Bill Wexler's Dog Pound Message Board

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Non-Tech : Bill Wexler's Dog Pound

REFR 1.847

-1.2%

Nov 14 9:30 AM EST

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To: JDN who wrote (6248)	1/23/2000 2:49:00 AM
From: Graeme Smith	Read Replies (1) of 10293

>> At a minimum we will pay 20% capital gains taxes at the Federal level. So the market pulls back 20% we are only even... This is wrong. Whatever your Account Balances screen says, your current worth is exactly that minus about 20%. It doesn't matter whether you sell your shares now or in 10 years time. Unless you plan on rescinding your American citizenship, 20% or so of your gains belongs to the Government. You might feel richer with an account Balance of $1M and $200K of unrealised capital gains taxes than $800K and no taxes, but in reality your basically as wealthy. Admittedly if the market goes up another 100%, its better to be invested $1M than $.8M, but if it goes down 20%, your better off to realise the gain and pay the taxes. Also, I can't remember whether it was you, but who-ever posted that companies buying back shares weren't doing so using credit, made a mistake of overusing anecdotal evidence. Although in many cases, strong, well run companies are buying back shares through their cash flows (eg. MSFT) this does not equate the market in general. The total of the increase in US company debt is about equal to the amount spent buying back shares. This is a fact that can be easily calculated by adding the totals of all US listed companies debt and share repurchases. There is no subjectiveness in this fact.

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