Buying Tesla Stock Taught Me a Costly Lesson

I bought Tesla (NASDAQ: TSLA) stock in June 2014 because I thought Elon Musk was going to save humanity.

Solar roofs on every house. Martian colonies by 2040. Cool electric cars making gas stations historical curiosities, like phone booths or Blockbuster Video. The stock barely kept up with the S&P 500 (SNPINDEX: ^GSPC) over the first five years, but I was convinced that things would change and give Tesla a real push.

I added more shares in 2019. Wrote glowing Fool articles about his genius. Defended him at dinner parties. The whole shebang.

Image source: Tesla.

The red flags I couldn't ignore anymore

But something changed. The Cybertruck idea sounded fantastic at first, with ultra-economic manufacturing principles and a unique design. Still, the early prototypes were tough to defend, and Musk's Twitter-centric marketing efforts started to look desperate.

So, I sold a few shares in 2021, making sure I had covered my original investment and then some, just in case the bad Cybertruck vibes turned out to be correct.

Then came the Twitter saga.

A supposed genius offered $44 billion for a company, immediately regretted it, tried to wriggle out, failed, and then lit the whole thing on fire. It was...clarifying.

Try to maintain "he's playing 4D chess" energy when Musk is posting meme-stock tweets at 3 a.m. while trying to buy the social media platform. Bet you can't.

I slammed the "sell" button hard in the summer of 2022, converting 88% of my remaining Tesla shares to cold, hard cash. Like the January 2021 sale, this batch yielded a 1,900% return.

Two weeks before the first Cybertruck deliveries, I'd had enough. The last handful of shares left my account at a 1,480% gain.

Tesla bulls might still be right about the future

The stock is higher now, about 2,780% above my starting price. Some of my Fool colleagues still recommend Tesla. They see robotaxis, humanoid robots, a pre-initial public offering (IPO) link to reusable spaceships, and a glorious artificial intelligence (AI)-powered future.

Maybe they're right. I've been wrong about Musk before, just in the opposite direction.

What I actually learned from Tesla

So, Tesla made me plenty of money, but I still wish I had left the stock alone in 2014.

Here's my costly lesson: I spent a decade thinking I'd found a forever stock. A company so transformative that I would hold it until I die and pass it to my kids. Instead, I'd bought a ticket to the Elon Musk Experience, and when I stopped enjoying the show, the investment stopped making sense.

You can't separate a founder-cult stock from the founder. I tried. It doesn't work. Every time Tesla announces something cool, I think about the CEO posting conspiracy theories. Every time the stock jumps, I remember that Full Self-Driving has been "coming next year" since the Obama administration.

The money was great. Truly, no complaints on that front. But I learned something more valuable: Don't hold stocks in companies you don't believe in anymore, no matter how green your brokerage screen looks. At some point, you're not an investor; you're just along for someone else's ride.

These days, I sleep better. My portfolio is less thrilling. And when Elon tweets something unhinged at midnight, I can just scroll past.

That's worth more than another 50% gain.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.