The time I invested all my money in one stock
An autobiographical recount of the last 8 years. The Tesla investment story.
Apply specific knowledge, with leverage, and eventually you will get what you deserve.
When you’re finally wealthy, you’ll realize it wasn’t what you were seeking in the first place. But that is for another day.
Naval Ravikant
When I was sixteen, I downloaded a stock simulator and bought stocks with fake money. Six months later, the stocks were up and I was +$50,000. I started to think that stock market investing could be my way to get rich. I also loved the idea of outsmarting people and getting money for doing, well, basically nothing.
On my eighteenth birthday, I walked into a small regional bank where I had saved six thousand dollars. I asked the bank teller if I could buy stocks. The bank ladies laughed. They sat down and then told me that stocks are risky. I walked out of the bank, looked up how to buy stocks, and downloaded half a dozen brokerage apps. Thus began my obsession with stock market investing.
What determines the price of the stock? Who decides?
The stock price is the most recent transaction. It’s what someone recently paid per share. Shareholders own the rights to the profits of the business. If profits unexpectedly increase, then so does the share price.
In my first year of playing with stocks, I placed thousands of trades for a net gain of +$22. At the same time, I was spending a lot of time watching YouTube. I watched videos of Warren Buffet. I learned that Buffet made almost all of his money from seven investments. The Buffet way is to learn every day and hold two or three incredible companies.
I clicked on my first Elon Musk video because I thought “Elon Musk” was a funny name. It was the first Elon video of thousands. I watched Musk talk about electric cars, rockets, and his way of seeing the world.
I looked up the closest Tesla store. It was in New York, 120 miles away. I called the number.
“Could I test drive a Model S?” I asked.
“Are you interested in purchasing or is this more for education?”
“Educational purposes,” I said.
“Are you 21?”
“No, I’m 18.”
“Someone who is 21 or older needs to drive the car, for insurance reasons.”
My father came with me to New York. He drove the Model S; I sat in the back.
“It drives like a dream,” he told his girlfriend, who had tried to talk me into selling the Tesla shares that I recently purchased. Tesla was one of the first stocks I bought. At the same time, I was a seller on Etsy and an avid user of Amazon. I invested in both Etsy and Amazon. The numbers went up.
Soon it became clear that I could finish college in three years from an in-state university. This would leave extra money in a Higher Educational Trust with my name on it. After a brief probate court dispute, I received around $70,000.
All of it found its way into my iPhone gambling app, I mean investing app.
I asked myself, “What do I need to do to get $10 million?” The best answer I could come up with was to concentrate all my resources on one or two investments with the highest expected return.
One evening while I walked out of my college dorm building, toward a finance society meeting, I decided to activate margin on my Robinhood brokerage account. Margin is borrowing money against equity holdings. The borrower isn’t required to pay off the debt, so long as the assets are valued at much more than the debt.
“Just for an extra couple thousand dollars,” I told myself. I pressed the button.
“I will regret this,” I thought.
Five years later, I had $335,000 of margin debt. I regret decisions, but I don’t regret that one.
Oregon
I graduated from university and didn’t apply for a single job. I wanted to make it as an entrepreneur. My father was skeptical. He offered me $20 to mow the lawn. As usual, we started arguing about Tesla. Despite his test drive three years earlier, he did not share my faith in Tesla. I threw his $20 bill back on the table and said “I have $70,000”.
Next, I booked a one-way ticket to Portland, Oregon, because I didn’t know what else to do. The plan was to get a car loan and buy a Tesla Model 3 when I got there. I could rent it out or use it for ride-hailing to make the payments. The week before departure, my application for a car loan was rejected. Of course it was, I didn’t have income. I lobbied family members to loan me the money or co-sign, but it didn’t happen. I shipped my bike to Oregon and flew out there anyway.
For two months, I went on adventures in the Pacific Northwest with my bike. It was fun, but I was running out of credit and activities. I was living in a borderline flophouse room rental I found on Craigslist. I paid the landlord with a credit card. I had a foam mattress on the floor and my standing desk was the cardboard box that my mattress came in. My table was the box that I shipped my bike in.
I opened seven credit card accounts with 0% promotional rates, for the first 18 months. I lived on 0% credit cards so I could buy and hold more investments. YouTubers were my friends. Every day I would watch a YouTube video, or ten, about Tesla, Elon, electric cars, and stocks. Then I would buy more Tesla shares. This was very fun. The stock price was dropping as my conviction in the company and the products was growing.
