So my financial advisor talked me out of buying $15k of TSLA at $162 couple weeks ago

So my financial advisor talked me out of buying $15k of TSLA at $162 couple weeks ago

I actually called him and asked him to process the trade, but he talked me out of it and sent me 3 separate Investment Analysis reports on TSLA. All three said stock was way overvaluated, and the fundamentals werent in line with 'sound' judgement.

One even said that target should be around $45...not a typo

Then last week happened...

As i see the run up in the last 2 weeks i seriously wonder what i pay these guys for......

I am tempted to post the reports here in forum.....i want to laugh at it....but i feel like crying instead.

Gizmotoy | October 1, 2013

To be fair, by many traditional measures of performance TSLA is currently overvalued. He was just trying to protect you from what he considered a risky investment, which is indeed what you pay those guys for.

Unfortunately for you he turned out to be wrong in the very short term, but longer term? Who knows...

tes-s | October 1, 2013

You could fire him. If the stock goes below 100, hire him back.

Brit.l.T | October 1, 2013

It's most likely over valued. I did buy and yes made a modest return. I think it will go up with the sales of this quarter most likely being good and then it prob will go down. Look for long term investment... I think one day it will be worth this.

jbunn | October 1, 2013

That would have been up by $2870 as of today. Could have been down as well.

A number of people have reported on Seeking Alpha comments that they took advice to get out of Tesla around 40. I wonder where Peterson is...

This is why I don't give friends and family advice. It's no win. I will tell them where I put my money, but no recommendations. Me, I'm long Tesla, Solar City, bio-tech funds, and tech companies. Like Gizmo says, it could all reverse tomorrow.

L8MDL | October 1, 2013

The question is what did he recommend. There have been a lot of places you could have made far more than the $2500 Tesla has gained (given a 100 share purchase). So he was right if he followed through. Of course hindsight is 20/20.

ian | October 1, 2013

I have a friend that was talked into selling at $92 by his stock guy. I told him to hold on. He made good money though as he'd been in from shortly after the IPO.

I won't buy more unless there's a serious pullback because all those analysis are spot on. Frankly it is overvalued according to nearly all the usual and generally accepted metrics.

Having said that, this is a game changing company and I believe in its vision and ability to execute. Tough call for sure.


bryanjaf | October 1, 2013

Amazon has been way overvalued for years, does not mean that entropy is around the corner, just the possibility thereof.

mrspaghetti | October 1, 2013

I kind of figure there's no point in getting advice from a financial advisor. If they were any good (i.e., they could see the future), they'd be so wealthy they wouldn't need people to pay them for financial advice.

bonaire | October 1, 2013

Keep a separate trading account with 10-20% play-money. You shouldn't be at the behest of your broker. If 15K was small chump change for your portfolio and fell into your speculative amount of funds to "bet" on risky stocks, then it should be "allowed".

You are the boss. Tell him one more of these and he's fired. I bought CREE yesterday on a hunch - no broker stopped me from buying and then seeing today's rise, I sold a proportional amount of covered calls for an approximately 10% gain in one day if the price holds up at or near $65.

Also, posting here is ranting, yes. But it also shows you need to man-up and tell the guy what "you" want to do with "your" money.

Invention | October 1, 2013

The first buy on TSLA was around 40, Second buy was around 115 which resembled a High Tight Flag and a Third buy was around 171 from a Three Weeks tight pattern and what also looked like an Ascending base. In order to properly buy or sell a stock you need to know how to read charts. For a stock to go up over 300% and not correct means that the Institutions the ones who control the market are not selling and they are probably adding to their positions. One day in the future the stock will correct around 25% to scare out the weak holders and then it will set up for another chance to buy it. Another secondary buy point is if it comes down near the 10 week line and bounces off with above average volume .

AmpedRealtor | October 1, 2013

The worst advice for a financial advisor to give would be to buy a risky, overvalued stock like TSLA. What if instead of going up it crashed, what sort of thread would you have started in that event? A financial advisor's job is to recommend sound strategies, not to promote gambling.

Pricee2 | October 1, 2013

+1 @ mrspaghetti. I think brokers are only concerned with the quantity of their advice and not the quality. Kinda like weather forecasters. If they were paid according to their accuracy most would be in the poor house.

fluxemag | October 1, 2013

Financial Advisers have access to a wide array of proprietary systems, subscription data and research reports. The key to good investing in my opinion is the quality of information you have access to. For example, last year when sequence numbers were being published by future owners on this forum. That was very high quality data because it wasn't widely known to the public. I used that and VIN tracking to forecast TSLA 2013 revenue and bought myself some shares. Because of the high percentage of my portfolio that position represented, I sold all of it at $90, nearly a three bagger. Yes, I could have doubled up again, but picking the top is just as hard as picking the bottom. Evaluating risk is crucial, and some of my sell decisions were better and more critical than the best buys I've ever made (RIMM, BSC, FSLR).

