Not Investment Advice

[Folster]

struggling with myself to not buy the tsla dip. so tempting. already overweight. if it somehow miraculously gets to 700....I'm going all in.

What's your current basis per share?

 

[BigRedRage]

What's your current basis?

672 in one app
902 in another

 

[BigRedRage]

looks like 762.94 overall

 

[Folster]

looks like 762.94 overall

I thought you got in way earlier than that.

 

[BigRedRage]

I thought you got in way earlier than that.

ive sold and rebought a few times. usually selling high and buying low. Once I sold thinking overbought and then it just went up on me.

 

[Folster]

I forgot to share this with you guys. I use a few sites to get my financial data on companies, but the best free one I have found is https://roic.ai/

It has financial statement data and ratios going back decades, all free It's phenomenal.

 

[Folster]

DIS is approaching really appealing valuations. If you need some communication/consumer discretionary exposure, Disney sub $100 could be a great long term play.

 

[BigRedRage]

DIS is approaching really appealing valuations. If you need some communication/consumer discretionary exposure, Disney sub $100 could be a great long term play.

I'm intrigued.

 

[elindholm]

DIS is approaching really appealing valuations. If you need some communication/consumer discretionary exposure, Disney sub $100 could be a great long term play.

I'll look into that. I'm losing patience with PARA, but I do want some coverage in that industry. I originally got VIAC (PARA) over DIS because it seemed like the better play at the time, but a lot has changed since then.

 

[Folster]

I'll look into that. I'm losing patience with PARA, but I do want some coverage in that industry. I originally got VIAC (PARA) over DIS because it seemed like the better play at the time, but a lot has changed since then.

Yeah. WBD has gotten walloped since their spin-off. It's just rough for the streaming and content industry. Disney having the parks gives it added diversification, although cyclical. I'm not sure what I would do if it hits $100. It may not get there unless we see another leg down in the pullback of the broader market.

 

[dscher]

I'm not sure what I would do if it hits $100.

It'll get there..

If you're long this market it looks like a good price based on the technicals. I could potentially see lower prices than 100 but the snap back would be swift IMO.

 

[Folster]

It'll get there..

If you're long this market it looks like a good price based on the technicals. I could potentially see lower prices than 100 but the snap back would be swift IMO.

Yeah, it seemed to trade sideways around $100 from 2015 up until the pandemic. It got down to $80 at the low of the pandemic and shot up to $200 with the Disney+ hype. I'd feel confident at $100. Even now wouldn't be horrible, but you have to lay off these blue chip companies at their highs and everybody wants a piece. Mr. Market will usually give you another opportunity.

 

[Folster]

I'm considering a very small speculative position in a long treasury ETF, maybe about 1K. I'm considering a leveraged play. The 10 year is at 3%. I'm not sure the Fed can meet market expectations of rate hikes over the next 2 years. They would have to get the Fed Funds Rate up to 2.75%ish to match current the market expectations. If the Fed gives up or is forced to due to a recession, bond prices will soar. The big risk is the leveraged ETF that resets daily so swings up and down could eat away at the balance. This would be a short term play.

Thoughts? Not sure about which maturity to target. In theory longer term would be more positively impacted by falling rates.

Trying to look for historical examples.

 

[Devilmaycare]

There's something I'm not clear on when rebuying a stock that I'm hoping someone can answer. I know that if I buy back a stock that I sold at a loss within 30 days of the sale that I don't get to book that loss. What I'm not clear on is what my cost basis is after the purchase. Is it the original purchase price or the 2nd purchase price?

1) Buy XYZ at $10
2) Sell XYZ at $8
3) 20 days later buy XYZ at $7
4) Sell XYZ sometime later at $12

When I sell at step 4 and I booking a $2 gain or a $5 gain? If it's the $2 gain then is my long term capital gain clock also based on the step 1 purchase?

 

[Folster]

There's something I'm not clear on when rebuying a stock that I'm hoping someone can answer. I know that if I buy back a stock that I sold at a loss within 30 days of the sale that I don't get to book that loss. What I'm not clear on is what my cost basis is after the purchase. Is it the original purchase price or the 2nd purchase price?

