Indeed. I am thinking of taking some profit now. I am only invested via the Scottish Mortgage Trust but they are 15% Tesla.
I’ve been reading this thread with interest as my investments and pension too are now higher than they were in January.
I think it’s strange than we’ve had one of the worst economic shocks ever seen caused by efforts to stem the pandemic and yet the stock markets are behaving as if nothing has happened. Obviously stock markets don’t reflect just the here and now but are also trying to predict the near future too when with the vaccine rollout we may start to return to some kind of normality but there are parts of the economy that are predicted to take years to recover such as the airline industry.
Does anyone else worry that current stock market levels have become detached from reality and are at least in part being distorted by the massive stimulus packages and Quantitative Easing being rolled out by Governments around the world?
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Well there are two schools of thought…
The long known ‘Buffett’ type approach of being scared when everyone else is positive and being enthusiastic when everyone else is jumpy.
In the shorter term, from a UK perspective at least, we’ve had some tricky years recently, with three big issues directing investment performance which have become known as the A B C, America, Brexit and Covid. As the U.S. election has delivered a winner with expectations of less erratic behaviour in international matters, Brexit will be done one way or another on 1st January (though the falling pound up to recent weeks has softened the blow somewhat for most globally diversified UK investors) and Covid is expected to become less disruptive through 2021 then, as you note, markets are predicting better times ahead. Yes some industries have been well and truly stuffed but bits of them are adapting already and will recover, though as is the nature of things there are winners too.
I feel you’re right to still have some feeling of uneasiness after such a stellar year for many investors but if you’re an investor seeking profit right now, in fact any time over last 5-10 years, where else do you go? Interest rates are nailed to the floor so most fixed income sectors are tricky, cash loses you money and commercial property has a chasm in valuations and performance right now between say big sheds and office/retail sites. I guess this is why alternates from the big four, commodities and bitcoin say, are benefitting from inflows but in reality for ‘normal’ investors, they feel equities is where it’s at and demand remains high. Though there are many more punts these days on options and the like, whether seat of the pants stuff or sophisticated algorithms taking the lead.
The fact is that there are so many more, software driven, trades these days that short term volatility is waaay much higher than it ever used to be. The flip side though is that this works both ways of course and my own personal belief is that this is/has been driving a lot of growth over the last decade at least.
Personally I’m leaning to looking back from 2024 say, and finding that we’ll have had a pretty decent run since the start of the decade (human nature is what it is and history has a habit of repeating itself, just look at any post global crisis results in the past) but frankly I would be equally unsurprised if things tank when ‘D’ shows up and Dinosaurs start roaming The Earth!
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@Dozey
That’s done well. Personally, if I think of selling or buying, I ask myself why? If it’s because I think it can’t go higher or lower, I ignore myself. Remove emotion, there has to be a reason and with Tesla, I can’t see any reason to sell. Yes it can tank from Monday, but then it can rise.
@ajm
I worry a little bit about the stock market levels, but what do you do? Sit out and watch them rise? My two pensions are up 42% and 39% since January 1st (not including contributions) and my ISA is up 87%. They can take a hit and I wouldn’t cry, but I’d obviously not be happy. If I was out of the market or in poor performing funds, I’d be very unhappy. Stay invested and take the highs and lows
My gut feeling is 2021 will be a flat year, but there again, what do I know?
A direct quote from Terry Smith (of Fundsmith):-
“When it comes to so-called market timing there are only two sorts of people: those who can’t do it, and those who know they can’t do it“, [he told the Financial Times].
Also, anyone who invests in a FTSE 100 tracker had better check out the awful performance over the last 20 years, e.g. on Yahoo Finance, vs. the S&P500 (main US index).
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With Tesla I can’t see any reason to buy anymore. The reason to sell is that fairly soon people will wake up and smell the coffee.
