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Strategies & Market Trends : Gorilla Game Investing in the eWorld
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To: tekboy who wrote (1089)12/23/1999 1:01:00 PM
From: gdichaz  Read Replies (1) of 1817
 
tekboy: Since we all know how sophisticated and worldly wise you are, a protest against tips clearly means that you are anxious for some.

So here goes.

Altho this is an area for study not quite a tip per se.

Curious what is the best use of IRS's, Keogh's (for those fortunate enough to have access to them) and other tax sheltered accounts for LEAPS vs using that precious space for short term trading.

In my discussion of LEAPS, I concentrated on furthest out and highest strike price as more bang for the buck in a stock like the Q with very very very good stock price appreciation prospects over the next couple of years - particularly in 2001 when CDMA data - the wireless / internet (and intranet) nexus takes off. Therefore 2002 Leaps and even better 2003 call LEAPS look attractive.

But I was thinking of tax paying accounts, in my example.

Clearly LEAPS are even more profitable (if they work) in tax sheltered accounts.

But those same tax sheltered accounts have scarce space by definition, so the question is, does it make sense to use that space for long term LEAPS if you just plan to hold for a couple of years, or should the point that they become long term from a capital gain standpoint make them a good hold outside IRA's etc. and leave room within those IRS's for (horror of horrors) trading? Ouch. Tilt. etc. etc.
Very very un gorilla like stuff that it seems the vast majority of posters on this thread do (perhaps in the closet) but do. At a minimum, many here probably do experiment a bit with new high flyers from time to time which may blossom or wither.

What to do?

Which approach makes the most sense. LEAPS inside or outside IRA's, etc. since the whole point here is opportunity cost. LEAPS inside use space for just holding for a couple of years which could be used where there is more danger of short term gains and the fine hand of Uncle Sam grabbing a large piece of the action.

Some discussion of alternatives here might be profitable. We might even learn something useful.

Hope so.

Cha2
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