Imbalance in my Crypto and Equity Positions (Patreon)
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Dear Team,
I am writing to provide you with an update on my investment positions. As you know, I have always strived to maintain a balanced portfolio of equities and cryptocurrencies, with equal amounts invested in each asset class.
However, during the recent dip in Tesla's stock price, I went very irresponsibly long Tesla with the following steps that you all witnessed my decision to go "heavily long" on Tesla:
- I entered into a number of synthetic long positions late 2022 and this year. This is a type of investment that allows me to profit GREATLY from the appreciation of Tesla's stock price without actually owning any shares of the company.
- I bought out-of-the-money calls. This is a type of option contract that gives me the right to buy Tesla shares at a specified price in the future.
- I swapped some of my Bitcoin for Tesla as I was convinced Tesla would outperform Bitcoin in the short run (this got a lot of cries from the Bitcoin Maxis)This reduced my exposure to Bitcoin and increased my exposure to Tesla.
- I swapped half of my long held Google shares for Tesla shares. This reduced my exposure to Google and increased my exposure to Tesla.
As a result of these actions, my Tesla position has increased in value very significantly over the last few months. This is due in part to Tesla's strong performance in the market. The company's stock price is up 107% year-to-date.
I am aware that my actions were irresponsible and that I am taking on a significant amount of risk. However, I believe that Tesla is a strong company with a bright future. I was highly confident in my actions and my investments have generated huge returns this year. I also believe they will generate a lot more in the in the long run.
As of today, my Tesla holding is worth about 1.7 times my Bitcoin holding (they were balanced only a few mths ago). I will continue to monitor the market and make adjustments to my portfolio as needed. If I see Tesla running out of steam, I will swap Tesla back to Bitcoin or some other faster horse.
Thank you