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Technology Stocks : America On-Line (AOL)
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To: Smart Investor who wrote (7034)3/18/1999 2:01:00 PM
From: musea  Read Replies (1) of 41369
 
Smart,

If you say that AOL's stock price will fall in the near future, you are probably always going to be right. It is a very volatile stock. But the momentum players seem to be favoring it right now and the growth story seems to be strong. Your timing will need to be really good to catch enough of a drop to pay for your commissions and taxes, in my very humble opinion. If you've been holding for a year, your basis is under 20 (let's say 18) which makes a share that you sell for 118 worth about 98 after taxes, and even less after commissions. You will need to wait for a drop to below 98 to buy back, and if you count commissions on both the sell and the buyback you are looking at an even lower re-entry point.

If you are trading in an IRA or similar thing, things are better because you won't have that immediate 20% cap gains tax bite.

-musea
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