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Strategies & Market Trends : Value Investing
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To: Honest Abe who wrote (3403)3/2/1998 2:00:00 PM
From: Ron Bower  Read Replies (1) of 78656
 
Abe,

I fully understand what you are saying - we must think after tax gains and I wholeheartedly agree.

However, using the methods of investing I proposed, you would have followed TXN up with stops and let it go when it started to drop, then followed it down with stops (presuming you believe the stock will rebound). During the period it was falling, the monies could have been in another stock that was gaining. The overall gain would more than offset the difference in tax rates.

Very few individual investors are in a 36% tax bracket and many are dealing with non-taxable accounts.

BTW - Buffet has a different situation in that any trade he might make influences the market. When he started, he did not hold nearly as long and made frequent trades. The same can be said for most anyone that has been successful in the market.

For what it's worth,
Ron

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