It's the world as I know it today. I watch and learn. I listen to what the experts say. I try things out. I build on what I know. I share my discoveries with others. Come along for the ride. Life's journey is always just beginning!
It has been interesting watching the behaviour of $TSLA over the past couple of weeks since the Q3 earnings report and conference. It can't be understated just how monumental of a feat Tesla has achieved with their numbers... so much so that they are being subpoenaed by SEC to confirm their numbers. I know that the Tesla community shares my joy in saying just how damn proud we are of this little engine that could!
Having said that, the share price did not shoot back up right away In fact, has had a slow gradual incline which took many of us long term shareholders by surprise. It touched for a moment back to $350, but came back down again. But if you look super closely in the last week, $TSLA seems to be following the market curve of the S&P 500, like a "normal company." Though, yes, it is out-performing this trend, the ups and downs are following the market much more uniformly, unlike it's normal erratic behaviour of past.
This may be a good sign.
Looking forward,
I'm gear up for the March unveil of the Model Y with great anticipation. While I will purchase the Model 3, the Model Y is what I'm after as my "end game" car. And similarly to last time, I chose to purchase my first $TSLA shares just shortly before the Model 3 unveil. I believe the stock price has a tremendous upside after this reveal.
From this point on, I'll be putting my disposable income from my side music gigs into my trading account, and faithfully moving it over to USD funds using Norbit's Gambit. Unfortunately, with my choice of using an online broker, the process from cashing my cheque in my account and moving it over to my trading account take about a week. Then converting the funds through Norbit's Gambit takes another week. So I have to always be 2 weeks ahead in my planning. Not to worry. It's 3 to 4 months worth of pay that I will have at my disposal when the beginning of March rolls around. In the meantime, I'll be rooting for $TSLA to take a slight dip just before (buying on the rumor).
However, even if the price of shares goes up, I'll likely still buy. It will be an interesting watch!
MY POSITIONS FOR TODAY (click on image to see larger version)
Last week, I bought my first shares of a Canadian company, Bank of Montreal. They have not missed a dividend payment for over 100 years, and are a legacy bank here in Canada.
I had been watching the stock for a few weeks now, and it has been moreover very stable at just over $100. I bought shares on October 22nd, using the strategy that I have heard and read about... and waiting for the share to dip before buying. And so on October 22nd, I saw an opportunity. And this is what the history looked like on that day:
To me, this looked like exactly where I wanted to get in.
And then the following days unfolded... and pretty much immediately, panic sets in:
Yup, I bought at around $103, and it's been hovering around $97-98.
The upside is that I only bought about $1400 worth of stock. The downside is that it's hard to know how much longer it will continue to slide down.
But the important perspective is the LONG perspective. Unless I found the one monumentally unlucky moment in BMO's history where they are headed towards disaster, the stock can be expected to go up in next few years, just as the 5Y historical trend shows:
So here it is through experience. It sucks in the short term to have an immediate loss, which in the context of recent history, feels like a very bad loss. But because I'm intending to hold my positions for the next 15 years, the trend will be most decidedly upwards. So the short term grief is not the same as the long term projection.
The one other lesson I'm learning is both when to buy dividend stocks, and the pace at which I acquire more. Each transaction has the same $4.95 transaction fee, whether I buy 1 stock or 100,000 stocks. Buying one BMO stock at this price is not really a smart return on the fee payment, even with the dividends (I mean, really, I'm going to attribute all of my dividend payouts to covering my transaction fees?)
So my new strategy, is to continue to deposit my peripheral income into my investment account, and then buy stocks at a strategic time. I'm still learning about this timing with ex-dividend dates and when the stock is likely to fall just after the dividend payout. It's still a learning process for me.
On the fun side, $TSLA got its turn in increased stock prices this past week, to no surprise. Not as significant of an increase as I would expect, but as long as it's going up, that's fine with me! I am intending on purchasing more shares in the future, though I feel like I may have already missed the boat on this last dip.
Finally, I identified a flaw in my positions chart at the end of the last post. Because my newly purchased BMO shares in are CAD funds (traded on the TSX), and the TSLA and CMC are in USD, I need to track them separately. Behind the scenes, I'll look at my combined gains/losses all in CAD (for my tax reporting purposes). But for these blog posts, the two currencies will be separated.
MY POSITIONS FOR TODAY (click on image to see larger version)
My battle for time between going back to work earlier than expected, the rolling demands of my side job as a professional musician, and wanting to be diligent in my investment decisions and actions, I may not be able to post as much to a blog. But God-willing, I'm going to still give it my best shot, even if it means posting less often.
My goal is still at least once a week!
