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

To: Mike Buckley who wrote (20844)	3/20/2000 7:36:00 PM
From: Todd Rumph	Read Replies (4) \| Respond to of 54805

There is the small problem of finding a 30-year investment... (Anyone know the prevalence of equities with a 15% CAGR over a 30 year term?) Just suggesting that the short-term model (two years short-term? in this market??) does offer the real benefit of flexibility and is probably more realistic. At best, an intermediate model with a hold time of, say, 5 years, is more plausible. Or maybe I should put it as a challenge: You pick a basket of equities for a 30-year haul. I buy and sell anything at any time. Who will finish ahead? Most investors feel more comfortable with the second approach. I agree that all too many take this second approach to extremes, going in and out of the market at the drop of an analyst's plumed hat. (Personally, I'm a long-term extremist -- I hold for years at a time, but fully reserve the right to admit my investment choices are wrong.) Todd

To: Mike Buckley who wrote (20844)	3/20/2000 9:46:00 PM
From: Seeker of Truth	Read Replies (2) \| Respond to of 54805

Mike, your numbers are surely accurate. They show that the longer you hold, other things being equal, the better is your after tax performance. The problem is, even gorillas don't usually remain as gorillas for 30 years. So I think the advantage of holding is certainly there but it is smaller than those numbers imply. The emergence of some newly arrived gorillas could from time to time outweigh the tax advantage. JMHO.

To: Mike Buckley who wrote (20844)	3/20/2000 9:56:00 PM
From: mtnlady	Respond to of 54805

"That's the proof that the short-term strategies have to perform so MUCH better on a pre-tax basis to come close to the results on an after-tax basis of the longer-term strategies." I agree Mike. I've charted my 8-12 stocks and they all have tendencies - example I can expect Siebel, on a good run-up, to go x-y% above the 40 day moving average and if I can buy them at the 40 day moving average I am doing very well. I have yet to 'crunch' the numbers but if you are in close to a 50% tax bracket (ST capital gains state and federal taxes combined). I am convinced that - taxes aside - yes I can do better selling 'at the top' (of course you never actually get the 'top') and buying nearer the bottom. HOWEVER (!) when you factor in the taxation issue... Boy.. you had better be 'perfect'.. which, of course, no one is. So.. if you insist on buying and selling (learning the hard way myself...) tis by far best to wait until you get those stocks into the LT capital gain category before you start trading. I say 'learning the hard way' as my spouse and our accountant both highly encouraged me to sell more aggressively this year to 'take some of the profits off of the table'. Well I did, and bought more stock during our last low periods, but am now faced with a horrendous tax bill(s). Lesson learned. I know my stocks are good and will be here for the duration so no need to 'take some off the table' before they AT LEAST get to the LT capital gain territory. We have talked about this a bit before. But there does need to be an 'end game' strategy. When portfolio's get to a certain size it is time to start selling some. You can't wallpaper with the stuff and quality of life entails you need to start cashing it in at sometime. And for many of us that is LONG before 'normal' retirement age.