Individual Stock Picking Results After 2.5 Years

[JBinKC]

Portfolio is now at 3 million!

Post q2 earnings, all of them blew expectations out of the water. Tech is hot because it's not only making money, but all raising guidance. This has been the craziest month so far. Looking back, I can't believe my portfolio just went up another million in a month?!@ Tesla is doing a little too well. Might be a short squeeze due to naked shorting, may just be momentum traders who wants to dump after the split. Who knows but I am not going celebrate until the dust is settled.

Phase one of our retirement has been reached. I'll be reducing my working hours down to 32 until the next milestone which is 5 million.

Congratulations that was the level of my portfolio when I permanently retired in 2006.

[LivingAlmostLarge]

Singuy, would you retire now with $3M? I think it's risky because it seems like such a frothy market. It's one thing to retire at $3m in normal times. This doesn't feel normal

[Singuy]

Singuy, would you retire now with $3M? I think it's risky because it seems like such a frothy market. It's one thing to retire at $3m in normal times. This doesn't feel normal

Nope, gonna keep on truckin. Like you said, the returns can't be trusted and I'm fully prepared to see it free fall.

Phase 1 retirement has reached which just means I am reducing my job to 32hrs while my wife works similar hours/week. At 5 million is when we both reduce down to 24hrs/person. 10 million is the fully retired number but I'm not even sure what to do at our age so we may just work 2-3 days a week just to have interaction with the world vs 100% interaction with young children. I know that can drive adults insane.

[Singuy]

Congratulations that was the level of my portfolio when I permanently retired in 2006.

Nice, so did you cash out or you just let it ride?

[JBinKC]

Retired from a W-2 job which after a two months ended up investing/trading for a living. What I really admire about your success I highly doubt you put in around 100 hours a week into the legwork. What is also very helpful I own my house free and clear and live in a very cheap area of the country so my income requirements are negligible.

[Scallywag]

Well!!!!

That was one roller coaster of a month for my portfolio but we're up!

I believe that this is a TSLA bubble & a part of me wants to take profits but the other part of me wants to ride this out as "retirement" is 20 years away. I am just worried that the market might go to hell in a hand bucket around election and global recession and then not return to these levels for decades (as happened with the 1929 crash).

Any advise for me?

[Singuy]

Well!!!!

That was one roller coaster of a month for my portfolio but we're up!

I believe that this is a TSLA bubble & a part of me wants to take profits but the other part of me wants to ride this out as "retirement" is 20 years away. I am just worried that the market might go to hell in a hand bucket around election and global recession and then not return to these levels for decades (as happened with the 1929 crash).

Any advise for me?

Sure, if 1/4th of the total stock market was Facebook, Google, Apple, Amazon, netflix and Microsoft in 1929.

[Scallywag]

Sure, if 1/4th of the total stock market was Facebook, Google, Apple, Amazon, netflix and Microsoft in 1929.

They were all traded in 2008, and except GOOG, in the bust of 2000 - 2002..

Plus, is there a solid reason why BKNG is inching up, despite travel being so badly affected?

[Singuy]

They were all traded in 2008, and except GOOG, in the bust of 2000 - 2002..

Plus, is there a solid reason why BKNG is inching up, despite travel being so badly affected?

In 2000-2002, these companies were still young chicks. Even then, if you bought any of those names in 2002 and kept them, you wouldn't be on this forum worried about returns. You'll be relaxing on some island you bought.

Also travel pays out stupid good dividends if they go back to their original earnings at today's stock prices. So there's a risk but travel is travel. It's coming back eventually. Now things like cruising and such who knows, as those are less mandatory than airline travel.

[LivingAlmostLarge]

In 2000-2002, these companies were still young chicks. Even then, if you bought any of those names in 2002 and kept them, you wouldn't be on this forum worried about returns. You'll be relaxing on some island you bought.

Also travel pays out stupid good dividends if they go back to their original earnings at today's stock prices. So there's a risk but travel is travel. It's coming back eventually. Now things like cruising and such who knows, as those are less mandatory than airline travel.

you bought a bunch of stuff when cheap you'd be retired and not just tech. Other stuff too. Think MSFT and Apple. Think Berkshire. Or even XOM.

[Jluke]

What’s next for Tesla after the split?

still a buy??

[james.hendrickson]

What’s next for Tesla after the split?

still a buy??

Just to confirm - is everyone clear on the fact that stock splits don't make a company more valuable? They're just a change in the number of shares outstanding.

Grossly simplified, if a company earns ten dollars in a year and there are ten shares outstanding, each share is an ownership claim on 1 dollar of the company's annual profits. If the company decides to on a 4 for 1 split, then you now have 40 shares. The earnings are the same, so each share gets you a claim on 25 cents.

Mathematically speaking, they're just a change in the number of shares outstanding. Splits, in and of themselves, don't make companies more or less valuable.

[Jluke]

Pre split TSLA went from 900 to 2300 or so per share in a month (estimate)

after split stock price is now around 440.

should we expect the rise to continue?

really looking to Singuy to respond.

[Singuy]

As James said, a split doesn't do a thing to the fundamentals of a company. However, a forward split for any company is a bullish sign by the board of the company, and a reverse split is a bearish sign by the board of the company. This is why the huge run ups historically when a forward split is announced. The opposite holds true for reverse splits.