I have access to good data to make my own decisions and can read balance sheets and financial statements effectively. So I don't need a financial adviser to tell me what to do. Most of the public thinks having an Etrade account, watching Cramer and reading Seeking Alpha are good enough to beat the S&P500.

skymaster | October 1, 2013

This stock is more exciting than Vegas!
I first got in at $35 and will continue to buy and sell... no matter what happens.

You can get advice from a broker, but you have to follow your gut.

jbunn | October 1, 2013

+1 @ mrspaghetti

The guys you want are youngish and retired to a beach somewhere. And they are not returning calls. | October 1, 2013

I decided to take conrol of my retirement accounts a few week ago. At our final meeting, my former financial advisor told me I had been lucky with Tesla and advised me to sell last week.

As I said, my former financial advisor.

I will sell some, when certain criteria has been met, but mostly I am in for the long haul.

carlk | October 1, 2013

Most of the financial advisers are no better than you and I. They would not be advising others how to make money if they are so good at it.

I wonder if anyone has listened to Bob Brinker's Money Talk on radio. He's a big airbag always bragging about how he was able to foresee market moves. Well the last I listened to him was during 07'~08' when he was recommending people to go into the stocks.

Brian H | October 1, 2013

Send him a bill for the profit you missed out on. | October 1, 2013

I am long on TSLA, but at ~$193, its gonna see a correction at some point. If everything goes perfectly between now and the Model E, then maybe its a $200 stock, but as soon as their is an execution hiccup, people are gonna bail.

Market sentiment is fickle. Not long ago the "pundits" were calling a $1K stock, then sentiment shifted without any great change in the company's actual fundamentals and now its half that.


mna123 | October 1, 2013

“I made my money by selling too soon.”

― Bernard M. Baruch

redacted | October 1, 2013

If your timeline for whether investment advice is good or bad is two weeks, just fire the advisor and get a cheap trading account somewhere. Go with the guy who jumps up and down for your advice.

There's all sorts of ways Tesla could tank. Good management could well see to it that it becomes another Apple; the vagaries of economics, poor planning or the untimely loss of a charismatic leader could propel it into being the next Fisker. It's going to take more than two weeks of random market volatility to determine if an investment in it is successful or not. And even if it were to be, that would not make it a wise investment for your situation, given the risk associated with it.

My question is: why didn't you just buy it a year ago? Then you'd be rich.

wb11 | October 1, 2013

i bought it at 162 and now about 190? is that right. It is definitely going to crash soon as the company is not worth $25 billion. Having said that, the sales are taking off in the northeast for the first time. Abroad too. 500 vehicles manufactured a week. Wait till they announce model x orders. This is real but the stock is still overvalued imo.

rfriess | October 1, 2013

Your adviser did the right thing. At the present valuation, the stock is for professionals that can act in second, not us. That said, if there is a significant adjustment, I could be a buyer.

EssDub | October 1, 2013

I bot at 25. Then sold calls around 65 / 70. Obviously they got exercised. But I do not regret turning a nickel into a dime (plus). Nor wonder about the return I missed -- hell, it bought me my MS!!

For the record I'm not touching the stock anywhere near these levels. I can't get my head around the valuation. And at some point it will turn. Probably very quickly. And it will be dangerous. And your advisor won't put you in that situation if you aren't actually prepared for the risk. He did the right thing.

Brian H | October 1, 2013

Pulled from my Advanced Robotic Stock Speculation Engine (ARSSE), it will pull back from $303 to $252. Wait for it.

mna123 | October 1, 2013

I am a buyer under 60 and I love EVs and want tesla to succeed.

And believe me it will get there. When AAPL was 700+, no one thought in their wildest dreams it will go to 385 and it just happened last October.

Point is at end of day tesla is a hardware company, they are not FB, LNKD, NFLX, CRM. What common among these high fliers is that they could scale w/o incurring any cost. This is not possible for Tesla.

Apple is 70% hardware and 30% software and that's why the stock price fell. Apple makes 40 billion $ profit every year, it could buy any company it want with their cash of 150 billion $ but stock still cut into half. And AAPL PE excluding cash is just 7 (worst than MSFT). Why? Because most of appl profits come from hardware. And you know what, AAPL has 37% net margin (We are not even talking about 25% gross margin Elon is talking about).

There are 20 million shares short and this is short by some big cats. No, they are not losing money, they must have sold out of money puts against it. They will ride it all the way up and when they close their puts, they will ride all the way down.

No way retail is holding 20 million shares short.

This will end bad, really bad when ever music stops.

P.S. I worked at Wall Street and left it with disgust after what I saw. Now I earn honest.

