- Kolja Barghoorn is one of the best-known financial bloggers in Germany.
- He’s been investing $5,500 in Tesla shares every month since the beginning of the year.
- He told Insider he’s convinced that Tesla will overtake traditional carmakers in the long run.
Few companies polarize investors as much as Elon Musk’s car company.
Star American investor Cathie Wood is a fan of Tesla shares.
“The Big Short” hedge fund manager, Michael Burry, has bet on Tesla stock falling, however.
The company achieved record sales of almost $12 billion in the second quarter of 2021, twice as much as in the same period a year earlier.
Net income in the second quarter was $1.1 billion, 10 times higher than in the same quarter in the previous year.
While some feel the company is overvalued due to a high price-earnings ratio, other experts, however, believe the company has strong growth and earnings prospects.
One is Kolja Barghoorn. He’s an entrepreneur and founder of the German YouTube channel “Aktien mit Kopf” – which roughly translates as “investing with intelligence.”
Since 2013, the 36-year-old has been making videos about shares and investing, and with over 300,000 subscribers, he’s become one of the best-known stock market bloggers in Germany.
Barghoorn also operates other companies, primarily websites and other YouTube channels that deal with topics like taxes, insurance, and real estate.
Barghoorn wants to invest $130,000 in Tesla
Barghoorn invests a lot in shares. Since the beginning of 2022, he’s been investing €5,000 ($5,500) every month in Tesla.
“The company is in an exciting phase, in my opinion, where it’s making more and more profit,” Barghoorn told Insider. “I also believe that in the future Tesla’s enterprise value will increase even more.”
His goal is to buy a total of $130,000 worth of shares in the company. He plans to invest $5,500 per month for two years with a monthly savings plan.
His strategy is based on the cost-average effect – when investors regularly put a fixed amount in fluctuating stocks.
When prices are low, more shares are automatically purchased, meaning you can avoid timing mistakes.
This can help savings plans perform better than one-off investments.
“I use a savings plan because Tesla may have a price correction at any time, or China may influence the price with interventions,” Barghoorn said.
That’s why he doesn’t invest a large amount all at once, but prefers to invest a medium-sized amount monthly basis.
But the cost-average doesn’t automatically lead to success.
For example, if a stock rises steadily over the long term, fewer and shares, fewer will be bought.
In the long run, Barghoorn is convinced Tesla will do well, especially because of its CEO, Elon Musk.
“There’s a blog article from Elon Musk in 2006, where he writes how he wants to build a Tesla. And he’s doing exactly what he said back then,” Barghoorn said.
He added he was confident that Tesla will double the number of cars it sells in a few years.
Barghoorn also dismissed the suggestion Tesla is overvalued because it produces and sells fewer cars than other companies.
“People forget what happens when revenue and the amount of cars sold double every year.”
50% growth over a few years makes a “gigantic difference” to a company that regularly grows by 5%, he said.
He added it “doesn’t matter” that an established company like Volkswagen sold million of cars in 2020 and Tesla only half a million, adding he expected Tesla to soon pass such companies and sell up to 15 million cars in 10 years.
But he said he’s also aware that his investment is uncertain, adding: “When you bet on a single stock, it’s always a risk. I might be wrong.”
This is a translation of an article that originally appeared on Business Insider Deutschland on February 27, 2022. It has been edited for length.