I sold my Tesla stock for WHAT?!
By: Angad Singh
Tags: Ethereum, Trading, Bitcoin, Investing, Tesla

I sold my Tesla stock for WHAT?!

The Next Big Investment

Photo by Jamie Haughton on Unsplash

Tesla stock for me has been a gift that keeps on giving. I have made some great profits on it and I’m sure if I continue to hold Tesla stock at its current price, I will still make significant profits over the next few years. Tesla is an amazing company with a visionary chief in charge — Elon Musk. If an election for humanity’s president comes along; I will vote for him. I am of course bullish on Tesla. Yet I sold all my Tesla stock. I also sold all my other stocks. I did not have a very diversified portfolio — I only held 3 companies, Tesla, Sony and Palantir; all in profits. There might be some volatility but it seems that the worst part of economic crash is over. USA and the rest of the world is slowly opening up and the economy is receiving helicopter money from central banks as “Stimulus”. With the US elections coming up, I am expecting more volatility but I think that after elections, stocks will continue to climb regardless of the election outcome. If Trump wins, stocks will rise because of corporate tax breaks. If Biden wins, stocks will rise because of more/higher Stimulus packages. So, if this is what I believe then why am I selling my stock portfolio? Simply because I believe that I have a better investment opportunity.

Securing the profits

This year, due to the Covid-19 crash in the stock market, and some lucky timing on my part, I was able to gain significant profits in my stock portfolio by buying when the crash hit and holding these stocks until yesterday. I could be greedy and hold the stocks for a further increase in the gains but I think the time to make 2x, 3x and 4x on Tesla stock and others is gone. Perhaps my Sony stock could provide a significant gain over the next 12 months with PS5 sales but taking all this out and “actualising” the gains made in the last 9 months or so seemed like a very good idea to me. Now with the money back in my bank account, I’m sure that I am out of the risk of an unexpected market correction caused by the US elections or some other black swan event like a second lockdown.

Photo by T on Unsplash

What Next?

USA printed more than $9 trillion this year for “Stimulus”. This is more than it has printed in the last 2 centuries. To leave your money lying around in a savings account in such a case would be financially suicidal due to the impending hyper-inflation that at least the US, and most likely the EU economy is also going to suffer. Because of this creation of money out of thin air, Gold’s price has surged like never before. And I believe it will continue to rise as a hedge against inflation as well as uncertainty. But Gold is not what I have in mind as the next big investment. What I believe is the next big investments are Bitcoin and Ethereum. I believe in them so much so that they represent roughly 50% of my net worth and I have now sold my complete stock portfolio to add to these positions.

How am I so sure?

Having more than half of your eggs in one basket is certainly risky and something that I would normally be against. However, I’m not the only person thinking this. Here is a quote from legendary investor and billionaire Paul Tudor Jones:

“The best profit-maximizing strategy is to own the fastest horse… If I am forced to forecast, my bet is it will be Bitcoin.”

This is monumental, because now Bitcoin is not just some magic internet money that geeks use to buy pizza, instead it is something that WallStreet firms like Grayscale, hedge fund managers like Paul Tudor Jones and publicly traded companies like Square Inc. are putting their money in. The so called “Smart Money” is now backing Bitcoin. It is no longer considered a speculative asset. Paul Tudor Jones has come on CNBC and talk about Bitcoin. Raoul Pal has come on Yahoo Finance and talked about Bitcoin. 6 years ago you would never hear something like this. Bitcoin was thought of as a medium for criminals to bypass authorities and buy weapons anonymously, online. Now it is seen as a hedge against political crisis, sanctions and inflation. If you still don’t understand why Bitcoin is important, read this.

With trillions of $ being printed; hyperinflation is just a matter of time. If you want to preserve your wealth you have a few conventional options; Stocks, Gold, Real Estate. To me all these assets are good but are not as undervalued as the new kid on the block; Bitcoin. Which acts as a store of value and does what Gold does but only better — it is more transportable than Gold and easier to store. A few days ago $1 billion worth of Bitcoin was transferred from one account to another. Do you know what the transaction fees for this was? $3. Can you imagine Gold doing that? Can you imagine the amount of KYC your bank will ask for to perform this transfer? Can you even imagine a small bank being able to transfer this amount? (if they do fractional reserve lending this might not be possible).

Tesla went 2x, 3x, 4x, even 5x or 6x for some investors this year. Do I expect this to continue? No. I would rather invest in Bitcoin, which I believe has a chance of 10x in the next 12 months. Why do I say so? Because Bitcoin’s price changes in 4 year cycles. The last peak we had was Bitcoin at $20,000 in 2017. Before that the peak was in 2013. This is because the “halving” of Bitcoin’s mining rewards occurs every 4 years, which reduces Bitcoin’s rate of inflation and causes a pump in Bitcoin’s price. And with the way things are going, it seems highly likely that Bitcoin will reach its next peak in 2021. Conservatively, Bitcoin does at least a 10x in each 4 year cycle. In the last cycle Bitcoin went from hundreds to thousands in 2016–2017. Then went briefly to tens of thousands in late 2017. If we expect the same then Bitcoin will move from tens of thousands (which is where it is at now) up another level of magnitude to hundreds of thousands (aka above or near $100,000).

Tl;dr — I’m selling Tesla, buying Bitcoin.

My Bitcoin Buying Strategy

I have been buying Bitcoin slowly (a little bit almost everyday) since Bitcoin was at $6000 in 2018. Now it is $13,000+. If I dump all the profits I gained from stocks straight into Bitcoin it will increase my average buy-in price. As I see it, this is inevitable but instead of dumping all the profits at once, I intend to follow a similar strategy of Dollar cost averaging this amount so my risk is spread over some time rather than just 1 day. I invest a little bit of money into Bitcoin and Ethereum everyday anyway, so the only change I will make is that I will increase the amount I invest everyday. I do not want this blog post to be never-ending so I will leave out why I think Ethereum is an equally good (if not better) buy as Bitcoin for another post. Happy investing! And please make sure you read this disclaimer below: