Why I Don’t Regret Selling Tesla

What's up guys, it's RAM here. So I'll admit, over the last three weeks, it's been my guilty pleasure to wake up every morning and then read the news on what's going on with Tesla. This has been a little bit like the Jerry Springer of stocks, with wild allegations being thrown around, Elon Musk making mom jokes, short sellers losing a fortune, and people making more profits than they know what to do with.

Here I am, in the midst of all of this as a Tesla Model 3 owner and Tesla shareholder, just sitting back, eating popcorn, watching how all of this plays out. But guess what? This time was different. When I woke up this morning and opened my phone to check the price of Tesla stock, I was surprised that once again, it's climbing back up to its all-time high price of nine hundred and sixty-eight dollars and ninety-nine cents.

Now here's the thing: normally, if something like this were to happen, I would be curious what's going on. I would read some of the news and then go about my day, just like any other. However, given Tesla's unpredictable rollercoaster of a wild ride and the fact that I very publicly announced why I sold off half my Tesla stock when it reached nine hundred and twelve dollars a share, I think it's worth it to address what's going on: why Tesla is continuing to surge up in price and, in the topic of this video, why I don't regret selling my Tesla stock at nine hundred and twelve dollars a share, even though today it's gone all the way up to nine hundred and forty-four dollars.

But first, here's a quick background. For me, it all began in early 2019 when I took the liberty of the Tesla Model 3. But once I drove the car, I just became such a fan of Tesla that I decided to go and throw some extra money in Tesla stock, which at the time was two hundred and sixty dollars a share, in hopes that maybe one day the price would go up and that would help pay for the sales tax of me buying the car.

I'm not usually the type of person to go and invest in individual stocks like this, but I just figured I'm a fan of the company, I support what they do, and I will just invest an amount that I'm comfortable with losing should anything happen. Sure enough, though, as soon as I bought the stock for two hundred and sixty dollars a share, the company just gets hammered with bad news after bad news, and the price just slowly sinks down to the rock-bottom price of one hundred and seventy-six dollars and ninety-nine cents.

Even though I was disappointed at losing one-third of my investment on paper, I still believed in the company and figured I would just wave it through to see what happens. Over time, though, the company actually ends up doing better, and Model 3 sales look promising. Elon Musk is cutting costs, and in what seems like a home run for Tesla, the stock price just keeps going up, up, and up.

Then that brings us to this year. On January 2nd, the stock was trading at four hundred and thirty dollars a share. Less than a week later, it was four hundred and ninety-two dollars. Less than a week later after that, it was five hundred and thirty-seven dollars. And a week after that, five hundred and seventy-two dollars. Then within just four days, the stock price jumped from five hundred and eighty dollars all the way up to its high of nine hundred and sixty-eight dollars and ninety-nine cents.

At the time, there was really no definitive answer as to why Tesla stock was going up so much in price and why it was just surging. Of course, there were theories that the stock went up when Tesla announced its recent quarter of profitability, and that momentum caused short sellers to cover their positions, pay up their losses, and push further demand for Tesla stock.

We've also seen other analysts raise their price expectations on Tesla all the way up to eight hundred and eight dollars, which at the time was high, and another analyst raised their price expectation to a mind-boggling seven thousand dollars a share. Of course, then you just have the excitement of making money because people go and see the price going up; they don't want to miss out, so they jump in, causing the price to go up even higher, which causes more people to jump in, which causes the price to go up higher.

Then it just becomes self-fulfilling at that point that the stock goes up in price because people believe it to just go up in price. Anyway, once the price of the stock jumped past nine hundred dollars in a matter of a day, I felt it was approaching a level that was not sustainable and driven more so by the euphoria of making money rather than the actual fundamentals of the company.

Even though I believe in Tesla long term, I had also tripled my money and felt like it would be a good idea to lock in some profit. So I sold off 50% of my Tesla holdings at nine hundred and twelve dollars a share, and on that, I made a three hundred and fifty percent profit within less than a year. Well, completely unbeknownst to me, when I sold my Tesla stock and then posted the video, that was the very same day that Tesla hit its peak; and the next day, the price just crumbled.

Within 24 hours, the price went from its peak at nine hundred and sixty-eight dollars all the way down to seven hundred and eighteen dollars a share, and it looked like on the surface that I had made the right decision to sell. Now, I felt uncomfortable and found it a little funny that people were praising me for timing the stock perfectly and selling at the right time because, honestly, that was pure luck. The way I saw it was that there was a 50/50 chance of me being right, and it was just as likely to go past $1,000 as it was to go down to 700. I happened to be on the right side of the coin, or so I thought.

Now here we are, and the stock price just closed above where I sold it at, and inevitably there's gonna be the question about whether or not I made the right decision to go and sell or if I should have just held this one out a little bit longer because it continues going up. But first, why is Tesla stock all of a sudden seeing so much pent-up demand, and what could be continuing to push the price of the stock even higher and higher?

Well, I suppose on the surface, Tesla has quite a few things going for it. First, several analysts have boosted their expectations for the stock, causing more people to pile in, causing the price to go up. Like Piper Sandler just announced a price target of nine hundred and twenty-eight dollars, and Morgan Stanley raised its price target to twelve hundred dollars, which was at least partially responsible for some of the rally that got Tesla to where it is today. Some of that also shifted focus towards Tesla's ability to manufacture battery and solar products, which even though that only made up six percent of sales in 2019, it has the potential to expand much further, therefore driving even more profits for Tesla.

Or on another positive note, the Tesla Cybertruck pre-orders have unofficially exceeded 500,000. Even though this is not confirmed by Tesla, it does make sense to me considering that all people need to do to pre-order the car is a refundable $100 deposit. But we do it to say I am doubtful that all five hundred thousand people are going to actually go and purchase the car if and when it ever comes to fruition.

