Re: Hey, It's Just a Way to Pass the Time...
I don't know why I can't help myself from staying in this debate on fundementals/technicals.
We need something to keep us occupied! :-)
I'll be the last person to minimize the importance of tax considerations. In fact, if I try to build a trading model around the Bear Stearns "fair value" W.A.G.s, I'll take into account holding period factors. So your point is well taken.
Having said that...
1. The "fundamental/technical" debate is not necessarily the same as the "long-term/short-term" one. James Cramer, among other hedge fund managers, trades like a fiend but has virtually no interest in technical analysis. OTOH, there are lots of mutual fund timers who play long-term moves based on moving average analysis. Sure, "technical," "trading," and "short-term" all tend to be associated in people's minds, but that doesn't mean it's invariably so.
2. share half the rewards with the Tax Man... be careful, please! Short-term capital gains rate, marginal or aggregate, is not near 50%, especially with the tax law changes.
3. Many investors and traders (and, I suspect, the vast majority of SI subscribers) have tax-deferred, tax-free (I can say that now with the Roth IRA), or tax-advantaged accounts. This is not a suggestion that one should turn their IRA into a trading account. But, for many, it is legitimate to analyze short-term tactics on the basis of pre-tax returns.
4. I'd rather have 50% of ten points of trading gains (or five, or two, or -- gulp -- zero) than the returns LGND have provided over most holding periods you can select over the past two years.
Just MHO.
Pý |
