already been released widespread to employees and I’d guess that customers will get it in the first quarter of 2024.
Will this be the version that finally solves autonomy? I remain deeply skeptical, but will reserve judgement until I get to try it out. One reason I purchased a Tesla was to do this very thing.
Tesla Take Down
Tesla’s morose Q3 earnings call took down the stock:
As Tesla goes, so does our portfolio. Our net worth started the month at $4,583,063 and ended at $4,257,929 for a loss of $325,134:
Buying an actual Tesla also contributed to the hit. I don’t count cars in our net worth, so the new Model Y took our portfolio down by about $50,000.
2023 (as of 11/1/2023)
- Days elapsed: 305
- Investment gains: $915,108
Since the Start of The Experiment (1/1/2013)
- Days elapsed: 3,957
- Investment gains: $3,441,886
Portfolio Takeover
The whole secret of investmenting is to find places where it’s safe and wise to non-diversify. It’s just that simple. Diversification is for the know-nothing investor; it’s not for the professional.
-Charlie Munger
I have mixed feelings about Munger’s quote:
Picking stocks is hard. The markets move fast. Creative destruction is very real and the pace of it is accelerating. Apple is a juggernaut now, but back in 1997, it had to be bailed out by Microsoft to avoid bankruptcy. And under Steve Ballmer, Microsoft didn’t do so hot. But under Satya Nadella, it’s thriving. Today’s hero is tomorrow’s zero. Or the other way around. It’s hard to predict and even harder to invest around.
It’s pretty easy to fool yourself. My most successful stock pick is Tesla which I bought mostly in 2012 because I liked Elon Musk (he was calmer back then) and I thought the Model S was a cool car. However, back in 2017, I apparently didn’t think much of the company. When Dividend Growth Investor challenged me to a 10 year stock picking bet, Tesla didn’t make the cut. If you have successfully picked stocks for a long period (more than 10 years), you also must acknowledge that luck probably played a part.
Picking and holding stocks takes time. Because Tesla has taken over my portfolio, I pay way more attention to it than I should. As I type this, the sun is out and it’s a beautiful day. And I’m in my basement typing away.
If you find stock picking amusing, it’s OK to play with part of your portfolio. But I look forward to a day when most of my holdings are index funds and I can stop looking at my Tesla news feed every day.
In the meantime, I’m going to continue to hold Tesla, bloated multiple and all. I’ll re-evaluate after I’ve had a chance to test out version 12 of FSD.
I’m also curious to learn the details on the Cybertruck:
- What will it cost?
- What will the range be?
- How big is the battery pack?
- What is the status of the 4680 batteries it depends on?
- How much will it cost to replace it’s massive windshield wiper blade?
I’m headed to Austin for the Cybertruck reveal on Thursday. Please say “Hi!” if you see me! In the meantime, here’s a video from the last Tesla event I attended:
More 1500 Days!!!
You can also find me (and the dinosaurs) at:
Mile High FI podcast:
Also here:
- Facebook: Facebook group and page
- YouTube: My channel is mostly devoted to home improvement, but I have some other material coming up soon too.
- Instagram: Pretty pictures of dinosaurs, sunsets, and nail guns!
- Twitter: Spontaneous, often insane, ramblings
- Coworking space: On the surface, MMM HQ is a coworking space. Look a little deeper and you’ll see that we’re really building community. The members of MMM HQ are some of the finest people I know
- Buying a Tesla? Use my referral code to get some perks!
*My goal wasn’t to have $1,120,000 at the end of 1500 days, but at any time before the day count was up. Why? It all goes back to the 4% Rule. Remember that our little friend, Mr. 4%, is nothing more than the most conservative safe withdrawal rate. Since my investment portfolio now sits at $1,550,000, I can spend about $62,000 in my first year of retirement.
