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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (20821)	3/20/2000 5:52:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Some folks claim to be able to time the market, but their results never hold up to objective scrutiny over the long term. I've never seen an attempt to make those comparisons using after-tax dollars assuming varaious tax-bracket scenarios. I do know that in my current tax bracket the before-tax short-term profits have to be twice the before-tax long-term profits in order to achieve the same after-tax profit. Add to that scenario that deferred taxes (the difference between paying long-term capital gains taxes every other year as opposed to paying them once in 20 years) has monumental impact on the after-tax returns of a life-long investment career. The moral of the story is the timing of when we pay taxes really does matter, giving shorter-term strategies a huge obstacle to overcome compared with longer-term strategies. --Mike Buckley

To: Uncle Frank who wrote (20821)	3/20/2000 10:51:00 PM
From: Rick	Respond to of 54805

>> I had read recently that investors who pay attention to sector rotation (and modify their portfolios accordingly) do much better than LTBH.<< I'd also be very interested in seeing how that's possible. Say there are sector rotations from tech, to basic metals, to value, and back to tech over a period of a year. First, by definition, you'd be behind the curve on 3 occasions. Second, you'd have to pay Uncle Sam 3 times. And third, you'd have 3 transaction costs, plus you could potentially end up back where you began. So where's the gain? I'm not saying its impossible but I'd certainly like to know the details. - Fred