Tesla's stock price experiences significant volatility post-earnings! How will you choose to act?
[Investor Story] The Rise of an Ordinary Worker: All In on Tesla, How Did He Go from Zero to Earning Over 1.8 Million?
Having just graduated, he encountered the pandemic, and as he entered the market, he experienced chasing uptrends and cutting losses, making quick profits but also losing principal. The bear market of 2022, which saw his assets halved, became a turning point for his investment awareness.
In 2023, All In $NVIDIA (NVDA.US)$achieved his first experience of a 'million-year income', transitioning in 2024$Tesla (TSLA.US)$, once again earning over 1.8 million Hong Kong dollars, with a cumulative yield of 450%.
How did he achieve this? What motivated him to go all in on Tesla? And how does he cope with extreme volatility?In this issue of mooer stories, we invite you to@Leo Jesse Livermore, to explore the insights from Leo's journey of retail investment growth.
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I. From Loss to Enlightenment: The Awakening and Breakthrough of Investment Cognition
Q: Hi Leo, what prompted you to enter the stock market, and how has your journey been in leveling up?
A: Hello everyone, I am Leo. I am a retail investor and also an ordinary office worker. When I first graduated and entered the workforce, I encountered the global pandemic, which left me feeling lost about my future. At that time, my monthly salary was quite limited, so I started investing to increase my income. In 2020, I saw news everywhere about the circuit breakers in the U.S. stock market, which piqued my curiosity, leading me to open an account on Futubull and embark on my investment journey.
When I first entered the market, I had not systematically studied investment and knew nothing, making many common mistakes retail investors tend to make, such as obsessively watching candlestick charts and chasing after rising stocks while selling off the falling ones. My first investment in the stock market involved participating in$GameStop (GME.US)$In the retail investor battle against Wall Street, although I initially made money from this skirmish, I quickly lost it back due to my own "abilities", and in the end, I did not earn much in 2021.
The real turning point came in 2022, during the bear market of U.S. stocks, when my assets plummeted by half. That experience completely awakened me. I began to study systematically, learning trading systems and investment thinking from many excellent teachers; it was also the year in which my investment growth was the fastest.
Q: When did your investments begin to achieve breakthrough growth?
A:I primarily trade U.S. technology stocks, and in 2023 and 2024, I recorded profits exceeding 2.7 million Hong Kong dollars over two consecutive years, with a return rate of approximately 450%.
In 2023, I was almost all in.$NVIDIA (NVDA.US)$。At that time, I learned many viewpoints and gradually realized that our advantage as retail investors lies not in technology or news, but in mindset and long-term holding.I insisted on making monthly investments in NVIDIA; every time I received my salary, I would buy shares, capitalizing on its growth before the AI boom. Of course, I was very fortunate, as the market provided me with this opportunity, and in 2023, I achieved an annual income of a million for the first time.
The profits for 2024 will primarily come from$Tesla (TSLA.US)$At the beginning of 2024, I gradually shifted my position in NVIDIA to Tesla, which was then experiencing a decline. I made a twofold profit on NVIDIA, as investment is the realization of knowledge, but I ultimately regrettably missed its subsequent tenfold increase.Currently, my core holding is Tesla, and I am employing an options strategy (primarily selling Covered Calls and Cash-Secured Puts) to operate; my account is continuously generating profits.
Q: What changes occurred in your mindset when you earned your first million in life?
A:(Laughs) At that time, I was certainly very excited, and my first thought was that I could quit my job! I also shared this with the Futubull community, and many mooers and mentors provided me with very important advice. They told me that for a young person who had just graduated and worked for a few years, earning a million had a large element of luck. Additionally, my mentor earnestly advised me to continue working to maintain cash flow, so I did not let my mindset become overly inflated. Retail investors are comprehensively lagging behind professional institutions in terms of technology, information, and tools; they are now using AI and robotic trading, making it difficult for retail investors to compete.The best strategy is to buy on dips and invest in stocks I believe in on a monthly basis; I think this can mitigate the impact of market volatility.
Investing spare cash allows for risk management. One should not rely on investments for livelihood, especially when there is a job providing a stable cash flow.I have steadily progressed in the investment market over five years to reach where I am today.
