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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Kirk © who wrote (12711)3/23/2000 6:44:00 PM
From: Justa Werkenstiff  Read Replies (3) of 15132
 
Kirk: Re: " The problem with market timing, being wrong, then saying you are protecting wealth does nothing for the 20 and 30 something year old investors that let a good chunk of market gain sit on the table and will miss seeing that
compound for 50 or 60 years if they do not get an opportunity to buy in at a lower level (plus taxes)."

Assuming the investor has investments which are suitable to holding for 50 or 60 years (index investors), then you have a point. Yet it is hard for me to imagine holding on for a lifetime. You gots to spend your money before you meet your maker. My grandfather used to say, "You can't take it with you." And who is to say that capital gains taxes won't be greater then than they are now?

Moreover, if you are a retail mutual fund owner chances are you will sell any fund fund before you expire. Chances are you will sell and buy countless funds during your lifetime. They will all underperform at some point. Maybe the manager moves or loses his ability in a changing market. Besides those funds pay taxes as you buy and hold because they trade.

And if you are an individual stock person, the argument assumes that companies you are invested in today will be around in 50 or 60 years or will prove to be good investments for that long. I don't think so.

There are always opportunities and for a young investor and there is plenty of time. A good trader can make up for plenty of time out of the market.

Re: "So...what are you going to do?"

Watch those municipals pay out a tax equivalent return of 10-12.5% every year. Send a letter to the Treasury thanking them for capital appreciation to boot. Trade the market when conditions are favorable until there is an entry point with limited downside risk. And then I will take on some long term positions for the next cycle.

Re: "Holding on to all those banking stocks would have made
you look great."

I feel great. Made a good trade. Took some dividends to boot. Not much more I could ask for. Many are trading at lower prices from where I sold them still. In fact, if I still held them from where I bought them, I might be under water now. So selling them made me feel great because I felt they could go lower and they did and I got out with a nice profit.

Re: "You are right, cash does provide you with options, but I am glad I have my options with an intact, personal portfolio, up 20% from the call, no taxes paid and still have "options" like going to cash should I wish."

Glad you are doing well.
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