Should I Sell?

[Musica40]

Looking for some sage advice. I am 65 and full retired. When I left my last job, I rolled over my 401K to Schwab. At that time, I was receiving financial guidance from someone who recommended that we buy Tesla. At that time one share was going for $832.65. Tesla then did a three way split and my shares went from 40 to 120.

The value of those shares at that time after the split was $277.55. As I write this, the value of one share has gone down to $183.25. My investment is down $11,316 or almost 34%. When we invested the original $33K, we were high on Tesla and believed that in the long run, it was a wise choice. Today those 120 share are worth only $21,990. We no longer feel that way.

Elon Musk has made bad choices and has done his best to ruin this company.

My questions are:

a. Should I take the loss and sell now?

b. Should I wait and hope that it goes back up to where we at least break even and then sell?

c. Do you see Tesla rebounding and becoming a factor in electric cars?

When I look at my portfolio and see the glaring loss, it makes my stomach queasy. I no longer believe in Tesla and feel the damage done is too much to overcome.

We are ready to sell and move pass Tesla.

 

[aja8888]

Well, Tesla will eventually be valued as a car company as that's where the bulk of their revenue comes from. It's a volatile business, to say the least and Tesla stock has been volatile since it was issued.

You can sell and take the loss and possibly offset some of it each year with capital gains from the sale of your winners up to $3,000 per year, if held in a taxable account. If it's held in your 401K you cannot offset the loss. Or you can hold it and hope it goes back to where you are comfortable selling it.

No one has a crystal ball to see future stock performance.

Also, Tesla is the leader in EV's but there are some Chinese companies right on their tail (BYD for instance). Here in the U.S., they are the clear leader and will be for a good while, but their sales are worldwide.

 

[GrayHare]

The market has recently realized EVs are not selling well. Does that turn around when Tesla brings out a lower-cost model? Does Musk implement something else revolutionary under the Tesla name? If you don't think so, and you have someplace else to invest the proceeds, I'd say it's reasonable time to sell, otherwise hold on.

 

[Slater]

Im not up to speed with everything EV & Ai related but in a similar boat but smaller scale. Im down $1900, have 25 shares in stock, not counting mutual funds...
Have buddy that invested his entire portfolio in Tesla & recently finally got out from putting all his eggs in one basket.
He still have 1000 shares & recently bought 550 more shares at $180 just this week.
I know Elon has been both an asset at the same time, hes been a liability....
He needs to focus on EV / AI, not his twitter baby....
They say theres 1.9 million customers that ordered tesla cyber trucks on pre-order....
How can this be bad?
Also Tesla isnt just an EV company but also AI, look at AMD & NVDA...
Tesla working on ai, robotics, less expensive ev vehicle, roadster, semi's, solar....
Cathie Woods just loaded the boat with T stock recently, personally & Ark, 4 million shares...
Ford & Chevy pulling back from EV manufacturing, gives tesla the opportunity to sell more units...
I dont know what the answers are, but if you sell, you lock-in losses, im 51, waiting it out at this point.......

 

[aja8888]

Im not up to speed with everything EV & Ai related but in a similar boat but smaller scale. Im down $1900, have 25 shares in stock, not counting mutual funds...
Have buddy that invested his entire portfolio in Tesla & recently finally got out of putting all his eggs in one basket.
He still have 1000 shares & recently bought 550 more shares at $180 just this week.
I know Elon has been both an asset at the same time, hes been a liability....
He needs to focus on EV / AI, not his twitter baby....
They say theres 1.9 million customers that ordered tesla cyber trucks on pre-order....
How can this be bad?
Also Tesla isnt just an EV company but also AI, look at AMD & NVDA...
Tesla working on ai, robotics, less expensive ev vehicle, roadster, semi's, solar....
Cathie Woods just loaded the boat with T stock recently, personally & Ark, 4 million shares...
Ford & Chevy pulling back from EV manufacturing, gives tesla the opportunity to sell more units...
I dont know what the answers are, but if you sell, you lock-in losses, im 51, waiting it out at this point.......

GM is currently "all in" on EV's. New Equinox, new Blazer, the entire Cadillac line, the Silverado, etc.

Ford has separated the company into EV's and ICE models.

Both of these companies are building vehicle assembly plants in Mexico and the U.S. and have battery plants under construction.

Tesla's robotic effort has been laughable. AI?...they are not in the same league as the chip guys and Google, Microsoft, etc.

