Here's some thinking we haven;t seen anyone, anywhere talking about.
LET ME MAKE IT CLEAR THIS IS NOT TAX ADVICE FRIENDS AND THAT IF YOU HAVE MORE THAN PEANUTS INVESTED YOU SHOULD CONSULT YOUR OWN TAX ADVISOR, BUT ALL IF THIS SELL NOW TO SAVE TAXES TALK HAS BEEN THE SOURCE OF LOTS OF LAUGHS FOR ANYONE WHO KNOWS EVEN A LITTLE ABOUT ESTATE PLANNING AND PORTFOLIO MANAGEMENT!
You might want to sell it out for theFederal return LTCG tax rate of 15% vs 20 or 25 or maybe the 39.6% rate that will apply next year... but after doing that, you might want to buy it back the next minute because AAPL is going to put in one fabulous performance and the stock will assuredly respond to that next year.
The other problem with selling prior to year end, of course, is that as a minimum you will be cashing out the gain net of State taxes and Federal cap gains rates... so that will reduce your investable capital. Do the math and think it through before making liquidating perhaps the best growth story of this century...
By the way, you may want to consider being even more sophisticated by donating appreciated stock to your favorite charity next year instead of selling it out now. That way you can play the game the elite wealthy play. You'll be able to take an itemized deduction at the stock's FMV now and against ordinary income (at next year's higher tax income rate or capital gains tax rate or at least this year's income tax -- not LTCG tax rate), and never have to pay taxes on the appreciation. Of course, too, if you wait until this time next year, you'll also probably be able to donate or sell the stock out well above $800, if not up in Munster's $900+ land.
The story is still young friends, and you'll have years to regret selling out too early.
Hate to say i told you so... but the stock is already up 10% since that post. lol
see you all above $600 before earnings and, likely, above $700 before earnings.
breathtaking -- and capital crushing -- for the unhedged short gumpers. roflol
In case you missed my post on why tax selling is a retarded thought on this stock. Now, if you have tax losses on aapl, you might sell it to harvest that to offset other gains... but then you'll have wash sale rules to deal with if you want to buy it back in 31 days...
And the stock will be well over $600 if not close to $700 by then. ROFLOL
So here I am, a cpa, attorney and MBA credentials along with professionally managing money for 30 years now, and you are going to ask me a question like that?
But just for you, here we are talking about selling out at a gain... and if you do that you owe appropriate treatment (short- or long-term capital gains depending on holding period) taxes whether you like it or not. Then, check this out since you obviously don't know what I or you are talking about, you can buy it back within the same split second or anytime thereafter and you will have a new basis in the newly acquired shares
But if you sell out at a loss and buy the shares right back, then the wash sale rules apply. See, I know one pantload and a bushel basket more than you think I do.
Now, before you go using this powerrful new knowledge to hurt yourself financially, here's a suggestion: go back and read this entire thread top to bottom. You will be more sophisticated and knowledgeable than you are right at this moment. LOL
Although I would mostly agree with this post which is excellent, I would disagree with some of the comments calling Cramer and others idiots. I used to be a HUGE Cramer fan and he is far from an idiot, the problem is sifting through is "fomenting". In the case of taxes, MANY people were wise to sell APPLE to lock in capital gains. Obviously, as stated they would need to come up with the capital to pay taxes and as a result, would need to come up with further capital to buy the same number of shares. Take for instance someone selling Apple at a profit of a million dollars, they would have $850 K after paying taxes. As it turns out, this was very wise since the stock has depreciated more than 15%. They would be able to buy in at a lower price as well as lock in their tax rate.
For a small investor, selling now with $100k gains would force them to pay $15K in gains and only have $85K to purchase Apple at its current price. The investor could wait for Apple to drop 15% but risks that the stock may never drop that amount and lose on a "big gain day". Point being, I agree that now is NOT the time to sell if you are LONG Apple. Still, it may be a bumpy week. Dec 31 never seemed so far away. Good luck!
Sentiment: Strong Buy
Cramer is also an MBA and lawyer. I know he is not an "idiot" in the cognitive capacity sense, but the way he conducts himself is true to that descriptor. He aslo suggests retail investors should buy and sell and often and makes assumptions all of the time that are not supported by reality, including his nonsense that all the selling in AAPL has been "tax driven"... that is idiotic as I have explained here on several threads.
His show requires the intellect of a clinical #$%$.. especially the baby crying #$%$, and Cramer's flipping back and forth is so legendary some traders deliberately trade against him with a 3 hour lag.
And do read on for my partner's adds -- most people reading here likely have marginal tax rates about equal to CURRENT LTCG tax rates... so listening to Cramer and the truly imbecilic clowns on Fast Money (we'd exclude Karen Fineman from that description but not Kass or the other loud mouths) selling out to get this year's benefit of lower LTCG rate vs something between 5-25% higher next year is an exercise in stupidity and ignorance for them.
Your tax calcs fail to include state tax effects... so unless you live in NH, Nev or Fla, one needs to include those effects.
9 weeks ago aapl was trading at $705 and everyone loved it, even the momo guys...
Today everyone is afraid of it and now it has cash of 30% of its market cap, the flexibility to do a huge stock buyback and big dividend increase, trades at less than 8x earnings despite growing revenues and EPS 3X faster than the S&P, and is so oversold technically on on fundamentals that the value funds are scooping it up.
Summing then, selling today is ill-conceived ...
10 or so #$%$ have suggested longs sell out to protect ltcg treatment. Read this and laugh at those short dweebs.
btw, the 15% ordinanry income rate is 15% friends... let them take the cap gains rate up if they want. Same news on dividends. LOL
keep this up top for those lacking finance acumen or otherwise listening to Cramer or the idiotic shorts here.
We added this morning, and off to play golf now. Have a great holiday weekend longs... let the shorts squirm here all weekend.