5:1 Tesla stock split

[ajdelange]

Escalator? Escalators go up and down. TSLA has been going sideways for months.

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[Crissa]

Escalator? Escalators go up and down. TSLA has been going sideways for months.

And a sideways stock goes up and down. You just only ride the up parts and not the down parts... It's risky, tho.

-Crissa

 

[Youaregoldone]

Fortune Telling is a psychological disorder. You either believe in Elon and his companies, or you do not. I wonder what are you hoping to do with your bankrupt Tesla Cybertruck. Why don't you sell your CT's spot in line and buy it when it's below value?

 

[Sirfun]

Thanks, can you let me know when the escalator gets to the bottom I missed the last one.

Fortune Telling is a psychological disorder. You either believe in Elon and his companies, or you do not. I wonder what are you hoping to do with your bankrupt Tesla Cybertruck. Why don't you sell your CT's spot in line and buy it when it's below value?

Here's some simple math. If you had 100 shares of Tesla that you sold at $425, because you think people are nervous and the price is going to go down to perhaps $350. Well you catch the escalator on it's way up at $360. So now your $42,500 is able to fetch you 118 shares and as the escalator goes by $425 again on that inevitable ride back up, your 118 shares are now worth $50,150.
Hmmm of course it's a difficult proposition and it does suck to sell out and then have to buy back in at a higher price, but that's life on the roller coaster of life.

 

[Sirfun]

Just leave my TP on the shelves!!! ?

 

[ajdelange]

Here's some simple math. If you had 100 shares of Tesla that you sold at $425, because you think people are nervous and the price is going to go down to perhaps $350. Well you catch the escalator on it's way up at $360. So now your $42,500 is able to fetch you 118 shares and as the escalator goes by $425 again on that inevitable ride back up, your 118 shares are now worth $50,150.

I think you made the math a little too simple by leaving out the unavoidable Step 3 below:

1)Buy 100 TSLA @ $200: Write a check for $20,000
2)Sell 100 TSLA @ $425: Receive a check for $42,500
3)Write checks to Uncle Sam and your state for ~0.4*(42,500 - 20,000) = $9,000
4)Use remaining $42,500 - 9,000 = $33,500 to buy 93.0556 shares @ $360
5)If they go back to $425 the portfolio is now worth $39,548.
Total Cash Outlay: $29,000. Rate of return: 39548/29000 = 136.4%

I never met a tax I liked so were I willing to part with $9,000 I'd put in a limit order for 25 shares @ $360 and if it goes down to that level and the order executes I would then have 125 shares. If the price "inevitably" goes back up to $425 the portfolio would then be worth 125*425 = $53,125. The total cash outlay is the same $29000 but the return is now 53125/29000 = 183.2%. Think I'll stick with Plan B.

 

[Youaregoldone]

I think you made the math a little too simple by leaving out the unavoidable Step 3 below:

1)Buy 100 TSLA @ $200: Write a check for $20,000
2)Sell 100 TSLA @ $425: Receive a check for $42,500
3)Write checks to Uncle Sam and your state for ~0.4*(42,500 - 20,000) = $9,000
4)Use remaining $42,500 - 9,000 = $33,500 to buy 93.0556 shares @ $360
5)If they go back to $425 the portfolio is now worth $39,548.
Total Cash Outlay: $29,000. Rate of return: 39548/29000 = 136.4%

I never met a tax I liked so were I willing to part with $9,000 I'd put in a limit order for 25 shares @ $360 and if it goes down to that level and the order executes I would then have 125 shares. If the price "inevitably" goes back up to $425 the portfolio would then be worth 125*425 = $53,125. The total cash outlay is the same $29000 but the return is now 53125/29000 = 183.2%. Think I'll stick with Plan B.

Looks like you will be able to afford a tri-motor, no problems...I wish I had those play numbers...even at the worst scenario.

 

[ajdelange]

The numbers are the numbers from his example - not my numbers and the actual numbers are totally irrelevant. What is important is that under the assumption of a long term rise selling and buying back is not smart relative to using the same money you would have to pay in tax to buy more shares when the price dips.

 

[Mudduck]

And a sideways stock goes up and down. You just only ride the up parts and not the down parts... It's risky, tho.

-Crissa

It's all fun, Like riding a new pony. Where's your adventure yall? Been doing the same thing since day one and expanding the herd immensely, it's fun. I only started with "play money" anyway and it's grown quite substantially. Ye haw. It always drops after a sharp peak, hop off the escalator then wait for the drop, bam, and jump back on. DSTSS

 

[Crissa]

I don't have a few thousand dollars I can lose, that's all.

-Crissa

 

[ajdelange]

It always drops after a sharp peak, hop off the escalator then wait for the drop, bam, and jump back on. DSTSS

Please see No. 53. Apparently it is not widely understood that hopping off and back on is not a good move because of taxes. The example numbers in #53 show that it is better to stay on and use what you would have to pay in taxes to buy more shares.

 

[Crissa]

Please see No. 53. Apparently it is not widely understood that hopping off and back on is not a good move because of taxes. The example numbers in #53 show that it is better to stay on and use what you would have to pay in taxes to buy more shares.

That's silly. Your taxes are determined by the difference in price between when you bought the shares and aold them. Yes, there's a slightly worse rate for shares held leas time, but it is never more than the net difference.

-Crissa.

 

[Teslaman]

Please see No. 53. Apparently it is not widely understood that hopping off and back on is not a good move because of taxes. The example numbers in #53 show that it is better to stay on and use what you would have to pay in taxes to buy more shares.

All my TSLA in IRA, so no taxes until withdrawal....

 

[ajdelange]

That makes it a little harder to decide whether the best option is to sell and buy back or just buy more shares when the price goes down. It depends on what it goes down to and how much you think it will go up. You'll probably have to run some Monte Carlos.

The big deal for those of us with IRAs is that we pay straight income rates on long term capital gains and have RMD's to worry about. I don't use the strategy I recommended in my IRA.

 

[Sirfun]

All my TSLA in IRA, so no taxes until withdrawal....

Same here.

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