Sold My Tesla Stock last week

edited August 2019 in General
Lost faith in the company or its ability to grow? Not on your life. IMO, the ostrich with its head in the sand attitude about the impending death of ICE vehicles demonstrated by legacy automaker chieftains all but assures that Tesla will become a dominant force in the auto industry in the years ahead.

Then why did you sell your stock?

Good question.

WARNING: WHAT FOLLOWS IS NOT WRITTEN BY ANY KIND OF PROFESSIONAL ANALYST, EXPERT OR ANYTHING CLOSE TO THAT. I'm just a guy with a rather small stock account I like to play with for fun since my big investing days are behind me and most of my assets are managed by a pro.

Deutsche Bank has failed. They're dressing it up with shall we say suspect optimism, but this giant bank is actually being unwound. Over the past three months, the Chinese government has had to step in and take over three large banks that failed in that country. Shipping companies are laying people off and reporting reduced traffic. Even the US Post Office reported a massive loss last week citing declining package deliveries. (Who writes letters any more?). That means online orders are declining. While Tesla is recording record sales, they're declining for almost all legacy auto companies. GM and Ford are reducing capacity and laying off workers. Germany's auto industry doesn't look good. Housing sales are declining; price declines that began in overpriced areas (i.e. San Francisco) are now spreading out to other cities. Late payments and defaults for mortgages, student loans, credit card debt and car loans are climbing. Gold bugs are always ranting about fiat currencies touting the imminent rise of gold prices. Guess what? It's now happening though silver prices are still pretty much tracking along with no significant movement. It's not widely known, but the banks have found a way to get around Dodd Frank to sell derivatives (those damned credit default swaps, CDOs, etc) by selling them in Europe which is beyond the reach of Dodd Frank. In 2008, several trillion in derivatives accelerated the collapse that began in the real estate market. I've seen estimates that banks now have liabilities for half a QUADRILLION in derivative contracts outstanding. In 2017, Trump signed a bill that could possibly result in banks raiding the accounts of depositors to try and remain solvent (senate bill 2511 or something like that).Trump's trade war is exacting a horrific toll on our farmers and soon our consumers and it's now moved into a currency war. Knowing Trump, he is unlikely to back down until it's too late.

The always present dire predictions from the gold bugs have now spread to established banks like Goldman Sachs and Morgan Stanley. I've watched more than one head of economics at UCLA et al predict that recession is imminent. Just last night, I saw one of the chart monkeys who is widely respected say that the market could shortly see a decline similar to what happened when Lehman Brothers failed in 2008.

My financial planner agrees that things don't look good and he's put most of his clients in safe harbor investments for the time being.

IOW, if we're not already in recession globally it will most likely happen soon. I believe in Tesla completely. Musk is right, his products are terrific and what's in the pipeline promise even more growth. I think Musk took on another $2.7 billion in debt this spring "for general operating expenses" despite still having ~$2 billion in the bank is he foresees a downturn happening soon too.

How steep will this recession be? Dunno, but tell you what, I felt a whole lot better that Bernanke, Paulson and Geithner were there in 2008 versus the clowns we have today.

Last week, Elon said he thought Ford might not make it through the next recession. Ford bristled, but where the Seeking Alpha types point to Tesla's $13 billion debt as a sign of looming bankwuptcy, Ford owes around $100 billion. GM is in similar shape.

I sold my Tesla stock because I vowed in 2009 never to get caught with my pants down again. Long term, Tesla will come out on top, but gravity will prevail here is what I think is about to unfold does indeed occur. I moved my accounts from major banks to a member owned credit union years ago. I've paid down my debt excepting the outstanding balance on my MX loan. I've checked and rechecked that my retirement income stream is as secure as possible.

When the market decline as sharply as I think it will, I plan to wait and buy back TSLA after the decline. Even a company with as bright a future as Tesla is not immune to the gravity of an overall sharp market correction.

Will all this unfold as I think? Hell if I know, but that's my story and I'm sticking to it for the time being.

I think long term Tesla is going to wind up as big as Apple if not bigger. I plan to be there to reap the rewards, but for the short term we have problems in River City.


  • edited August 2019
    I am going to sell mine also
    When it gets to $4,000/share
  • edited August 2019
    Just temporary for me, Jim, I'm with you. The economic news is just so dire right now. It's downright scary to look at.

