In these posts, I am acting as an unpaid financial journalist and an occasional ornery political commentator. This is not a recommendation to buy or to sell. Trade at your own risk. Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons. The sale may before or after the blog. Before buying or selling any stock, even one recommended by a trusted financial advisor, please research it and make up your own mind which is what I always try to do. Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news. In this post, I am merely describing my reasons for purchasing or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale. The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments.
Friday, October 24, 2008
TAX LOSS SELLING TODAY
I had booked several thousand in short term capital gains earlier this year. Looking at my portfolio, it was not hard to find some losers that I did not care to own anymore, so they were sold today and the losses incurred will significantly lower the realized short term gains for 2008, thereby lessening the potential tax bite. A couple of the losers were closed end funds that were leveraged. Buying stocks with borrowed money is a prescription for disaster in this market. I may use the proceeds to buy the bond ETF, LQD, sometime next week. iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD): Overview This ETFs has investment grade corporate bonds and an expense ratio of .15%. It holds about 100 securities. This is a link to a technical analysis of this ETF. Don't Forget About Corporate Bonds - Barrons.com
I took one gain today, which was the KEYPRA that I recently bought at 7 sold today at 12.05. see KEYPRA
I mentioned that I might sell it to lock in the gain in an earlier post. Stocks & Politics: Notable News for Today 10 21 2008
It rallied today I believe on the news that another troubled midwest bank, National City was going to be acquired by PNC.
I added only one position. I bought back the shares of Dupont at 29.7 that I sold at over 45 in mid-September. This stock has not seen a 29 handle since around 1995. It is also a financially sound company paying a dividend over over 5% at that cost. At the current price, I am comfortable holding it through the current troubles. Dupont did guide 4th quarter earnings down when it released it released its 3rd quarter report.DuPont 3Q profit falls on charges, cuts 2008 view: Financial News - Yahoo! Finance Their earnings last quarter were impacted by a large hurricane charge of 227 million. The price broke through its prior 52 week low established just yesterday. Worsening demand for its products will certainly hurt but the decline in raw material and energy costs will improve margins.