So Tesla imo is a different beast all together. Notice the volatility of the stock pre and post covid. Pre covid it ran up to 900s before a violent Covid crash down to the 300s, follow by the meteoric rise DUE TO FUNDAMENTALS from two very positive earnings. The problem with the rise is that there were a lot of S&P inclusion speculations built into which caused the rise to be violent and bubble like. Most people were expecting Tsla to retrace back down to an unknown number after S&P or if S&P will not be announcing anytime soon. It was doing this even after a very good q2 earnings until the split was announced. My take is that the bullish sign of the split was to set a FLOOR for the stock price vs a bubble. It's telling investors "we are fairly certain Tesla stock wouldn't crash down to the 300-500s again due to what we know about the future of our company so therefore we are going to give retail investors a better chance to invest with a split". This was the insinuated signal that completely turned the stock around and broke to all time highs day after day.

With that said, I do think there will be some demand for the lower priced Tesla stock as it's the hottest ticket on the market right now. So hot that it caused an EV bubble with many other Tesla wannabes. But this is short lived as momentum traders will move elsewhere(probably to Covid battered stocks) as coronavirus numbers improve daily. So I am predicting a retrace of 10-15% until a week prior to battery day (sept 22) in which the momentum traders are back for a new round to swing some money out of this buy the rumor sell the news event. The timing is perfect for them as Covid numbers will most likely tick up as it's 2 weeks post school has opened, so the transition from Covid battered stock will flood to tech again. After Sept 22, there will be a sell the news event until Sept 30/Oct 1st as people anticipate Q3 results which should again be better than people expect and shoot up from there.

Tesla is currently sitting at 400 billion dollar valuation which means they have lots of valuation to fill as current earnings doesn't support this. They are however executing extremely well, often time better than expected as gigafactories are completing in record time and vehicle ramps are hitting positive margins faster and faster. There may be another round of exuberance if the new Plaid power train Model S/X also comes with some kind of refresh design announced during battery day which will pull money out of Tesla wannabes and into Tesla. This can also happen tomorrow due to the lower stock price.

As a Tesla investor, our eyes are always on operating margins and operating incomes. What people don't realize is that Tesla will be profitable in future quarters WITH service being a drag on financials due to most of the fleet being under warranty. Service is actually the BIGGEST money makers of legacy auto, not the margins they make from cars. So for Tesla to pull this off is extremely impressive because service drag will eventually turn positive like legacy auto. Anyways, Q3 results will defeat the last bear thesis which is regulatory credits being the sole reason why Tesla is profitable. They did not change guidance, so our models are predicting a 650 million dollar gaap profits Q3, and possibility over a billion in profits Q4.

So there's no easy answer to this at all and this is all just something I keep in the back of my head as I will not be touching my shares no matter where it goes for another 3-5 years.

[james.hendrickson]

As James said, a split doesn't do a thing to the fundamentals of a company. However, a forward split for any company is a bullish sign by the board of the company, and a reverse split is a bearish sign by the board of the company. This is why the huge run ups historically when a forward split is announced. The opposite holds true for reverse splits.

So Tesla imo is a different beast all together. Notice the volatility of the stock pre and post covid. Pre covid it ran up to 900s before a violent Covid crash down to the 300s, follow by the meteoric rise DUE TO FUNDAMENTALS from two very positive earnings. The problem with the rise is that there were a lot of S&P inclusion speculations built into which caused the rise to be violent and bubble like. Most people were expecting Tsla to retrace back down to an unknown number after S&P or if S&P will not be announcing anytime soon. It was doing this even after a very good q2 earnings until the split was announced. My take is that the bullish sign of the split was to set a FLOOR for the stock price vs a bubble. It's telling investors "we are fairly certain Tesla stock wouldn't crash down to the 300-500s again due to what we know about the future of our company so therefore we are going to give retail investors a better chance to invest with a split". This was the insinuated signal that completely turned the stock around and broke to all time highs day after day.

With that said, I do think there will be some demand for the lower priced Tesla stock as it's the hottest ticket on the market right now. So hot that it caused an EV bubble with many other Tesla wannabes. But this is short lived as momentum traders will move elsewhere(probably to Covid battered stocks) as coronavirus numbers improve daily. So I am predicting a retrace of 10-15% until a week prior to battery day (sept 22) in which the momentum traders are back for a new round to swing some money out of this buy the rumor sell the news event. The timing is perfect for them as Covid numbers will most likely tick up as it's 2 weeks post school has opened, so the transition from Covid battered stock will flood to tech again. After Sept 22, there will be a sell the news event until Sept 30/Oct 1st as people anticipate Q3 results which should again be better than people expect and shoot up from there.

Tesla is currently sitting at 400 billion dollar valuation which means they have lots of valuation to fill as current earnings doesn't support this. They are however executing extremely well, often time better than expected as gigafactories are completing in record time and vehicle ramps are hitting positive margins faster and faster. There may be another round of exuberance if the new Plaid power train Model S/X also comes with some kind of refresh design announced during battery day which will pull money out of Tesla wannabes and into Tesla. This can also happen tomorrow due to the lower stock price.

As a Tesla investor, our eyes are always on operating margins and operating incomes. What people don't realize is that Tesla will be profitable in future quarters WITH service being a drag on financials due to most of the fleet being under warranty. Service is actually the BIGGEST money makers of legacy auto, not the margins they make from cars. So for Tesla to pull this off is extremely impressive because service drag will eventually turn positive like legacy auto. Anyways, Q3 results will defeat the last bear thesis which is regulatory credits being the sole reason why Tesla is profitable. They did not change guidance, so our models are predicting a 650 million dollar gaap profits Q3, and possibility over a billion in profits Q4.

So there's no easy answer to this at all and this is all just something I keep in the back of my head as I will not be touching my shares no matter where it goes for another 3-5 years.

Singuy, what do you make of Tesla's competition? Does it have any? Do you view Tesla's proprietary technology as giving it a significant market advantage against other auto manufacturers?