My biggest position by far is Tesla now, and I have kind of slide up the dial on the allocation for the past few months.

So I want to write a post here to make a record on my thought process now and revisit this months and years later.

Also to caution and remind myself some important things about investing in TSLA.

A complete growth story

So first of all, there is no way to invest in TSLA if one is looking at its multiples.

Before Trump was elected and the stock price was below $200, it might still have some reasonableness to it.

Anyway now it’s 100x PE and there is a crap ton of growth being priced in right now.

To their credit though, this is probably the most innovation company currently on earth right now, especially related to autonomy, AI, and energy.

So at their current price I am still going to be at least holding, if not buying more to fulfill the “allocation”.

Investment themes

So the front and forward one is electric vehicles.

There was an EV boom which took TSLA’s price to hyper-euphoria but it did crash back down because EV isn’t as big of a boom as people had previously thought.

Nevertheless, I believe EV is the future, and the adoption would be slowly but surely.

And of course FSD is the other important piece of the story that ties in here.

If fully unsupervised FSD really comes to fruition, which as a consumer I really want to see that as well, then the income most likely wouldn’t just be selling cars.

The FSD can be a subscription model that generates recurring income. They can sell FSD softwares to other car companies. Robotaxi can come to fruition as well which eliminate taxi and uber drivers.

It might be years away but at least it should be a few years instead of decades.

Also I am happy to be a part of investing in such innovation for mankind.

Beside cars, there is also optimus the humanoid robot.

Basically its just bringing AI to everything in the physical world.

Cautions with TSLA

Having been investing in TSLA since mid 2023 and start around $160/share up to now $400+/share, it’s easy to get caught up in the dreams and the promises.

But as fast as it explodes, it falls equally as hard at times.

One of the main risks regarding tesla is, no other than the man Elon Musk himself.

You never know what he would say or do. He will take the company to the moon but in the short term he can do things that can swing the stock price up and down crazy.

Also because tesla is so much built on a dream, once people feel like that the dream is not materializing or come crashing down, so will the stock price.

And that’s how Elon Musk is. He is always over-optimistic and over-promise.

Which is a good thing, innovators need that.

But the over-promise does lead to overblown stock prices that eventually get corrected.

Also because it’s such a volatile and much talked about stock, many speculators who aren’t interested in the company long term are also in here to try to make a quick buck on momentum and trading.

Once the momentum is gone and the speculators head for the exit, all the bloating could disappear and the price can be left much lower than the peaks.

Don’t ever be in a hurry with TSLA

So never be in a hurry to buy. It will always come back down.

Trimming when it’s hot can be difficult, but if it’s way too bloated and allocation start to get unreasonable, don’t hesitate to trim it and buy back in later.

Also don’t play with TSLA options. I did just yesterday and now regretting it already over the weekend when I can’t trade it.

Hopefully I can close out the position on Monday without taking a huge loss.

Current allocation and strategy

My current allocation as of this writing is around 18%.

I want to get to 20-25% which is why I want to buy it, but it does feel bloated at this point with the recent 100% price surge since trump’s victory.

Nevertheless, a big amount of capital came in so I’ve been buying a lot to take it up to the minimum allocation.

I will remind myself, no need to be afraid to buy it quickly to take it up to the allocation percentage. If it falls, I will buy more. If it keeps going then I can trim.

Also I have been starting to see TSLA stock kind of similar to bitcoin.

It’s going to swing like wild so HODL is key. Always add when it’s beaten down.

It will be at least 10x+ within the next 10-20 years, I have no doubt. Their earnings might not really be 10x+ in real terms, but along with rampant inflation and their growth, 10x in 10 years I think is just minimum.

So HODL, don’t be afraid to buy in a bit pricey, and don’t hesitate to buy the way down. On the other hand don’t be afraid to trim if it balloons too much, it will always come back down. Treat it just like BTC and I should be fine.