**My original goal was $1,000,000 and no debt, I later raised the goal by $120,000 to $1,120,000 because I will have debt in the form of a mortgage and I firmly believe in not paying it off (LOOK at the MONEY I’m MAKING!). My compromise was to have enough money put away to cover the mortgage at the time of retirement.
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>If you find stock picking amusing, it’s OK to play with part of your portfolio. But I look forward to a day when most of my holdings are index funds and I can stop looking at my Tesla news feed every day.
Reading from this as well as previous posts on the topic that I recall (+ mentions on the MileHighFI podcast) – I’m not sure what game you’re playing here by still holding such a big part of your portfolio in TSLA.
1. Is it about the money? Doesn’t sound like it. With your net worth – even TSLA going to zero wouldn’t really change your daily experience. Or to $1000 for that matter (OK, not counting the helicopter 😉 .)
2. Is it about fun and finding stock-picking “amusing”? Maybe a bit warmer, but OTOH it doesn’t sound like you’re enjoying “scrolling Tesla news feed every day” and analyzing FSD prospects – so is this REALLY your idea of a pleasant past-time?
In other words, if you really (quote) “look forward to a day when most of your holdings are index funds” – then why not make it happen, regardless of your tests of FSD next year and attempts at pricing it better than the market already did?
Or maybe there is another story here – that you don’t really enjoy this stock-picking exercise but with surplus of both money and focus you got into it as a mental habit that’s hard=ish to drop now – and high-stakes (i.e. large % of portfolio) serve to make it exciting? (Would it really be that absorbing if you only had let’s say $10k invested in it?)
Sorry if I got ahead with my guesses here – I don’t really know what’s going in your head ;). But my impression is that whatever’s going on here might not be 100% intentional, and perhaps stealthily taking your focus away from more pleasant and valuable things in your life.
(TL;DR: Holding TSLA in your case sounds like nothing but a mental exercise – are you sure you want to keep spending your life energy on it?)
Tesla: I do like cars, tech, and thinking about the future, so this does give me enjoyment. But I wouldn’t follow Tesla so closely if I didn’t have such a large stake in it. And I can think of better uses of my time. So yeah, you’re mostly right.
But I think it will resolve itself soon as I believe Tesla is at an inflection point.
It’s pretty nonsensical by now, isn’t it? You can be a Tesla fanboy and still sell some of your Tesla stock to secure your own future.
Then again, from the losses in October for Tesla and for Carl himself it seems to me like Carl has about $1 million to at most $2 million in Tesla stock. So he could in fact lose it all and still be happily retired. with the remaining $2.5 to $3.5 million in other investments.
If $TSLA went to $0, I wouldn’t be happy, but it wouldn’t change our situation. Our FatFIRE situation would just be a little slimmer.
With that said, I’m going to start unloading it in small amounts soon.
Enjoy the Cybertruck reveal! I’ll be watching online.
How did you get tickets!?!?
I’ve polled a bunch of my friends on this car. 50% say it will be a massive flop. 50% say it will succeed. I’m unsure where I stand on the issue.
You could get a ticket with referral credits. It may be a silly use of points, but I had excess. Also, a friend got me into the Cyber Rodeo and I wanted to pay him back. Video here: https://www.youtube.com/watch?v=WAj_09jOJzM
The Cybertruck has 2,000,000 reservations and I’d guess that about 25% of that will actually take delivery. But it will take Tesla until at least the end of 2025 to make 500,000 of them, so it may be a while before we know if it will flop.
I think it will be successful, but I’m biased.
It seems your portfolio is quite imbalanced. I understand you like tesla(I do as well) but your initial Tesla investment was a far smaller percentage of your portfolio when you started buying the stock.
Seems like some portfolio rebalancing is in order.
Rebalancing, maybe. If Tesla solves FSD and really starts laying into the energy storage business, the stock is cheap.
What ever happened to the Tesla Semi?
Haha. I know Pepsi has some of them (36?) for testing. No other distribution though. I suspect much of the issue is that 4680 battery tech isn’t anywhere near where it was supposed to be.