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Diary of a Dumb Investor: my tech stock splurge (pt. II)
Finally, I've taken the plunge and bought electric car maker Tesla. Or at least I will when the postman delivers my form.
The moment has arrived. After a long time yearning for shares in electric car maker Tesla Motors (TSLA), now is the time for me to jump aboard the US tech stock.
Tesla shares have already enjoyed an astronomical rise, surging from around $34 at the beginning of last year to a peak of $265 in February. It has been dubbed ‘the new Apple’ after becoming the highest-flying US carmaker in at least two decades.
I’ve looked on enviously, waiting for a pull-back so I can get in on the action. With a 14% drop over the last month, I feel the time is now. Sure, many will mock me – its price earnings ratio is in three figures, and even Tesla chief executive Elon Musk warned the share price was ‘more than we have any right to deserve’.
But just as I got flak for ‘jumping on board late’ when buying Hutchison China Meditech (HCM.L) back in 2012, I’m hoping the criticism I’ll inevitably receive on this purchase will eventually ring hollow.
It’s hard to argue that electric cars aren’t the future, when even Formula One’s throaty V8s have been replaced with a whirrier, quieter ‘power unit’ that uses forms of electric energy alongside more traditional fuel.
Racing cars have followed in the wake of mainstream car manufacturers, which have long been rolling out vehicles that don’t rely solely on petrol. But these half-hearted measures are not for Tesla, whose cars run only on electricity.
While it has been confined to the midlife-crisis friendly sports car and luxury end of the market, Tesla is making moves into the mass market. When we eventually move to all-electric cars (if even smoking is going that way, I don’t see how we won’t) it’s difficult not to see Tesla being in pole position.
Now all that’s left is the small matter of actually buying the shares, which are listed on Nasdaq, the US stock exchange for many technology companies. It’s my first purchase across the pond, and a little bit harder than I had expected. First I need to complete a W-8BEN form to ensure as a UK resident I don't pay too much tax on Tesla dividends. Given I’m investing in a nice, shiny future of electronic transport, it’s a bit disappointing to learn I have to stick this form in the old-fashioned post. I just hope the shares haven’t raced ahead even further by the time I get the green light.
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by Gavin Lumsden on Dec 19, 2014 at 17:24