If LB discusses that VIX model again, then RB is going on strike and will never come back. The only reason the nerd knows anything about taxes, after skipping its one course over 30 years ago, is that Headknocker is too cheap to hire someone to do his taxes. Admittedly, it would cost a fortune to pay someone to do it, since LB is a magnet for esoteric tax issues, and more than a few trades need an entry somewhere, creating a large headache at a certain time every year, year after year, decade after decade.
I have discussed the downgrades of Disney by a couple of WS analysts.
My purchase was made at $15.49, below Disney's book value, near the start of RB's 3 week frolic and detour on March 6. Buys of JWF KSA DIS and NYX/SOLD Entire Position in TFI/ Just a Day of Ignoring My Own RulesBuy of HNZ at 31.67/Tax Advantages of Equity Preferred Dividends/Foreclosure Acceleration/Disney Downgrade by Pali/Cap & Trade/NADX
The analyst from Pali said sell that stock. That was on March 11, 2009. I ignored that piece of advice for the reasons set forth in that last linked post. Ultimately, an individual investor has to do what makes sense to him or her. I still own those shares. Now what do I do with them? There is no good answer to that question.
Disney reported better than expected earnings after the close, though earnings did fall to 43 cents excluding items from 58 cents a year ago. The Walt Disney Company Reports Second Quarter Earnings - Yahoo! Finance Taking into account that the world is in a recession and possibly may be moving out of it now, the focus needs to be on the future, not the past. Disney was bid up in after hours to $24.10. If it opened at $24 tomorrow, the percentage gain would be close to 50% based on my cost. It is too late for an old codger to do the calculation. That is 50% in 2 months. (Alternative meaning: YouTube - Get It While You Can) The trader, and LB is 1/2 trader, says sell, even if the gain is short term, while the other half of LB, the long term investor, says hold for at least $30, a double, and a long term capital gain. The trader often harvests these kind of gains early in a tax year to offset ill-advised decisions harvested near the end of the year. Every year seems to have a few of those. There is no clear answer to this problem, and I have been doing it for 40+ years now. A factor for the long term is the blue chip status of Disney, its financial strength, and the possibility that the worst of the storm has blown over. Maybe, I will do my coin flip tomorrow morning if it is over $24. Heads, I sell and tails I keep it. If tails comes up then I will do the flip again when Disney hits 27- remember the story that Taleb gave about playing russian roulette too many times. Duality of Long Term Risks/Stocks Under $5: Per Se Lottery Tickets/
No comments:
Post a Comment