Buying Tesla after big stock market losses has paid off in the past

  • In the last two days, Tesla shares have fallen 15.3 percent; a two-day loss of 15 percent or more has only occurred six times since its IPO in 2010.
  • When averaged out a week later, it has returned 3.96 percent, trading positively about 67 percent of the time, according to an analysis using Kensho.
  • In the month-later period, the average return goes up to 19.25 percent, trading positively 83 percent of the time, according to Kensho.
Elon Musk
Brendan Smialowski | AFP | Getty Images
Elon Musk

In the last two days, Tesla shares have fallen 15.3 percent. Such a two-day loss has occurred only six times since the electric car maker's IPO in 2010.

A week after those losses, it returned an average of 3.96 percent, trading positively about 67 percent of the time, according to Kensho, a hedge fund analytics tool. However, if one looks at the individual instances that go into that average, the swings are notable:

That smoothes out a bit in the month-later period where the average return goes up to 19.25 percent, trading positively about 83 percent of the time, but the swings are still wild:

Past returns do not guarantee future results, and worries about Tesla's ability to meet bond payments could make this time different. But in the past, the stock was able to rebound after big equity declines.

Disclosure: NBCUniversal was a minority investor in Kensho prior to the firm being acquired by S&P.