Birchtree's Account Talk

[Mapper]

I have felt the same way when it came to selling vs. holding. I never understood why someone would hold and take a big loss in a bear market for instance, just to avoid paying taxes on a gain.

But larger investors look at risk / reward and when capital gains are raised, the upside potential gets smaller, and they are more apt to pass on some of those investments that they may have made if cap gains were lower. Not all, of course. But it's similar to interest rates with real estate deals. At some point the rates make it less attractive of a risk / reward investment. I'm working on a deal right now where the potential buyer said the lease must return X% above costs on their downpayment to be worth their while. X% - 1 and they are not interested and will look for the next opportunity.

Yes, there certainly is risk/reward factor. Obviously we don't know what might influence the psychology of all traders but I hesitate to fully embrace the provided argument because the capital gains tax is applied universally to all capital gains. I guess more people could stay in cash, but it seems the investors role is to do just that, invest. As you said, if your deal doesn't work the buyer will look for the next opportunity. The real estate scenario laid out is dependent on the investor finding or waiting on a better deal for a variable value item. This real estate investor needs to meet risk/reward criteria that are affected by multiple moving parts (lease cost, rate, down payment, local market....) Always there will be investment options but when the capital gains tax applies universally an investor meets with the tax no matter the investment vehicle.

In any case it does seem logical that reduced capital gains taxes would have an effect on overall market volatility...which would certainly have implications for trading strategies.

As for the Santa Rally...bring it on. I'm ready!

 

[Birchtree]

A few more nibbles to keep the money circulating: UDR, MRK, AOS, RPM, MS, CBG. The bulls are on their way.

 

[Birchtree]

I'm waiting on the melt up that's coming and sampling the buffet: MCP, GLF, TWIN, BWP.

 

[silversurfer]

sooooo, you seem fairly confident that the news of a standard & poors downgrade wont affect the market for this next week? I know the deadline on that is 90 days, but if the consensus is that it will have minimal effect short term, that would make me feel better. Thoughts?

 

[cak165]

I was listening to Mark Grant from Southwest Securities on Bloomberg last night, he agrees that the S&P downgrade will be disastrous for the EU and its banks, however, he contends that there will be a great rush toward dollar-based assets, including securities and treasuries. If he's correct, we can finally see some sort of "decoupling" between the U.S. and the rest of Europe, at least in the short term. The Fed and the central banks are making it clear that they're not going to sit idly by either, they're not going to let anyone default, again not until they think the house is in order and EU can stand on its own. Now, if we can get some confirmation that consumer spending didn't take a dive after black Friday and is holding steady, there might be a strong year-end rally. Don't forget, there's a ton of money on the sidelines and money managers who are still looking for bonuses, if the market can shrug off a couple of bad pieces of news like it did today, it tells me some people are buying the dips and soon they'll be chasing the market. I believe there's an ECB meeting on Thursday and then later in the month, some people Draghi might cut rates, it just seems like it's an environment where the RISK ON trade can be in play for a while. I'm being very cautious though, there are still a ton of uncertainties out there so this market could turn on a dime.

 

[Birchtree]

http://www.safehaven.com/article/23551/important-market-update


"Oppenheimer is one bull on U.S. equities, as the firm believes that investors have overestimated the negative impact the crisis in Europe has on the U.S. economy and corporate profitability."

http://www.safehaven.com/article/23547/are-the-stars-aligned-for-a-year-end-rally

 

[Birchtree]

"Taking out SPX 1265 and Dow 12,200 with force will be a short covering signal."

http://www.marketoracle.co.uk/Article31947.html

http://www.marketoracle.co.uk/Article31979.html

 

[Birchtree]

"So I believe this will be an extended rally, with only minor one or two day corrections for the next few weeks."

http://greenfaucet.com/the-market/the-stock-market-explodes-now-what/95347

 

[Birchtree]

http://www.marketoracle.co.uk/Article31980.html

 

[Viva_La_Migra]

Everytime I hear this level of extreme bullishness..a big correction takes place (lol).

Birch is a permabull. He never sees a down market. :laugh:

 

[Birchtree]

I'm buying a few chilly wall flowers today: BHI, MCP, PII, TWI, TWIN, LNN, HNR, BK. Gotta keep movin to stay warm. What I really need is a big steaming pile of bull manure - superlative with that sweet smell.

 

[Birchtree]

"If you can transcend the day-to-day newsflow slog for a broader perspective, the technicals of the US stock markets are actually quite bullish today."

http://www.safehaven.com/article/23591/bullish-stock-technicals

 

[Birchtree]

"Pipeline showdown escalates payroll tax fight. Bill pushed by John Boehner and House GOP would extend payroll tax cut and benefits for jobless - but ties those items to a provision that clears a path toward approving the Keystone XL pipeline." Good for them.

 

[Birchtree]

The oceanic account lacked luster this week: +$59K, -$8K, +$400.00, -$130K, +$96K for a soft gain of +$17K - but I'll take it. Perhaps next week will be more profitable.

 

[Birchtree]

I'm buying a number of long term energy wall flowers today while the lows are available: ANR, LTD, DRC, BTU, SDRL, NFX, HP, CNX.

 

[RealMoneyIssues]

I'm buying a number of long term energy wall flowers today while the lows are available: ANR, LTD, DRC, BTU, SDRL, NFX, HP, CNX.

You're buying on a down day??? That's different...

 

[Warrenlm]

"Pipeline showdown escalates payroll tax fight. Bill pushed by John Boehner and House GOP would extend payroll tax cut and benefits for jobless - but ties those items to a provision that clears a path toward approving the Keystone XL pipeline." Good for them.

Limbaugh's take on this was interesting. He opined that both sides want the contributions to keep rolling in from the environmental/idealists and the business interests as the debate about the pipeline continues. So both sides will not precipitate a decision right now. Funds would stop coming in. He did not mention, but it was reported elsewhere by talking heads and print media, that cannot lie, that the pipeline will actually allow exports rather than support energy independence.

 

[Birchtree]

Eating a little figgy pudding and chasing Ferdinand: BAS, GLF, LNG, GGC, CBU, AGCO, CNH, KOP. For a few more dollars.

 

[Birchtree]

Did I just run into a bull head fake, nah. Buying a few more wall flowers: FAF, ALB, ENH, AME.

 

[pmcint01]

I think your manure truck is lost!