Tesla's roadster is not in production. The "new" inexpensive EV is still a long range thought and has not been announced. It could be years before the inexpensive car materializes.

It seem like whatever Cathie Wood does, everyone does the opposite!

 

[Dash man]

I don’t personally own any Tesla and wouldn’t buy it. There are better tech stocks to invest in: MSFT AVGO GOOGL, or you could invest in QQQ, an ETF that follows the NASDAQ 100. Sell and put the funds in a money market while you research and decide what you want to do. There’s always an S&P500 fund.

 

[HarveyS]

L I no longer believe in Tesla and feel the damage done is too much to overcome.

We are ready to sell and move pass Tesla.

Seems like that's your answer. There are other investors who take the opposite opinion and will buy your shares.


Out of curiosity, what else did the advisor suggest you buy, and how did those do?

 

[braumeister]

Assuming you had never bought any Tesla in the past, if you looked at it today do you think you would be tempted to buy at this price? I've always looked at this as the key factor. Sunk cost is irrelevant.

 

[latexman]

Wwwbd?

 

[Aerides]

I would bail. It's not a huge amount, take the loss and move on.

 

[Slater]

GM is currently "all in" on EV's. New Equinox, new Blazer, the entire Cadillac line, the Silverado, etc.

Ford has separated the company into EV's and ICE models.

Both of these companies are building vehicle assembly plants in Mexico and the U.S. and have battery plants under construction.

Tesla's robotic effort has been laughable. AI?...they are not in the same league as the chip guys and Google, Microsoft, etc.

Tesla's roadster is not in production. The "new" inexpensive EV is still a long range thought and has not been announced. It could be years before the inexpensive car materializes.

It seem like whatever Cathie Wood does, everyone does the opposite!

https://www.thedrive.com/news/gm-is-stalling-ev-production-because-demand-is-falling-off
https://www.cnn.com/2023/10/17/business/gm-delaying-ev-truck-second-plant/index.html

 

[OldShooter]

I love this guy!

William Bernstein: “Do you think that by choosing a portfolio of only a few stocks that you hope will score big, you are maximizing your chances of becoming wealthy? Indeed you are, but you are also maximizing the chances of a retirement of cat food cuisine.”

William Bernstein: “Make no mistake about it: The object of this particular game is not to get rich – It’s to not get poor.”

William Bernstein: “You are not as good looking, as charming, or as good a driver as you think you are. The same goes for your investing abilities. In an environment filled with incredibly smart, hard-working, and well-informed participants the smartest trading strategy is not to trade at all.”​

 

[jebmke]

I would bail. It's not a huge amount, take the loss and move on.

This is my gripe with small slivers of anything. Not big enough to make you rich and when they go south they are eyesores that just stare back at you.

 

[OldShooter]

Well, Tesla will eventually be valued as a car company ...

Several years ago when the stock was at $700 (pre-split) I did a back of the envelope model using typical car company margins, typical market EPS, and some total-unit market projections for passenger cars and light trucks.

The result, admittedly very rough, was that to support a $700 stock price Tesla would have had to achieve a 100% market share worldwide for both cars and light trucks.

 

[Accidental Retiree]

We are ready to sell and move pass Tesla.

I think you have your answer right here.

 

[jazz4cash]

Wwwbd?

WB chose the Chinese EV maker BYD, right?

 

[Texas Proud]

I was never a fan of the Tesla stock and there is a thread where some here were touting the stock big time...


For awhile they were proven 'right' as the stock continued to soar... but I always thought it was the greater fool theory for the valuation... it seems like the side that thought it was overvalued is being proven right in the long run...


One of the problems that I see on TV is that their cars are 'stale'... I have no idea but the ones that I see look the same.. so a old model S looks like a new model S etc...


It also looks like their US sales were flat or down in 2023 from 2022 and just slightly higher worldwide... so the growth seems to have stalled...

 

[jldavid47]

Two words: Get out. This is the danger in holding individual stocks. TSLA is a car company with competition increasing every day - especially from China. Yes, it's a battery company as well, but competition is growing there as well. It's trading for almost 60x trailing earnings and almost 44x forward earnings. Is it really going to grow that fast any more to justify those multiples? If TSLA has turned tail and is not in sync with the rest of the so-called Magnificent 7, then something is wrong with TSLA and the market knows it.

