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The Future Fund LLC Partner manager Gary Black defended his firm’s Tesla Inc. (NASDAQ:TSLA) investment strategy amid criticism from Tesla bulls, emphasizing a disciplined approach to position management over short-term trading.
What happened: Black revealed that the average purchase price of Tesla shares since the beginning of 2023 was $162, while their average sale price was $252. The revelation came as The Future Fund recently cut its Tesla position to $351, following a 150% rise from its April low.
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“That’s what professional investors do: buy low, sell high,” Black said on X, addressing criticism from Tesla enthusiasts. “No one has ever gone bankrupt 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 November 15, making Tesla the fifth-largest holding 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 out that Tesla’s earnings estimates have been cut by 59% since the price cuts, and noted that competitors matched the cuts, resulting in minimal volume growth. Despite the recent rally, Tesla shares have underperformed the NASDAQ 100 index by 32 percentage points over the past three years.
