Please consider Tesla Is Last Stronghold for Investors Buying the Dip in Tech Stocks
Tesla shares dropped 65% in 2022, their worst year on record. Facebook parent Meta Platforms Inc. sank 64%, and Netflix Inc. declined 51%. But tech and other growth stocks have rebounded to start the new year, buoyed by hopes that the Fed will slow its pace of rate increases. The S&P 500 has edged up 3.2% in January.
Abhas Gupta, a 41-year-old entrepreneur in Irvine, Calif., said he moved his whole equity portfolio into Tesla shares in 2018, enamored by its electric cars and promise of disruptive innovation. Last year, he lost his entire seven-figure retirement fund after taking out margin loans and using options to turbocharge his bets on Tesla, he said. Still, he said he is far from calling it quits.
“I basically burned a lifetime’s worth of wealth, but none of this has shaken my confidence in the company. There is just no company even remotely close to Tesla on innovation,” Mr. Gupta said.
“Why would I invest in a basket of dinosaurs?” he said of the S&P 500.
Mr. Gupta said he is aggressively buying long-dated call options on Tesla. Call options give traders the right, though not the obligation, to buy shares at a stated price by a certain date, while put options grant the right to sell.
Overall, options volume in Tesla has grown in the past few months, according to Cboe Global Markets. One of the largest options bets on Tesla is that shares will reach $825 in the next three years; the stock closed at $133.42 per share Friday.
2018 to 2021 Tesla Top
- Gupta put his entire portfolio into Tesla in 2018.
- The range for the year was $11.80 to $25.83.
- Tesla peaked at $414.50
- From $11.80 to the top, Gupta was up 3,413 percent
- From $25.83 to the top, Gupta was up 1,505 percent
He lost every penny, buying the dip on margin. His largest position now is a bet that Tesla will reach $825 in three years.
If Tesla soars to $800, that won’t be good enough. He will lose every penny. Instead. if he bought shares outright at $110, and shares get to $800, he would make 627%.
Apparently, that’s just not good enough.
My guess is that he loses it all on those options.
This post originated at MishTalk.Com.
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Mish
That’s what people here told me a year ago as well. I would have missed a lot of gains as a result. And as I have recently stated, I am no longer adding to my core position in oil and gas stocks, and I am now banking the substantial dividends that I am currently receiving. And I am looking for opportunities in renewables and tech.But I am still encouraging those with little exposure in oil and gas, that it is still a good time to invest. I expect 20+% returns going forward, even if oil prices stay where they are. And in the long run, I expect higher oil prices and even higher returns. But the enormous gains of the last two years will be difficult to repeat.
He is one of those who play the market for excitement it gives him.
Sounds like something you’d read about on the r/wallstreetbets subreddit. That space is known for people embellishing their stories of extreme loss to gain karma (essentially upvotes). Doesn’t sound like a legitimate story to me. Even if it were legitimate, it’s mostly an outlier. There’s far more people buying the dip a few shares at a time, others selling puts and getting assigned.
enamored by its electric cars and promise of disruptive innovation. Last
year, he lost his entire seven-figure retirement fund after taking out
margin loans and using options to turbocharge his bets on Tesla, he
said.”