Now before you get too excited and think I am about to lay down the path and guide you
through some get rich quick strategy by trading Tesla, I'll have to curtail your excitement
right now, and disappoint you.
The best strategy for investing or trading is none other than... your own.
Sure you can follow someone else who may literally tell you when to buy or sell at the exact
time they do, but that really is gambling.
HOLD In addition to that, for something like 95%
of people who trade stocks, lose, so be aware of the statistics against you.
Therefore I would suggest that for the majority of you, that it is best to just accumulate
stock and hold for as long as you can.
Accompanied of course by the adage of time in the market beats timing the market.
And this was 90% of my strategy.
But even so, you might still find some of what I have to say useful or insightful, or
at least thought provoking.
And if some of you feel like you need to be a bit more active in the market, rather than
simply sitting years on the sideline, then this might be of interest to you too, as that
is how I felt.
WHEN TO BUY When it comes to LEAPS, I get continually
asked by people of when they should buy, or when is the best time to sell them.
Now I don't try and up sell some LEAPS trading course, I'm guessing I probably could, but
I prefer just talking about Tesla.
But I am sure you understand that I can't tell you when to buy and sell shares or options.
I mean that would be insane, and I wouldn't even get anything out of it.
I just like to talk about ideas I have, and what I am up to, and then get invaluable feedback
from all of you.
I mean people hear me out, and listen and then comment and tell me their strategies
too, or what they think of mine.
Although like I say, I do talk about what I am up to, and do caution everyone whilst
I am doing it, but if you go back to my videos, there are only actually 2 times I have ever
said I bought LEAPS, which was the crash mid last year, and the one this year, which happen
to be Teslas two largest crashes over the time since I started this channel.
The reason I bought them, is because the price got crazy.
It was just too good to ignore.
It was contrarian investing, buy when low.
Except I couldn't buy any shares when the price was low.
Because I had no money, I was truly already all in, and my YouTube channel doesn't quite
pay me well enough.
I use all my income from this channel to cover my financing on my Teslas, and all my Patreon
support to cover my costs.
But I do want to eventually sell my Model 3 to upgrade to a Plaid, so please make sure
you subscribe to help me subsidize that.
I'm sure it will make me even more bullish and motivate me further to make more videos.
I mean it's the best consumer product in the world.
So yea, I was all in on Tesla, but it dropped to these crazy low prices, and I explained
all the reasons they were low at the time, and how they didn't make sense, and how Tesla
was extremely under-valued.
But I didn't have the funds, so I sold about 10% of my shares, and bought up the LEAPS.
So I guess that is my strategy in a sense, but it's not like I planned it so much at
the time, it just became irresistible.
And I managed to sell most of these when the stock was around 1050 to 1150 pre-split.
And then re-bought even more when the stock dropped low in May.
And when I re-bought I did manage to buy them with longer expiry dates too, now looking
at mid 2024 instead of 2023, that feels so far away, in Tesla time, so much can happen
then.
I am kicking the can up the road as much as possible, the can that has the chance of making
it to when the stock hits escape velocity again.
They are however admittedly a little bit further out the money too.
My thinking is, even if I lose them all, and the expire to 0, then it was just 10% of my
portfolio I lost.
But if they win, and win big, then it could improve my portfolio perhaps by 30%.
10% won't make much difference to me, but 30% would.
That might even been Tesla Roadster money.
I felt like this was a calculated asymmetric investment.
I try to do numbers relentlessly to back this up.
I publicly show these numbers and go through them with you all, and explain how I reach
every single metric.
I then read all of your comment to see if there is something I have missed, or the reason
for my numbers might have been off by something.
And then I keep refining them.
Bottom line, the return of them winning outweighs the chance of them losing, this is an asymmetric
investment.
For example I see it as perhaps a 50% chance that I will 10x my return.
Those are good risks to reward.
But of course you could equally look at it as 50% chance to lose perhaps.
STRATEGY But this is my strategy, not yours.
You need to come up with your own strategy.
We may have different plans, tolerance for risk, capital, security, etc.
On top of that I have been abundantly clear that I only have 10% of my portfolio in LEAPS,
or had, it has risen somewhat, but still, the vast majority of my Tesla investment is
and always has been shares, and with the very simple basic strategy of holding for as long
as I can.
But there are also many scenarios out there, where we see Tesla reaching 3 to 5 times the
current stock price, perhaps within about 2 years.
And if you manage to catch that with some LEAPS, then it does feel good.
You strategy shouldn't be something you can work out in 10 minutes, or even an hour.
Keep thinking about what you want to achieve, what level of risk you can handle.
Put yourself in scenarios and be honest with yourself.
Think if in 2 years time, the stock price hits $1,000, and you didn't buy your LEAPS,
are you going to be kicking yourself, you could have had a 10 times return perhaps.
10 times return in just 2 years is amazing.
However, - 100% is not so good.
So imagine that too, what if you did put money into LEAPS, and even if in 2 years, the stock
price still hadn't moved, are you going to hurt?
Think about tax as well, you have to factor that in too.
WHEN AM I SELLING Then there is the problem when it comes to
trading Tesla that I have been struggling with.
Well you know how so many people love to support you when the stock is down, and remind you
that it's only a loss if you sell, well it's also only a profit if you sell too.
And being a Tesla Bull, that is the hard part, trying to time selling.
Now my initial strategy for LEAPS was to never sell and just hold and exercise, but that
might have been someone naive, given the volatility we see from Tesla, there have been so many
ups and downs and opportunities to really succeed.
I mean I always look at Tesla as under valued, so ever selling seems like I am selling the
stock for too cheap.
But the market doesn't see it that way, and at the end of the day it dictates the price.
But I will be selling.
I mean no one even went broke taking some profits.
I won't sell a lot though, for example if we are up to around 350-400 I will sell off
a few, enough to probably cover perhaps my entire initial LEAPS investment, so I am just
playing with house money.
It may only be about 20 to 25% of my LEAPS.
Then if it keeps running, I still have a decent amount, and if it drops, well rinse and repeat.
OBJECTIVE But it can be hard to hold them on for long
enough for the real run, and not take profits.
Of course I recently increased my LEAPS holding by 3, due to the split, so it certainly gives
me more options.
But I hope to hold them long enough until Tesla's stock price does hit around the $1000
mark, and then I plan on exercising as many as I can afford, likely funded by selling
the options I can't afford to exercise.
And thus eventually increasing my Tesla position by about 30%.
Then if Tesla sees big drops again, then I will give it another shot.
RISKS Remember though, anything can crop up even
including the likes of wars, pandemics, inflation, or whatever.
If the stock doesn't rise enough within 2 years then I likely lose.
Unlike shares, where you have forever for them to rise, and no one can take them off
you if they dont.
Hence why I don't get too greedy.
And this is also the reason I buy the longest expiry dates possible.
It reduces risk further.
Of course due to inflation, once the economy corrects itself, the price of everything will
likely be higher, yet I still locked in these low stock price of today, so LEAPS could also
be viewed as somewhat of a hedge against inflation as well.
ASK Although I wont tell you when to buy or sell,
you can still ask me questions on Patreon about LEAPS or investing in Tesla in general.
I'm happy to help, and love talking about it anyway.