General Investing and Economics Discussion - No Politics

[IEEEWreck]

@IEEEWreck @BuzzStone I traded in and out of JNJ for years like that. It was in a trading range and I waited until it was at the bottom of the range and would pick up 500 shares and dump it when it got near the top of the trading range. Picked up $3-4 per transaction every couple months it seemed. Made damn near $15k one year so I kept 200 shares. Next year I added another 100 in shear profits. Over a decade I amassed 1000 shares that way. It was trading at around $130/share when I dumped it. That stock also pumped out $.90/share in dividends so $900 in cash hit my account every quarter.

Got back in at $115 and wish I’d gone all in because it’s about $150 now. Oh well.

Why were you short term trading JNJ? They're a classic blue chip.

 

[LibertyTurns]

Why were you short term trading JNJ? They're a classic blue chip.

After about 2 years of owning it and watching it I noticed it floated up, then drifted down, then floated up, then drifted down, etc. About that time trading costs went down to $19.99 (yeah believe it!). I realized that on 500 shares at about $50-60/share I could make $1500-2000 buying and then selling, minus short term capital gains taxes (15%) and trading costs I was net $1200-1500+ to the good on each swing. Paid for my son’s GT education that way and a down payment on our house.

 

[LibertyTurns]

@IEEEWreck There’s many ways to successfully invest. You just need to find a strategy and style that works for you and milk that baby for all its got. When people get greedy and break out of successful tactics is typically when they crap the bed. My advice: don’t fall in love with yourself, get out when there’s blood in the water or your system stops working because the market will make you pay.

 

[jacketup]

I am amazed at all the people listening to Buffett like he is some kind of god. He is worth listening to, but not to worship.

BRK-A holds 2 of the 4 records for largest quarterly losses in history, at number 1 and number 4. That's without adding in BRK-B. Most of its holdings have been S&P 500 businesses. The main thing he proves is that if you hold a large cap long enough you'll probably make money. Or at least that was true until the politicians started their recent supercharged vote buying program. We still don't know where that will end up.

I would never invest in airlines. I am not sure why he thought that was a good idea, and the airlines are a big piece of the BRK quarterly losses. Too many friends in the industry have had to change jobs because their airline went bankrupt or was forced to merge due to financial problems. They had to start over at the bottom of the seniority list. Research defunct airlines on Wiki and the list is extremely long. It's an industry without something he preaches--a moat--because there are always pilots and always airplanes available for competition to pop up.

 

[LibertyTurns]

A lot of people overlook these billionaire elites ties to China. They expected continued globalization, now all their strategies have to be reworked. For the airlines you’re making $21B/yr pre-tax on annual expenses of $175B. You expect stable oil prices, maybe even a slight decline. Aircraft are becoming more efficient & older pilots from Vietnam War, etc are retiring being replaced with younger less expensive pilots so operating costs should decline. Then you have government providing you the ultimate safety net because you donate a couple million to some schmucks running for President, Senator, Congressman, etc. They all take care of themselves.

Watch Buffet. Listen to Buffet. Adore Buffet, no, but he’s a window into the cheap and generally low risk money.

https://www.bts.gov/newsroom/2019-annual-and-4th-quarter-us-airline-financial-data

 

[IEEEWreck]

I am amazed at all the people listening to Buffett like he is some kind of god. He is worth listening to, but not to worship.

BRK-A holds 2 of the 4 records for largest quarterly losses in history, at number 1 and number 4. That's without adding in BRK-B. Most of its holdings have been S&P 500 businesses. The main thing he proves is that if you hold a large cap long enough you'll probably make money. Or at least that was true until the politicians started their recent supercharged vote buying program. We still don't know where that will end up.

I would never invest in airlines. I am not sure why he thought that was a good idea, and the airlines are a big piece of the BRK quarterly losses. Too many friends in the industry have had to change jobs because their airline went bankrupt or was forced to merge due to financial problems. They had to start over at the bottom of the seniority list. Research defunct airlines on Wiki and the list is extremely long. It's an industry without something he preaches--a moat--because there are always pilots and always airplanes available for competition to pop up.

You should expect that result from the Buffet's thesis. His whole schtick is buying fundamentally undervalued stocks. He's not so foolish nor so vain as to claim to find undervalued stocks AND the moment the market realizes it's valuation was irrational.

 

[Peacone36]

I have done well in the last 60 days with hotels, resorts, casinos. My biggest win has been Eldorado Resorts where I bought in at 18.74 and its now valued at close to $36. Hilton (PK) and Red Rock Resorts (RRR) are others that have done well for me. I have ratioed down several time in GE and now its in the green. I expect it to do better when they start working on jet engines again as airlines ramp back up.

 

[Deleted member 2897]

I have done well in the last 60 days with hotels, resorts, casinos. My biggest win has been Eldorado Resorts where I bought in at 18.74 and its now valued at close to $36. Hilton (PK) and Red Rock Resorts (RRR) are others that have done well for me. I have ratioed down several time in GE and now its in the green. I expect it to do better when they start working on jet engines again as airlines ramp back up.

