The year was 2013. I was a sophomore in college taking an entry-level economics class. We were learning about which factors shift the supply and demand curve. Using what we learned in class, our assignment was to find a company and analyze how their activities were moving the supply and demand curve and what that would mean for their business going forward. For some reason I stumbled upon this article and thought it would be a great example for the assignment:
https://www.technologyreview.com/2013/04/04/179130/why-tesla-survived-and-fisker-wont/
The article discusses that although Tesla and Fisker are both electronic car companies, Tesla was putting more money into their battery technology whereas Fisker was putting more of their resources into creating a sleeker design and, because of that, Tesla would come out successful in the electric car market. I thought this aligned well with what we were learning because a that type of investment in technology allows Tesla’s to better control their costs and become more efficient at producing better electronic vehicles.
The article was written on April 4, 2013. On that day Tesla’s stock price closed at $8.22 per share. I probably wrote my paper at the end of April and the stock closed then around $10 per share.
Lets see how things would look like today if I had made a $1,000 investment in Tesla after I wrote that paper… that $1,000 in 2014 would be worth $104,715 today. That is INSANE. It makes me sick honestly. Take a look at the graph to see the journey my $1,000 would’ve gone on:
So why didn’t I invest in Tesla? To be honest, I don’t have a great answer. I had the $1,000 to invest if I wanted to take a flyer. Was it a lot of money to me at the time? Of course! I was a sophomore in college and I had a lot of other stuff that I could put that money towards.
What is the moral of the story? What lessons have I learned and what can you learn from this?
- ALWAYS TAKE THE FLYER!!!! If you do the work and the opportunity is right there, act on it and don’t think about it again.
- It’s so important to have a few different streams of income. If I did in 2013, then giving up that $1,000 at the time might not have felt like a risky investment. I might have even felt comfortable investing more. At least I could rationalize parting with the money by saying: “I can make that money back soon.” But since I didn’t and I didn’t know when I would see that money again, it scared me off from doing anything that today, would’ve been something really great.
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