The stock market

[Brock Beauchamp]

 

what? You better be paying taxes, or you are in trouble......reinvesting doesn't matter at all....

Yep. My understanding is that if you hold a single stock for less than a year, it's 30 or 35% tax. If you hold it for more than a year, it's 15%. What you do with the money afterward is irrelevant.

 

I'm going from hazy recollections, though... My numbers there may be off a bit. I haven't sold many "winners", though I've sold some modest losers over the past few years.

 

I've never paid the higher rate in taxes because if I'm ready to get out of a stock, I've probably held it for more than a year.

[Mike Sixel]

 

Yep. My understanding is that if you hold a single stock for less than a year, it's 30 or 35% tax. If you hold it for more than a year, it's 15%. What you do with the money afterward is irrelevant.

 

I'm going from hazy recollections, though... My numbers there may be off a bit. I haven't sold many "winners", though I've sold some modest losers over the past few years.

 

I've never paid the higher rate in taxes because if I'm ready to get out of a stock, I've probably held it for more than a year.

 

You are correct, Brock. Under a year, it as regular income for determining taxes. Over a year, pay 15%....

[Brock Beauchamp]

 

You are correct, Brock. Under a year, it as regular income for determining taxes. Over a year, pay 15%....

IMO, it's kind of ridiculous the lower rate kicks in at a single year.

 

If you want to support long-term investing, market stability, and retirement savings, 3-5 years makes a lot more sense to me.

 

Go easy on the people who invest long-term for stability and retirement, don't let the high-rollers and brokers get that rate after just 12 months.

[Mike Sixel]

 

IMO, it's kind of ridiculous the lower rate kicks in at a single year.

 

If you want to support long-term investing, market stability, and retirement savings, 3-5 years makes a lot more sense to me.

 

Go easy on the people who invest long-term for stability and retirement, don't let the high-rollers and brokers get that rate after just 12 months.

 

better yet......tax all income the same.....don't "punish" those that work for a living with higher tax rates.....but we digress.

[Willihammer]

Gains on long term investments should not be taxed the same as gains on day trades / speculation.

Personally don't think the system is broken but if they wanted to add a 10% or 5% bracket for 3+ year holdings I'd definitely be in favor of that.

[Mike Sixel]

 

Gains on long term investments should not be taxed the same as gains on day trades / speculation.

Personally don't think the system is broken but if they wanted to add a 10% or 5% bracket for 3+ year holdings I'd definitely be in favor of that.

 

Why not? Why is one way of earning money taxed differently than another way?

[Willihammer]

 

Why not? Why is one way of earning money taxed differently than another way?

Seriously? For starters, millions of Americans put their investments in the hands of money managers who, in a flat tax environment, would be incentivized to trade on momentum ie. speculation in order to reach performance goals. It would encourage even more risk taking than is already taking place and ultimately hurt returns for the average Joe.

[Mike Sixel]

 

Seriously? For starters, millions of Americans put their investments in the hands of money managers who, in a flat tax environment, would be incentivized to trade on momentum ie. speculation in order to reach performance goals. It would encourage even more risk taking than is already taking place and ultimately hurt returns for the average Joe.

 

You mean in addition to the massive income inequality this contributes to? Yes, I'm very serious. 

 

There is no reason Warren Buffet should pay a lower tax rate than his administrative assistant, as Mr. Buffet has pointed out over and over.

[Willihammer]

 

You mean in addition to the massive income inequality this contributes to? Yes, I'm very serious. 

 

There is no reason Warren Buffet should pay a lower tax rate than his administrative assistant, as Mr. Buffet has pointed out over and over.

We're just going to have to agree to disagree here. Moving on...

[T.C.]

Any thoughts on Amazon? Lots of news coming out lately about different projects like their new grocery store concept. Echo and dot commercials seem to be on all of the time as well. Might be overvalued with that high PE but is there any doubt Amazon is the company of the future?

[Mike Sixel]

 

Any thoughts on Amazon? Lots of news coming out lately about different projects like their new grocery store concept. Echo and dot commercials seem to be on all of the time as well. Might be overvalued with that high PE but is there any doubt Amazon is the company of the future?

 

I own it in both my money and retirement accounts.....for that last reason mostly. 

[Brock Beauchamp]

 

Any thoughts on Amazon? Lots of news coming out lately about different projects like their new grocery store concept. Echo and dot commercials seem to be on all of the time as well. Might be overvalued with that high PE but is there any doubt Amazon is the company of the future?

They're definitely the future and if you want to invest, now is the time. They've dropped at least $50 off their peak price from a few months ago.

 

But I don't know if I'd invest in them at this point. I got in when they were around $330 and, obviously, made a great return on them... But at their current price point, I'd be more wary.

 

But it really depends on the return and speed. As I said, they're down from their peak price right now and they look to dominate the future. While you won't see the 140%+ gains I'll see, you should see significant gains within a year, I suspect. I think they'll be back over $800 a share relatively soon.

[Brock Beauchamp]

Another thing to remember about Amazon is that while their P/E is astronomical, two years ago they had never turned a profitable quarter as a company (or if they had, it was rare).

 

Now they're turning a significant profit every quarter. If there's a company whose absurd P/E is warranted, it's probably Amazon. I'm not sure what the ceiling is on the company but it's very high.

 

But, at some point, that P/E needs to normalize, which means the stock price will flatten. Not sure when that will happen, though.

[Brock Beauchamp]

If you're looking at a tech stock that is minimal risk, I'd consider Facebook.

 

1. Their P/E is a fraction of Amazon at 44.

 

2. They beat the consensus expectation every friggin' quarter.

 

3. Their profits rise almost every quarter.

 

I don't know if there's a company out there that has made smarter purchases at a higher frequency than Facebook. When they picked up Instagram, people were questioning their methods. When they picked up WhatsApp, people were floored by the price they paid for the app.

 

Today, both platforms are thriving and so is Facebook itself. WhatsApp in particular was a really smart pickup, despite its absurd price.

[Brock Beauchamp]

Another tech stock I put a little money into last year was Square (about $1k).

 

Got in around $10 and it stayed mostly flat but in the past few months, it has surged to $14 a share.

 

I don't know if I'm confident enough in them to drop big money (for me, $3-5k), but I'm considering dropped another $1k or so into them to see what happens.

 

They have the potential to be a market disruption. I don't think it will be a monster growth company, but I think they have the potential to turn into a profitable enterprise in the coming years as more small businesses begin to realize they can save a crapload of money on credit card processing (and take small business loans to grow).

[Mike Sixel]

Shopify, still like Shopify A LOT.

 

I agree on Facebook, I just got in a few weeks ago.

 

OTOH, wtf do I know? I almost bailed after the election......I still think year 2 of the new administration could be bad for the market....

[Brock Beauchamp]

 

OTOH, wtf do I know? I almost bailed after the election......I still think year 2 of the new administration could be bad for the market....

I lean the same direction, though I'm not sure where it will fall in years 2-4.

[gunnarthor]

 

Shopify, still like Shopify A LOT.

 

I agree on Facebook, I just got in a few weeks ago.

 

OTOH, wtf do I know? I almost bailed after the election......I still think year 2 of the new administration could be bad for the market....

As bad as Trump can be, I still think the big massive companies - Wells Fargo, Disney, Exxon, etc - will be protected over the next four years.  I'm not sure where to invest in tech because 1) I'm not sure what's what and 2) I'm not sure GOP policies will be good for silicon valley.  

 

And, if nothing else, index funds are fairly safe if boring.

[gunnarthor]

Well, looks like the Dow might cross 20,000 today or tomorrow.  Some interesting pieces of trivia in this article on the Dow.

 

https://finance.yahoo.com/news/dow-20000-approaching-145145621.html

 

Since its inception in 1896, the Dow’s average annual return has been 7.27%. The average daily return is .02537%, with the average positive day seeing a gain of 0.71% and the average down day seeing a loss of 0.74%.
July is the best month of the year, with an average return of 1.3192%, while September has been the index’s worst month, with an average loss of -1.0586%.
The Dow’s best year ever was 1915, when the index gained 81.66%. The Dow’s worst-ever year was 1931, when it lost 52.67%.
The index’s best decade ever was the 1990s, when it gained 317.59%. It’s worst decade was the 1930s, when the Dow lost 39.54%.