II. All In on Tesla: Building a Faith-Based Trading Strategy
Q: Why choose to go All In on Tesla instead of diversifying investments?
A:This is a great question. I consider myself a long-term believer in Tesla.
Firstly, my retirement fund is already allocated in a diversified manner.$S&P 500 Index (.SPX.US)$Therefore, with the funds I can control, I am willing to take greater risks to pursue maximum returns. Secondly, I believe Tesla is more than just a car company; it is leading a technological revolution in the physical world. From electric vehicles to autonomous driving, and even to the Optimus humanoid robot, it has the potential to completely liberate human labor and reshape the future. This company is continuously turning dreams into reality, which is why I am willing to bet on this belief.
Of course, if you missed this opportunity, it's not a big deal. After all, there will be more opportunities in the future.All-in on a single stock carries significant risk. I have previously consulted several friends on this matter, and the advice I received emphasized the necessity of comprehensive risk hedging and mental preparedness. Just as companies like IBM, Nokia, and Kodak were once highly successful, they too faced decline. Investment does not necessarily need to adhere strictly to textbook diversification, but it is crucial to manage personal risk effectively. However, there are precedents for successful all-in strategies, such as Duan Yongping's all-in approach.$NetEase (NTES.US)$and$Apple (AAPL.US)$He achieved success.I believe that embracing a great company while accepting overall risk is feasible.
Q: How can we understand the relationship between the underlying stock and options? Could you elaborate on specific operations?
A:What I use most frequently is selling Covered Calls. Due to Tesla's high volatility, its stock price fluctuates significantly, making holding the underlying stock relatively passive.When the stock price rises, I sell some out-of-the-money Calls—those with a strike price higher than the current price—to collect premiums. Then, I use the premiums received to increase my holdings of the underlying stock when the stock price declines.
For example, taking the situation of August 27 as an example, Tesla's closing price is $349.6 (rounded to $350). The quoted price for the $350 Call expiring on September 26 is $18.65, and the price for the $350 Put is $17.7. I would sell based on the expected volatility range predicted by market makers; summing $18.65 and $17.7 results in a fluctuation range of about $36. Therefore, the price of $TSLA one month later on September 26 may fluctuate between $315 and $385. I might sell a $400 Call expiring on September 26 to earn the option premium.
Another method is to sell Puts.When Tesla's stock price drops to what I consider a value range, such as below $280 or below $250, I will sell a Put.Sometimes I sell near-term Puts, and other times I sell longer-term ones, like the $300 Put expiring next year. The premiums collected help me to accumulate more shares of Tesla.
I have consistently sold options on a regular basis, collecting premiums to increase my holdings of the underlying stock, which is a systematic regular operation. By persisting over the long term, I have now accumulated over 1,000 shares of Tesla in my Futu account. The key is to maintain this discipline, which is quite challenging.
I do this every month, regularly selling options to continuously collect premiums, and then increasing my stock holdings, which allows me to accumulate more and more shares.
Q: How can one avoid 'catching falling knives' or being impacted by extreme market conditions when trading options?
A:Earlier this year, I encountered such a situation when I started selling Put options at around $250, using significant leverage. Suddenly, due to the trade war, the market plummeted, and during one day, I incurred a maximum loss of $500,000. Since I was fully invested, the loss amount was substantial.
If I had attempted other operations at that time, it might have led to greater losses; I could only wait. A few days later, the trade war was paused, and the market surged, allowing me to promptly close all options at a profit.In a volatile market, the more actions one takes, the more likely it is to make trading errors; thus, the best approach is to refrain from trading.
I sell options when I have underlying stocks and sufficient cash, which is generally a more stable and secure method. Selling options without holding the underlying stock is a significantly riskier endeavor.Selling options while holding underlying stocks can hedge against some risks.
Q: Given the significant volatility of Tesla, is there a discipline for gradually building or reducing positions?
