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Got this from Rat's, Mr Hoernig again,
Apologies if you've seen it alreadyhttp://www.smartmoney.com/tradecraft/index.cfm?story=20010315
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Yep like the thoughts.
You don't have to wonder to far to find punters who fall in love with a company. Thats bad I'd say if you find yourself ralling to support your pet no matter the reality sell.
JR
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Hi FC..I have said before I hate taking a loss and I read your link with interest. Jono has also made some good points about the folly of buy and hold or dollar cost averaging in previous posts ("loseing the use of the money for other investments). Trouble is over the years...I have never lost any real money through dollar cost averaging..even with absolute shocker companies like AHX. Youo see where the tading argument breaks down is all companies are worth something in the end (partic in our limited market) and invariably the takover price is at a huge premium to the final bottom price. Takeover news is usually kept quiet from the market so you can rarely "pick" when it is going to happen. What I tend to do is move capital loss making stocks around the 3 various investment structures I have eg Super vs Family Trust vs Personal holdings and balance the loss against a gain at the end of the finacial year (to avoid capital gains tax). I then rebuy the stock under a new structure. You see I am of the belief that you can never time the market. Like reading tea leaves AB.
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hello AB,
You have really got the tax thing sorted out- Wow,!
Wish I could find an accountant half as smart.....
As far as market timing goes, well, I like to keep trying! (not right now though, just sold most of mine, and went back up my tree) I have not invested in this sort of market before, so best if I just leave it to the very smart people for a while-
best luck, FC.
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What I tend to do is move capital loss making stocks around the 3 various investment structures I have eg Super vs Family Trust vs Personal holdings and balance the loss against a gain at the end of the finacial year (to avoid capital gains tax). I then rebuy the stock under a new structure. You see I am of the belief that you can never time the market.

Ab not trying to pick on ya but the important words are
capital loss move it were you like it's still a loss of capital.

Like reading tea leaves
Maybe to predict the exact time is, but you can tell if it's am or pm.

JR

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"What I
tend to do is move capital loss making stocks around the 3 various investment structures
I have eg Super vs Family Trust vs Personal holdings and balance the loss against a gain
at the end of the finacial year (to avoid capital gains tax)."


I may be paranoid, but I wouldn't put an admission of illegal accounting practises in print, even if it was on a forum in a different jurisdiction.
I'll correct that. The accounting practise is not necessarily illegal, but the reason for doing it is. I would find another reason for doing exactly the same thing.
As you can tell I don't trust the long arm of the tax man, (or any government bureaucracy for that matter).
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Hi Barcoo...The capital loss is not moved literally from one structure to the next. Each structure is it's own legal entity. I said in my post I sell from one and buy into the other. Nothing illegal about that. Don't be paranoid. What I have been doing is perfectly within the law thankyou..in fact is recommended by accountants around the country. Only last weekend the Fin had a big article on just that. Nor is the practice "tax avoidance" as you seem to imply. I was simply pointing out to the group a useful practice to help in easing the pain of picking the wrong stock.

Holding different stock under different structures eg Super vs FT vs direct ownership also "future proof's" government medling into the different tax treatments of various structures. After all these bafoons have written the telephone size tax act over the year not me. Supposed to have got simpler with Howard..what a joke!

Look at the rediculous 15% Super levy for instance and the recent lowering of capital gains tax on personal holdings. You'd be pretty stupid if you had held all your eggs in the one "Super" basket. Also governments look like medling again with Family trusts like they have in the past..so why hold all your stock in a Family trust? I agree one should be careful when dealing with the tax office..but as their botch up of the BAS proved...they themselves are not above the law. Nor do they make it..our elected representatives do that...and as sure as the sun rises each day, they will continue to place outright stupid limitations on people trying to save like me...instead of encouraging investment in this country.
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Further...point to me anywhere in the tax act that say's it is illegal to realise a loss at June 30 and buy back next finacial year to offest gains in the previous year. Fund managers do this all the time..be careful my friend with your "accusations"..I didn't appreciate your overtones.
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"What I
tend to do is move capital loss making stocks around the 3 various investment structures
I have eg Super vs Family Trust vs Personal holdings and balance the loss against a gain
at the end of the finacial year (to avoid capital gains tax)."



The above is a direct paste from your original message which I quoted in my message.
Note the last 5 words in brackets. It was your accusation not mine.
My accountant tells me this is illegal. If you do exactly the same thing, but for a different reason (one accepted by the ATO) then he tells me it is legal.
My comments were intended to benefit you, not accuse you. No overtones there whatsoever. I don't give a toss about your tax dealings, just trying to save you from an audit.
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You have missed my point. The 3 Investment structures are completely separate legally. They stand on their own independantly..what could possibly be "illegal"? This is not passing losses down from one to the next ie a company within a company within a company...I have a very conservative accountant thanks. I have nothing more to say on the matter.
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Interesting post wapping.

Re <<Youo see where the tading argument breaks down is all companies are worth something in the end (partic in our limited market) and invariably the takover price is at a huge premium to the final bottom price.>>

Do you keep your eyes open for shares like HIH and CTR which may be worth nothing in the end?

