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Financial Planning / Foolish 401(k)s
|Subject: Re: Roth 401K-brokers that allow individual stoc||Date: 8/20/2013 11:25 PM|
|Author: aj485||Number: 25118 of 25234|
I'm gambling....because I only have stock in 2 companies?
Yes - they each make up significantly more than 4% - 5% of your total investment portfolio, they are both high flying aggressive growth tech companies (yes, Tesla is a tech company that tries to masquerade as a car company), and tech companies tend to fall hard.
Tesla stock might not quadruple but I believe it will double, eventually.
Or it might crash and burn to zero. Tesla has not shown sustained profitabilty. It has had a single profitable quarter after operating for 10 years. And you apparently bought during or after the rally that accompanied the profitable quarter announcement. You bought high, hoping to go higher. That'a a gamble.
At least half of the Teslas sold aren't sold in the US. Even if the US economy crashes it won't kill Tesla.
Well, based on the Tesla First Quarter 2013 Shareholder letter dated 5/8/13, Tesla said they hadn't delivered any customer cars outside of North America, so that doesn't seem to be consistent with your statement. Be that as it may, Tesla needs to have a sustainable way for their cars to go on long range (500 mile+ roundtrip) trips in it's entire market. If they want to be a world-wide car company, they need to provide that capability world-wide. How much will that cost, and how will they afford it, while still turning profits? If they can't find a way to provide that capability, they are destined to be a niche commuter car company, competing with the likes of the Volt and the Leaf, whose parent companies can afford to sell them as a loss leader, if necessary. Tesla, being a one-trick pony, won't have that option.
Mr. Musk is a great leader and innovater.
Elon Musk also is spending time and money on SpaceX and Solar City. The money he made from PayPal will only go so far, and by trying to be in charge of 3 aggressive growth companies in completely different industries, can he really give all 3 companies the leadership they need?
You didn't say much about Amazon, but you apparently also bought it near it's all time high at the time, hoping it would continue to go higher. It did for a while, but has recently dropped back down, probably to near where you bought it at - which is why your overall portfolio was only up 12% - 13%, while Tesla was up 20% - 30%.
You know - it might work. There are people who hit it big when gambling. But based on the portfolio you have, the amount you have invested and the goals for your portfolio, you appear to be gambling by going for the Hail Mary, rather than grinding it out.
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