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Or you can think for yourself and lose money too. I thought I was very smart and did a DCF analysis of TSLA for myself. Looked into the assumptions, and convi

Or you can think for yourself and lose money too. I thought I was very smart and did a DCF analysis of TSLA for myself. Looked into the assumptions, and convinced myself that even in the most bullish case, the revenues and profits generated by TSLA would not justify a valuation above 500B dollars. I have now lost about the price of a TSLA Model S on paper, and still have not closed out my TSLA short. I should have just bought a TSLA instead of shorting TSLA. The saddest part is, even if TSLA corrects I'll only make a few tens of thousands of dollars ... and I have in jeopardy hundreds of thousands. Stupidest move of my entire life. If my crypto portfolio had not 4Xed this year I would be in real trouble with my wife. Sometimes I feel like its the same trend in the market blessing me and cursing me at the same time.

ghaff 6y ago
The market can stay irrational longer than you can stay solvent and all that. Read/watch The Big Short if you haven't. (Most/all? of the people in the movie made out but almost didn't.)
caffeine 6y ago
I think your mistake wasn't doing the DCF and putting on the position, that is a reasonable move (short interest in TSLA has been huge, a lot of funds thought the same as you ). Your mistake was bad position management once you had it on the wrong way. I don't know what % of your stack you had on that bet, but if it's money your wife would get mad about it's too much. Definitely don't want more than 2-5% of your chips on a flyer like that. I'd say keep trying to make smart bets, but cut the size down and do more of them, and take them off if they are bleeding.
- TheMagicHorsey 6y ago
  It's less than 2% of my stack. But my wife and I live extremely frugally, and invest very conservatively in general. She is very loss averse.
cableshaft 6y ago
One of the harshest lessons people who aren't already in the financial industry learned this past year is the financial markets don't have to be tied to reality, like, at all. Companies don't have to be providing the value that justifies their stock price (TSLA, even Elon thinks it got too high), companies in dying markets can become wildly profitable investments because a bunch of people collectively decided to throw money at it (GME, AMC, BB, BBY, etc), the stock market as a whole can soar while the lower and middle class are facing the worse crisis they've ever faced, etc. Only thing that is making sense (to me, at least), is crypto's recovery. It's 2+ year bear run didn't make any sense to me. Glad to see it roaring back.

ghaff 6y ago

The market can stay irrational longer than you can stay solvent and all that. Read/watch The Big Short if you haven't. (Most/all? of the people in the movie made out but almost didn't.)

caffeine 6y ago

I think your mistake wasn't doing the DCF and putting on the position, that is a reasonable move (short interest in TSLA has been huge, a lot of funds thought the same as you ). Your mistake was bad position management once you had it on the wrong way. I don't know what % of your stack you had on that bet, but if it's money your wife would get mad about it's too much. Definitely don't want more than 2-5% of your chips on a flyer like that. I'd say keep trying to make smart bets, but cut the size down and do more of them, and take them off if they are bleeding.

TheMagicHorsey 6y ago
It's less than 2% of my stack. But my wife and I live extremely frugally, and invest very conservatively in general. She is very loss averse.

cableshaft 6y ago

One of the harshest lessons people who aren't already in the financial industry learned this past year is the financial markets don't have to be tied to reality, like, at all. Companies don't have to be providing the value that justifies their stock price (TSLA, even Elon thinks it got too high), companies in dying markets can become wildly profitable investments because a bunch of people collectively decided to throw money at it (GME, AMC, BB, BBY, etc), the stock market as a whole can soar while the lower and middle class are facing the worse crisis they've ever faced, etc. Only thing that is making sense (to me, at least), is crypto's recovery. It's 2+ year bear run didn't make any sense to me. Glad to see it roaring back.