I wish you the best of luck. I wouldn't touch any of that with a 10 foot pole - just not my type of risk comfort. I've heard airline executives (including Boeing) speak on TV and they're not ramping up anytime soon. They expect to have massive layoffs in September when the government bailout money runs out. There are planes parked all over everywhere as flight volumes are down 90%. The Boeing CEO said he expects flight volumes this fall to get to around 25% of normal, and expects the airline recovery to take a couple years to get back to 80%+ of their old volume. But then again as we all know, none of that means that airline and hospitality stocks won't double anyway.

 

[Deleted member 2897]

I have ratioed down several time in GE and now its in the green. I expect it to do better when they start working on jet engines again as airlines ramp back up.

Boeing announced 7,000 more job cuts today. The CEO said they don’t see a return to older volumes for the next several years.

 

[Peacone36]

Boeing announced 7,000 more job cuts today. The CEO said they don’t see a return to older volumes for the next several years.

I’m not actually in any airlines right now. The positions I have taken are with companies with long term low volatility that fell way off. I am fine with letting things lie for 12-18 months. I have not over extended

 

[LibertyTurns]

Not sure what everyone’s been doing lately but I’ve had to pull money out to cover next year’s taxes on short term gains. This stock market activity is crazy.

With rare exception lately I’m buying on Mon or Tues and selling late on Thurs or Fri. Nuts.

What’s everyone else doing?

 

[Supersizethatorder-mutt]

Not sure what everyone’s been doing lately but I’ve had to pull money out to cover next year’s taxes on short term gains. This stock market activity is crazy.

With rare exception lately I’m buying on Mon or Tues and selling late on Thurs or Fri. Nuts.

What’s everyone else doing?

I am just carrying on as usual. I can't risk buying and selling on a fixed (retirement) income. But I am thoroughly enjoying seeing my IRA's get back thus far to the levels they were in December, and probably very soon, the levels they were in late January. They went down by almost 20% from late January till mid-May, and they have rebounded by about 15% of the January mark in the past 3 weeks.

 

[Peacone36]

Not sure what everyone’s been doing lately but I’ve had to pull money out to cover next year’s taxes on short term gains. This stock market activity is crazy.

With rare exception lately I’m buying on Mon or Tues and selling late on Thurs or Fri. Nuts.

What’s everyone else doing?

so I am as green as baby **** in regards to the market. I am currently in 11 stocks and up 40% since April. What can I expect come tax time?

 

[LibertyTurns]

so I am as green as baby **** in regards to the market. I am currently in 11 stocks and up 40% since April. What can I expect come tax time?

If you sell under a year of buying it you owe short term capital gains. You pay at your tax bracket rate (10, 12, 22, 24, 32, 35, 37%). You can get punished by another 3.8% if you’re in the NIIT zone. Likely you’re not. If you’re churning like I am and have $60-80k short term gains, you might find yourself on the hook for $25-30k or more of taxes. Not a small sum.

Long term is likely 15% on the gain for you unless you’re making under $40k (Zero) or above $450k (20%).

You do have dividends if your stocks pay that and they can pay out short & long term gains- quarterly typically. Usually this is a small percentage unless you own a lot of stock.

If you have losers & dump them you can diminish the tax owed by lowering your gain but it only works in the same category. Short term for short term, long term for long term. You can’t use a long term loss to offset a short term gain, but you can carry over year to year and use your losses to reduce future years taxes on capital gains.

 

[Peacone36]

If you sell under a year of buying it you owe short term capital gains. You pay at your tax bracket rate (10, 12, 22, 24, 32, 35, 37%). You can get punished by another 3.8% if you’re in the NIIT zone. Likely you’re not. If you’re churning like I am and have $60-80k short term gains, you might find yourself on the hook for $25-30k or more of taxes. Not a small sum.

Long term is likely 15% on the gain for you unless you’re making under $40k (Zero) or above $450k (20%).

You do have dividends if your stocks pay that and they can pay out short & long term gains- quarterly typically. Usually this is a small percentage unless you own a lot of stock.

If you have losers & dump them you can diminish the tax owed by lowering your gain but it only works in the same category. Short term for short term, long term for long term. You can’t use a long term loss to offset a short term gain, but you can carry over year to year and use your losses to reduce future years taxes on capital gains.

So when I am day trading (recently flipped ERI into twice as many stocks in NCLH) I am basically penalized? Or only if I withdraw those funds from my account? My real question is: Is trading in and out frequently bad for my tax situation?

 

[LibertyTurns]

So when I am day trading (recently flipped ERI into twice as many stocks in NCLH) I am basically penalized? Or only if I withdraw those funds from my account? My real question is: Is trading in and out frequently bad for my tax situation?

I’ll only address taxes as an investor not a day trader. There’s differences & I really would be completely out of my league discussing day trader tax nuances, strategies. If you have TTS with the IRS, I’d think you knew it.