“I will go down with the ship,” I told myself. Solidarity is a powerful experience. Survival focuses the mind.
Over time, I concentrated everything I had, and then some, into Tesla stock. I purchased over $100,000 of Tesla shares.
I decided to go to Mt Hood to ride my mountain bike. I got on the train without a ticket. When the train people came around to check, I got off at the next stop and missed the connecting bus to Mt Hood.
I started riding my mountain bike uphill into the wind on the shoulder of Mt Hood Highway. A car with a bike rack was coming up behind me. I put out my thumb. The guy picked me up. We chatted and went mountain biking together. He was riding with a snowboarding helmet. He crashed. On the way back to the city, he floated the idea of joining him as a ski instructor at Mt Hood.
A few weeks later, I decided to get my Oregon driver's license. With that, I could buy a Tesla vehicle tax-free. I went to the DMV in Portland. The same guy who picked me up on Mt Hood Highway was there. He was also getting an Oregon driver's license. I mean, that’s crazy. We took the license test sitting next to each other. The sample question was, “What is 2+2?” He got it wrong. I will never forget that. This actually happened. All of this actually happened.
I was unsure what I was doing with my life. I was mountain biking and selling wooden bowls on Etsy. I decided it was time to return to New England. Back east, I was still unsure what I was doing with my life.
Then, the Q3 2019 Tesla earnings report popped the stock price +19% in after-hours trading. I gained $18,000 overnight. This was a big rush for a jobless 21-year-old.
Tesla was the most shorted stock in the world. In 2018, it looked like Tesla was going to go bankrupt, for sure. Instead, they illegally built a third production line in the factory parking lot. I did not know how dire the situation was at Tesla, nor did I know that Elon would pull the infamous tent out of his ass. I had faith that the Tesla team would figure out production.
Not knowing what else to do, I decided to go back to Oregon for round two. I applied for another car loan, for just $13,000 this time. It was approved. I still needed another $40,000 to get the car, and I did not want to sell one single Tesla share.
My aunt shut down my uncle lending me money. “Good luck,” she texted me.
“I don’t need luck, I need capital,” I wrote back.
My flight landed late Saturday night in Portland. I went to my Airbnb. The following morning, I had ski instructor training at Mt Hood with 2+2. I didn’t have the Tesla yet, so 2+2 gave me a ride to the mountain. On the way back to the city, near where he originally picked me up hitchhiking, the vehicle broke down.
“How are you going to commute to Mt Hood to teach ski lessons?” he asked.
“I’m actually going this week to pick up a Tesla Model 3.”
He laughed at that.
The next day was Monday, December 9, 2019. It was my cousin’s birthday. I received the message that my Long Range Dual Motor Model 3 was ready for pickup. I took a Lyft from my Airbnb to the Tesla store. I paid the remaining $40,000 by borrowing on margin against my Tesla shares. I took delivery of the Model 3. I bought it tax-free because I had an Oregon driver's license. I picked up my cousin in my brand-new Tesla and took her out for her birthday lunch.
The following weekend I drove 2+2 to Mt Hood in the Model 3.
It was unclear where I was going to live or how I would charge my car. Then, my cousin's parents offered to rent me a four-bedroom house in one of the nicest neighborhoods in the city. I subleased the other three rooms to cover the rent. I got approved to drive for Lyft and I started making money.
In a matter of weeks, I went from no car, no house, and no job, to a Tesla, a four-bedroom house plus hot tub, and working as a ski instructor at Mt Hood.
Me going through life:
While I was skiing for free, for fun, I met a Polish girl who was also living in Portland. She was like a model and wanted to hang out with me. We went on a walk and saw a movie.
I thought to myself, “Wow, life is so easy.”
That was February 2020. Then, I got sick, the Polish girl went home, and there were lockdowns, riots, and horrifying wildfires.
Somehow, during the March 2020 stock crash, I never got a margin call. A margin call is when the broker tells the borrower to pay down the margin debt by adding more cash or they will sell your investments to get their money back. Stock prices bounced back quickly when people realized the world wasn’t ending, and at the same time, the Fed dropped interest rates on debt, to zero.