P.S.S I personally think management is also involved in this play.

P.S.S.S You can bookmark this thread and visit it in 2 years.

nomorebmws | October 1, 2013

Honestly, it sounds like he did his job. If you wanted to make a speculative bet with money you can afford to lose, sure go ahead. But that's not the role of an FA. And if you wanted to buy for the long term just make sure it's part of a coherent investment strategy. But I can't imagine any decent financial advisor going out a limb to advocate purchasing a risky tech stock.

PapaSmurf | October 1, 2013

I am also thinking TSLA is way overvalued. We can be fans of the product and still recognize that the stock is not a good investment at the current price. I don't claim to know where the realistic price of the stock should be, but I strongly suspect that it will trade below $150 again within the next 12 months.

I have no plan to buy or short this stock. I am just staying away. It is a bit of a cult stock right now and not trading on any sort of known metric. This is goin to end badly for some new investors who are buying now. Bag holders.

JZ13 | October 1, 2013

For those of you who are wary of the stock due to current valuations you are using the wrong metrics to value the stock. You cannot use traditional metrics for an extreme growth story. It doesn't matter what the average p/e is. It doesn't matter how TSLA's market cap compares to GM, blah blah blah. That is like comparing Amazon to Walmart which would be very foolish. Walmart can only grow earnings in small increments because they are already mature. Amazon has BIG upside potential growth. So they get far higher valuations. The same is true with Tesla and their automaking peers.

The way to value TSLA today is to forecast their sales in the future. If you believe Tesla will sell 100,000 Model S and X in 2016 then Tesla would be trading in the $400 range if you applied a multiple of 50 to it. Frankly, I think Tesla's p/e will be far north of 50 pre GenIII.

Furthermore if you believe, as I do, that Tesla will have maxed out the production capacity for NUMMI by the end of this decade and have new factories coming on line in Europe and Asia then you start to see a stock that is easily over $1,000.

The numbers bear out. Check out Sal Demir's discounted cash flow analysis here:

Kaboom | October 1, 2013

Actually, my advisor is quite competent, and he has consistantly outperformed the market based on a balanced portfolio mix.

And i know two weeks is nothing in the long term, but i just really had a hunch and urge to put something into TSLA, and he dissuaded me, but I also agree he is doing his job.

He said of course i can buy on my own, but its nothing he can advise to do now, even two weeks ago.

But i will say, if it comes back down to below 170, i am going to add some.

earlyretirement | October 1, 2013

I love love love love the company and I LOVE my Model S. I even reserved a Model X already and put down my deposit.

But NO WAY I'm going to buy the stock at these levels. It just comes down to common sense valuation plays.

Sure the stock could go up but I don't fault your financial advisor for giving you sound advice. IMHO.

Jamon | October 1, 2013

@Kaboom - it will very likely dip back below $170 at some point - possibly for a very brief time. At that time your instinct will be to panic and want to walk away from the stock because its falling too fast. If you stay true to your commitment and buy when it dips that low, I think you will be very happy in the long term. Just make sure it's money that you can afford to lose :)

mario.kadastik | October 1, 2013

Well it'll be polarized thread, but you basically are not buying a traditional company. Tesla is representing significant market disruption with a possible long term global revolution in transportation. Tesla is well positioned for benefiting from said revolution due to first mover advantage, good battery design and patents and already secured supply chain.

In addition the buildout of a proprietary supercharger network is a huge value that most analyst consider a burden, not an asset. Valuing this company on Model S and possible Model X sales numbers would yield a definite overweight rating and that's what most of the analysts do. However if you do a proper Tesla master plan accounting, then TSLA is dead cheap. Estimating just slowing Model S sales, similar pattern for Model X and a reasonable adoption of Model E with Tesla maintaining a 25% margin on the higher end models and 15% on the E, then by my simple math of P/E compression and giving it a conservative 25x P/E (still a growth company in 2020 I think, not established) I arrived to a price of ~$800 for TSLA. Most conservative I was able to pull up was a price of $500.

Tesla will not stop at Model E. There will be electric trucks and vans. Tesla will license and build the drivetrains for competitors and license the hell out of supercharger network.

So only listen to your analysts if you think the master plan is a hoax and will not happen. If you believe that Elon really wants to revolutionize the car industry and think he can pull it off, then TSLA is still at least a 2-5 bagger.

bradslee | October 2, 2013


+ 1

Totally agree. For those who think TSLA is overvalued and who keep comparing TSLA with GM or BMW, they are really comparing apples with pears. For those of us who bought TSLA at $20s or $30s, at that time TM did not even produce any Model S. Did we think TSLA that did not make a dime but was worth $2B overvalued? Not at all. Thus, there will be always two camps on TSLA: one is side with Elon's vision and another is side with rigid financial doctrines.

