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Thursday, January 7, 2021

The Tesla Cycle


Today (January 7th), Tesla stock blasted through $800 per share. As it did, Elon Musk's net worth surpassed Jeff Bezos' and Musk became the richest person in the world. 

As you know from our recent post, we've installed Tesla Powerwalls on our home. Today, was the day that I paid for those Powerwalls. 

Putting these two things together, I found it ironic that I was paying a handsome sum to Tesla on the same day that Musk made this achievement. I'm not saying that I should be able to skip the payment just because Musk made guap, just noting the irony. I'm getting a great product from a great company and I'm happy to pay the agreed-upon price, especially since my realized gains from Tesla stock investing is paying for these Powerwalls.

I have been investing in Tesla for a long time. Musk might be the richest person in the world now, but he's also made a lot of other people rich along the way. Some of those people are like me, both investors and customers. I don't want to know how much stock I'd own today if I'd held TSLA in 2016 instead of buying a Model X. Owning the X has been incredibly rewarding, I have no regrets.

This owner shareholder combination got me thinking about how many people were in a similar situation. They were able to afford Tesla products in part because of how well their TSLA investments have done. Or they became shareholders because of how much they love the product and/or mission. This is a positive feedforward system: owners become shareholders, shareholders become customers. Then customer/shareholders sell a fraction of Tesla stock holding to buy a Tesla product, Tesla sales increase, Tesla share price increases, remaining Tesla stock holding value increases... rinse and repeat. I'm calling this the Tesla Cycle. Of course, there is no such thing as a perpetual motion cash machine, nor am I suggesting that you take this as stock advice. But we've been able to do this multiple times to buy multiple Tesla vehicles and our Powerwalls and I wonder how much of Tesla's growth to-date has been driven by this cycle. 

If millions of people are customer/shareholders, this could be a significant flywheel that has brought in significant revenue and growth to the company. If you've hung out on Tesla twitter or the Tesla forums, you've seen that, for many people, Tesla is the first (or only) stock that they've ever owned, some opened a stock account specifically to buy TSLA. Similarly, in these online forums, you've seen that a Tesla car was often the most expensive thing (or at least car) that many of the Tesla fans have ever purchased. Tesla has throngs of fans, if even a small percentage of them are participating in the "Tesla Cycle," it could be a significant factor in the company's growth over the past few years.

Do you think there's anything to this? Did Tesla's stock growth turn individual investors into Tesla product owners? Did the love of the product turn customers into investors? Have you sold Tesla stock to buy something from Tesla?

2 comments:

  1. No product for me yet, must buy house first then car someday in the not too distant future. ����⚡

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    Replies
    1. Great to hear that your investments have done well and have helped with your house fund.

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