In the spring and summer of 2020, I wasn’t working. I was growing mushrooms, camping, and riding my bike. I was mountain biking with Jake, who was working remotely for a bloated corporation, so also not working.
“I’d be happy with a quarter million dollars. I think that’s a good number,” he told me.
Jake had around $60 - 70k. Despite how much a person has, they will be happy when they have 2 - 3 times more than that, in perpetuity. This was true for me.
“I have a quarter million,” I told him. We’re both about to plunge into a cold river after our bike ride. “It’s still not enough to buy a house,” I said.
In July 2020, with nothing else to do, I browsed the Tesla website. I decided to apply for all of the jobs at Tesla. Two days later, they emailed me. After a few phone calls, they offered me an entry-level role. (In 2020, 2.25 million people applied to work at Tesla.)
While working for Tesla, my Tesla investment went up 10X. One of many frustrating mornings at work, I opened Robinhood. My account was valued at $1 million. I used my employee discount and access to cheap capital to buy a second Tesla. I took delivery of a Model Y and quit my job the next day.
Once again, I did not know what to do next. So I went back to ski-instructing and woodworking in my garage. My tables were beautiful, and I sold some of them. But the shift from working at the coolest company in the world, 5 or 6 days a week, to not doing that, was a big shift. I had also sustained another head injury from mountain biking. I fell into a depression and started gambling money away via Reddit meme stocks. I started taking wild risks, drinking and driving and skiing dangerously. I was in a skiing accident where a rope caught my neck and sliced it open, about an inch away from my jugular.
I decided to move back to New England, again. I shipped the Model 3 to my father's house and drove the Model Y across America. After the Model 3 showed up at his house, my father had a change of heart about Tesla.
I will save the health stuff for another book. For now, I will say that my health trended inversely to my financial net worth. Some call it “mental” health, as if the body and mind are two separate entities.
Unearned Capital Carries Weight
I was uncomfortable when I inherited the original seventy thousand dollars. I gave some of it away to internet charities. I offered some to a friend. I suppose I experienced feelings of guilt regarding that level of unearned capital.
My life was like a dining table with many plates of food, but just me eating. Do you want to be that person?
It’s not my preference.
For a few weeks when I was 23, my account hovered around 1.8 million dollars. I had two Teslas, a million dollars, and I was miserable.
Hundreds of thousands of unearned dollars can disturb the precarious balance of life. It’s like wearing ice skates with a brick of gold tied to one ankle.
Staring at numbers and charts on a screen by yourself is a lonely life. Stock market people know the financials of everything and the value of nothing.
It’s difficult to say how exactly the money affected me. It provided large swaths of free time. It soaked me in ego, delusion, lethargy, boredom, and loneliness. Tons of unearned money is not conducive to meaningful work and meaningful relationships. It removed the forcing function to be useful and stay sane.
Too much freedom can be worse than no freedom. Without a clear use for it, money, like fire, can be an agent of chaos. Everything is flammable. Days when my net worth increased by $50k in 8 hours, gave me permission to quit jobs as soon as I felt inconvenienced.
I couldn’t figure out what to do next.
Employment generally sucks. People who don’t need the money don’t last long in an entry-level role. In America, most of our work and day-to-day social relationships come from employment. Without employment, there’s a good chance an American finds themself alone and bored. And that’s when demons come out to play.
For a decade, I plowed through pain and stress with my eyes fixed on the grail of getting rich. When I got there, the devil came to collect.
The strategy I employed is one that high-net-worth people can do. It’s called buy-borrow-die. Acquire assets, the value goes up, borrow against those assets, and buy more. Rinse, repeat, and die. The debt can be paid after you’re dead. There are no taxes if there are no realized capital gains.
If freedom is the absence of lies and dissonance, if freedom is nothing to lose, then despite all my money, I was far from freedom.
I checked stock prices every day. I consumed content that confirmed my biases. After I quit my job, I was eating almost all of my meals alone. My social interaction with peers was limited. This is not where I wanted to be in my early twenties.
Meaningful work feels like fulfilling your potential by making original contributions. It feels like doing exactly what you should be doing. Waking up without obligations, checking stock prices, watching YouTube videos, and listening to earnings calls, did not feel like the great work of my life. I didn't feel like I was contributing to much of anything. I was useless and alone.
