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Technology Stocks : Dell Technologies Inc.

DELL 118.47

+1.0%

Jan 29 3:59 PM EST

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To: Geoff Nunn who wrote (39795)	4/30/1998 9:28:00 PM
From: Chuzzlewit	Read Replies (1) of 176388

Geoff, I like to say that the best way to view taxes from an analytical point of view is that since taxes aren't due until you sell you can view the tax liability as a zero interest (because the liability is calculated until you sell) non-recourse (because if you lose the gain you owe nothing) loan! Note that even if there weren't any differential in rates between short-term and long-term capital gains you are still better off with a buy and hold strategy because of the zero-interest feature. Consider what happens if we were looking at a 28% capital gains tax regardless of holding period. On a hypothetical 25% per annum gain the trader nets 18%. But the buy and hold investor nets 21.46%! She'd need to do 29.8% net of transaction costs but pre-tax to equal the buy and holder That's because you get to keep that theoretical tax liability working for you. And we haven't even figured in transaction costs. BTW, Lee is a she. TTFN, CTC

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