Hopefully Baillie Gifford will be unloading a fair amount of their Tesla position to the tracker funds so that when the crunch comes they will not be so exposed.
tbh I’ve never understood the craze with either the brand or the vehicles. I’ve been expecting the brand/stock to plummet for a year or more. tbh if you want an EV there are better options, IMHO 
The only reason to sell Tesla at the moment is its valuation. If you know deeply about investing, you’ll understand it’s not just about valuation. Plenty of research about Tesla as a company and its list of avenues and why people like to invest in it. It’s not a car company.
Baillie Gifford has already reduced its position in Tesla. Rules forced it to in Aug/Sep just gone.
If it does go down, it will go down quite a lot, as the average investor will panic sell. When you’ve made 5 x your money in 7 months, it can do what it wants. I won’t cry.
Just checked Morningstar and possibly the best performing Investment Trust, Scottish Mortgage, has 14% of its portfolio invested in Tesla, followed by AliBaba and Tencent, both Chinese companies. Scottish Mirtgage has done very well this year along with Allianz Technology and Pacific Holdings all very susceptible to high P/E holdings.
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SMT have now sold 20% of their holding in Tesla, down to 11% of the portfolio. Very sensible in my view.
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So, at the start, I’d been checking the period end Jan '20 to the present and things were looking good. If I checked beginning Dec '19 to now then, up until today, it was showing nearly 9K down NET; so there was a dive in Dec’10-Jan’20. I check today and, finally, I am in profit (only £287) compared to the start of Dec’19!
@anon4216120 All my funds dropped 4-5% in the first 2 weeks of Dec’19, but then were about 9% up as at Jan 30th '19. Sounds like yours didn’t recover Dec’19-Jan’20. Good funds in the right world sectors recover faster and by more.
Here’s my ISA from 30/12/19 - 30/12/20:
It would be nice to feel this thread is helpful to some. There’s good advice in some posts above. If anyone’s investments are negative, flat or just barely in profit this year, something is wrong.
Are you sure about that? I have a Mercedes hybrid and it is clear to me that they don’t understand either battery technology or software to the extent that Tesla do. Perhaps it’s just Mercedes that are software-incompetent but it seems to me there is an analogy with “built for cloud” software like Workday versus software that was on premise and the software company made a cloud version to catch up like Oracle did. The modified for cloud stuff is inferior and I think the internal combustion heritage companies have a lot of catching up to do.
Why?
What would he have done 5 yrs earlier?
Switched-out of some of the funds I was in (one I was holding on to had become a ‘dog’*) and sharply reduced management costs.
- a case of tomorrow would be better but that never came. Not helped by the fact that post c.2010, the market became driven by yield and the focus on strong underlying cashflows of corporates.
One learning was that direct investment via retail channels (even with trackers) can be better accessed via IFAs and use of platforms.
I have a chunk of BT pension that I cannot defer beyond 60 - in 3 and a half years time.
And a defined chunk in the USS universities pension, plus more going into the USS until I retire (normal age 67, iirc).
So what the heck do I do with that?
The BT income becomes a tax issue when that begins.
Also my wife is likely to live about 3 decades longer than me so would like a decent income when I’ve snuffed it!
Looking at this thread is the first time I ever thought of taking out my defined benefits pensions and losing that security and getting an IFA to invest it for me, so that when I’m gone the lump sum paying my retirement income remains for my wife and kids.
All I can suggest is to see an IFA and see what options present, which will be informed by your aggregate benefits, wish to provide for others and general attitude to risk…which is where your last para is going?
But, some decisions are not obvious and there are no one-way bets.
I know some of the TF values from DB schemes are enormous but there are potential material tax considerations borne from LTA limits, the growth of this having been crushed by the current environment and continual QE.
Silly Q perhaps - what’s to stop an IFA investing your money and then saying, oh sorry, I lost it?
That actually happened to the father of a friend of mine.
So you have become a day trader.
Wonderful high when you buy a Tesla or Apple.
Not so good when you buy the opposite.
How can an amateur beat the pros, though?
You don’t give ifa your money, you ask for advice where/how to invest it and then take (or not) his advice. Always keep complete control, that’s the important thing. Then you will understand what’s it’s doing and act accordingly.
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