Hi CH,
Although I've not spent more than 5 minutes listening to the two political conventions this year, I've heard all I care to. I can't get very excited about the 'choice' of a 2nd generation professional politician or a 3rd generation professional politician as my next 'leader.'
I run my investing as an EQUITY WAREHOUSE with stocks, bonds and mutual funds as my inventory. Reviewing my own 1999 capital gain events, I found that for every $1.00 of Inventory I shipped from the Warehouse during the previous tax year, $0.36 of it was profit (pre-tax). Most of the profits fall into the LONG TERM category, so are not penalized quite as badly as ST cap. gains. There were 136 shipments made last year or about 2-1/2 shipments a week.
Looking back, 1999 showed that I had an unusual year. I believe there were five separate cash buy-outs that occurred during the year. This made a mess of my planned taxes, inventory turnover, etc. As a result, my inventory turnover rate (dollar based) was about 36% of total average portfolio value. If I were to subtract the "extraordinary" events of the buy-outs, it falls back to closer to historical norms of about 25%. (small compared to ST Traders)
I'm extremely pleased with the 36% average capital gain on my inventory sales. I think this makes my warehouse one of the most profitable types around. The investment model I use packs a profitable punch on a LIFO basis, but it's heartening to see how well it does on a FIFO basis.
Hillary mentioned "Peace and Prosperity" in her address the other night. Yes, I'm prospering. I'm also paying my way for the "Peace" side of the equation through taxation.
Best regards, Tom |
