Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: Dalin who wrote (2377)	3/25/1999 12:40:00 PM
From: Trader Dave	Read Replies (2) \| Respond to of 4710

5 to 10 years? hey, in tech a long term horizon is 1 to 2 years. you want to make sure sonet has long term growth in it before socking this thing away for 5 years. we're in the early discussion stages of ip over optical bypassing the need for a complete sonet loop. (it's probably not an issue for a few years, but it's something to be aware of....)

To: Dalin who wrote (2377)	3/25/1999 4:09:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 4710

Dalin a buy and hold strategy works very nicely because of the timing of taxes. It is mathematically superior to a trading strategy because of the ability to stay invested at all times. For example, consider a stock that grows at 30% per annum, and a capital gains rate of 28%. The trader earns 21.6% per annum after taxes, so that at the end of 5 years his total investment has grown by 165.9%. In contrast, the buy and holder's after-tax stake has grown by 195.3%, or 24.2% per annum. The trader would need to generate a 33.6% per annum rate of return to equal the return generated by the buy and holder. Now, if we assume the more realistic 18% LTCG tax rate the buy and holder generates a 26.4% per annum after-tax gain. The trader would need to generate 36.6% pa pre tax to equal what what the buy and holder generates at 30% pre tax. TTFN, CTC