MegaSack DRAW - This year's winner is user - rgwb
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I started messing around buying shares back in February,and came across nio.I felt as though it was a solid company and kind of still do,but like I said I'm new to this.I started buying shares gradually through February early March,I've got around 3 grands worth at a massive high average of 56$.Since I bought these shares have done nothing but drop,I'm down around 35 percent so for a first time investment I'm gutted.Has anyone else got shares in this company and any thoughts on future prices.To be fair the business model and cars look sound,and deliveries of new vehicles keep going up every quarter.
I felt as though it was a solid company
What gave that impression their numbers look optimistic at best /nee outright lies.. The market cap is set about 25% more than ford and NIO sold about 2% of the number of vehicles - I don't believe the books balance on those numbers.
What would have looked solid was their return to date they have good looking market history +1000% return. I assume they were artificially inflating it to garner interest and investment.
Blue horseshoes love annacott steel.
If you're buying shares as an entertainment with money you can afford to lose - essentially gambling, with the potential to make money in the long term and the risk of losing it, that's the kind of share to buy. As an investment for your later life, very high risk.
It is money I can afford to lose but still gutted.I know it doesn't sell anywhere near the amount of cars as any of the major car companies,but then Tesla is valued more than the largest 6 car companies in the world combined,so yeah I suppose it was a risk as I thought it could in a few years be a major ev player.But yep massively overvalued more than likely at the minute.
An expensive lesson to learn so just move on. I have some shares that are below purchase price 5 years post purchase, I view them as an annuity, you surrender your capital on purchase in return for an income via dividends. Reinvest the divi back into the shares and start spending the income on retirement,low share price buys more units.
No idea about nio I am afraid but any individual share carries a higher risk.
Tesla is valued more than the largest 6 car companies in the world combined
Stands to reason since Tesla are not only a car manufacturer
Although they are grossly overvalued as well but are still pulling their weight at least due to their diverse portfolio of products
I'm not saying nio are a bad investment....but the warning signs to look much closer are quite evident even at a glance at their fact sheet
Sounds like an expensive mistake.
I wouldn't put all eggs in 1 basket. Diversification is key. 1000% historic increase would immediately suggest to me that is't overpriced, and similarly any PE ratio that's excessively high too.
Only way I'd be in Tesla or similar is via a fund where it's pooled with other assets and rebalanced regularly. eg SMT has been selling Tesla pretty much every month recently simply to limit it to a sensible portion of the overall portfolio. Not looked in to NIO enough personally, but it's not one I'd dabble with as a core holding. Gamble half a percent of my bank roll hoping for a 1000% return on top of a previous 1000% return (much like crypto pumping an mooning)... perhaps.
Dunno what funds NIO is in, but there must be one that specialises in EV's or gains exposure to the Chinese automotive industry etc.
Gimme a consistent 10% annually rather than 9 useless stocks and 1 Tesla/NIO/Bitcoin mooning to cover the other 9 flops and give a bit extra. But then I guess different people have different priorities.
If you can afford to lose the money, then just hold the shares. If you sell now, you definitely lost. If you hold, you might get lucky and they grow. IANAIFA
Never sell shares at a loss. If anything but the dip, but guessing the dip is the challenge
Never sell shares at a loss.
That's rather strange advice.
If you realise you've made a mistake or something happens and a company / investment no longer looks like a good bet you have two choices:
1. Wait for it to return to your buy price (which may never happen or take years)
2. Sell now and invest in something else
For every month you're waiting for the share to rise and it doesn't, you have the opportunity cost of missing out on gains of other, more successful companies.
As a general rule selling every time it dips isn't a good strategy but leaving money invested in a dud out of principle isn't a good strategy either.
You should have invested in the doggy coin.
In all seriousness I personally think they are a pile of junk but still have exposure via B Gifford. I hope they are doing some kind of due diligence and analysis to make the call on my behalf. Without them I’d have no Tesla too.
Investors chronicle podcast those week is interesting, basically saying too much money chasing too few assets so shares, property, classic cars be warned.
I am looking at houses and very average ones are selling quickly, then a neighbour comes on the market at 10k extra.
Asset prices go up and down.
Investors chronicle podcast those week is interesting, basically saying too much money chasing too few assets so shares, property, classic cars be warned.
Been that way for most of the last 10 years with QE pushing interest rates and bond yields down, so money has been chasing equities, which have been doing very well for a long time. We've had a 10 year bull run until about 18 months ago and now it's back to full speed ahead again.
