So much of this discussion of whether to dump tech ( or Q in particular) occurs without the clarification of whether one is in a taxable or non taxable position. If its your IRA we're talking about, that's one thing. But if you are a long term holder with a basis of, say, 6, in a taxable account,thats another. To sell here in Georgia, you're going to give 34% of the profit to one government or another. Then, if you want to get back in when things look better , you've got to pay another 34% of the profit (if any) you've managed to make on something else. Then you've got the hidden tax of the inevitable imperfect timing of your decision. You won't be lucky enough to sell at the absolute high water mark, and you won't be lucky enough to buy back in at the absolute low water mark.So add that in as well.
Bottom line. If you're paying taxes, and if you believe in the long-term outlook for the co., I can't imagine a better strategy than patience. If you're going to sell in search of greener pastures,that stock down the street you're thinking about had better really sizzle.
A final thought. We all talk from time to time about what the hypothetical Microsoft investor who bought in 1983 and held would be worth today. Well, the reason such investors are mostly hypothetical is because its difficult to hold on during those inevitable periods of rest between the legs up.
Its also the case that if a company is truly revolutionizing the world, it has a greater tendency than the average stock to get ahead of itself; to move up in fits and starts; kind of like bursty data; with longer and more pronounced periods of consolidation.But revolutionize the world this company will.And I for one intend to sit tight, and contemplate the world of 2010.
Bon chance to all. |