You need to ask yourself more fundamental questions at age 65, however:

1) What asset allocation will I feel comfortable with going forward? How much market risk am I willing to accept? Am I at a point financially where return of capital is more important than return on capital?

2) Should I really be investing in individual stocks or should I be investing in (boring) mutual funds or ETFs?

If you can't answer these questions then you need to find someone who can help you answer them. Good luck.

 

[UpQuark]

Looking for some sage advice. ...

b. Should I wait and hope that it goes back up to where we at least break even and then sell?
.

I am no sage (most of what I think I only just learned on these forums the past few years), but I checked the Analysts ratings for TSLA on the Fidelity site, and the rating is 0.6 out of 10 'very bearish'. On the other hand, when looking through the individual analysts there were a couple analysts who expect it to outperform.

If you sell now, what will you do with the money? Would your new investment grow enough to recover your original investment and do it faster or more dependably than you expect tesla to do it?

I had some disappointing investments that I sold when they were down (unfortunately in accounts that I couldn't capture the loss), and later I went back and compared what-if between the old and new investments, and I was in a slightly better position.

But, I recently (past couple months) sold my retirement target year funds, and I don't know that I'll ever recoup that loss because it was substantial, but seeing them was just so depressing (especially because a few years ago they were doing great but everyone here on the forum said to sell, but I didn't because they were paying 8 to 11% income and I thought they would keep doing that, but apparently that was just due to the steep glidepath away from equities).

I'd read that the target funds should recover in a year or two (or four), so maybe selling them was a disadvantageious emotional decision.

But I feel so much better now because what remained of the investment is at least creating green color in my portfolio, so even tho statistically it might take twice as long to actually recover, there is a real psychological boost to seeing an investment say, 4% up, versus, 4% less down. I've tied a knot and moved on (or whatever that old expression is).

 

[Franklin]

I would bail. It's not a huge amount, take the loss and move on.

+1

 

[retire48in2018]

My advice - is be diversified.

I don’t own any single stocks, and would not have any single stock more than 5% of protfolio.

 

[MichaelB]

I’ll be devil’s advocate and give a reason to hold, or even buy more.

Tesla has built a global manufacturing infrastructure and continues to expand. While the US and European traditional auto makers are struggling to design and manufacture competitive EVs in volume, Tesla has achieved that and effectively has the top share of heart and share of mind. The Tesla charging design has already become the standard in the US.

Elon Musk has indicated Tesla is committed to being the industry leader in auto related AI. This is no easy task and may be just bluster, but if they achieve that they may become a much more valuable enterprise.

I’m not interested in a debate, just want to post a different point of view.

 

[Exchme]

I love this guy!

William Bernstein: “Do you think that by choosing a portfolio of only a few stocks that you hope will score big, you are maximizing your chances of becoming wealthy? Indeed you are, but you are also maximizing the chances of a retirement of cat food cuisine.”

William Bernstein: “Make no mistake about it: The object of this particular game is not to get rich – It’s to not get poor.”

William Bernstein: “You are not as good looking, as charming, or as good a driver as you think you are. The same goes for your investing abilities. In an environment filled with incredibly smart, hard-working, and well-informed participants the smartest trading strategy is not to trade at all.”​

+1
Buying something because you think you know more than other market participants is a tale as old as markets themselves. Even if you are right, highly volatile stocks make it almost impossible to hang on. And very often the fate of the ones that hang is to lose their total investment.

If OP is lucky, he/she will feel stung by this and just buy a boring old Total Market fund. Those are plenty volatile enough and difficult enough to hold through good times and bad.

 

[OldShooter]

... I checked the Analysts ratings for TSLA on the Fidelity site, and the rating is 0.6 out of 10 'very bearish'. On the other hand, when looking through the individual analysts there were a couple analysts who expect it to outperform. ...

Here is the thing to remember about analysts: An analyst who could make accurate predictions would not be an analyst. They would be lounging beside the pool on their megayacht, sipping from a drink decorated with an orchid, and making a trade once in a while when the checkbook got low. There are really only two kinds of analysts: those who have tried and failed to live on their successful predictions and those who are afraid to try.

But ... there are so many analysts and so many opinions over the spectrum that there will always be those who turn out to be right. Those will be considered the genius analysts. Temporarily.

 

[joesxm3]

Looks like your thesis has changed. If you are not willing to buy more tomorrow then you probably should dump it.