From: demon@desire.wright.edu (Stupendous Man)
Newsgroups: sci.econ,misc.invest,misc.taxes,talk.politics.misc
Subject: Re: Taxes and stocks (mostly)
Date: 19 Nov 92 13:30:53 EST
Followup-To: misc.invest,misc.taxes
Organization: Demonic Possesions, Inc.

...(me:)
>>	Differences in price can be quite large.  You'd have to wait for
>>confirmation of the sell before you bought, at the least...
> 
> Good grief.  Nowadays, you get confirmation in 30 seconds.  In 1985, you
> just got your broker to write a sell ticket and a buy ticket contingent
> on the execution of the sale.  They would go to the floor trader together
> and he would execute them both.  Even in 1985, a floor trader could be
> instructed to execute both tickets only at a sufficiently small spread
> (e.g. do the sell and the buy only if the breakage is no more than 1/4).

	You are correct.  I was thinking in terms of confirmation from the
broker, and not about contingency sales (which I never do :).

>>	Sorry, but there are no losses.  Someone does not knock on your door
>>and ask for money.  Paper "losses" are only real if you actually sell at that
>>point.  Most successful traders don't base their trades on paper.
> 
> Successful traders base all their trades on paper.  Successful TRADERS mark
> their holdings to market every day; every day you operate as if you bought
> at yesterday's close.  Yesterday's profit or loss means nothing today.

	Mmmm, I don't know if I can agree with your definition of "successful". 
Success is based on results, and not strategies.

>>It's even better when you realize that
>>Clinton will either index capital gains for inflation or cut the rate.
> 
> Dream on.

	It's looking that way.  He's certainly backed off from his
post-election assurances about his economic policies.

>>Selling and buying back immediately simply locks in whatever profit
>>you have at that time.
> 
> And it raises your cost base.  It reduces future taxes at the cost of
> today's taxes.  If you anticipate future taxes will be higher, then it
> may make sense to pay ahead.

	And of course you no longer have the tax money or the commission money
to invest....
	Maybe "minor" in terms of amounts, but "successful" (sorry, couldn't
resist) traders don't incurr unnecessary costs. :)

>>	Maybe.  If Clinton lowers the rate, I win BIG.
> 
> Still dreaming ...
> 
>>> I'm sure there are a number of people in misc.invest who have the same
>>> fallacious reasoning as you do.  That's how the rest of the world makes
>>> its money in the market.
>>
>>        Heh.  So your portfolio is up how much this year?  Mines up 40% so far.
> 
> Don't start with numbers.  If numbers are the only guide to the truth,
> what are you going to do when I say that I agree with Ted Frank and I
> beat your 40% going away?  Does that make Ted Frank right?

	Nope.  My comparison is with Ted.

	BTW-how much more would you have if you had held?

Brett
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80s: 18 million new jobs, deficits down (%GNP), tax rates down, tax revenues up
GNP up, inflation down, unemployment down, interest rates down, cold war won
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Newsgroups: sci.econ