TSLA instead of Mortgage

TSLA instead of Mortgage

I have a 5 year fixed mortgage at 2.98%, I've decided today to invest 95% of my principle (approx $20k CAD) on TSLA. Goal is to sell hopefully sell when the share doubles and put the $ back in the mortgage right away.

Am i crazy ?

eAdopter | 24 april 2013

It depends. Can you afford to take the gamble even if your bet is wrong?

This is the type of behavior that got so many "victims" into trouble as the 2007 housing bubble burst. The pain was mostly self-inflicted. While the gamble may turn out well, it's still gambling.

That said, I think TSLA will do very well. I'm just not willing to put so much at risk. It's a personal choice.

David Trushin | 24 april 2013

Yes you're crazy.

kilimats | 24 april 2013

If i'm correct, this strategy is called the Smith Manoeuvre ?

L8MDL | 24 april 2013

You're gambling against big fish with huge budgets - day traders and short-sellers are everywhere. It can work but isn't generally recommended. My rule = never invest what you cannot afford to lose - just as I play Vegas.

gasnomo | 24 april 2013

Crazy isn't the word I would use, I'd say irresponsible. Speculating in the stock market, much less on one stock to fund a mortgage is exactly the type of behavior that contributed to the financial mess. Your home is not a piggy bank.

Carefree | 24 april 2013

It's you money - so do as you please. I do think however that you are completely out of your mind. All it takes is for Elon to hint that reservations in the US have slowed down somewhat and the stock will take a serious nose dive.

I am heavily invested in Tesla (both in the Model S and stock) but I will have no financial burden if the stock tanks. If on the other hand I'd have to decide between a mortgage and Tesla stock, I certainly would chose the mortgage.

h8young | 24 april 2013

Is this even a serious question? DON'T DO IT!

kilimats | 24 april 2013

kk i wont do it guys, thanks for waking me up :)

Robert22 | 24 april 2013

Was that Smith manoeuvre or Smith manure?

Brian H | 24 april 2013


Be prepared; now the stock will soar, and you'll miss out on huge gains. ;)

Carefree | 25 april 2013

kilimats, glad you came to your senses:-)

Vawlkus | 25 april 2013

As L8 said, "only gamble what you're willing to lose".

ChristianG | 25 april 2013

The Stock market is mainly a casino where people are not affraid to bet more then $50, and TSLA still is a high risk stock. Tesla doesn't have the reserves to handle a big setback. And the other thing is TSLA is on a alltime high.

Sure the imediate future for Tesla looks very well, soon we european guys send our money overseas and they are still living 'old' reservations until the end of the year.

Also the market isn't always based on realety, it's all abou mass psylochology and hypes too. So be prepared to loose the money you invest or be prepare to sit the crises out,

Brian H | 25 april 2013


ChristianG | 26 april 2013

Only one spelling mistake? I had a good day :P

Nicu.Mihalache | 26 april 2013

TSLA has inflated seriously lately. It may still go up in the short term, but it is more probable that it will go down. Do not get shredded by the bubble machine!

Until the stock and the company realize their long term potential (not a sure thing, but there is a reasonable chance), short term movements will drive you crazy and eventually force your hand to take a big loss and get out (because you are risking more than you can afford to lose). Then you will pull your hair off watching the stock go up again afterwards.

Please don't do that!

Brian H | 26 april 2013

I saw reference to a study a while ago that suggested all economic (and perhaps some other) activity is driven / characterized by bubbles (of various sizes). Sort of a continual froth. Seems to be a consequence of different agents / actors in the transaction stream having different goals and information, plus the dynamics of hope aroused and disappointed, etc. Such unrealistic schemes as price controls hope to eliminate this, but end up creating bigger bubble-disasters.

djm12 | 27 april 2013

If you are interested in investing in Tesla or any other stock, buy it slowly over a period of several years. The price for Tesla stock is currently quite high - if you buy $1,000/month over the next twenty months, you take advantage of market fluctuations without needing to worry about market timing.

Nicu.Mihalache | 27 april 2013

@ djm12

actually, your suggestion is even better than what you think ;)

I will take an extreme example so that the numbers are more obvious. Then I will state the precise result.

You buy today 1 share worth $10. You buy tomorrow 10 shares worth $1 each. You have 11 shares for which you payed $20, that's an average of $1.82. But the average price of the share was $5.5 (= (1 + 10) / 2).

In conclusion, if you buy a fixed amount of $ periodically, you end up with a position that has strictly less cost average than the share had on the market (except if the price do not vary at all, in which case you are even).

If you buy a fixed number of shares each time, then you get the average. But with fixed amount, you buy more shares when it is cheaper, which drives the average down ;)