Editor’s note: This article was first published in August 2013; the 32 and 164-dollar share prices and the 400% twelve-month gain it cites are from that time and are pre-split prices (Tesla split its shares 5-for-1 in 2020 and 3-for-1 in 2022). Putting all your savings, including money you may need, into a single stock is extremely risky. This 2013 story is kept as a historical record and is not investment advice.
Patrick Hop, a 22-year-old student at the University of California, invested all his savings in Tesla (about 30,000 dollars), making several of the classic investing mistakes, such as investing money he would need and putting all his eggs in one basket: he put everything into a single company.
Hop admits that everyone told him he was crazy and not to do it, but a year later the young man is glad he ignored the warnings of the people around him. Those 30,000 dollars have now turned into 250,000 dollars, and he still has not sold, as Tesla is hitting all-time highs. For now the stock is still in an uptrend, with a gain of more than 400% over the last 12 months.
He admits he is a fan of the company and always told his friends how big it would be one day, which is why he bought the shares at 32 dollars. Today they closed at 164 dollars.
The young man, who has already had his moment on CNBC, says he would like to have his own company one day. Risk does not scare him as long as you are clear about what you are up against, and for him, betting everything on this company was the right call.
While many analysts are starting to say Tesla could be badly overvalued at these prices, this young student, who considers himself a Tesla expert, says we haven’t seen anything yet: Tesla will keep dazzling the market, and this company will probably play an important role in the car of the future.
Yes, sir. That is how you make money in the stock market, and rules, as they say, are made to be broken now and then.
Featured image: Sarah Larson from Ann Arbor, MI, USA, CC BY 2.0, via Wikimedia Commons.
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