Around July 15th next week.
Market seems to be pricing in (for a 10% yield) about $0.40, and then $0.80 for October, for an annual return of around $1.80. But, steel prices are rising apparently due to a few temporary plant shutdowns in the Great Lakes area. And the FTC might be preparing to bring dumping charges on foreign tubular steel used in energy production. Earnings next week around $0.50 could push MSB back up to $20+. If some optimism returns we could see pricing for an 8% return or up to $25/unit. Naaaaah! Dream on.
Well, I'm not sure I want it to go up yet. I'm pondering doing tax loss harvesting by doubling my position then waiting 31 days and selling the original position. That would reset my basis down and generate tax losses to offset other options premiums. I had assumed I couldn't do that without a recapture tax hit. But I discovered you were correct in a discussion we had last year regarding recapture on sale. Apparently domestic iron ore is a section 1231 property and has different (and more advantageous) tax handling than oil and gas trusts. Our distributions are taxed as cap gains (after one year) and we can sell without any recapture. If I'm correct about this then MSB becomes a good candidate for tax loss harvesting. The only reason I've delayed is waiting to see if it continues dropping. I don't want to double my position only to see it drop a lot within the 31 days I have to hold before selling. Any opinions whether we are done dropping for the short term in the $17s?
Good luck with tax loss harvesting during an uncertain period for MSB.
I can't remember the last time I achieved anything good with t.l.h., and I've tried several times.
I'm glad to hear your new understanding of the MSB tax treatments. Although the annual depletion seems to be completely unpredictable (last year it was much much lower than the previous year), I still plan on holding for several more years and sell if and when the adjusted basis approaches zero.
Liz: several things to note. MSB is trading in a range now. 17-18 dollars which is consolidation pattern. Looks like strong resistance at 18. The 20 day has also been a strong resistance and that is coming in at 18.25 right now. Next. the dividend will now range .35-.46 with target of .42. Based on someone's post of shipping tons. If the shipping tons is based off of what I arrived at then its .44-.55 with a dividend of .52. With this in mind the stock may move up through theses levels of resistance but it would be hard to push through 19-20. After the dividend the stock will return back to 17 and maybe lower. I have a target of 15. I would be a buyer there as long as Clfs can stay afloat and based on the iron ore demand can stay above 90. Last. you will have to deal with the tax on the dividend if in a individual account and possibly the loss on the stock if we can not push through 18-18.25.