[Nuckle]

Originally Posted by BimmerDimmer6

10k.

Was that a question or an answer? Hahahaha

[NemesisX]

I have a question.

I'm not an expert on investing. Everything I've learned about investing I've learned from my dad. His philosophy is buy and hold, and continue to buy regardless of what the market is doing. He never has to guess tops or bottoms this way, and it's amassed him an 8 figure net worth over the course of 33 working years by purchasing nothing but index funds so he's doing something right. He doesn't even follow the usual 60/40 stock/bond split, he's quite a bit more aggressive than that by being all in U.S. equities.

Suppose I were to buy $100,000 worth of shares in Apple some decades ago with after-tax dollars. Fast forward to now, and my position in Apple is worth $1,000,000 (with a cost-basis of $100,000).

Let's say I sell Apple. I now owe long term capital gains tax on $900,000, correct? Say I make enough such that I have to pay 20% in capital gains.

So I owe the government .20*900,000 (value minus the cost basis) = $180,000 in taxes. That $180,000 is gone.

Let's say I were to sell my $1 million Apple at a certain price. Apple's peak stock price this year was $327.85/share.

So I'm an average investor and I'm not a wizard and therefore I cannot possibly predict this peak price exactly, but in a magical world let's say I do. Somehow beyond reason I'm able to predict precisely the day the market will "crash" and I sell all of my Apple stock at $327.15/share (all 3056 shares worth $1M). It's sold, I get $1M cash. I pay $180,000 to uncle sam, and I'm left with $820,000 in my bank account ready to invest.

$820,000/3056 shares = $268.32/share.

Does this not imply that in order for me to have made a good decision I need Apple's stock price to go down at least to $268.32 per share, otherwise I've lost out on money?

Looking at Apple's stock price, it looks like it went below $268/share briefly on March 9, 2020. Then it went up again for the next few days before going down below $268/share on March 12 - April 8 (with some peaks in between but I'll make it simple). Who the hell knows what it will do in the next few months, years, etc. The only thing that's certain is that 30 years from now it will almost certainly be higher than $327/share (ignoring stock splits).

To me, that seems like such a small window to make a guess about something as complicated as a stock price. If you were to sample every person on earth who is in this position I'd imagine that a vast majority of them would guess wrong and fail to get back into Apple below the price they need to in order to have made a profitable decision. I don't know that for a fact. I'm guessing/speculating here.

By not selling stock, I keep money that I would have paid to uncle sam in capital gains tax in my account, accruing compounding gains for years to come.

[BimmerDimmer6]

Originally Posted by Nuckle

Was that a question or an answer? Hahahaha

Just an assumption. Haha, if it makes you feel any better I bought like 2 weeks in Vegas worth of CCL at 16.5 - am not feeling very good about it I haven't checked it since Friday. I am an idiot and thinking about buying more to recoup my loss of it goes up but idk

[premier3is]

Originally Posted by NemesisX

I have a question.

I'm not an expert on investing. Everything I've learned about investing I've learned from my dad. His philosophy is buy and hold, and continue to buy regardless of what the market is doing. He never has to guess tops or bottoms this way, and it's amassed him an 8 figure net worth over the course of 33 working years by purchasing nothing but index funds so he's doing something right. He doesn't even follow the usual 60/40 stock/bond split, he's quite a bit more aggressive than that by being all in U.S. equities.

Suppose I were to buy $100,000 worth of shares in Apple some decades ago with after-tax dollars. Fast forward to now, and my position in Apple is worth $1,000,000 (with a cost-basis of $100,000).

Let's say I sell Apple. I now owe long term capital gains tax on $900,000, correct? Say I make enough such that I have to pay 20% in capital gains.

So I owe the government .20*900,000 (value minus the cost basis) = $180,000 in taxes. That $180,000 is gone.

Let's say I were to sell my $1 million Apple at a certain price. Apple's peak stock price this year was $327.85/share.

So I'm an average investor and I'm not a wizard and therefore I cannot possibly predict this peak price exactly, but in a magical world let's say I do. Somehow beyond reason I'm able to predict precisely the day the market will "crash" and I sell all of my Apple stock at $327.15/share (all 3056 shares worth $1M). It's sold, I get $1M cash. I pay $180,000 to uncle sam, and I'm left with $820,000 in my bank account ready to invest.

$820,000/3056 shares = $268.32/share.

Does this not imply that in order for me to have made a good decision I need Apple's stock price to go down at least to $268.32 per share, otherwise I've lost out on money?

Looking at Apple's stock price, it looks like it went below $268/share briefly on March 9, 2020. Then it went up again for the next few days before going down below $268/share on March 12 - April 8 (with some peaks in between but I'll make it simple). Who the hell knows what it will do in the next few months, years, etc. The only thing that's certain is that 30 years from now it will almost certainly be higher than $327/share (ignoring stock splits).

To me, that seems like such a small window to make a guess about something as complicated as a stock price. If you were to sample every person on earth who is in this position I'd imagine that a vast majority of them would guess wrong and fail to get back into Apple below the price they need to in order to have made a profitable decision. I don't know that for a fact. I'm guessing/speculating here.

