Bought 22 shares of Tesla at $443. Total of USD $9,746

I was thinking for a long time for how to deploy funds into the market, and what I believe in. I had boiled down to the following choices:

  1. ESR REIT 5.68%. This is a bond, not the REIT.

2. BNP Paribas 5.125%

3. Tesla

The ESR REIT and BNP Pariabas were very tempting as their leveraged return was about 12% and more. It adds about $800 a month of passive income. For bond investing, the most important thing is whether the company will go bankrupt or not. And based on ESR and BNP’s situation, it is very unlikely that either will go down.

However, I would need to borrow another $170,000 to buy those, bringing my margin valuation to around 160%. It’s a bit lower than what I’m comfortable with.

In addition, the BNP Paribas bond is the same type of coco bond which I already have two of. From experience, if one goes down, all of them go down. The correlation is very strong. It would be extremely stressful if that happens, and I may have to come up with a lot of money in a very short amount of time.

I would recommend the BNP Paribas bond to anyone buying their first bond or have a ton of other holdings. It will generate a nice passive income at a fairly low risk.

Hence, Tesla was the lowest risk of the three choices. Tesla is one of the few companies I know which should experience exponential growth. Battery day on Sep 22 is coming up, where Elon Musk claims that many exciting things will happen. Even so, I fully expect that even with fantastic news, the stock might go down. But I believe in Tesla and its products, and I’m in it for the long-term. And I want to hold enough so that it makes a difference.

Admittedly I find that I like making big bets on companies which I believe will change the world. It isn’t something I recommend to most people, as it can go quite wrong. Most people should simply buy a diversified ETF, and not try to pick stocks. It’s what Warren Buffett believes himself. But like him, I’m still picking stocks (not that I think I’m Warren Buffett).

But it makes life a little bit more interesting. Let’s see how this goes.

Leave a Reply

%d bloggers like this: