Re: Selling on news - legaldog
posted on
Oct 13, 2006 08:50AM
First, I have to say I've been chuckling since you posted this:
"Well at least my has substance to it.
Proverb.....any fool can start an arguement."
That fool would very likely lose the argument, because he can't even spell agrument! LOL
That said, I don't understand your continued emphasis of "selling the news". While this MAY occur to a degree, assuming there is some PR with the news, and especially if my "compounding effect" theory holds water, the sell point may be quite high. The influx of new investors, recognizing the value, may push us way up, and maybe even sustain the rise. And more news can be expected (the big question is "When?"). But the astute investor takes other things into consideration, e.g., the prospect of more news, a continued gain with a few minor little bumps along the way, the possibility of the "sell the news" dip not being a big as you suspect, and the biggy - tax implications on a short term gain.
Doing as you suggest, selling the news on a nice rise in PPS, only to flip a few days later and buy back a little cheaper, can be an effort in futility, i.e., a very foolish move. You could easily lose a lot of long term money if your intent is to buy back.
For argument's sake, let's say the PPS moves up 80%, you sell and take your short term gain, then watch the PPS pull back 40% and buy back. What did you gain? Nada. At least if you live in a state with income tax. If it's a big gain and you live in CA, you're going to get hit with 33% Fed tax, plus 9.3% CA state tax - that's 42.3% of your gain gone with the wind. Then buy back?
Hopefully most here are astute enough to play this game with a little more foresight than you display.
I invite your "arguement". LOL
SGE