Do I think that along the way,TSLA price will see a rough journey of up and down? Absolutely. However, I firmly believe that by 2020, TSLA will eventually reach the $44B valuation goal set by Elon, that would translate TSLA price into $300-$400 per share.

Iowa92x | October 2, 2013

Let the financial pros manage your 401k and Roth, but take ownership of investing with your play money. I'm getting it done through eTrade and overall my accounts are averaging a 48% return. Not uncommon on a good day to pull in $2k. Paying an advisor costs thousands in the long run. Will their expertise bring you a higher return that compensates for their fees? Not sure that is true.

Litennn | October 2, 2013

Brian: LOL I have heard of people talking out of there ARSE but never getting stock predictions.

Litennn | October 2, 2013

Brian: ARSE would have been possessive if they actually had one.

rdalcanto | October 2, 2013

Maybe, Maybe, maybe, it will go back down to 170. I don't think it will see 150 again. Q3 results in a month will drive up the stock. Then there will be an announcement about another factory or deliveries to Asia, driving it up more. Then Q4 results. Then Model X pre-production models, then Model X deliveries, then Gen 3 prototype.... The good news will just keep coming every 6-12 weeks that will keep the stock slowly climbing to 500+, maybe 1000+.

skymaster | October 2, 2013

Don't forget the bump the stock will get when Elon takes his boys cross-country sometime this winter. I sure hope this happens. | October 2, 2013

TSLA got a downgrade today:

Tesla Motors (TSLA) slipped 2% ahead of the open, following a downgrade to neutral from outperform from Robert W. Baird, which cited the stock's valuation. The maker of luxury electrical cars ended Tuesday 11% above a 173.80 buy point from a three-weeks tight pattern.


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Theresa | October 2, 2013

I bought three times so far and have returns of 1005% (yes that is correct) 590% and 130%. I sold enough of the 1000% stuff so that even if I lose the rest I have still made money.

fluxemag | October 2, 2013


rdalcanto | October 2, 2013

Yes, the "experts" that are shorting the stock and getting killed will keep trying to "downgrade" the stock, and publish a made up number based on classic metrics, of what the stock price "should be," in order to try to control it's growth. I'm happy they do. It doesn't affect Tesla's day to day business dealings, and it keeps the stock from going parabolic and suffering a real crash. Despite the constant, negative articles (which have been appearing weekly since the stock took off in the spring), I have no doubt it will be over 200 by the end of the year.

earlyretirement | October 2, 2013

Look..the car is great but at these kind of valuations all kinds of things can happen.

Heck look at this.

I mean for all we know someone staged this with a gasoline can...but ANYTHING that makes the news like this and the stock will get blasted..... and IF there is something like this all the analysts will come out with downgrades, they will jump on the short train and you can get hit in all kinds of ways.

Things don't move in one direction forever. I don't care if it's gold/silver/commodities, real state, and TESLA stock...

rdalcanto | October 2, 2013

Yes, funny that I posted what I did hours before the "fire" coverage. I think that is the one thing that can cause the stock to fall fast in the next week. Even as a long on the stock, I am now think we are looking at more than a 10% drop in the short term. I briefly thought about selling everything and then buying back in at the bottom. However, with 40% of profits going to Uncle Sam, the drop from the "fire" stories would have to be more than 40% and I would have to time the buy back perfectly. I've decided to hold all my positions, and just buy more stock if there is more than a 30% decline from bad press.

zero2hide | October 2, 2013

Using a "Financial Advisor" is so last century :) Think about it, these guys make their money by shuffling yours around. The same information is out there for all of us to research.

Read a few financial investing books and tinker on your own with your own money investing in products you know about, believe in, use or like. Set a "Trailing Stop" order to offer some protection to the investment and away you go!

Brian H | October 3, 2013

If it's going to be worth buying at $170, it's worth buying at $180.

WayneH | October 3, 2013

Friends, be cautious. Yesterday's fire is a game changer. Many large holders will no longer feel comfortable holding major positions for the fear of another incident happening. Do not buy on the dip. Sell some of your existing holdings if you do not feel comfortable selling all. This fire has tarnished the brand whether we want to accept that fact or not. It will take time to heal the brand again. Do not put your head in the sand like an ostrich and pretend things will be the same as before. Analysts could dump their stocks and then downgrade it. It could go much lower than you realize.

Kaboom | October 3, 2013



you may be right, some might panic a bit about the fire and lock in some gains by selling. I say good for me, because when it goes below $170 i will be waiting to buy.

WayneH | October 3, 2013

Even before the fire the valuation was in the stratosphere expecting perfection of execution at all levels for several years. The Tesla teflon is now tarnished. Sorry but this may drop a lot more than you think. I just don't want us nice folks on this site to be in pain when share prices drop a lot.