I've been using a margin loan to enable me to diversify into other high growth stocks and even pick up a few more Tesla shares when the price was low earlier this year. I love the liquidity, but at some point in time, I have to sell something to pay down the margin. As Tesla is enormously concentrated in my portfolio, Tesla shares become the main assets to be sold to pay back the loan. The catch is I want to make payments at an opportune time in terms of share price.
So here's the approach that I've settled on. I think of it as a Tesla wall. I set a certain limit $X (several million) for my Tesla position. I set a sell limit order to sell a certain number of shares when the price is high enough that after the sell, I still have a position of $X. Thus, I'm allowing my position to advance a few points beyond the wall, but then I sell it back to the wall.
I can change the wall at any point in time and I have only shifted it up. My latest sell was at $838.71. But now my main balance is finally low enough that I've increased the wall such that I won't sell any more until Tesla is above $1000.
I used to be solidly buy-and-hold, but if you hold Tesla long enough, eventually it will make sense to trim a little. One thing I like about this approach is that it does give me latitude to repurchase shares whenever we might see a meaningful pull back. Just like I trim when my position is over $X, I can also buy back if my position falls back below, say 90%×$X. The wall works both ways. I still love backing the Cybertruck up to load up on underpriced shares.
In retirement, we plan to live on a small percentage of our Tesla position. So we'll use the wall and margin account to maintain a growing Tesla position. The amount that we need to live on is a much smaller percentage than I expect Tesla to grow over the next 10 years. So the wall can keep growing!
The important thing is that wall gives me a more disciplined approach growing the Tesla position over time while being able to enjoy the income that such a large position makes possible. It's okay to have your cake and eat it too!
I think a lot of us struggle with the decision to sell shares in a company whose mission is so important and which has made many of us wealthy beyond our wildest dreams-at least on paper. But at some point FOMO should give way to a much more inevitable and inexorable reality, YOLO. So I implore all of my TMC brothers and sisters to take a step back and enjoy some of the rewards of both investing in and holding through the terrifying dips and dizzying heights. Provide for your loved ones, contribute to your favorite charity and have some fun!
I did sell some shares to buy my P3D back in 2018. If I stop to think about what that beauty cost in stark terms of TSLA valuation, I might kick myself. But the sheer joy that ride gave me every time I settled into the driver’s seat is irreplaceable. And the pleasure I derived when letting others drive it and experience the giddy delight of a launch in near silence or the killer sound system, knowing I’d often converted a cynic or someone simply under the spell of the MSM’s anti-Tesla spin, was simply priceless. And yes, that purchase confirmed my thesis and commitment to Tesla and further TSLA accumulation, but really, I didn’t need much convincing by late 2018 when I bought it.
Now, I’ve since left California and moved to Phuket, Thailand, which forced me to sell “Free Willy” due to the crazy import duties here. So I desperately await the arrival of the MIC Model Y to these shores! Fortunately, I sold the car to one of my best friends and his family and they in turn get endless joy from the car. The two preteen boys are complete Tesla/TSLA devotees, driven in large part by ambushing mom with fart mode and playing games while taking turns sitting in the driver’s seat in the garage. And mom and dad opened small TSLA accounts for them that they follow religiously. They ask mom and dad for more shares for birthdays and Christmas and Hanukkah rather than toys! So I continue to get pleasure from that expenditure of shares even though I haven’t seen the car in over two years!
But that experience was only the appetizer. I sold many more shares last year after last year’s explosive post-split rise in TSLA to fund my dream home. And unlike Steven the Irishman from “Braveheart” it’s not my island. Nor is it a fortified island redoubt secretly being built somewhere at an undisclosed location by Krugerrand. But, it is on a hill on an island.
More importantly, every morning I wake up to an awe-inspiring sea view and end the day sitting in a sala overlooking my infinity-edged pool taking in the often jaw-dropping and sublime sunsets of the Andaman Sea on the west coast of Phuket. Now I did partially fund this with the 1.6% margin loan I secured with Schwab backed by my largely TSLA-driven portfolio rather than cash out an even higher number of shares. Instead I sold some BTC to pay down a substantial percentage of that loan. And yes, I’ve missed a little of BTC’s current rise, but at the same time the TSLA shares I didn’t sell have done very well over the past month and will continue to grow far into the future. I’m not sure I can say the same for crypto and I certainly don’t see as clear a path for it as I do Tesla.
I share this story not to make anyone jealous, but rather to drive home the point that not one extra minute is promised or guaranteed. So, do not let paralysis caused by fear of selling some shares prevent you from enjoying the precious moments that the sale of some shares can provide. And do not over analyze said sale and start calculating what your net worth would’ve been if you’d just held on for another day or month or year!
This IS an advice!
And again, I cannot say thanks enough to the founders of this forum, the tireless moderators and the many extraordinary contributors who have shared their amazing knowledge to the benefit of all who would listen and encouraged the rest of us to do our own due diligence. We are remarkably lucky to have seen the future early and found a forum to continually test and evaluate our thesis for what can and should be a bright future for all, both individually and collectively as a species.
Profound gratitude.
