Tesla Inc (NASDAQ: TSLA) shares count among the most controversial – and profitable – long-term investments in US stock markets.
I say controversial because Elon Musk's EV company has often been a top target of short sellers.
Depending on their timing, some traders betting against Tesla shares will have walked away with a tidy profit. The stock is notoriously volatile for a company with a US$835 billion market cap.
Indeed, 2022 saw the stock fall a precipitous 65%, which came after shares hit all-time highs of more than US$407 in November 2021.
Longer-term, however, it's not the short sellers who've made the real money. It's the buy and hold investors.
So, just how much money would I have today if I'd bought $2,000 worth of Tesla shares five years ago?
How much have Tesla shares gained?
One of the biggest drivers of success for Elon Musk's company is that it's far more than just an electric car maker.
Tesla is a leading, innovative tech company.
In line with his space travel and satellite ambitions, Musk has been pouring money into AI technology for many years.
Most recently, those investments have been paying off for Tesla shares in the form of the company's supercomputing Dojo technology. While not quite there yet, Musk believes this tech will enable Tesla vehicles to drive entirely autonomously sometime soon.
That leads to a lot of other potential revenue earners for the company, like robotaxis. And it's helped drive the stock up a whopping 147% so far in 2023.
With that strong run behind it, Tesla shares are now up, wait for it, 1,2367% in five years.
That compares to a 71% gain posted by Nasdaq Composite Index (INDEXNASDAQ: .IXIC) over this same period.
Five years ago, I could have bought into Musk's company for US$19.94 per share. Overnight those same shares closed at US$266.50.
So, back in September 2018, I could have bought 100 Tesla shares with my US$2,000 investment, with a bit of pocket money left over.
Today, that investment would be worth US$26,650.
Boom!
Investing in foreign currencies
Now, you may have noticed we've been working with US dollars.
Whenever you invest in a stock priced in a foreign currency, like Tesla shares, you've got to consider the potential impacts of currency exchange rates. Those can work for or against you.
In this case, they would have benefited me.
In 2018 the average exchange was about 75 Aussie cents to the US dollar. Meaning I would have invested AU$2,667 for those 100 Tesla shares five years ago.
Today we're right about 65 cents to the US dollar.
That makes my US$26,650 of Tesla stock worth AU$41,000.
And all from an AU$2,667 punt in 2018.
