well thats the problem. Every year, fair value goes up so not only do you have to be right, but you have to be fairly timely.
well he wont sell the fund, but yes there is some value in the carryover, but not as much as you think. There is little value to tax loss carryovers to a mutual fund administrator, the fund holders are the primary benefactors and unless there is very substantial turnover cap gain distributions are often small. And even then, mutual fund holders tend to pay little attention to tax carryovers. And there's not much of a real benefit as fund holders will tend to do just as well in a passive index etf that has no material cap gain distributions.
no brainer to not sell the shares. Avoid the heavy capital gains taxes, and pay the lower tax rate on dividends as they come in. ATT may not have the best prospects but they dont appear to be significantly overvalued either.
I think he's right, Warren was wrong. However, that doesnt mean he's still wrong. IBM is not earnings $20 this year, but at a price in the low 130s, if IBM can earn $14 or more while aggressively buying back stock, that can still be a profitable investment.
stock picking lately has not been that dismal, except for IBM. Other stocks that have gone down like American Express, havent been bought since 1995, and selling them would have severe tax consequences.
well this wouldnt incur capital gains for you but it would for Berkshire. If Berkshire sells $1 of American Express or Coca-Cola(which is almost pure gain), then after paying 35% corporate tax it will only receive 65 cents. Generally, its much more beneficial, barring extreme overvaluation, to hold onto the stock and pay the 14% tax rate on dividends as they come in.
I understand but buying a convertible preferred with the option to convert like the bac preferred is very different than buying one like this that automatically converts into shares in less than 2 years.
Strategic total return, Hussmans last fund to remain above its index, may lose that position when the next charts come out in a few days. He had a little less than a 2% lead going into the month and my guess is he will fall a little short. He used to have a large lead, its kind of a strange fund because the index, the total bond market, varies quite a bit from this holdings which include utilities and gold stocks.
IBM cannot buyback $13 billion a year and pay $4-5 billion in dividends a year. It exceeds their cash foow by a significant amount.
I dont own amazon, but I'm not nearly as pessimistic here. $25 billion sales growth is possible and the low hanging fruit has not disappeared. Sears will likely fold within the next couple of years, perhaps JC Penney too and the continuing decline in mall sales will continue and perhaps further accelerate. AWS will continue its rapid growth. The big opportunity though is in grocery. Kroger alone is $110 billion in sales per year and amazon has a real opportunity to make a dent here. The razor-thin margins in many grocery stores and the very high labor costs that they have give amazon the potential to turn that dent into significant damage as many stores don't have the potential to absorb a loss in sales. Amazon's prime now is just rolling out in a lot of cities and 2-hour delivery (which I just used for the first time) can really be a game changer in further growing sales. As for Amazons profitability, its very low but the potential is being clouded by Amazon's current strategy which is growth.
Buybacks dont decrease the funds available for additional Divs if stock is compensation that would otherwise have to be paid. So instead of paying $2 million in wages, you give stock valued at $2 million and immediately retire it in the hope that provides extra incentive. If you dont buyback shares, yes your % ownership decreases, but the company has $2 million additional to invest for its benefit or to pay out dividends.