This is not worthwhile unless there's real money involved. Let's take a million shares of INTC bought in November 1988. There's a hefty tax bill if you sell, worth postponing as long as possible.
First, inoculate the INTC long. In days of yore you shorted against the box; now you have to do something cleverer like shorting an index future. Then, buy a big, broad, diversified portfolio of high-beta stocks with low correlations with INTC. You end up with a neutralized INTC position, and a large portfolio of very volatile securities.
Big winners and losers should pile up quickly among volatile stocks. Periodically harvest the losers, sell some INTC against them, and readjust the short future and portfolio. Thereby, you steadily 'transfer' your INTC cap gain to a diversified portfolio.
Since this process is big and ugly, and neutralizing the long position until it's finished is hard under the 'constructive sale' rule, you'll probably want to hire a good banker to do it for you. But it works.
Good luck,
mb |
