Individual Stock Picking Results After 2.5 Years

[Scallywag]

Haven't updated this thread. Was going to post my 6 mil celebration but the increase in Tesla holding was so violent it blasted through 6 and went to 7 in like a week. I haven't done a thing to this portfolio in the past 6 months. I saw this portfolio crash all the way down to 3.8 mil in March and pretty much struggled between 3.8-4.8 for 6 months until recently.

Well done, Singuy!!!!!!!!!!! Cheers to $TSLA!

[Singuy]

That's amazing! Well done. It's crazy how rapidly your holdings have grown.

Any thoughts of an exit strategy? At what point do you cash in your chips and sail off into the sunset to enjoy your riches? How much do you think you need to retire comfortably?

I am way past the number I need to retire comfortably which is around 3 million. As for the exit plan, we are still experiencing no other alternative. Bond's interest rates are just too low while money is being diluted by the government daily. Yes I do feel like there's a correction around the corner but the current scenario is cash is trash so any minor correction is bought up so then the market will go higher.

As for Tesla which now almost account for almost 5 million...I believe it's going to level out around this level until higher breakthroughs in operating margins and net income. Forward PE at current valuation is about 130, and if the stock doesn't move in 2022, then forward PE will drop down to the 70s. I believe it is currently fairly valued way more so than when Tesla was at 900 bucks early Feb. Unlocking those new operating margins really ease my anxiety about this position..lol.

[disneysteve]

I am way past the number I need to retire comfortably which is around 3 million. As for the exit plan, we are still experiencing no other alternative.

Certainly there are stocks that are less volatile that you could transition into. Boring, yes, but probably safer too. Heck if you put $7 million into a basket paying even modest dividends like 3%, that would throw off $210,000/year in income (plus any continued growth in share prices). If you don't need the money yet, you could reinvest those dividends and see the portfolio continue to grow even more.

Going to bonds or cash isn't the only option.

[Singuy]

Certainly there are stocks that are less volatile that you could transition into. Boring, yes, but probably safer too. Heck if you put $7 million into a basket paying even modest dividends like 3%, that would throw off $210,000/year in income (plus any continued growth in share prices). If you don't need the money yet, you could reinvest those dividends and see the portfolio continue to grow even more.

Going to bonds or cash isn't the only option.

Well after paying a 1.5 million dollar tax bill first.

I am hoping that I can hold these companies until they are dividend generating assets. Then live off that while selling a few here and there. Liquidating anything that takes you to the next bracket of capital gains + the additional 3.8% Medicare surcharge when you don't need this money AND you still see lots of future potential doesn't calculate well in my book.

[disneysteve]

Yeah the fact that this is all in taxable accounts complicates things for sure.

The future potential is important but is there some point where you simply have way more than you could ever need and decide to stop playing the game? I guess I’d be concerned that it could all evaporate as quickly as it accumulated.

[Singuy]

Yeah the fact that this is all in taxable accounts complicates things for sure.

The future potential is important but is there some point where you simply have way more than you could ever need and decide to stop playing the game? I guess I’d be concerned that it could all evaporate as quickly as it accumulated.

Well I try to stick to good companies and that is what my research lead to. I don't think this is much of a game but as me buying a piece of the company that generates real cash flows and has insane growth year over year due to excellent execution. Yes I can see how there will be days when the sky looks like it's falling and there are paper losses but good companies always recover from the ashes and come back stronger (hell Tesla and AMD are prime examples of recovering from the black swan of covid and now supply chain issues).

Started this entire journey trying to find the next Apple, Amazon, or Google. I always have to treat them as such meaning if you believe these companies are the future than the value of your stock wouldn't evaporate. The thought of value evaporating is what kept people who were buyers of google, microsoft, amazon, and apple from holding the stock for 15 years.

[disneysteve]

The thought of value evaporating is what kept people who were buyers of google, microsoft, amazon, and apple from holding the stock for 15 years.

Very true. You've clearly demonstrated your stock-picking ability. It's just hard for me to imagine what I'd do in the same situation. With $7M we'd be set for life with way more money than I ever expected to have. Even if I thought it would keep growing, I think I'd have a tough time not taking at least a good chunk of the money off the table and then probably leaving the rest alone to let it run. But I totally get why you wouldn't do that, too.

[LivingAlmostLarge]

Very true. You've clearly demonstrated your stock-picking ability. It's just hard for me to imagine what I'd do in the same situation. With $7M we'd be set for life with way more money than I ever expected to have. Even if I thought it would keep growing, I think I'd have a tough time not taking at least a good chunk of the money off the table and then probably leaving the rest alone to let it run. But I totally get why you wouldn't do that, too.

Me too. I can tell you if we make money from selling DH's company I can totally see us divesting a big chunk and just diversifying. But then again we'd be done.