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.
Welcome to a super-boring Performance Update! Yay! Or not. My heart isn’t into this one because 11/1 feels like a loooonnnng time ago. Since then, my portfolio has dropped in spectacular fashion.
I haven’t been posting much because life has been busy. We’re wrapping up the Project House (update soon!). Getting this sucker rented early in 2023 is our number 1 priority for 2023.
Meh November
In November, our net worth dropped from $3,856,020 to $3,843,825 for a loss of $12,195:
2022 (as of 12/1/2022)
- Days elapsed: 334
- Net worth gains (actually losses): –$1,148,917
Since the Start of The Experiment (1/1/2013)
- Days elapsed: 3,621
- Net worth gains: $3,027,782
Tesla The Stock versus Tesla The Company
Since December 1st, the old net worth has fallen another $500,000. Most of this is due to the spectacular decline in Tesla’s stock price. Elon Musk’s stock sales, rising interest rates, Musk’s Twitter hijinks, concern about demand in China, and a potential worldwide recession have created a perfect sh*t-storm for the stock price.
On the flipside, Tesla The Company is doing well. Tesla’s 4680 and Cybertruck initiatives are much delayed, but are finally spooling up. In 2023, the Austin and Berlin factories will be at volume production. Tesla’s charging network is expanding aggressively. It’s Megapack (grid level energy storage) factory is rocking and rolling. The world is moving towards electrification and Tesla is leading the charge (see what I did there?) in autos and more.
Would you rather have:
- A company that’s doing great and a sh*tty stock price?
- A company that’s on the ropes and a great stock price?
I’d always take the former and that’s where I believe Tesla is now.
I would also argue that Tesla had a bloated stock price pumped up by exuberant retail investors, so some of this decline was a necessary adjustment.
But, I’m an index investor now. I look forward to eventually moving all of our money to index funds so I don’t have to think about stuff like this anymore!
More 1500 Days!!!
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Mile High FI podcast:
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- 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.
*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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Retail investors expected Tesla to execute, and they didn’t (again). In a lot of ways, the competitors have caught up, or surpassed them, at least in autos. Musk has shown that he is a visionary, but not a leader.. Personally, I would exit Tesla now as it doesn’t look like the board has the guts to replace Musk with someone who can actually run the company successfully for this next phase where they are having to compete.
I think Tesla and Musk are synonymous until end of this decade. He is not done yet with cars, charging network, trucks, semis etc.
Tesla’s execution: In some ways, it’s doing incredibly well. They are the leader in EVs and have managed to accumulate a 22,000,000,000 pile of cash. It will be able to survive a bad recession. On the other hand, Cybertruck, 4680, and FSD are waaaaay behind.
I agree that some of the competition is making great products (the upcoming Ioniq 6 looks awesome!), however not nearly at the scale of Tesla or with the margins. If the world really moves to EVs, many legacy auto manufacturers are in for the fight of their lives.
It’s really a tough time for Tesla investors. What do you suggest people who are bottom-fishing? I did the mistake during Sep-Oct of 2020 when I was chasing a stock, but not the company. That company is dead now.
Bottom fishing! Tesla isn’t going anywhere. It has significant cash reserves and is in the process of ramping up its most efficient manufacturing yet (Austin and Berlin). There are 1,500,000 reservations for the Cybertruck. Tesla’s is growing its Supercharger network aggressively and will soon open it to other EVs. Tesla is growing energy storage (Megapacks!) aggressively as well. Both of these have slimmer margins than cars, so it will be a while before they contribute meaningfully to the bottom line, but it will happen.
However, the next year or two will probably be challenging as a global recession takes hold. Tesla should make a cheaper car ASAP.
Thanks Carl. I am still a Bull for Tesla.
I have not cancelled my cyber truck order. I think it’s going to be revolutionary.
I should have asked Bottom fishing in general.
I wrote in my comment in such a way, it meant like Tesla I am asking for Tesla. English is not my first language haha. It’s almost 2023.
If you’re really confident that somehow Mr. Mark has mispriced a stock…
I’m always trying to think long term. If I think a company is going to be doing great 5 years from now, why should I care what value Mr. Market places on it tomorrow?
Thanks Carl.
TSLA is still way over valued for a car company.. TSLQ is the way to see the light. It has little to do with Twitter. It’s all about valuation as a car company and the fact that Tesla’s percentage of EV production in the marketplace will only go down. Upper left to lower right TSLA charts. Get used to it. Sorry but true.
TSLA is a wonderful car company. Their cars are expensive but still in demand. Average model3 price is $56K. The truck and semi are realizable product line extensions. FSD is a pipedream as are robotaxis. An ARK analyst was on Bloomberg on 1/3/23 and acknowledged that FSD and robotaxis were 2/3 of the expected long-term value.. Sorry they are not going to happen even in 10 or more years.
I think Tesla will have to lower prices or announce a cheaper model (that still maintains margins) soon. The current prices aren’t sustainable, especially since the most popular vehicle (MY LR, 5 seater) doesn’t qualify for the tax credit.
I own shares and part of my reason for investing is because of the potential for Tesla to make money on stuff not directly related to auto manufacturing. The most important is probably the 4680 batteries. Batteries are a super pain to manufacture and if Tesla figures out the dry electrode process (they already have for the anode but so far, not the cathode), that will be huge. FSD is another one. However, the batteries are severely delayed and similar to you, I’m not optimistic about FSD. Sigh.
There is other stuff like grid level storage, insurance, and the Supercharger network, but all of those are smaller in scale and/or have lower margins.
One thing that is true is that legacy auto is going to struggle for a while. What do you do with dealers, a huge stranded asset no longer needed with EVs? Since EVs are much simpler, how do you let go of much of your workforce. How do you source batteries? How do your transition all of your platforms to one optimized for electric? None of these things are insurmountable, but it won’t be easy. I can see Toyota, Honda, and Mazda having a rough go.
House looks great Carl! Can’t wait for you to enjoy that Model Y, paid for by Tesla stock 😀
Hey Gary!
I canceled my Y order. My investments were down $2,000,000 over the past 12 months and spending a lot of money on a car just didn’t feel right. Also, our 2003 Honda Element and 2010 Mazda 5 keep going strong (200,000 miles each!).
I hear rumors that Hardware 4 is coming out soon. Maybe a refreshed 3 as well. If both of those are true, I may order a 3.
In any case, I will have a Tesla one day. Perhaps later this year…