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

To: Stock Farmer who wrote (46158)	9/3/2001 11:01:52 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

John, The only operable question is whether or not one actually believes that the stock is overvalued, and then whether one acts rationally on one's beliefs. I'm going to end my participation in this conversation by mentioning that it's not the only operable question for me. If you choose to ignore the metrics I've mentioned that are part of my decision-making proccess and accordingly decide that I'm acting irrationally, I'm thrilled to have presented the irrational behavior "so nicely" that you can exhibit it in upper case letters as the sort of behavior that causes bubbles. However, the next time I need a clincial assesment about that, I'll select a qualified psychiatrist or psychologist of my own choice. In the event that you are indeed board-qualified, your lack of social skills would definitely render you ineligible for the position. --Mike Buckley

To: Stock Farmer who wrote (46158)	9/3/2001 11:50:18 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

The math is relentless Just like day-after-quarterbacking is. When you know what happened, it isn't hard to figure out how you might have done it better, but figuring it out in real time is a wee bit trickier.

To: Stock Farmer who wrote (46158)	9/4/2001 1:03:18 AM
From: hueyone	Read Replies (1) \| Respond to of 54805

The math is relentless: as long as you buy back a stock like Seibel for less than you sell it for, you will profit more in the end than holding through. After tax. John, I must be confused about the math. What about this example? Mike and John each buy 1000 shares of XYZ Corp at $10/share. XYZ Corp appreciates to $11 per share next week and John sells it. John is in the 50% s/t term tax bracket, so he ends up with $10,500 after tax. The stock falls to $10.75/share and John buys some more. But John's $10,500 will only buy 976.75 shares at $10.75 per share. Over the next few years the stock slowly appreciates to $14 per share and both John and Mike sell. A l/t cap gains rate of 30% applies. Mike sells for $14,000 and pays $1,200 in taxes and nets $12,800. John's 976.75 shares sell for $13,674.50 and he pays $952.33 in taxes and nets $12,722. Mike did better just hanging on. If John did this every year (and paid transaction costs) the difference in Mike's favor would be more pronounced---unless John was able to buy back in at a significantly larger discount to the price he sold it at than was given in this example.