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Non-Tech : Traders-Unlimited tax losses, unrealized -- Ignore unavailable to you. Want to Upgrade?

To: Robert A. Green, CPA who wrote (10)	1/28/1998 1:09:00 AM
From: ahhaha	Read Replies (1) \| Respond to of 15

No investment decision should be tainted with tax considerations. Taxing is a posteriori. In fact, an investment taken with the intent of manipulating taxing consequences is a tacit form of evasion, but it's not prosecuted because such action reduces the effective return so no "excess profits" punishment is felt to be needed. If one wishes to maximize gains it is necessary to manage an investment independent of any taxing consequence including making a decision to hold in order to obtain long term status. One decides to hold based on earnings potential and valuation, not on taxing status. As soon as taxing considerations are brought into play judgement of worth becomes distorted; you hold while your investment busts down through your sell point in order to achieve a status. It takes decades of hard experience to learn this, and it seems to be trivially false, but experience shows that you have to make judgements independently of tax considerations. Now as far as this executives resenting my comments about trading, well, they're not going to come out and divulge the endless collection of brainless moves they've made because they have an executive's image to uphold. Their accountants aren't going to say a word, so you only hear about the probability distribution outliers who happened to be successful. Mr Green can confirm every word of what I've said, but that would make him into a liar. His own trading activity has been a disaster. How do I know this? The probability of it being true approaches certainty, on the order of 99.9%, because that is the expected rate of failure among traders. The only traders that last are the ones that avoid risk by hedging on the exchange floor. The market mechanism is set up to give them a positive expected return if they comply with the dictates of risk neutrality. But if they have the positive expected return, then the complement of expectations is borne by the other side, the public. So the game is set up to make the public a loser. It's just like that in Vegas. Someone has to pay the casino overhead. Now Mr. Green I sure would like to have you enlist the abilities of the most astute university econometric mind to attempt to refute me on this. The probability that a chimpanzee can make a successful trade is almost 50%. The probability that a chimpanzee can make 100 trades in a year and come out ahead is on the order of 2%. In three years and say 1000 trades, the probability drops to .2%. No human or galactic alien with the most powerful computers in the galaxy can do much better. This is a mathematically unavoidable truth. Apparently they didn't teach Mr. Green about this sort of thing, they only teach you what you need to pass the CPA exam. Then you presumably know something. But that entitlement provides no testament about knowing the hard facts of trading, dealing with the IRS, or blowing soap bubbles about stylish executives making a killing in the market. You don't need to step in quicksand. You can continue to deal with issues appropriate to taxation. It's boring stuff, but I'm sure someone would like to hear what you have to say and would like your assistance in answering tax questions. That's where your knowledge and interest lie. So keep to your interest and you won't ever hear a word from me. You can only shoot yourself in the foot if you quit contributing to this thread.