Tempted by Tesla – with insight from The Wall Street Journal

Use Spotify? Access BizNews podcasts here..Use Apple Podcasts? Access BizNews podcasts here..___STEADY_PAYWALL___.I Knew Better, but I Bought Tesla Stock.A bull market can tempt a business journalist into mistaking himself for an investing genius..By Dennis Kneale of The Wall Street Journal.Dec. 20, 2021 6:15 pm ET.The long-running bull market is a wondrous and marvelous thing. In the first quarter of 2021, Fidelity had 365,000 401(k) accounts with over $1 million, double the total from the first quarter of 2020..The higher the markets rise, the more some of us believe we are investing geniuses. I fit this diagnosis. Though I spent my career covering business news and talking about stocks on cable news, I invested almost entirely in index funds and ETFs—until a few months ago..Emboldened by the growth in my retirement account and the ease of betting five-figure sums in seconds online, I started making some moves. Within weeks a cardinal lesson proved itself: Once your portfolio is set, the less you do, the better.My foray into higher risk began on Sept. 27: Alibaba at $150. The stock had hit $310 in October 2020, before a corporate crackdown in China pounded the share price. I had met Alibaba founder Jack Ma more than a decade ago when I worked for Forbes and we profiled him. I left that meeting impressed.Ten days after I bought in, news broke that investing legend Charlie Munger had almost doubled his stake in Alibaba, to more than 300,000 shares. The stock surged to $177 by Oct. 22, and I was feeling cocky—up 18% in less than a month.Yet I refused to sell and count my winnings, failing to heed the old saying that bulls make money and bears make money but pigs get slaughtered.And then the price started to slide in mid-November. By market close on Dec. 20 it had plunged 35%, to $115. Alibaba's CFO resigned, and the company cut its growth projections and reorganized its corporate structure.Yet I lack the conviction to buy more. I am down more than 20% in less than three months.When I was still buzzy from my gains, I placed a few wilder bets. First up: bitcoin. A wealth-manager pal told me everyone should have 1% of his retirement fund in crypto, and a new Wall Street-endorsed vehicle came out. So I bought it: BITO, a futures fund that invests in options on bitcoin price moves rather than betting directly on bitcoin.The investment is so volatile that my Fidelity account software required me to change my investment outlook from cautious to high-risk before I could buy it. Justifiably so: I bought BITO at $40.81, and now it's under $30.Second wild bet: Tesla. On Oct. 28 I published a column about Tesla, noting that I had failed to pull the trigger when it went below $800 and vowing to avoid buying it until after the next market crash.Five days later, my resistance crumbled. I bought Tesla stock at $1,186 a share.Then, on Saturday, Nov. 6, founder Elon Musk, that mischievous scamp, asked his 67 million Twitter followers: "Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock. Do you support this?"Almost 60% of responders voted yes, and the company's stock price fell 10% on Monday and kept sliding as Mr. Musk kept selling. He has shed almost $13 billion in stock, or 3.2% of the company given his original 10% stake, and if he goes the full 10% he will face one of the largest tax bills in American history.Meantime, the Tesla stock that cost me almost $1,200 a share is trading at $900. My wager is down 25% in six weeks.Still, on Dec. 16 Tesla stock was down to $936, so, both bloodied and bowed, I bought more shares—after all, the cult stock was on sale. By day's end it closed at $926.92, down 1%. On Monday it closed a few cents below $900.The same day, I also bought GBTC, an index that tracks bitcoin prices, and it closed down 3.6%. Then I clicked a few more times to buy shares of Bird Global, a hip new electric-scooter maker funded by Silicon Valley genius David Sacks, who invested early in Facebook, Uber, and Airbnb. That stock was down 19% when the market closed that day.If you haven't sold, you haven't lost: That was a mantra I often repeated as an anchor on CNBC and Fox Business when the market tumbled. But in those days I owned no individual stocks. The saying doesn't feel quite as reassuring now.Mr. Kneale is a writer based in New York.

Tempted by Tesla – with insight from The Wall Street Journal

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