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I remember doing a due-diligence on Tesla during the Oil Crisis of 2015. The stock was at 195 or so, the company hadn't released anything other than high-end s

I remember doing a due-diligence on Tesla during the Oil Crisis of 2015. The stock was at 195 or so, the company hadn't released anything other than high-end sedans, and the cars were still sold in stores. If you went to their website, you saw that they were planning to have a $35,000 vehicle for sale by 2018, with rapid charging stations set up across the country (forming a corridor for coast-to-coast travel), where Tesla owners would be able to charge for free. And furthermore, the leadership - Musk - had shown his worth when he put his last dimes into PayPal just a few years earlier. I said it was a good company to go long on for a three year timeline. (They didn't listen, I was only 17 and had never invested in my life). It might be time to give them another examination.

rainyMammoth 7y ago
And it's good they didn't invest on your advice to go long on TSLA. If you invested into The diversified SP500 instead with the same timeline (2015 to today) it would give you a slightly similar or even better return than TSLA that went from 195 to 295 ( and that is IF the current price holds until tomorrow which will most probably not). Never forget opportunity cost while investing!
- paulpauper 7y ago
  but the person who buys telsa instead of an index fund is likely anticipating increase volatility and has higher risk tolerance
  - gimmeThaBeet 7y ago
    They can anticipate higher volatility, but that doesn't mean they're being compensated for it. Yeah we have the benefit of hindsight, but that's what we're talking about. If you're just evaluating past performance starting from any point in 2015, Tesla generated average returns, was pretty uncorrelated (which is great), and was way more volatile than the S&P. That's not thrilling.
- gimmeThaBeet 7y ago
  As in, as far as I can tell, maybe like 1 month in 2015 to now would get you superior returns to the S&P, with like, 3x the volatility. Unless you bought Tesla before like, 2013, the returns(especially risk-adjusted) in general are not great. That definitely grinds my gears a bit when it comes to Tesla. The cars are fantastic, but the equity isn't quite the product. You can dismiss the haters, but that volatility is pretty intrinsic to Tesla. They're doing a lot of great things, but that alone does not a great investment make, and I think that doesn't get discussed very honestly. One thing it does have going for it, very low correlation.

rainyMammoth 7y ago

And it's good they didn't invest on your advice to go long on TSLA. If you invested into The diversified SP500 instead with the same timeline (2015 to today) it would give you a slightly similar or even better return than TSLA that went from 195 to 295 ( and that is IF the current price holds until tomorrow which will most probably not). Never forget opportunity cost while investing!

paulpauper 7y ago
but the person who buys telsa instead of an index fund is likely anticipating increase volatility and has higher risk tolerance
- gimmeThaBeet 7y ago
  They can anticipate higher volatility, but that doesn't mean they're being compensated for it. Yeah we have the benefit of hindsight, but that's what we're talking about. If you're just evaluating past performance starting from any point in 2015, Tesla generated average returns, was pretty uncorrelated (which is great), and was way more volatile than the S&P. That's not thrilling.
gimmeThaBeet 7y ago
As in, as far as I can tell, maybe like 1 month in 2015 to now would get you superior returns to the S&P, with like, 3x the volatility. Unless you bought Tesla before like, 2013, the returns(especially risk-adjusted) in general are not great. That definitely grinds my gears a bit when it comes to Tesla. The cars are fantastic, but the equity isn't quite the product. You can dismiss the haters, but that volatility is pretty intrinsic to Tesla. They're doing a lot of great things, but that alone does not a great investment make, and I think that doesn't get discussed very honestly. One thing it does have going for it, very low correlation.