    Well, one thing good will come of it, if things unfold as I (and others fear) we'll be rid of Trump for sure. No way he'll avoid the blame for throwing the last straw on the camel's back with his stupid trade war.
  • edited August 2019
    If Tesla can straighten out its short term problems and refocus the company, I believe it will emerge as a winner as some surprising names go away. That is my hope, at least. The thing to remember about DeutscheBank is they are one of the most egregious scammers of Tesla stock out there. More than once the analysis (emphasis on the first four letters) division has said nasty things about Tesla, precipitating a big drop. That's when the investing end of the business quietly scoops up shares. They do it to companies all the time on Wall St but DB has a habit of going after Tesla this way. Slam it today, buy shares, then a month later say something really positive. They all play this game, usually with more subtlety. Most would be skeptical of Tesla eclipsing Apple down the road but there was a time when Apple stock was worthless and people were wallpapering bathrooms with share certificates, so anything is possible. I just don't see the old guard companies being able to move from carbon to electrics with the possible exceptions of Peugeot and Nissan. Ford made a mess of electrics years ago, GM offers one disaster after another (I've seen four Bolts in the wild). But all fail where Tesla gets it right: the charging network. The old guard companies take an attitude of "The aftermarket will take care of that. Next!" So good luck driving that Porsche Taycan from Phoenix to San Diego. Real good luck with that. This alone gives Tesla a commanding edge in the market.
  • edited August 2019
    Who cares if there is an incoming recession. It will be at most a year or two. Stronger companies/stocks can easily weather that. I held significant numbers of NFLX and APPL through the 09' great recession. Even with that severity it did take very long for them to recover and continue to rise faster than ever been.

    ***My financial planner agrees that things don't look good and he's put most of his clients in safe harbor investments for the time being.***

    Was he just advising where you put your money or he actually directed the transaction himself? You probably see now where I am getting to.
  • edited August 2019
    @johncrab: when was Apple stock worthless? Are you sure you are not just making shit up?
  • edited August 2019
    @Yodrak: when was Apple stock worthless? Can you specify a date? AAPL has undergone numerous stock splits over the years, so, while a historical chart makes it look like the price was near zero, it was never zero. A company with a zero stock price is bankrupt. Do you think Apple was ever bankrupt ( or bankwupt)? If so, when specifically?
  • edited August 2019
    Apple was close to bankrupt in 1997-1998 before the company brought Steve Jobs back from exile. They were just about gone. Don't know what the stock price was back then but they were definitely on the ropes. We needed new computers at the time and my wife and I were glumly contemplating having to go with Windows.
  • edited November -1

    I care. I lost high six figures when the market crashed in 2008. I held my stock investments through the downturn, real estate as well, but it took years to get back to where I had been.

    It may turn out to be a routine recession, but that half a quadrillion in credit default swaps has me worried. That's what put the crash of 2008 into hyperdrive and they never fixed the underlying problems with the economy. Consumer and corporate debt are at astronomical levels. I believe we're currently third in the world per capita, something like that. 90 days late on auto loans are now higher than was true in 2007.

    We all do what we want, but this time I refuse to take that big a hit again.

    My relationship with my financial planner over my real holdings is none of your business. My play account? I don't care what anyone knows.
  • edited November -1
    Climate change for money
  • edited November -1
    "That's what put the crash of 2008 into hyperdrive and they never fixed the underlying problems with the economy."

    Bank failures are way up and this time they're betting on corporate debt, consumer debt, just about everything. Right now, the market is being propped up by stock buybacks and that has dried up of late. When you realize that earnings have been flat to down for corporations overall — they've been inflated by stock buybacks to look better — see the quantitative easing going on, and note that big investors have all abandoned the markets for the time being, well... it could be a normal recession or it could turn into something much, much worse. Depends on how it's handled and this time we have Mnuchin instead of Paulson. That is not an equal trade. Much of Europe is already into negative interest rates and that is not good at all.

    It just doesn't look good. You do what you want, but I'm going to sidelines for a while.
  • edited November -1
    90 days late in an auto loan ? Really
    How many auto loans are currently in play vs 2008 ?
    Ya thought so.
  • edited August 2019
    My financial advisor thinks a recession is at least 9 months away. they feel the markets are still strong. Trump blowing off steam creates volatility but it is not a big deal. With good economic policies the recession could be delayed. But they never pull everything out of the market. They move more from growth stocks to value stocks from lesser grade bonds to higher grade bonds. They decrease the ratio of stocks to bonds slightly. Besides all the Tesla in my main portfolio my TSLA is invested by myself with a different brokerage. It's my play money. I bought at $200 and it peaked somewhere in the high 300s before dropping back. I was tempted to buy more but I changed my mind. but I definitely won't sell any. I believe in TSLA for the long haul.
  • edited November -1
    Great Britain had a .2% GDP decline last quarter. First decline for them in seven years. Brexit won't help but I have no background in economics and can't speculate if there will be contagion.
  • edited August 2019
    @sabbia. There is always contagion. Britain will bring the EU down but obviously not to the same degree because bilateral trade will suffer. Just like Trump’s stupid trade war with China brings both countries down. Smart financial strategists will move money to less affected markets to try ameliorate losses. I look at CNBC. One of the things that they report is exchange rates. They used to highlight the Yen, the Euro and the British pound. They stopped headlining the British pound in the last few weeks.