This week, has been nothing short of eventful in the world of Tesla. The Q3 earnings call wasn't even the biggest news of the week! Hopefully you are already following a lot of the Tesla news around, but in a list of things happening these past two weeks:
1. Version 9 of Tesla's Software rolled out (and is still rolling out) to its current customers.
2. Tesla HAMMERED the market with being the best selling sedan in the US, and topping at #1, or the Top 10 of almost every auto-selling chart out there! 3. Tesla is profitable and even beat the numbers of the bullish projections out there! 4. Tesla released their LEMuR (Limited Edition, Mid-Range) Model 3.
I would love to get into all of these, but I'll just leave this, my favorite meme, of the week:
An incredible turn of attitude towards Tesla by one of the bearish skeptics of Tesla in Citron. The future is here!
UPDATE: Bought some shares in Bank of Montreal this week. I'll share my experience about this later. It's a very important perspective, I believe, for anyone new to investing.
CMC continues to sink. I realize that unlike Tesla, where you have lots of noise to choose from when the stock sinks, CMC has no noise, and I feel like I'm in the dark. But I'll hold long anyway.
MY POSITIONS FOR TODAY
As of October 26, 2018 closing
TIP: If you want to see a bigger, clearer version, click on the chart and it will show you an expanded version.
Now that I've received my first payment from my side job (as a piano accompanist), I'm ready to start purchasing my first dividend stock. I have my eye on is Bank of Montreal on the TSX. Why? For over 100 years, they have never missed a dividend payment -- and this includes the great market crash of 2008. This gives me assurance that I can rely on their commitment to investors even during profit losses.
To prepare, I opened a second trading account, which also happens to be my second Tax-Free Savings Account (TFSA). About 10 years ago in Canada, right around the market crash, this new savings system was launched to encourage middle-class citizens to invest in the economy by providing them a tax-shelter. Essentially, this is a savings account where any investment growth would not be taxed.
Here's a video with a great overview of the TFSA:
Sounds great? Well, I'm just getting started, because there's more!!!
1. The tax-free shelter applies also to dividend payments and capital gains (i.e. rise in stock prices).
This is probably the single most important aspect of the TFSA that most Canadians are not taking advantage of.
Think of it this way: When you have a regular trading account and the shares you buy with it go up in value, the moment you sell the shares and withdraw funds, you are taxed on the gains. But not so if they are in a TFSA.
Let's look at an example. In my case, if you look at my $TSLA shares in the table at the end of this post, you will see that I am sitting at a profit of about $1400. Right now, that growth is in my RRSP trading account. If I was retired and I sell those shares, I will be taxed on those gains. Here in Canada, that can be as high as 46%. So the government is going to take virtually half my earnings, which is around $700! Now think about in 10 years, when I hope to retire early, and the predicted $2000/share happens for $TSLA. That's a 900% profit. That means for every share I sell, the government will tax me about $1000 -- PER SHARE (in an RRSP account, tax includes $100 on the original investment, and $900 on the gains)! And of course, we all have more than one share. Paying an $10,000 tax for only 10 $TSLA shares is an unbearable, but inevitable conclusion.
Now if these were in a TFSA, there's NO TAX. You keep it all. It's that simple.
2. Any growth increases your contribution room.
This is the second greatest advantage of TSFA's that Canadians seems to be unaware of.
When you make a withdrawal from your TFSA, the amount of the withdrawal gets added to your contribution room at the beginning of the next year -- EVEN IF ALL YOU ARE WITHDRAWING ARE GAINS and your original contribution is untouched.
Let's me share another example from my personal experience. I had been putting away funds for years in a TFSA to save up for a grand piano. When I finally was ready to buy, I withdrew the entire balance of my TFSA, including all the interest I had earned. That entire balance, including the interest I earned up until then, showed up as additional contribution room at the beginning of the next year. Now think about a situation where instead of 1.5% interest, I gained 50% on the price of my $TSLA shares and withdrew those funds. Get it?
Simply put, your contribution room grows as big as your investment gains.
This makes gives the TFSA incredible potential on the market if you are someone who is investing for capital growth. If you are aiming to pick stocks for the sole purpose of selling them off when they hit a peak price, it means the amount of your TFSA contribution room could far surpass the standard annual contribution limits.
One warning though. Your contribution room also shrinks with your losses. So if you are unfortunate in picking stocks that cause you capital losses, you cannot recoup those losses in a later year. Consider yourself warned.
2. Reporting Your Taxable Gains is less stressful.
Okay, so actually, I'm new to this part.
I remember the first time I had to report my investment gains on my annual tax report when I was purchasing stocks in a regular trading account. I was tearing my hair out trying to make sense of the forms. I had no idea at the time that you only pay taxes on gains that you withdraw from the account (since you have already paid taxes on the initial investment).