With Biden's massive stimulus programs in the US, it's not going to end soon. At some point there'll be a correction, but you may as well make the most of the bull run whilst its happening.
Back to the OP though.
Investing in a single share is pretty risky. Investing in a single high tech 'bubble' stock is extremely risky - NIO is massively over valued (like Tesla) and unprofitable so everything hinges on as yet unseen massive future growth (which may never happen). Effectively you're buying into the founders 'dream' which may turn out to just be a dream...
You'd be much better off investing in managed funds which will spread the risk over say 50 companies. If you like high tech exposure Scottish Mortgage Trust of Polar Capital Technology Trust. You're still at risk of taking a hit if sentiment turns against tech companies, but at least your exposure is spread across a wide range of companies, some of which may even be profitable!
So, what would I do in your situation? I'd probably sit it out and wait as there's a chance you'll get your money back as the world is coming out of Covid doldrums and we're going to have a bull run for a few years. Most of the stellar growth, in NIO, seems to have happened, it's jumped up 1000x and you're not going to see that happen again, so I wouldn't expect to see a big return on your investment.
Cheers for all the replys as very helpful.I think I will just stick it out with nio in the hope that I'll get my money back in a year or two, guardian piece talks of them expanding into europe later this year so hopefully share price will improve.I think as a few of you have said I'll start putting some savings into a fund, again I've got no idea which one so if anyone has any suggestions that would be great.I think medium risk,with a minimum average return of 5percent👍
I used to work for them...
Not sure about them to be honest but I can't see the shares being worth much until they start selling in Europe and the US.
We were given shares when they floated but unless you sold them that day I don't think anyone made any money.
When I tried to sell mine I was told it would end up costing me so they just lapsed. (There's only a short period after you leave when you could sell, very complicated arrangement probably designed to make it nearly impossible to sell!)
I was drawn in buy the money no object we're goiy to be awesome but but the money soon ran out and things changed pretty quickly.
A part of me hopes they do become a bigger player but honestly I'm just not sure they will.
I think the end goal will be to sell the battery swap stuff to a big player.
Make of all that what you will.
Never sell shares at a loss. If anything but the dip, but guessing the dip is the challenge
https://www.yourbias.is/the-sunk-cost-fallacy
Definitely strange advice - how did this play out for Sirrius Minerals investors?
A share that has tanked very often tanks more but it might not. There's no rational basis for always selling or always holding when a share loses you loads of money it needs to be case by case on how well it might do in the future.
If the OP has done his homework and really think it's a brilliant stock then now's the time to buy more and lower his average purchase cost in time for the boom.
If a stock is already pretty inflated but you still think it could rise a lot (tech breakthrough, new markets, being acquired etc.) you're probably better off buying option calls on it as if it does go south you'll just lose the premium when the calls expire.
Definitely strange advice – how did this play out for Sirrius Minerals investors?
Or Woodfords fund holders....
If you've made a mistake, get your money out and working somewhere else. Every day you hold a dud is a day of lost gains on a successful company.
Sunk cost fallacy and getting out of a losing bet ASAP is sound advice... unless the share is down but your long term reasons for investing are still intact.
Check out the Rolls Royce thread - that stock was like a roller coaster for all involved. I’m sure many sold at a lost but it’s one of my top performers after the rights issue.
My view is have 20 stocks to diversify. No way one will wipe you out but you still have a big enough holding in each to get decent gain if it outperforms. Don’t watch daily but track quarterly revenue / growth figures and read investor updates. If things turn south then dump the stock if it has no way to return. Even with this effort it’s no more than gambling.
I've just sold my worst performing fund which is a Vanguard FTSE 100 tracker, held it for three years (IIRC) and it's been under water for ages.
Ironically the FTSE is starting to improve so I'd probably break even if I waited another 6 months, but I've sold it as I'm betting on US Equities rising faster than UK Equities, so I'm just going to re-invest it back in US stocks. If I'm right, I'll make more money crustalising the loss now and betting on a faster train than staying in the slow lane. If not, well, you can't win them all.
I am q happy holding loss making shares, its almost counter intuitive as when dividends accrue do you buy fully valued stocks or bombed out ones.
There isn't a correct answer of course, as everyone is different. Some uk stocks have had a terrific run this year, some are so out of favour but still sound companies.
Sounds like an [s]expensive[/s] cheap mistake.
Corrected that for you 😉 . If it makes you feel any better, I could dig out the price charts for when I bought Tesco, Shell, Morrisons and a Russia fund 😀