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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: James F. Hopkins who wrote (19882)	7/11/1999 7:01:00 PM
From: HairBall	Read Replies (1) \| Respond to of 99985

Jim: Well, leave to you to figure out all the angles...<g> Regards, LG

To: James F. Hopkins who wrote (19882)	7/11/1999 7:19:00 PM
From: Benkea	Read Replies (1) \| Respond to of 99985

Jim: "I don't trade the IRA anywhere near as often as I do the regular account." This always cracks me up when I hear it. I too am guilty. Why on earth do we trade in taxable accounts and hold in tax deferreds or exempt? I guess we just like to compound our money at a lower rate after taxes :) From the 1989 Berkshire Hathaway Chairman's letter: "Imagine that Berkshire had only $1, which we put in a security that doubled by yearend and was then sold. Imagine further that we used the after-tax proceeds to repeat this process in each of the next 19 years, scoring a double each time. At the end of the 20 years, the 34% capital gains tax that we would have paid on the profits from each sale would have delivered about $13,000 to the government and we would be left with about $25,250. Not bad. If, however, we made a single fantastic investment that itself doubled 20 times during the 20 years, our dollar would grow to $1,048,576. Were we then to cash out, we would pay a 34% tax of roughly $356,500 and be left with about $692,000."