Let’s say you purchased 1k shares of ERI On 4/22/20 @ $15/sh and sold on 5/8/20 for $21/sh. You held it less than a year so that’s short term gains & you racked up a $6k gain. Assuming you make $60k, you have a short term tax rate of 22%, so Uncle Sam will want his cut of $1320.

Your transaction clears and you buy 2k shares of NCLH on 5/15 at $11/sh for a total cost of $22k. At closing it’s now worth $22.43/sh. Your stocks are now worth $44,860. If you cashed out Monday at the same price you’d owe Uncle Sam another 22% of the $22,860 of short term gain or another $5030 bring your total tab to $6350.

If you do not sell you do not realize the gain, so you owe no additional taxes.

If you held your NCLH for a year & let’s say the price is $45/sh on 5/15/21, you’d likely be in the 15% long term capital gains bracket. You’d owe 15% of the $24k you realized or $3600 instead of the $5030 you’d owe if you sold if you held it under a year.

If your holding distributes dividends, again it depends how long you’ve held it. Greater than 1 year you get punished 15%. Less than 1 year and it falls into your personal tax rate.

Hope this helps. Reason I mentioned putting tax money off to the side is twofold. I have to pay estimated taxes so I pay quarterly. The government punishes me for having too much non-tax withheld income. You may find yourself it that case next year. Secondly, in early 2021 you’re going to need to pay the piper. If stocks have gone down at end of year & now you’re sitting on losers, you want to dump them in December to reduce your tax bill.

It’s all about maximizing your returns and minimizing the amount of money you flush down the toilet to the greedy, wasteful, corrupt government bastards whose hand you can never seem to get out of your pocket.

 

[Peacone36]

I’ll only address taxes as an investor not a day trader. There’s differences & I really would be completely out of my league discussing day trader tax nuances, strategies. If you have TTS with the IRS, I’d think you knew it.

Let’s say you purchased 1k shares of ERI On 4/22/20 @ $15/sh and sold on 5/8/20 for $21/sh. You held it less than a year so that’s short term gains & you racked up a $6k gain. Assuming you make $60k, you have a short term tax rate of 22%, so Uncle Sam will want his cut of $1320.

Your transaction clears and you buy 2k shares of NCLH on 5/15 at $11/sh for a total cost of $22k. At closing it’s now worth $22.43/sh. Your stocks are now worth $44,860. If you cashed out Monday at the same price you’d owe Uncle Sam another 22% of the $22,860 of short term gain or another $5030 bring your total tab to $6350.

If you do not sell you do not realize the gain, so you owe no additional taxes.

If you held your NCLH for a year & let’s say the price is $45/sh on 5/15/21, you’d likely be in the 15% long term capital gains bracket. You’d owe 15% of the $24k you realized or $3600 instead of the $5030 you’d owe if you sold if you held it under a year.

If your holding distributes dividends, again it depends how long you’ve held it. Greater than 1 year you get punished 15%. Less than 1 year and it falls into your personal tax rate.

Hope this helps. Reason I mentioned putting tax money off to the side is twofold. I have to pay estimated taxes so I pay quarterly. The government punishes me for having too much non-tax withheld income. You may find yourself it that case next year. Secondly, in early 2021 you’re going to need to pay the piper. If stocks have gone down at end of year & now you’re sitting on losers, you want to dump them in December to reduce your tax bill.

It’s all about maximizing your returns and minimizing the amount of money you flush down the toilet to the greedy, wasteful, corrupt government bastards whose hand you can never seem to get out of your pocket.

I never took this into account.dammit

thank you

 

[LibertyTurns]

I never took this into account.dammit

thank you

People get gouged by hidden expenses. Taxes, transaction costs are common items. There’s other ways of having money leech out the back door for example:

You might want to look at how your brokerage performs. When you buy & sell, how does the sale actually execute? You hit the buy button & the current spread is sell at $11.50 and buy at $11.46. You hit the button with a buy limit of $11.50. Blocks of sales occur and if you look carefully maybe you’re closing at $11.49 with your poor performing brokerage while a better brokerage is closing at $11.48 or $11.47. On the face of it 2 cents looks like a pimple on a gnat’s butt, but with 1k shares that’s $20. Trade 50 times a year with equal buys and sells, 1 trade a week/ 2 transactions and you’re out $2k.

If you’re an ETF bubba, you got discounts and premiums to account for in addition to expense ratios. If you’re frequently trading ETF you’ve got spread ratios that can kick your butt. Passive funds usually have really low expense ratios so on $100k you may only pay $200. More actively managed accounts may be .75% so you’re paying $750/year or $60/month just for them to manage your money. International funds or stocks have other expenses typically.

It makes a difference.

 

[LibertyTurns]

Well it appears another buying opportunity is emerging. At some point the selling will stop and there will be money to be made.

 

[jackets55]

I never took this into account.dammit

thank you

Liberty is correct. However, if you are making these transactions in an IRA (either Roth or Traditional), 401k or other qualified accounts, taxes are not owed until $$ are removed from the account and in the case of Roth IRA, not at all.