However, when it comes to your TFSA, it's kind of a non-issue. By virtue of having a TFSA, Revenue Canada has your contribution amounts for the year across all your TFSA accounts, and tracks it on their website. Up until now, my TFSA has been with a bank. This is the first time I'll be reporting my investments on my tax report from my TFSA trading account -- if I have to at all. I suspect, it will be similar to my bank, in that it is already automatically reported to CRA for purposes of establishing my contribution room for the following year.
On a different note... what the heck is going on with my CMC stocks? *sigh*
Okay, what is going on? Elon Musk back on Twitter, with undertones of trolling the SEC after a settlement was announced to be reached. The stock recovered initially on Monday and then has had a steady decline over the week, with the biggest drop on Friday after tweets about his disdain for short-selling and his seeming lack of confidence in the SEC investigation.
Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!
The play, as you see, is "SEC: Shortseller Enrichment Commission"... which is why the news is suggesting that he is undermining the integrity of the SEC after the settlement.
Well the news spun it, the short-seller investors dumped the stock (I suspect as usual) to give the impression that it was true, and we are sitting back at a price in the mid-200's.
And then he pulls out one of his tweets from January 2012, and the updates his opinion on it quite forcefully:
Today, I opened a second TFSA (Tax-Free Savings Account) trading account, this time with my trading company. Until now, I've been holding $TSLA stock in my RRSP trading account (our retirement savings plan here in Canada), but it's time to take all that available contribution room I have in my TFSA for a spin! (I'll post one day about what the amazing opportunity the average Canadian has with the TFSA. It's SO much more than just tax-savings on your interest!)
It's a strange thing to be a shareholder and hope that the stock sinks even further! I'm not sure when my fund transfer will go through in the upcoming week, but hopefully it will be before the stock starts heading back up.
Maybe I should ask Elon to keep tweeting just for a few more days until I'm ready to buy! He's giving all his long-investors a chance to gain more shares, and with it, more say on the future of the company.
On a serious note, here's my favorite recent tweet of Elon's:
People sometimes forget that a company is just a group of people gathered together to make products. So long as it makes great products, it will have great value.
He's bang on. That's what the long position is all about... the real world happenings, not the virtual world propaganda. Short sellers and FUD are just noise. Results are ultimately what matter.
It's late, and I've just started a full-time job. Great source for more "investment" money, but limits my time to do other stuff. So I'm just going to quickly ramble here so I can go to bed. I can't possible skip the big news after the market closed today.
Essentially, It's a $40 million penalty ($20mM for Musk, and $20M for Tesla who is found in violation for not keeping Elon under control.)
The biggest, and most scariest to me, is that Elon Musk must step down as Board Chairman, and will not be able to reapply for that position for 3 years (it's posted as 4 years in another source). Why scary? He has to be replaced with two independant members. While the board will nominate candidates, shareholders will vote. I am hoping that the Board members have a sum of more than 50% of the shares in the company, and I can trust that they will choose appropriate members to keep Tesla's incredible entrepreneurial run alive. The worst case scenario, shareholders are fooled into accepting someone who doesn't have the mission of Tesla at the centre of their decisions. Yes, Tesla needs to be profitable... but only because it needs to make money to sustain its forward momentum in development and innovation. Not simply to give out make cushy rich people more rich.
I'm preparing myself for an onslaught of campaigning in the media from the short sellers to appoint someone who will attack Tesla from the inside. However, I do have faith in the current board that they will not let that happen.
Apparently, the market sees this settlement as a good thing! It's very sad that I didn't have any funds to purchase more shares when I had the chance. That may have possibly been the last chance to buy them under $300.
Yes, as predicted, the most brutal of hits to $TSLA stock since I first bought it comes today after the announcement of the lawsuit against Elon from SEC.
I don't want to play conspiracy theorist too quickly, but there's something really fishy about this whole ordeal.
The Timing
This at the end of the third quarter, and anticipated to be Tesla's most significant quarter to date in the history of their company. Profitability, accolades on performance, manufacturing and delivery milestones. One of my Facebook buddies said it best:
The Expediency
How is such an investigation so quickly started, resolved, and pasted all over the public news streams? Within one week? Really?
The Hypocrisy
Yes, that's a strong word. But it seems that there was a 2008 market crash, that there seemed to be clear investment criminals involved, and they weren't indicted or even penalized? What's that about?
Yes, clearly I'm upset over all this. But I'm also upset because...
...I WISH I HAD AVAILABLE US FUNDS TO PURCHASE $TSLA TODAY!! This is a huge opportunity before the Quarter 3 report, which will likely send the share prices back up.
