OK, Dave...I see where you're going on the taxes. Fortunately, being in Texas, I avoid the state/local tax situation.
Now we're getting into the esoterica of tax planning. Basically, there are some assumptions that I'm making about the timing of future sales. If I've pegged PMCS wrong and we had a blow-out top Friday, chances are that in the last 5 months of 1999, I'll end up selling PMCS anyway. So the whole thing is taxable this year anyway. But if I'm right about PMCS and the tremendous growth still in front of it, then I'll be holding my new purchase long-term, and when it does sell, it has a higher cost basis than the rest of the position so I do derive a future tax 'benefit' from the transaction. Finally, if I end up liquidated the whole position in the first half of year 2000 at some lower Stop Loss price, I'll have some short-term losses to counter my long-term gains (to my tax 'benefit').
Anyway, the name of the real game is to maximize portfolio value with acceptable risk, and taxes are but one component. Whatever I've been doing is working year-to-year so I have no complaint. And it sure as h*** beats the returns I was getting from my mutual funds before I really started studying stocks. |