If what you’re doing is not at least a little challenging, then you’re not near the limit of fulfilling your potential. When difficulty presented itself, when uncomfortable feelings emerged, I would go back to stocks like a baby addicted to crack. I would open my brokerage account and bask in the delusion that I was a genius investor. I didn’t know what to do. I was caught in a loop of checking numbers on a screen.
I suspect that if I hadn’t inherited $70,000 which became over a million, then I would have put more effort into looking for work that I really wanted to do. Perhaps I would not have had such an ego structure getting in the way.
“I have a million dollars,” was chronically on my mind. So too was, “I’m a loser who doesn’t have a job, doesn’t have income, doesn’t have a girlfriend, and has a million dollars and can’t figure out what to do with it.”
At one point, post-Oregon, I was so depressed and generally dysfunctional that I had to force myself to sign up for Uber just to do something, anything, to feel like a normal functioning human who is part of society. I was a millionaire driving for Uber.
This was not the great work of my life.
There’s a feeling that after we get a bunch of money, then we can start the great work of our life, and find amazing relationships. Turns out, it is difficult to trade capital for work and relationships you love. It’s hard to even know what the first step is. And it’s hard to take steps when it’s hard to get out of bed.
Looking back, I approached life in this general order:
Finance maxing
Health maxing
Meaningful work and relationships maxing
The problem is that trading money, for health, work, and relationships is not as easy as shopping on Amazon or buying a stock, especially if your health is gutter.
A better way could have been prioritizing meaningful work and relationships, which helps a lot with health, which in turn helps with finances.
At the time, it was easier for me to focus on finance, basically a fake-work get-rich-quick scheme. Not only did this distract me from making original contributions and forming relationships, but it also detracted from the financial benefit of work and relationships, because my get-rich-quick scheme actually worked. For someone with $1,000, a $2,000 paycheck triples their net worth. For me, a $2,000 paycheck meant about as much as a participation award. It increased my net worth 0.2%. And I spent it like it was worthless.
The culture tells us we should be happy. Happiness comes from meaningful work and meaningful relationships. The market can’t provide it. The market baits with meaning and switches with pleasure, pinning faces to hedonic treadmills.
The pinnacle of hedonism is the victim script.
“Capitalism did this to me, the Fed did this to me, genetics did this to me, the boogeyman did this to me.”
Human does not mean broken. I did not want to be a product of my circumstances. I looked for what to do next. I didn’t stop, I didn’t give up, I didn’t succumb to neurosis.
I also got a kick in the ass.
Guillotine
The stock was at an all-time high. It was obvious that recession was imminent. I consciously decided not to sell any of my shares.
Why didn’t I sell my shares, pay my debts, pay the taxes, and walk with a million dollars?
I would tell myself things like: Live by the sword, die by the sword. I don’t like taxes. I got to where I am by holding. These shares will be worth more in the future. A million is not enough.
As silly as it may sound, I was emotionally attached to my Tesla investment. “Sell” was not in my vocabulary.
At some deep level, the universe seeks balance. We don’t take the easy “W” when we can because it’s not about winning, it’s about the war. If you get 10, you’ll seek 30. It’s about the quest. The mission. The thrill. The villain can easily kill the protagonist, but he drags it out with a speech and then gets killed. He doesn’t take the easy W because his opponent defines him. There’s a fear of winning, because, then what?
I held and borrowed. Through cars, travel, food, healthcare, interest on debt, and a proclivity to buy stocks and never sell, I racked up $350,000 of debt, in four years. The money goes quick. After the Fed raised rates, the interest payment on my debt became $1,650 per month.
At any time, I could have sold shares and erased the debt. But instead, I went to an online Mexican pharmacy and ordered three different types of benzos. They arrived just in time for the stock price collapse.
I had failed to comprehend the terms and conditions of the debt. I had failed to abide by my self-imposed borrowing limits. And I failed to comprehend that I had put my financial well-being in the hands of a group of unelected bureaucrats called The Fed. The Fed raised interest rates, which increased my debt, lowered the profits of Tesla, made savings accounts more attractive than stocks, and drove a long squeeze — the further the stock price falls, the more shares need to be sold to cover debts, in a vicious cycle.
The downward squeeze was exacerbated by Elon selling billions of dollars of Tesla shares.
