‘It’s always in people’s minds’

Several Tesla electric vehicles are parked in front of a Tesla service center in the Kearny Mesa region, in San Diego, California, U.S., October 31, 2023. 

Abhirup Roy | Reuters

Marko Sustic has bet big on Tesla this year.

The investor, who also happens to work in the European auto industry, bought Tesla shares nearly every month in 2023 and has almost doubled the size of his position over the course of the year. Sustic has no other electric vehicle holdings out of a belief that competitors won’t be able to beat Tesla’s technology.

“There is no catching up with them,” said the 32-year-old, who also has two Tesla cars at his home in Croatia. “It’s just a matter of time when the stock will explode.”

Sustic isn’t alone. Tesla, which entered the S&P 500 three years ago this week, is on pace to attract the largest flow of individual investor dollars of any security in 2023, according to data from Vanda Research. The firm calculates net flows to find these favorites, subtracting the amount of stock sold from what was bought.

That means Tesla will eclipse even the SPDR S&P 500 ETF Trust (SPY), which tracks the largest stock market index in the world, and underscores Tesla’s fast ascent to retail-investor glory. Tesla wasn’t even among the top 20 stocks that individual investors bought before 2019, Vanda data shows.

A banner year

Stock Chart IconStock chart icon

Tesla over the last 5 years

‘That was a bargain’

Elon Musk speaks onstage during The New York Times Dealbook Summit 2023 at Jazz at Lincoln Center on November 29, 2023 in New York City. 

Slaven Vlasic | Getty Images

Still, he’s all in on Tesla’s story, citing the push into robots and AI chips as cause for long-term optimism. His only serious concern would be if Musk left and the company’s performance worsened.

“If you can find a company that makes a product that people love, and it’s different than anything that other people have, then you have that chance to really make substantial money,” Ford said. “At some point, I do believe that I’ll look back at the price of the stock now and go, ‘Wow, that was a bargain.'”

‘Guts and heart’

Individual investors have often been the butt of the joke, with investing experts pointing to their inability to time the market and best allocate their money.

Yet individual traders have gained attention following the rise of short-squeezed “meme” stocks during the pandemic. Even as that craze fizzled, retail trading remains popular: Everyday investors put more than four times the amount of money into their 20 most-bought securities in 2023 than they did in all of 2018, according to Vanda data from early December.

For Schwarz, the UC professor, the flight to Tesla this year is complicated.

It’s concerning, he said, if individual investors are making bigger bets on single stocks than funds that invest in diversified indexes, like the S&P 500 ETF. Still, while investments that spread bets across a pool of stocks is safer, trying to pick certain companies is more desirable than not being in the market at all, he said. 

“Traders would be much better off if they just bought [the] index and forgot the password to their brokerage account,” he said. But, “even if Tesla doesn’t do as well as the market, it’s still better than probably just spending it on useless consumption and not participating.”

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