How I am handling Tesla’s drop
Fundamentals deteriorating?
Concentration risk
Tips for Tesla’s investors
With Tesla stock down so much this week, I was doing some reflections & penned down some thoughts.
Firstly, I wasn’t expecting Tesla to be down so much in such a short span, especially since I was quite bullish on the upcoming Q3/Q4 results.
Well, reality check from Mr. Market.
Here we are with Tesla down 15% in just a week, currently at $220+ 😅
How I am handling Tesla’s drop?
I am not nervous or panicking
Just not as excited cause I don’t have much funds left to accumulate more
(What a waste of cheap prices)I would say I am in a state of indifference
Was this drop caused by a fundamental shift?
This is a good time to be doing a fundamentals check:
Sales are strong
Profitability & margins are increasing
Long-term optionalities like FSD, humanoids are progressing nicely
In short, Tesla’s fundamentals remain exceptional. Financials are great too.
Short-term:
Short-term demand might be weakened by the recession. But this is true for 99% of companies on the planet.
Long-term:
Tesla is still on track for 50% YoY growth.
Considering how other automotive companies are seeing a 20-30% decline in sales, I would say Tesla is still doing exceptionally well in relative terms.
My conviction in Tesla remains very high.
Concentration Risk:
I also reflect on my decision of being concentrated on Tesla.
I understand there’s key-man & political risk, among others. And there’s always a chance of a black swan event happening (eg. Elon getting killed)
If a black swan event of this magnitude were to happen, while it will be very painful, I will ultimately be okay.
All in all, the risk-reward probability outcomes of being concentrated in Tesla are worth it.
Conclusion:
The hardest part of investing is managing our emotions during downturns. If investing were so easy, everyone would be rich already.
I understand it’s easy to say but hard to actually stay the course.
In volatile times like these, it’s helpful to ask:
How am I feeling right now?
Why do I feel this way?
Eg. Have I done the research myself?
Do I really have conviction in the company?
How would I look back at this situation 5-10 years from now?
Will my decision to stay invested pay off?
These questions help us be more anchored on a long-term mindset.
Heaps of bearish report on tesla again....