[Mike Sixel]

I really hope you all bought NVIDIA when I first mentioned it.....insane returns the last 12 months. 

[gunnarthor]

 

I really hope you all bought NVIDIA when I first mentioned it.....insane returns the last 12 months. 

I did not - bought into John Deere around then, instead.  Hope you're right on shopify though.

[Mike Sixel]

 

I did not - bought into John Deere around then, instead.  Hope you're right on shopify though.

 

shopify is a LONG term play for me. I thought NVIDIA was too, but I might just have to lock in some cash next year to pay off some debt. Especially if they lower tax rates next year....

[Mike Sixel]

Nvidia couldn't wait 1 more week to lose it's value......just 1 more week....

[DaveW]

Id eccomend buying WWE by EOY, I'm predicting they hit $28-$35 sometime in 2017

 

Also bitcoin over $950! Nice little 200% return over the past several months.

Edited December 29, 2016 by DaveW

[Mike Sixel]

 

Id eccomend buying WWE by EOY, I'm predicting they hit $28-$35 sometime in 2017

Also bitcoin over $950! Nice little 200% return over the past several months.

 

I saw bitcoin yesterday....wish I'd have followed you on that ride!

[Mike Sixel]

 

Id eccomend buying WWE by EOY, I'm predicting they hit $28-$35 sometime in 2017

Also bitcoin over $950! Nice little 200% return over the past several months.

 

Based on what, for WWE? Not sure it matters, not sure I can buy them, but I am in interested.

[DaveW]

Based on what, for WWE? Not sure it matters, not sure I can buy them, but I am in interested.

Brand split has been very good for the company, WWE network has been doing very well IMO and they are KILLING it on YouTube, which will only continue to grow the brand.

[gunnarthor]

 

Brand split has been very good for the company, WWE network has been doing very well IMO and they are KILLING it on YouTube, which will only continue to grow the brand.

Not sure I'd buy WWE. 

 

First, entertainment is pretty fickle and what interests someone today might not hold them tomorrow. I know WWE is trying to grow (my kids bought a Scooby Doo/WWE video) but it seems limited. They've missed earnings three out of the last four quarters and have been downgraded by several stock watchers.  (Which could mean it's a good buy-low candidate).  And their 200m bond might hurt current investors in the future, as well.  Admittedly, I haven't looked into it much more than that.

 

http://www.barrons.com/articles/why-wwe-shares-are-on-the-ropes-today-1481647034?mod=yahoobarrons&ru=yahoo&yptr=yahoo

[diehardtwinsfan]

 

Well, looks like the Dow might cross 20,000 today or tomorrow.  Some interesting pieces of trivia in this article on the Dow.

 

https://finance.yahoo.com/news/dow-20000-approaching-145145621.html

 

Since its inception in 1896, the Dow’s average annual return has been 7.27%. The average daily return is .02537%, with the average positive day seeing a gain of 0.71% and the average down day seeing a loss of 0.74%.
July is the best month of the year, with an average return of 1.3192%, while September has been the index’s worst month, with an average loss of -1.0586%.
The Dow’s best year ever was 1915, when the index gained 81.66%. The Dow’s worst-ever year was 1931, when it lost 52.67%.
The index’s best decade ever was the 1990s, when it gained 317.59%. It’s worst decade was the 1930s, when the Dow lost 39.54%.

 

This is probably more impressive given how long the markets traded in an incredibly narrow range.

 

Anyways, if you were thinking of locking in profits, the market appears to be topping.  The major drops over the last couple of years have correlated directly to a strong dollar (which is at a peak again right now).  Might not hurt to sit on the sidelines for a month or two in any of your investments you don't love. 

[diehardtwinsfan]

 

I'd recommend continuing to invest in any energy/oil companies as well over the next couple months.

Bitcoin still continuing to rise, still time to jump on that train, I'd bet that it hits $900 in the next 60 days.

 

Good call Dave.