“I would really advise people not to have margin debt in a volatile stock market and you know, from a cash standpoint, keep powder dry,” Musk said on a podcast. “My best guess is that we have stormy times for a year to a year and a half, and then, dawn breaks roughly in Q2 2024, that’s my best guess,” he said. “Booms don’t last forever, but neither do recessions.”
I realized too late. I stared at my account. It had dropped 75% — more than a million dollars — gone. My debt-to-asset ratio was critical.
The broker issued a margin call. It gave me 15 minutes to deposit more cash into the account or the algorithm would sell my shares at the worst prices in years. I didn’t have thousands of dollars in cash sitting around waiting for this to happen. So the broker began selling my shares. The further the stock price fell, the more they sold.
From Christmas into the New Year, my account was one price fluctuation away from liquidation. One quick twitch and the holdings would be liquidated to less than I started with. I'd be left with a tax bill that I wouldn’t be able to pay because I had $20,000 of credit card debt, a $25,000 car loan, $4,000 per month of living expenses, and no meaningful income. I came to the conclusion that I deserved nothing more than to go to zero.
I could no longer withdraw money from my brokerage account like I’d been doing for years. On Christmas, my mom loaned me $5,000 to pay rent. I sold possessions to raise cash and pay down my margin debt.
I took benzos to sleep. I went to my mother's apartment. I felt okay enough to sit down and start thinking. I did mathematics at her kitchen table.
“I know where the stock price is going long term,” I said to my mom. “I can sell everything now and in five years I could have a million dollars. Or I could roll the dice and hold, and in five years I could have five million dollars. It’s guaranteed one million or a 50/50 shot at five million.”
“Oh jeez Chris I don’t know.”
“If I sell some now, whatever liquidity I can scrape together will have a bigger impact improving the debt-to-asset ratio and avoiding more margin calls.”
I clenched my teeth. I submitted a $100,000 sell order at the lowest price the stock had been in years. The next day, the price took one final plummet. The day after, it bounced back and the squeeze was over.
My mom called and left me a voicemail of jubilation.
“The tide has turned,” I told her. I repaid the $5,000 loan.
The stock market gods didn’t zero me out. The account emerged in the green. I watched the guillotine fall and chop my hair off.
Much more than money, I needed something to do. Once the problem is properly framed, the answer is the easy part.
That winter, I started doing kundalini yoga exercises every day with a YouTube streamer. I read The Alchemist. I went out and got a job at Home Depot. I read Harassment Architecture by Mike Ma.
Late at night, deep in the winter, I felt that there was a book that wanted to come out of me. I started writing.
Through writing, I think.
I wrote an essay called The Third Opportunity to Get Rich Off Tesla.
I realized, with help from people in my life, that it is time for me to sell my Tesla shares, pay my debts, pay my taxes, and guarantee that I can continue to invest in myself and my books.
I can think more clearly.
I can be the person I want to be.
The game is over. I won.
I am relaxed in a garden surrounded by friendly people. I have multiple years of runway to write and be of service as best I can.
Much of my ability to health max was enabled by my affinity for finance maxing. But on its own, finance maxing is dumb. When life is about maximizing a number on a screen, I lost the thread.
Co-creation is what there is to do. My life, the pathless path, is not about a number on a screen, it’s about knowing what to do next.
“The most important thing is to never lose the thread. Money is secondary. Public opinion is secondary. Social status is secondary. Power is secondary. All nice things to have, but they can never be primary goals; they're indirect by-products of living truthfully. If you seek any of those things as primary goods, you must eventually lose your thread and get lost, which is spiritual death. If you just seek the truth, and tell the truth, and give all of your energy to living as truthfully as possible, then it's impossible to lose the thread. To the man with a real thread, good things come, but only because a truthful life catches many imperceptible tailwinds, all kinds of implicit alpha you'll never be able to fully explain. What I'm describing is real and empirical, you can very loosely see the causal pathways, but there's no dataset for singular events, and the causal efficacy is so unreasonably tremendous that you realize this is why the New Testament three times refers to God as "the Spirit of Truth."
Justin Murphy
A fit body, a calm mind, a house full of love. Those things can’t be bought — they must be earned.
Naval Ravikant
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Great read! Very interesting. Hey Chris, where can I read: "The Third Opportunity to Get Rich Off Tesla"? Thanks!
Serious guts here. Wow.