A:In recent years, I have consistently continued to buy without reducing my holdings. I have monthly salary income as my regular cash flow, and with the premiums received from selling options, whenever stock prices decline, I increase my position, and when they drop to a certain level, I continue to buy. Over the past few years, I have been continuously buying, constantly adding to my position.The key strategy comes from the book "Just Keep Buying": continue to purchase without attempting to time the market—since the market is predominantly rising, missing out on compound interest is more detrimental.If I were a new investor, in such a volatile market as this year's tariff war, I would certainly chase trends and sell at a loss when forced to during market lows, thus missing out on the significant rebound in May where one could have made a million in just one month.
3. Tesla's Future Outlook and Long-Term Investment Philosophy
Q: There has been a lot of noise surrounding Tesla; how do you filter out the noise to maintain independent judgment?
A:I have a love-hate relationship with Musk; I have learned to accept his unpredictability. The best approach is to lower short-term expectations, especially regarding Elon. Similar to this year, the ongoing tariff trade war and the rift between Musk and Trump have continuously impacted Tesla's stock price. I will focus on the progress of Tesla's products and technology.I believe the company is making progress, which is good. It is important to ignore the noise and focus on the company's own development. I will also continue to monitor the company's quarterly performance and technological breakthroughs in FSD.
Q: What key variables should we pay attention to when looking ahead to Tesla's future?
A:I believe the most important factors now are the development of FSD (Full Self-Driving) and the progress of the Optimus humanoid robot. The key point is to watch when Tesla will remove the safety driver.At this early stage of business development, safety is the most important; there can be no accidents. Elon Musk has also considered this aspect, which is why the safety driver has been kept in place. I believe that in a few months, the safety driver will be removed if FSD is truly ready, and Tesla will be ready to fully open the autonomous driving market. At the same time, I anticipate that Tesla will achieve profitability in Austin alone, making it the first profitable and cash-flow positive Robotaxi company in the world.
Q: How to balance the pursuit of high returns with principal risk management? What advice do you have for beginners?
A:I am also an ordinary worker, just like most people. If you want to replicate my approach, it is actually quite simple: just work hard and never give up.Focus on your investment goals; then invest regularly in index funds or stocks that you believe in the most. Adhere to long-term investment principles and trust that compound interest will always yield substantial returns.At the same time, do not attempt to anticipate disasters; instead, prepare mentally and financially so that you can survive through them. Only those who remain optimistic can ultimately succeed.
Q: Many voices are concerned that the U.S. stock market has peaked; what is your opinion?
A:In recent years, every year there have been claims that the U.S. stock market has peaked. In 2020, 2021... yet it has always reached new highs after corrections. Investing is the manifestation of belief; if you are unwilling to bear the cost of volatility, you will not become wealthy in the stock market. I believe in the long-term growth potential of the U.S. stock market, as long as you believe that the U.S. economy and technology will continue to innovate. The stock market has survived numerous crises, including wars, the Great Depression, inflation, pandemics, and geopolitical conflicts, but the major indices have always rebounded and risen higher.For ordinary investors, do not attempt to judge market peaks and troughs; the best strategy is to consistently invest a fixed amount over the long term.
Q: Over the past five years of investing, experiencing market fluctuations, do you have any investment insights you would like to share?
A:We cannot do everything perfectly; we must focus on the goals we most want to achieve. For example, my goal is financial freedom. The investment process is filled with pain and anticipation. After achieving a small goal, I gradually adapt to moving towards the next goal. When the market experiences fluctuations and downturns, I may temporarily feel defeated and downcast, but I accept it and continue to move forward.
Investing is not only about making money but also about cultivating confidence and a sense of achievement through personal effort, knowing that one is on the path to success. These are all parts of life; achieving goals and ideals is not just a reward for oneself, but the process of striving for dreams is itself the meaning of life.
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*Disclaimer: The content of this article is provided and authorized for use by@Leo Jesse LivermoreAccept@牛友有料到This article is compiled from interviews, with images provided and authorized for use by.@Leo Jesse LivermoreThe case studies in this article are for reference only and do not constitute any investment advice. The information related to the mentioned stocks represents the personal opinion of the user and does not constitute any stock recommendations. Past performance of individual stocks does not guarantee future performance; the stock market carries risks, and investments should be made with caution.
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