Tesla former VP of engineering liquidated virtually entire stake in the company
fortune.com
fortune.com
> “It’s going to go up huge. Now is the bottom,” he said …
> “It’s not so exciting to be up 1% in a year when the market is so strong,” he said. “I do look around all the time and see everyone getting rich—and I’m not poor, but I haven’t made a lot of progress over the last three years, so therefore I think it’s like a rubber band—I’m going to catch up again.”
Imagine giving your money to someone writing this line of thinking
This makes sense. If somebody previously did something right that means they are presently doing something right. For this reason the stock tanking is good in the same way that the stock going up was also good
Investment is a risk after all. Besides, there’s also something off-putting about snarky HN comments trying to judge someone’s whole skill set and character by only one angle.
I almost wanted to say “If he’s so dumb and you’re so smart, why don’t you go raise billions and profit like him,” but I won’t because I recognize that things are more complex.
Because intelligence is not the driver of success here
> one angle
You can be bullish on Tesla. That’s perfectly fine.
But saying “aw man everyone else is getting richer than me so it’ll probably be my turn next” is humorously bad
https://youtu.be/lGI7kAdWafU?t=376
I pity his investors, but they are all probably pension funds.
There is also something super interesting on the statement, apparently made by the Tesla driving team to him, if his quote is correct, on how the first 11 versions had "every possible situation hardcoded" but now is different....
"Track record" often looks a lot better because a fund manager got lucky early on, and number goes up. But they were not managing a big fund then. So then they get lots of investors and at the same time regression to the mean happens.
Unlike most tech companies, making automobiles is a cyclical, labor, and capital intensive business that is unlikely to produce consistent profits over the long term, which puts the value of it’s earnings far lower than other tech companies. Their is a substantial risk of zero profits or large losses during a downturn. If it had a single digit P/E ratio like virtually every other automaker, the stock price would be substantially lower.
It’s totally reasonable to fully liquidate as it’s not possible to time the market and determine when the peak is and it’s clearly over priced.
However, that doesn’t mean that Tesla will fail or that it’s a bad company. It’s just people have bid it’s stock price up to a crazy level.
Only knowing one side of their trade doesn't tell us anything. A comment like "It's up 25% of his sale price in the few days after he sold" is nonsense unless we know he didn't invest in something else up 25%!
Even in our own investing we should be comparing A versus B - not looking at A alone. And generally most talk about stocks has this problem.
Like I'm fairly sure this person didn't log into a web portal looked at his stocks and then pressed the "sell" button and an hour later he has the money in his bank account. Or is it that easy for people like him?
Ouch.