The Future Fund LLC, Managing Partner Gary Black pushed back against accusations of short-term trading, clarifying his firm’s Tesla Inc TSLA investment approach focuses on strategic position adjustment rather than active trading.
What Happened: Black revealed that The Future Fund’s average Tesla stock purchase price since early 2023 has been $162, while their average selling price has been $252. This disclosure came amid debate over the fund’s trading practices on social media platform X.
“We don’t trade Tesla,” Black stated. “We trim when Tesla’s price goes higher, which causes upside/downside to decline. We tend to buy more when Tesla’s price falls.”
The investment veteran expressed concern about growing polarization within the Tesla investor community, noting that moderate voices are being pushed out by extreme positions. Black highlighted recent instances where well-known Tesla bulls faced criticism for discussing potential short-term risks, even while maintaining overall positive outlooks.
“The community has lost some great Tesla longs as spokespeople and is in danger of losing still more because the cult is prone to attack anyone who is not over the top bullish,” Black wrote.
Of particular concern to Black is the potential loss of the $7,500 federal EV tax credit, which he argues could significantly impact Tesla’s business. With electric vehicles comprising approximately 80% of Tesla’s revenue, the company faces greater exposure to EV market dynamics compared to traditional automakers.
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Why It Matters: The Future Fund has maintained Tesla as a significant holding since its 2021 launch, though the position has been adjusted from 12.2% in October 2022 to 4.6% as of November 2023. These adjustments reflect Black’s disciplined investment approach and response to changing market conditions.
Tesla’s stock has shown significant volatility over the past year, trading between a low of $138.80 and a high of $358.64, according to market data. Black’s fund recently trimmed positions at $351 after the stock rose 150% from its April bottom.
“As disciplined growth investors, we have to like Tesla less at $350 than we did at $140 since the relative upside/downside is less favorable,” Black explained.
The veteran investor emphasized that maintaining a balanced perspective, including acknowledging both bullish and bearish cases, has been key to his credibility in financial media appearances.
Price Action: Tesla stock closed at $320.72 on Friday, gaining 3.07% for the day. In after-hours trading, the stock edged up 0.0062%. Year to date, Tesla’s stock has risen by 29.10%, according to data from Benzinga Pro.
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