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Trading in Tesla shares - past two months
27 Sep 2020 (116 views)

My recent trades in Tesla have been profitable. I have invested long in Tesla when it was around $350 and sold the shares around $500.

I attribute this success to both luck and a knowledge of the intrinsic value of the shares. 

I followed many fans and pro-Tesla analysts about the positive aspects of Tesla and how it can revolutionalize the car and energy industries, but I also have a sense of what is "too high".

I probably made a profit of $50,000 (USD) in my trades over the past few months, but it was not always a happy journey. 

I had taken a short position in Tesla two months ago and saw, at the worst point, a paper loss of $60,000 when Tesla traded to a peak of $520. This was the pre-market price, so it was not captured as the highest price.

Several people, including chart experts, advised me to close my position, and cut my loss. I held on. Luck was on my side, and the Tesla stock price reversed. I closed the position with a loss of $10,000.

My current position is 300 shares in Tesla at an average price of $360. The current price is $403, so I am showing a good paper profit. 

I decided to buy 200 shares at $365, when several other people were urging me to hold back until it reached $300. I felt that it was not going to that level, so I decided to buy at a higher price. It turned out to be correct.

What are the lessons that I apply in my trading?

* It is better to be long in Tesla at a "reasonable price", which currently is $350. 
* It is all right to buy at a slightly higher price, if the price is not likely to reach the target of $350.
* Have enough funds to hold a position (whether long or short) so that you are not forced to liquidate your position.
* Be ready to sell at an overvalued price, which currently is $500.
* My current trading range for Tesla is $350 to $500, but I am willing to adjust it based on new financial figures.

At a price of $350, the price earning ratio for Tesla is still at an insanely high level of more than 900. However, I am not using the current EPS. I project the EPS in 2025 based my projection of the financial figures for Tesla in 4 years time.

I project the EPS in 2025 could be $20, so a price of $500 shows a PE ratio of 25X which I consider to be acceptable.

I must close off with a statement on luck. I have been lucky so far. But I am aware that my luck my turn, and all the profits that I made on Tesla might be taken away. It has happened like that in the past.

So, I hope that my luck holds. But I cannot just rely on luck. I need to have a good feel about the acceptable price range.

Tan Kin Lian
 


Trading in Tesla shares - past two months
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My recent trades in Tesla have been profitable. I have invested long in Tesla when it was around $350 and sold the shares around $500.

I attribute this success to both luck and a knowledge of the intrinsic value of the shares. 

I followed many fans and pro-Tesla analysts about the positive aspects of Tesla and how it can revolutionalize the car and energy industries, but I also have a sense of what is "too high".

I probably made a profit of $50,000 (USD) in my trades over the past few months, but it was not always a happy journey. 

I had taken a short position in Tesla two months ago and saw, at the worst point, a paper loss of $60,000 when Tesla traded to a peak of $520. This was the pre-market price, so it was not captured as the highest price.

Several people, including chart experts, advised me to close my position, and cut my loss. I held on. Luck was on my side, and the Tesla stock price reversed. I closed the position with a loss of $10,000.

My current position is 300 shares in Tesla at an average price of $360. The current price is $403, so I am showing a good paper profit. 

I decided to buy 200 shares at $365, when several other people were urging me to hold back until it reached $300. I felt that it was not going to that level, so I decided to buy at a higher price. It turned out to be correct.

What are the lessons that I apply in my trading?

* It is better to be long in Tesla at a "reasonable price", which currently is $350. 
* It is all right to buy at a slightly higher price, if the price is not likely to reach the target of $350.
* Have enough funds to hold a position (whether long or short) so that you are not forced to liquidate your position.
* Be ready to sell at an overvalued price, which currently is $500.
* My current trading range for Tesla is $350 to $500, but I am willing to adjust it based on new financial figures.

At a price of $350, the price earning ratio for Tesla is still at an insanely high level of more than 900. However, I am not using the current EPS. I project the EPS in 2025 based my projection of the financial figures for Tesla in 4 years time.

I project the EPS in 2025 could be $20, so a price of $500 shows a PE ratio of 25X which I consider to be acceptable.

I must close off with a statement on luck. I have been lucky so far. But I am aware that my luck my turn, and all the profits that I made on Tesla might be taken away. It has happened like that in the past.

So, I hope that my luck holds. But I cannot just rely on luck. I need to have a good feel about the acceptable price range.

Tan Kin Lian