Ah, the painful gift of hindsight, the ultimate tease in the investing world. It’s quite often painful to look back at the stocks that got away—the ones that you were this close to buying before steering clear—and losing out on huge gains.
Sometimes, of course, you’re also met with relief when you see that too-good-to-be-true stock sink.
When it comes to Tesla Inc (NASDAQ:TSLA), however, it belongs firmly in the first camp. Had you invested in Tesla stock back in 2010 during its initial public offering (IPO), you have netted a gain a of roughly 18 times your investment.
That means that for every $1,000 you had poured into TSLA stock, you’d be $18,000 richer about a decade later. Not a bad return at all.
Of course, a lot of those gains were in the early goings of Tesla Inc’s lifespan.
Over the past five years, for instances, an investor would have seen their money only grow by about 52%.
Chart courtesy of StockCharts.com
While 52% isn’t anything to be ashamed of, Tesla lags behind stocks in other industries like pot over that time, which saw thousands of percentage points of gains over that same period.
So there’s a few lessons here we should take away.
The first is that getting in early is fundamental to seeing the biggest returns on investment. While this may sound like common knowledge, it doesn’t mean that investors always take it to heart.
After all, being the first one through the breach is scary. You’re entering uncharted territory and you have no idea if this whole thing will blow up in your face.
The thing to remember is, even during implosions, the brave who invest early enough are often rewarded with gains.
Bitcoin miners are a prime example. Billions of dollars have been wiped away as a result of the Bitcoin bubble bursting last year. But if you got in early enough, even that calamitous drop was not enough to wipe out your massive earnings.
The same goes for those who invested long before the dotcom bubble (barring a few companies that went under). Many of the top stocks of that time, however, recovered nicely, and netted a very healthy payout for those who jumped in early.
That’s what these trips down memory lane are good for: to remind us that getting in early is almost always worth the risk. It’s why I’m so bullish on marijuana stocks. And so far, I’ve been proven right.
In any case, let’s take a deeper dive into Tesla stock and see where it’s going in the future.
TSLA Stock Projection
As mentioned earlier, the gains have slowed for Tesla Inc. in recent years.
While the company is often grabbing headlines for one thing or another, whether it’s for a fascinating new product or Elon Musk smoking week on a podcast (or performing all manner of ludicrous, sometimes damaging antics), the recent slowdown makes sense, given how fast the company has shot up since its IPO.
Which isn’t to say that its best days are behind it. Far from it; it just means that we’ve entered what is a lull period in the company’s trajectory, and the next few years are going to be critical for Tesla stock.
The first and most important thing to watch right now is the “Tesla Model 3.” The newest (and cheapest) offering from the automaker was supposed to be the company’s entrance onto the mainstream.
While we haven’t seen it quite take off as a of yet, it has come down significantly in price, hoping to match up expectations with reality. (Source: “Tesla’s Model 3 pricing inches closer to $35,000 target,” The Verge, February 6, 2019.)
It is an impressive vehicle, by all accounts, and is suited to take advantage of the number of more environmentally friendly politicians across the globe looking to reduce car emissions.
The company’s goal is to reach a $35,000 price tag before subsidies. While it has a long way to go, Tesla ended up slashing a good chunk of its workforce—seven percent—in order to help reach that goal. (Source: “Tesla is slashing its workforce by 7% to make a cheaper Model 3,” CNN, January 18, 2019.)
Progress is being made, in other words.
It’s also good to know that as the global conversation on climate change ramps up, having an affordable, sleek option by way of the Model 3 is going to be a huge boon to TSLA stock.
Not to mention that, in the U.S., Tesla Inc is facing what is certain to be one of its biggest opponents in President Donald Trump. If a Democrat with a pro-green agenda comes into power anytime soon (say, 2020), expect to see Tesla sales spike as subsidies are reintroduced and incentives are spread in order to encourage electric vehicle purchases.
Other analysts have taken notice, jumping the company’s target for year’s end up significantly. (Source: “Tesla shares jump after Canaccord Genuity upgrades the stock and predicts 40% rally,” CNBC, February 11, 2019.)
Entrenched analysts and others raising price targets has naturally helped speed along TSLA stock in 2019.
Overall, the company appears to be heading the right direction. While I slagged off Musk earlier, it’s hard to argue that he holds the moniker of “visionary CEO” and has remained pretty much unchallenged in that position for years now.
Musk, while sometimes a danger for stockholders, is also one of Tesla Inc’s primary selling points. He’s got vision and ambition that few other CEOs have, and he is a true innovator. And innovation is a key ingredient to any young company’s rise to dominance.
So when you take into account all the good and the bad, I think that the next 10 years for TSLA stock could see a very strong jump. Maybe not 18× return on investment, but certainly in the hundreds of percentage points—maybe even thousands.
As for my Tesla stock prediction for 2019, I see the company being able to net a healthy 20% on the low end. I’d put that as a safe bet, while it could also easily reach 50% gains in the next 10 months.
Risk abounds with TSLA stock, of course. It’s by no means a safe pick, but for those looking to make money both now and in the long-term, Tesla is an intriguing option.
While Tesla Inc is known for thinking outside the box, the company has yet to introduce a time machine, so those early stock gains are gone forever.
But there is still a chance to reap the benefits of what is, in my mind, a very strong company.
Sure, it has its warts, but those are far outweighed by the company’s virtues: innovative products, a visionary leader, and involvement in a growing industry that’s gaining political steam.