By not selling stock, I keep money that I would have paid to uncle sam in capital gains tax in my account, accruing compounding gains for years to come.

Interesting way to think of it, although I wouldn't view it like that by looking at the cost of it after taxes.

Buy and hold strategy in indexes will likely always be positive in the long run.

Also, a 100k investment in Apple a few decades ago would be worth MUCH MUCH more than 1m! Sorry I didn't provide much input here, hopefully someone else can lol.

[Rmtt]

Originally Posted by BimmerDimmer6

Just an assumption. Haha, if it makes you feel any better I bought like 2 weeks in Vegas worth of CCL at 16.5 - am not feeling very good about it I haven't checked it since Friday. I am an idiot and thinking about buying more to recoup my loss of it goes up but idk

Well if you are in it for the long term...always average down when you have the chance.

[Jordan's World]

Any thoughts on BA? Do you guys think everything is factored in already, or should I be patient right now?

Thinking about putting in a limit order for a 100 shares this morning.

[Bimmer Nerd]

Originally Posted by BimmerDimmer6

Just an assumption. Haha, if it makes you feel any better I bought like 2 weeks in Vegas worth of CCL at 16.5 - am not feeling very good about it I haven't checked it since Friday. I am an idiot and thinking about buying more to recoup my loss of it goes up but idk

Look at it this way. If you can buy enough shares to lower your average to $12-13 a share, you will only need the stock to rebound up until that price point for you to break even. Always average down if possible.

Originally Posted by Jordan's World

Any thoughts on BA? Do you guys think everything is factored in already, or should I be patient right now?

Thinking about putting in a limit order for a 100 shares this morning.

Always depends on your risk factor. However, personally, I am waiting.

[BimmerDimmer6]

Originally Posted by Bimmer Nerd

Look at it this way. If you can buy enough shares to lower your average to $12-13 a share, you will only need the stock to rebound up until that price point for you to break even. Always average down if possible.



Always depends on your risk factor. However, personally, I am waiting.

Thats an idea.

[ny325]

Crude oil.

[MisterF80M3]

Originally Posted by Jordan's World

Any thoughts on BA? Do you guys think everything is factored in already, or should I be patient right now?

Thinking about putting in a limit order for a 100 shares this morning.

It looks bearish to me. The uptrend is broken.

[Zara]

Originally Posted by MisterF80M3

It looks bearish to me. The uptrend is broken.

Too risky to know for sure, let it retest the resistance and support before being bearish. I got my eyes on the SP500 and if it breaks below 2700 then it's a good opportunity to short it. If it fails and goes above 2900 then the rally might not be over yet.

Originally Posted by NemesisX

So I'm an average investor and I'm not a wizard and therefore I cannot possibly predict this peak price exactly, but in a magical world let's say I do. Somehow beyond reason I'm able to predict precisely the day the market will "crash" and I sell all of my Apple stock at $327.15/share (all 3056 shares worth $1M). It's sold, I get $1M cash. I pay $180,000 to uncle sam, and I'm left with $820,000 in my bank account ready to invest.

Obviously, it's called swing trading dude...not that foreign of a concept.

Also, you don't need to have a crystal ball to test your theory...all you have to do is go back 5 or 10 years, etc. and pretend that you bought at a time when stocks were oversold (RSI under 30) and sold every time the stock was overbought (RSI over 70). That's the most robotic way to trade when it comes to "buying low and selling high." Then just take those numbers minus tax and you'll have your answer.

If you do end up doing this exercise on paper though, I'd be curious to see your results...in some cases this makes sense. Ever notice how Amazon and some other blue chips come crashing down after making higher highs and bouncing off of resistance? If it pains you to not realize those highest of gains then employ that strategy, pay the piper, and don't look back.

Also, unless you plan on giving that stock up as inheritance to future generations then you're gonna pay tax on it regardless...whether it's paid all upfront and/or held for longer than a year or not are the obvious variables.

[BimmerDimmer6]

We're fucked. I am pulling my money out of the market and buying a boat or something. I think it would be a safer investment at this point.

[corn18]

we're buying a camper.

[BimmerDimmer6]

Thats sweet, how many slides does it have? And does it have the garage thing? My buddy has one with a garage in the rear for his bikes and kayaks and i think it turns into a porch, but I could be making that up.

[corn18]

Originally Posted by BimmerDimmer6

Thats sweet, how many slides does it have? And does it have the garage thing? My buddy has one with a garage in the rear for his bikes and kayaks and i think it turns into a porch, but I could be making that up.

3 slides. No garage.

[BimmerDimmer6]

DOW 30k this week?

[NemesisX]

^ im going to guess that Dow will hit 30k in 3-5 years.

[Bimmer Nerd]

Originally Posted by BimmerDimmer6

DOW 30k this week?

No chance

[BimmerDimmer6]

Is USO ever going to be a "buy," it still seems risky even down like 80%... maybe if it was like a nickel?

[premier3is]

Originally Posted by BimmerDimmer6

DOW 30k this week?

I'd put up my whole life savings and all my assets to bet against this lol. No way in hell will it hit 30k in a week.

[corn18]

I’d bet a million bucks that I cannot predict where the S&P 500 will end the week within 1%.