The Future Fund LLC Managing Partner Gary Black defended his firm’s Tesla Inc. (NASDAQ:TSLA) investment strategy amid criticism from Tesla bulls, emphasizing a disciplined approach to position management rather than short-term trading.
What Happened: Black revealed that his fund’s average Tesla stock purchase price since early 2023 has been $162, while their average selling price reached $252. The disclosure came as The Future Fund recently trimmed its Tesla position at $351, following a 150% surge from April lows.
“That’s what professional investors do – buy low, sell high,” Black stated on X, addressing criticism from Tesla enthusiasts. “No one ever went broke by taking profits.”
The Future Fund began reducing its Tesla position in the fourth quarter of 2022 when it represented 12.2% of the portfolio, following Tesla’s 20% EV price cuts.
The position now stands at 4.11% as of Nov 15, making Tesla the fifth-largest holding in The Future Fund Active ETF (NYSE:FFND), behind NVIDIA Corp. (NASDAQ:NVDA), Alphabet Inc. (NASDAQ:GOOGL), Salesforce Inc. (NYSE:CRM), and Netflix Inc. (NASDAQ:NFLX).
Why It Matters: Black pointed to Tesla’s earnings estimates being reduced by 59% since the price cuts, noting that competitors matched the reductions, resulting in minimal volume growth. Despite the recent rally, Tesla’s stock has underperformed the NASDAQ 100 index by 32 percentage points over the past three years.
The investment veteran expressed concern about growing polarization within the Tesla investor community, noting that moderate voices face criticism for discussing potential risks.
“In the X world, uberbulls bash fellow bulls personally for not being bullish enough. That does not happen in the real world. Portfolio discipline is rewarded, not criticized,” Black emphasized.
The debate comes amid increased attention on Tesla, with recent headlines highlighting the Cybertruck’s appearance in President-elect Donald Trump‘s motorcade during a visit to SpaceX’s Starbase facility, potentially signaling new opportunities in government and security sectors.
Price Action: Tesla stock closed at $352.56 on Friday, up 3.80% for the day. After hours, the stock rose by 0.26%. Year-to-date, Tesla’s stock has surged by 41.92%, according to data from Benzinga Pro.
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