Thread by @heydave7

My first TSLA stock purchase made in August 2012 is now 100x ($5.94/share to $599.04).

Here's a thread.

At $637/share all my TSLA stock purchases in 2012-2013 will be 100x.

I'm more in humble awe & wonder than I am excited or exuberant. I was never taught the power of a 100x investment, but to have discovered it... it makes me question even more traditional and conventional thinking.

I know that my TSLA investment could do down, and that's fine. I've got a long-term view and the company is executing even better than my highest expectations when I first invested.

But it's an interesting place to be, to look at 100x in retrospect and not in anticipation.

When I first invested in TSLA, I did think that Tesla would do a 10x ($3b to $40b market cap) as shared in the 2012 CEO Compensation Plan. And I thought TSLA had potential to do another 10x if they reached their first 10x en route to becoming the largest automaker in the world.

However, I did NOT expect the 100x to come in just 8 years, and with purely holding common stock.

This is mind-blowing to me, to say the least. How is this even possible?

I've been thinking a lot about the key ingredients required for investing for crazy gains, and I just don't see this stuff being taught almost anywhere. But I think it's tremendously valuable.

For those curious, I did a video a while back and how I built conviction to buy TSLA at $30 (or $6/share post-split) in 2012.

Also, I shared here's a real-time blog of sorts of my real-time thoughts and analysis from that time period.

teslamotorsclub.com/tmc/threads/ar…

I divide up my TSLA shares into two groups. 1. Shares purchased from Aug 2012 to March 2013. Put 80% of all liquid assets into TSLA at this time. Was saving 20% of liquid assets for down payment on new house.

I still hold practically all these shares in this first group.

2. Spent remaining 20% of liquid assets (house down payment) and bought TSLA options on May 9, 2013 after Q1 earnings.

When options expired in 2014 and 2015, I sold some but exercised the rest.

Had to take margin loan to do that (transferred to asset-backed line of credit).

Took me 2-3 years to pay off this loan, and was thrilled when I did. I hated having debt, even though it was backed by my TSLA shares.

This 2nd group of shares, I'm keep with more loose hands and they are less super long-term like my 1st group of shares.

At one point my 2nd group of shares was probably about 35% of my total TSLA shares. Now they make up roughly 20% of my total TSLA shares. This will likely trend down over time.

I have nothing to prove and have zero interest in bragging (which is complete silliness to me), but I'm sharing this to help people be open to unconventional outside-the-box thinking and approaches, not just with investing but in life. Most of the time the herd isn't right.

Some more thoughts...

Most people would attribute a 100x to pure luck. This is reinforced by conventional investing thinking which says higher reward is only possible with higher risk.

I obviously don’t agree with this.

I do think luck or rather I call fortune plays a big role, but I don’t think 100x is always pure gambling. It might be for some or even most, but I never felt like that myself.

There are certain skills that help in analyzing and finding opportunities that IMO reduce risk.

First principles thinking is one of those skills. I spent my 20s developing thinking skills to go deeper to the true essence of things and then to work backwards. I don’t know how else someone can filter the noise from signal.

(Ep. 206)

Another skill is have multidisciplinary exposure and depth across many fields, such as business, economics, politics, history, sociology, anthropology, philosophy, psychology, music and arts, sports, education, etc.

This helps to see things more clearly with less blind spots.

The skill of reading super fast is vastly under-appreciated. I could do 100+ videos on how important I value this and it wouldn’t be enough. Reading super fast has allowed me to be able to quickly learn new areas and this growth compounds.

Understanding human psychology and crowd behavior and thinking is crucial IMHO. Pair this with a true and deep understanding of what investing and business is, and you’ve got an amazing combo that is rare.

Here’s a few videos I’ve done on reading super fast.

This is one of the most important skills I’ll teach my kids, along with multidisciplinary knowledge and depth.

(Ep. 28)

(Ep. 103)

(Ep. 159)

Another skill is the ability to demystify risk. Can’t do much if always petrified.

Here’s a few videos I’ve done on this topic.

How I Stopped Feeling Poor (Ep. 94)

Playing It Safe vs Taking Big Risks -(Ep. 38)

Another skill is the ability to understand compound growth not just on an intellectual level but to really get it intuitively. Most people never grasp how powerful compounding at a slightly higher rate really is.

The Power of Compound Growth (Ep. 61)

Another skill is ability to think in decades.

Humans are very reactionary and susceptible to the sensational. But there’s a thinking that can transcend and see long-term picture.

It’s about being firmly grounded in both long-term and the now. Tough and that’s why it’s a skill.

I think the skill to value a company is extremely important. But even the best “valuation” experts missed TSLA because their valuation methods are usually reasoning by analogy. Valuation methodology is usually flawed unless combining quantitative and qualitative analysis.

Investment philosophy is another skill that is crucial IMHO.

Have a mediocre investing philosophy and probably get mediocre returns.

For me it’s about getting to the essence of investing and working backwards from there.

(Ep. 200)

One of challenges is often greatest opportunities are found in very fast-changing environments where there’s a lot of confusion. When things are rapidly changing, there are no established “experts”. Everybody is trying to figure it out.

The “experts” usually figure out things too slow in fast-changing environments, that’s why I don’t consider myself an “expert” by any means. I understand how difficult investing for truly outsized gains is and that’s why I’m constantly learning.