    @dmm. This is the strategy of Goldman Sacks in dealing with the China Trade war|
  • edited November -1
    Tesla is undervalued and You can’t time the market.
  • edited August 2019
    Not selling my small share. Hanging onto it till the day I die.
  • edited August 2019
    I actually like the price and will be buying. I wouldn't own US companies except Tesla and some dividend stocks. Some suggest shorting oil as the fracking business is overleveraged. I have cash on the side already waiting for a nice drop as the GOP is famous for wrecking the economy.
  • edited November -1
    glad you sold. Hopefully you buy before it shoots up 200 points.
  • edited August 2019
    @dmm1240 | August 11, 2019
    My relationship with my financial planner over my real holdings is none of your business. My play account? I don't care what anyone knows.***

    You posted this on a public forum and then say it's none of other's business?

    I just wanted to comment your financial planner is a very smart person. He got nothing when you continue to hold the stock.
  • edited August 2019
    He had nothing to do with my Tesla holdings and I k ew exactly where you were going. Commenting about the economy and investments is not personal.
  • edited August 2019
    @Sammo: You can’t time the market.
    @RHJ: 90 days late in an auto loan ? Really How many auto loans are currently in play vs 2008 ? Ya thought so.

    Nope, you can't time the market. But you can look at economic dark clouds and see a storm approaching.
    I included several links just for you, RHJ.

    Look, to those who don't know me, I'm not a troll. I own a Tesla and plan to buy another this fall. I think Elon Musk is a genius. What has me worried is NOT Tesla, it's the overall economy. I've been through 2 bad recessions in my lifetime: 1973-74 and, of course, the Great Recession. Most recessions are temporary and last a few quarters. Then you have the bad ones, the worst always occur in the financial sector and take the longest times to recover. The Great Depression was touched off in 1929 when the stock market crashed causing a lot of people to make good on stock purchases made on margin purchases and they didn't have the cash to cover. This in turn spread to banks and the entire economy. The 1973-74 OPEC recession started when OPEC stopped sales of oil in retaliation for the U.S. saving Israel's butt in the 1973 Yom Kippur (think that's what it was called) war. That led to the rest of the decade being plagued by stagnant economic growth and high inflation. People with short memories credit Ronald Reagan with the "cure" in the early 1980s. The truth is it was Paul Volcker, chairman of the Fed, who pushed interest rates into double digits finally tamed inflation, but at great cost. Reagan was greeted by a steep recession as soon as he took office that was really a continuation of one that began in 1980 when Jimmy Carter was POTUS, there was a brief respite before the bottom dropped out again. As we all know, the Great Recession was rooted in mortgage lenders handing out mortgages to anyone with a pulse to satisfy demand from Wall Street banks for more and more mortgages they could package and sell to investors like pension funds. When people with mortgages they couldn't afford started defaulting causing the root mortgage bonds to fail, that triggered payments on the damned derivatives the banks had been selling that froze the global banking system. Dodd Frank was a step in the right direction, but not enough. The root cause of the entire thing -- deregulation that let banks turn themselves into casinos -- has never been adequately addressed.

    For those thinking I'm just shooting off my mouth, try doing a simple Google. The info is out there. I did and here are some links on some of the reasons I cited for caution:

    Car Payment Delinquencies

    A record number of Americans are 90 days behind on their car payments. More than 7 million Americans are at least 90 days behind on their auto loans, according to the New York Fed.

    Household Debt

    Student Loan Debt

    Student Loan, Auto, and Credit Debt Rise

    Credit Card Debt

    Bank Failures

    Deutsche Bank

    China Bank Failures

    I'm not being a Debbie Downer just because. I'm not attacking Tesla. I fully agree that in 5 years or so Tesla will be a titan in the auto industry and energy as well. But for the short term, when a recession hits all stocks decline. Gravity takes over and takes them all down. How much? If I knew that I'd have 20 Teslas in my garage, but there is no doubt that stock prices will decline sharply at some point and then start to rebound. You can't time it, but you can get somewhere in the neighborhood. Hold no matter what is a good long term strategy, all you have to fear is that the company whose stock you own doesn't go under. It's also true it takes a while for stock prices to recover when recession hits, often several years.

    Take it or leave it, I really don't care. Just trying to share some things I'm seeing.
  • edited November -1
    I appreciate your thoughts. And these decisions are always personal. Nobody truly knows. I have shared the advice that I have gotten from my financial advisor. They are keeping me in the market but shifting the emphasis as I outlined above, In reality they are likely decreasing my overall holdings in stocks like TSLA. My "fling money" is likely 1 % or less of my investments and that is my TSLA that I am holding on to in the long term.,
  • edited November -1

    Agreed. My setup is similar to yours. I look @ my play account the same way. Strictly for funsies. If the stock market reacts to all this as I expect then I’ll increase my total shares over what I had.

    Leaving aside Tesla, the numbers look awful. The bright spots are few and far between. That half quadrillion in derivative contracts has me extremely concerned. “The Big Short” ends with a text message saying the banks had started selling a new investment called bespoke tranches that Some authority or other said was another term for a CDO. The greedy never learn.
  • edited August 2019
    "Who cares if there is an incoming recession. It will be at most a year or two. Stronger companies/stocks can easily weather that. "

    Your foresight is amazing. But I won't be coming to you for investment advice, no offense intended.
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