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Diary of a Dumb Investor: my tech stock splurge (pt. II)

Finally, I've taken the plunge and bought electric car maker Tesla. Or at least I will when the postman delivers my form.

 
Diary of a Dumb Investor: my tech stock splurge (pt. II)

The moment has arrived. After a long time yearning for shares in electric car maker Tesla Motors (TSLA), now is the time for me to jump aboard the US tech stock.

Tesla shares have already enjoyed an astronomical rise, surging from around $34 at the beginning of last year to a peak of $265 in February. It has been dubbed ‘the new Apple’ after becoming the highest-flying US carmaker in at least two decades.

I’ve looked on enviously, waiting for a pull-back so I can get in on the action. With a 14% drop over the last month, I feel the time is now. Sure, many will mock me – its price earnings ratio is in three figures, and even Tesla chief executive Elon Musk warned the share price was ‘more than we have any right to deserve’.

But just as I got flak for ‘jumping on board late’ when buying Hutchison China Meditech (HCM.L) back in 2012, I’m hoping the criticism I’ll inevitably receive on this purchase will eventually ring hollow.

It’s hard to argue that electric cars aren’t the future, when even Formula One’s throaty V8s have been replaced with a whirrier, quieter ‘power unit’ that uses forms of electric energy alongside more traditional fuel.

Racing cars have followed in the wake of mainstream car manufacturers, which have long been rolling out vehicles that don’t rely solely on petrol. But these half-hearted measures are not for Tesla, whose cars run only on electricity.

While it has been confined to the midlife-crisis friendly sports car and luxury end of the market, Tesla is making moves into the mass market. When we eventually move to all-electric cars (if even smoking is going that way, I don’t see how we won’t) it’s difficult not to see Tesla being in pole position.

Now all that’s left is the small matter of actually buying the shares, which are listed on Nasdaq, the US stock exchange for many technology companies. It’s my first purchase across the pond, and a little bit harder than I had expected. First I need to complete a W-8BEN form to ensure as a UK resident I don't pay too much tax on Tesla dividends. Given I’m investing in a nice, shiny future of electronic transport, it’s a bit disappointing to learn I have to stick this form in the old-fashioned post. I just hope the shares haven’t raced ahead even further by the time I get the green light.

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7 comments so far. Why not have your say?

Tony Peterson

Apr 09, 2014 at 16:48

Stopped posting the current state of your portfolio then?

I wonder why that would be.

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Daniel Grote - Citywire

Apr 09, 2014 at 17:53

Sorry Tony, we forgot to add that to Dumb Investor's piece - it's in there now.

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Magic Monty

Apr 10, 2014 at 07:09

Truely a Dumb Investor.

Buying tesla on a P/E of more than 100, the price has gone my friend and in USD (Bet you don't get a good exchange rate). Selling at a profit (Pay your witholding tax) then change the USD back into GBP. Not to mention sending various paper by post - What a pian.

(Will it go up yeah sure, but will net a huge percentage from investment fee's to banked profit - 'Not a Lot' as that other nasty little Magician used to say.

Why not just invest in Quindell QPP - It really is the new Amazon, more than doubling revenue and profit every, just set up a sub company with the RAC attributable to QPP share holders set to make Billions (See RNS for details).

No real competition thus far, of a size that prevents barrier to entry in its unique markets. Will up list from AIM to become a likely FTSE top 100 share in June thus opening up the purchase of it's share to pension funds and restricted covenant institutions. Then duel listing on the CISX and maybe Nasdaq later.

Invest in QPP and send me a bottle of Mum Rouge as a thankyou next year out of your massive profits.

Magic.....

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david ballard

Apr 10, 2014 at 12:44

I'm happy to use my real name

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Kenpen2

Apr 10, 2014 at 13:32

I don't get the appeal of electric cars. Assuming that half the energy in a fossil fuel is lost in delivering it as electricity to the car (probably an underestimate), they're always going to be energy inefficient, and that's without the cost of lugging a heavy battery all the time (to say nothing of the toxicity and cost of battery manufacture).

So how're they ever gonna catch on ? Can any engineers out there enlighten me ?

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Kenpen2

Apr 10, 2014 at 13:43

PS well done Dumbo, your portfolio's looking a lot bluer than mine; maybe you've cracked it !. At this rate you'll be able to give up financial journalism and retire early.

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Pactrol

May 19, 2014 at 16:59

Halifax Share Dealing service

all I asked for was transfer the funds from my cash isa which now pays a pittance to a share dealing account that I opened 25th march after several phone calls as to where my funds were I received a letter dated 12th May stating it would be another 2 to 3 weeks. !!! unbelievable in fact I was so annoyed I've told them to forget it. so now I'm looking for a isa share dealing account that can transfer in my cash isa from Halifax & won,t charge an arm & a Leg in fees.

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