Tuesday, 3 January 2023

X-Axis and Tesla Woes

In my first post of 2023, I touched on a couple of topics that have subsequently become more relevant.

One was that (about 2022) I wrote that:
This was my first down year since I started tracking these things in 2009, with my net worth total declining by 11.6%. At my age, this number is all about investment performance, with income from employment pretty much irrelevant.

This is a topic covered by Nick Maggiulli today, accompanied by a nice chart illustrating my point rather neatly: 

I'm at the extreme right of the x-axis above, and clearly while saving over 20% of my income doesn't hurt, how my investments perform is far more impactful to my net worth.

Interestingly, Nick's year seems to have been very similar to mine, although he is far younger. In this article he writes:

In fact, 2022 was the first year ever where I saw a decrease in my net worth from the year prior. To be specific, my net worth dropped by 11% in 2022 though my portfolio was down over 20%. What prevented my net worth from declining by 20% like the rest of my portfolio did? My ability to save money to offset my investment losses.

As I mentioned in my post, a reasonably large percentage (about 20%) of my portfolio is made up of investments in my company, which performed relatively well last year, although my main retirement account was down almost 20%.

That's four consecutive mentions of 20%, make that five, which must be something of a record! 

 The second topic I mentioned was that of Tesla, and I suggested that: 

"he [Elon Musk] seems to be having some kind of mid-life crisis and his political views, unpleasant to the majority of people, and certainly to his customer base, have likely reduced the demand for Tesla cars."

The stock ended the day down by 12.24% after the company:

"delivered fewer vehicles in 2022 than it initially targeted, capping a year during which the stock suffered its worst annual performance as demand appeared to soften and Covid-related production disruptions persisted."

Not the start to the new year I was hoping for, but a tremendous buying opportunity, or is the stock headed for under $100 shortly? Time will tell. 

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