Diamond Hands

I have a colleague whom I occasionally share lunch with. Two years ago, when Tesla's stock price peaked at around $414 per share (post-split), nearing a $2 trillion valuation, he invested in Tesla shares. I was skeptical and questioned his decision. I asked, "Did you invest all the money you intended to, or do you plan to add more?" He replied that he had invested all at once.

Another acquaintance mentioned that they had bought CVS stock five years prior, and its price hadn't moved since then. Even after another two years, there was no change. While I refrained from openly criticizing their choices, I couldn't help but think they might be making mistakes. Instead, I checked in on them every three months, asking if they still held onto their stocks. Their response was always, "Yes, we're holding on; we have diamond hands."

It seems they might not grasp that, over more than two years, they haven't gained anything and may even be losing money. Furthermore, not only are they potentially losing in the stock market, but inflation is also eroding the value of their money.

I wonder why some people, unfamiliar with the stock market, invest significant sums in just one or a few stocks, only to lose money and then conclude that the stock market isn't for them. If they haven't made an effort to learn about investing, perhaps they should expect these outcomes. The Tesla investor told me recently, "I've done my part; I've also bought a new Tesla. Now it's up to Elon." This kind of perspective leaves me shaking my head in disbelief.