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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.
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“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).
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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.
