Flipping has its drawbacks.
I tend to flip stocks which are easy to predict within a cycle involving a few weeks. To flip one of these Internet high flyers, you have to be very good and very lucky because timing the market is near impossible. You can be lucky and get it right here and there or maybe a couple times in a row, but most of the time you lose your shirt.
Furthermore, if I'm convinced about the prospects of a company, as I am of Go2Net, then I think the real money is in holding it for more than a year. I'm anticipating a gross return on my GNET investment in the range of $400,000 to $600,000. If I sell before one year, Uncle Sam pockets $120,000 to $180,000. After one year, he'll have to settle with $80,000 to $120,000. To me, that I means I keep $40,000 to $60,000 more of my gains. So selling before one year means I have to find another investment vehicle to make up for that difference. Either that or make darn sure that my flips will net me more than the difference in additional taxes.
Regards,
Dany |