However, not all news was necessarily good, and in a way, Tesla stockholders were given some mixed signals. Like in late January, before the sudden price increase, Elon Musk made it clear that Tesla did not plan to raise any more capital, but two weeks later, as the stock price surged higher than anyone thought was imaginable, he announced that Tesla would be raising more capital by introducing another two billion worth of stock in the company.

This arguably makes some people think it's this Tesla's way of taking advantage of a high stock price that's otherwise just too good not to cash in on. After all, I was in the same boat. I had no intention of ever selling my Tesla stock until it goes up a hundred percent in a week, and then all of a sudden it becomes very tempting to want to lock in some of these profits. Honestly, no one could fault Tesla for doing this because it just makes sense to take advantage of such a strong stock price.

It's also a really good way to raise cheap capital and then further reinvest that back into the company. So from Elon Musk's perspective, this is really smart. But it does make you think a little bit that if Tesla is doing this, do they maybe think their stock is overvalued?

I've also seen quite a few people comparing Tesla stock to that of Bitcoin, and sure, when you put the two charts side-by-side to one another, I see what they're trying to get at. Without going into a whole discussion about how cryptocurrency is entirely different than Tesla, I will just go and say cryptocurrency is entirely different than Tesla. Even though I don't doubt that speculation plays a big component in a big role in the price levels of Tesla and Bitcoin, Bitcoin is still largely driven by speculation, and Tesla is a company that produces a tangible good and has a promise of future profitability.

As far as my thoughts on this, even with the price of Tesla stock surpassing the amount that I sold it at, I still don't regret selling. Sure, in hindsight, if I had a way to predict the future, absolutely, obviously I would have waited. If we knew what was going to be happening, selling it for anything lower than that would have just been stupid. But that brings us to the entire premise of investing in a speculative stock like this: no one can predict what's going to happen, and we all need to make the most calculated decision that we can at the time with the information we have available to us.

Sometimes you're gonna get it right, and sometimes you're gonna get it wrong, and it's absolutely impossible to accurately predict what's going to happen in the future. Perhaps I post this video, and then tomorrow Tesla stock surges past $1,000, and then I missed out on some profit, or maybe the stock price just starts falling and falling and falling, and then I look like a genius. But from the way I see it, it's much less important about being right and finding the perfect opportunities to buy and sell, and it's much more important about taking the calculated risks that you feel comfortable with—not being overcome with emotions, not trying to chase profits or avoid losses.

It's just about being smart with your money, being okay with locking in profits, or holding out a little bit longer, and just being okay with that decision. For me, that's why I decided to sell 50% of my holdings and then just hold on to the other half in the short term.

After that, it looked like I had made the right choice, but now today it seems a little bit more unclear about did I make the right decision. But with something like this, you could almost never look into such a narrow window of time to determine whether or not you were right or wrong. All I'm trying to get at is this: long-term, slow and steady wins the race. People shouldn't say it was smart for selling at nine hundred and twelve dollars because it could have just as easily continued going higher. People also shouldn't say it was dumb for selling at nine hundred and twelve dollars because it could have easily fallen lower.

Having a short-term window is too narrow to come to any conclusion about a stock unless you're day trading it, and the only way to see how this plays out is to wait a matter of months or even years to see what happens. To me, I still believe that the current valuation is built a lot right now in speculation, and even though Tesla definitely has a lot going for it, I don't believe a lot has changed fundamentally to justify it doubling in price so quickly.

But then again, I could be wrong. I'm still holding on to half just as a hedge in case it hits seven thousand dollars a share, and if I see any big pullback or pessimism towards Tesla, I might consider jumping back in. But overall, I have no regrets, and being able to lock in such strong profits relatively quickly feels good regardless of where it is right now. Plus, we all have this Starlink IPO to look forward to. For anyone who wants to take a cue from Reddit Wall Street Bets and make some pretty big moves, I'm kidding on that.

But for real, whenever this does happen, I have a feeling we have quite an exciting IPO to be able to talk about and see what happens. Now for those who are not aware, Starlink is one of Elon Musk's latest ventures, and it's a satellite company manufactured by SpaceX, with the promise of launching thousands of satellites into orbit in order to give everyone a low-cost, high-performance internet anywhere in the world.

Obviously, if this does well, it could be massive for the company. So Starlink signaling an intention to IPO at some point in the future could be very interesting to follow, which as of right now still could be a few years away, so you have time to save up.

So anyway, there are my thoughts on Tesla, the basics and fundamentals of investing long-term, the importance of being patient, and knowing your own risk tolerance as to when you need to lock in profits without getting carried away with emotion. Like I said in the last video about this, we'll be able to look back at this video and see how all of this plays out. Maybe it's gonna be much higher, maybe much lower. No one can predict where this is going to end up, not even all of these analysts.

The one thing is, absolutely for sure, 100% I'm going to ask you to smash the like button for the YouTube algorithm if you have not done that already. So with that said, you guys, thank you so much for watching. I really appreciate it. As always, make sure to subscribe, hit the notification bell, and also feel free to add me on Instagram. I post pretty much daily, so if you want to add me on there, feel free to add me there as well.

On my second channel, The Graham Stephan Show, I post there every single day I'm not posting here. So if you want to see a brand new video from me every single day, make sure to add yourself to that. And lastly, if you guys want free stocks, use the link down below in the description. Webull is going to be giving you 2 free stocks when you deposit $100 in the platform, and one of those stocks could be worth up to $1,400.

So if you want a chance to get two free stocks, with one of them potentially worth up to a lot of money, use that link down below in the description. Thank you guys so much for watching, and until next time!