A great controversy this cutting of the losses. Some people seem to have it down to a fine art. It seems very important for spec type shares. For the more bluechip type I have found when I have sold at a loss(using a trailing stop) the price has gone up eventually. I am fairly new to it all though.
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You see where the tading argument breaks down is all companies are worth something in the end (partic in our limited market) and invariably the takover price is at a huge premium to the final bottom price

It seems like a soft argument for not selling a loser to me.
JR
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I guess I have been lucky in that I have yet to buy into something like HIH..and I say lucky because let's face it luck is all it comes down to sometimes (that is wy risk = reward when it come to direct share investment). Nobody ie the "market" could see HIH coming. "Chartists" are kidding themselves if they think they can predict the demise of something like HIH..Jono's point is good though: at least a stop loss bails you out of a disaster like HIH..trouble is when you apply it to EVERY stock..chances are you are on average going to be selling out of stocks at consistantly lower prices... as you point out. That's my feeling about it all..I go back to the original Motley fool...(read it)..you might as well be looking at tea leaves as looking at charts in my opinion.
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I go back to the original Motley fool...(read it)..you might as well be looking at tea leaves as looking at charts in my opinion.
Thats what makes the world interesting dif opinions.
trouble is when you apply it to EVERY stock..chances are you are on average going to be selling out of stocks at consistantly lower prices
You seem to generalize a lot AB, maybe you only see things the way you'd like them to be.

Fundalmental research is nothing more than trying to predict the future using past data.AB can think that ta is like reading tea leaves & isn't alone in his believe but that's cool we can't all dance to the beat of the same drum.

One last thought on both TA & FA goverment policy can bugger both up. Victor Sperandeo(trader Vic 2&1) covers this in his books & I'd encourage anyone to read esp Trader Vic2 to get a better understanding of how one can apply the 3 varables-TA-FA-GP(goverment policy)
Lastly I'd encourage one & all to explore the dif approaches for themselves don't accept what anyone says it's your money, remember that most people lose money in the stock market.

JR
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Hi everyone,
Interesting discussion all round, and one that seems to be going on a lot all over the boards at the moment ;
saw this post which I thought was interesting, sorry if you have seen it already----
http://boards.fool.com/Message.asp?mid=14569916
Have a good day all . Cheers,FC
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http://news.bbc.co.uk/hi/english/business/newsid_1221000/1221957.stm

Probably as good a way as any other I suspect,
FC
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Nice post Fc I've learnt a hell of a lot from DB.
He is very respected.
Thanks.
JR
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Probably as good a way as any other I suspect,
LOL
Astrology bah, the whole theory is based on the planets revolving around the earth.

Expert's can be made to look fools over the short term & some are just fools.

The kid angle I like, I started a portfolio for my young nephew & let him pick the stocks(although I only gave him 20 to choose from), away his portfolio returned more than my long term positions over the last 8 months.

JR
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You are a nice uncle to have Jono,
Sounds like your nephew has inherited the investing
gene---
Cheers,FC.
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The kids got time on his side & I hope that he learns the value of cash & avoids the credit trap unlike his uncle's early experience.
JR
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fc1 great post re the four year old. lol

Hope we find the final results.....
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Glad everyone had a bit of a laugh,

Now all we need are some kids, plus a copy of the financial review.....

Wealth and riches await!!!!





Cheers,FC
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Hi Jono...whilst I don't agree with charting ..ie the mathematics of it all etc..I do use charts eg stocks hitting 52 week Hi's and Lows to point me at certain stocks. It is the random walk along the charts that I tend to believe in.... ie Ball and Officer, rather than the "predictablity" of the future. ie I am a natural sceptic. I do accept opinions to the contrary though! I don't agree that most PEOPLE as you say lose money on the market..perhaps you should rephrase it....Most TRADERS lose money on the market. IF you'd LTBH all the stocks in the ASX 50 over the last 20 years...how can you say you'd have lost money? It is a great discussion!
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Got both..and feel very lucky! Thanks for the fantastic posts!
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most PEOPLE as you say lose money on the market..perhaps you should rephrase it....Most TRADERS lose money on the market
Well traders are people so no need.
Most people lose it has to be that way, the greater fool your profit = someones loss.
IF you'd LTBH all the stocks in the ASX 50 over the last 20 years...how can you say you'd have lost money?
Well I don't think that maybe more than 8 co's existed in the asx top 50 20 years ago that still exist today.

I think also that is not really the object of yourself or most other investors you could just take the fund road. To buy & hold the top 50 I think you would certainly lose most your money.
If you brought the top 50 & changed your holdings to match the current top 50 you would do better but the fee's would kill you.
So you try nailing down the stocks that you think have got the chance to last the next 20 years not so easy.
Another thing to consider about Ltbh in the Aust market aging population. You just can't be certain that the last 20 years will match the next.

"predictablity" of the future
Not my way, probable direction, risk V reward.Nothing or noone can predict the future of cause excluding 4 year olds.

I don't consider myself a trader only, hey I've held a stock for nearly 2.5 years.
I'm a ta investor who will trade so as not to hold a loser.

JR





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And the result with the post cassie posted about competition:

http://news.bbc.co.uk/hi/english/business/newsid_1235000/1235304.stm


Child won!
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Hi there allordinary.
,
Ahh, thank you so much for finding that link,
(been dying to find out what happened)


not surprised though are we!

I am definately a convert to Choas theory.....
Thanks heaps,
FatCassie1 (still laughing)
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Whoops- or is it Chaos
that looks better!



Cheers, FC
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