Elon Musk Investing

[robertbanking]

Hello you very intelligent and wonderful people that make up these forums. I do hope you are doing well and having a good day so far.

I was wondering i saw a video by Elon Musk recently and he said that he has a substantial amount in Tesla stock, if the company would go bankrupt he would also. He said he could diversify his investments to make him safer from bankruptcy but he chooses not to. I know this would not be a wise decision but i kindly wondered if you wanted to become super successful investing, do you kindly think this would be a good strategy please? I know your investment analysis must be very comprehensive, but do you believe taking bigger risks and going all into certain stocks would be a good investment strategy please for bigger returns, even though it carries more risk if you choose to accept this? For instance maybe having a holding of 3 or 4 stocks in the whole of your portfolio, rather than for instance 20 - 30 stocks. If anyone kindly had any thoughts on this i would be forever grateful and it would mean the world to me for any advice you can kindly give.

I wish you a wonderful day and its a true privilege and pleasure to be part of this amazing forum, with so many knowledgeable and wonderful people. As ever i wish you all the very best wish your investing and take care.

[JohnB]

Stock picking needs skill and luck. If you think you have both then the strategy will work well, but ask two questions 1) am I better at this than others, 2) can I afford the risk if my strategy fails. The upside might make you more money than you ever need, the downside could be nasty.

And of course Musk is a man with remarkable skills (and luck), when he buys into a company, he also invests his own skills. I don't think he's a role model for investors, any more than Warren Buffet is.

[Steveam]

Some (considerable) discussion of this type of investing by PastCaring

viewtopic.php?f=8&t=17074

Any subset of the whole market is highly likely to produce a different outcome to the market. Professional investors spend a lot of time trying to identify the appropriate subset and implementing an appropriate strategy - most fail to beat the market.

Unless you have an edge why do you think you can beat the market?

Risk (of non market outcomes) and diversification are different sides of the same coin. There are some tunes on this subject but the thrust is true. Another issue is equating risk with volatility. Volatility is used as a key parameter in options pricing as if volatility is the same as risk. It is possible to create an efficient frontier but this is really just the same expected performance at lower volatility.

Musk (Buffet, others) may be able to achieve superior returns but this is only known in retrospect; most active managers underperform.

Best wishes,

Steve

[Gerry557]

I think trying to compare a multi billionaire with us mortals won't do you much good. I doubt loosing Tesla would make him bankrupt. He has other interests.

Yes it would be great to put all your investment into one "winner" if only you knew what that was. Even if you did would your crystal ball tell you when to sell?

You might get a BP moment and if everything is in that.... Well.

[pyad]

Hello you very intelligent and wonderful people that make up these forums. I do hope you are doing well and having a good day so far.

I was wondering i saw a video by Elon Musk recently and he said that he has a substantial amount in Tesla stock, if the company would go bankrupt he would also. He said he could diversify his investments to make him safer from bankruptcy but he chooses not to. I know this would not be a wise decision but i kindly wondered if you wanted to become super successful investing, do you kindly think this would be a good strategy please? I know your investment analysis must be very comprehensive, but do you believe taking bigger risks and going all into certain stocks would be a good investment strategy please for bigger returns, even though it carries more risk if you choose to accept this? For instance maybe having a holding of 3 or 4 stocks in the whole of your portfolio, rather than for instance 20 - 30 stocks. If anyone kindly had any thoughts on this i would be forever grateful and it would mean the world to me for any advice you can kindly give.

I wish you a wonderful day and its a true privilege and pleasure to be part of this amazing forum, with so many knowledgeable and wonderful people. As ever i wish you all the very best wish your investing and take care.

If you have to ask that here then I'd say you certainly don't have what it takes for such ultra successful high risk investing. I'm not saying it's wrong but that it depends on the personality, knowledge, skill and balls of the investor. People who have it don't seek advice on message boards. Also, such ability will normally out at a very young age.