Tesla Stock Crashed!

Volatile times ahead...

• 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+ 😅

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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.

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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.

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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.