1) Buy XYZ at $10
2) Sell XYZ at $8
3) 20 days later buy XYZ at $7
4) Sell XYZ sometime later at $12

When I sell at step 4 and I booking a $2 gain or a $5 gain? If it's the $2 gain then is my long term capital gain clock also based on the step 1 purchase?

It's called a wash sale and in your scenario your basis is $10 provided quantities are the same. The $2 sale and $7 buy are washed. You bought for $10 and sold for $12. This would apply to both long and short term.

Keep in mind, you can also get hit with a pre-buy wash sale where you buy additional shares at a lower price first and then try to sell an older share lot previously purchased at a higher price. The wash sale would be flagged if that pre-buy was within 30 days of the sale.

 

[Devilmaycare]

It's called a wash sale and in your scenario your basis is $10 provided quantities are the same. The $2 sale and $7 buy are washed. You bought for $10 and sold for $12. This would apply to both long and short term.

Keep in mind, you can also get hit with a pre-buy wash sale where you buy additional shares at a lower price first and then try to sell an older share lot previously purchased at a higher price. The loss sale would be flagged if that pre-buy was within 30 days of the sale.

Thanks! That was really helpful and I think I understand it now.

 

[Folster]

I should have posted this on the first page.

Don't buy unprofitable companies! especially now! If you want to roll the dice on a speculative company you like, don't invest more than you can afford to lose.

 

[dscher]

Carvana announces huge layoffs after buying $2.2 billion auction copmany

The announcement was made by Carvana's Chief Executive Officer Ernie Garcia in an email to workers on Tuesday.

www.12news.com

Stay classy, corporate greed......

 

[elindholm]

It's called a wash sale and in your scenario your basis is $10 provided quantities are the same. The $2 sale and $7 buy are washed. You bought for $10 and sold for $12. This would apply to both long and short term.

Keep in mind, you can also get hit with a pre-buy wash sale where you buy additional shares at a lower price first and then try to sell an older share lot previously purchased at a higher price. The wash sale would be flagged if that pre-buy was within 30 days of the sale.

Uh, are you sure?

I think the basis is $7. The wash sale means that he can't book the loss between buying at $10 and selling at $8, but it doesn't wipe out the lower basis when he buys it on the cheap later.

If his basis is $10, then he has come out ahead with respect to taxes compared to not having made the wash sale at all.

 

[Folster]

Uh, are you sure?

I think the basis is $7. The wash sale means that he can't book the loss between buying at $10 and selling at $8, but it doesn't wipe out the lower basis when he buys it on the cheap later.

If his basis is $10, then he has come out ahead with respect to taxes compared to not having made the wash sale at all.

1. Bought at $10
2. Sold at $8
3. Bought back at $7 within 30 days
4. Sold at $12

Throw out step 4. It doesn't matter that he ultimately sold again at $12. The wash sale was when he bought it back within 30 days. Had he kept holding the stock he would have lowered his cost basis from $10 to $7 and allowed him to claim a $2 loss without the wash sale rules.

But it looks like I was off on the actual tax accounting. He has to add his $2 loss to the new $7 basis/purchase price (his broker should do that for him). So his new basis would be $9, not $10 as I incorrectly stated. The fact that he ultimately sold again at $12 has no bearing on the wash sale. He has a $3 gain to report, not a $2 gain.

In summary:
So he has a basis of $9 and sale price of $12 = $3 gain. Had he just held the stock from his original purchase his gain would have been only $2. The wash sale rule is resulting in him having to report an extra $1 in gains. Had the stock fallen and he sold at $5 he would have had a $1 less in losses to claim. So it would have gotten him both ways.

@Devilmaycare, can you confirm?

Here is the investopedia example I used.

For example, consider the case of an investor who purchased 100 shares of Microsoft for $33, sold the shares at $30, and within 30 days bought 100 shares at $32. In this case, while the loss of $300 would be disallowed by the IRS because of the wash-sale rule, it can be added to the $3,200 cost of the new purchase. The new cost basis, therefore, becomes $3,500 for the 100 shares that were purchased the second time, or $35 per share.

Thanks for pointing this out Eric. Let me know if you agree. I want to make sure I'm giving out accurate info.

I am not a tax advisor.

 

[elindholm]

Thanks for pointing this out Eric. Let me know if you agree. I want to make sure I'm giving out accurate info.

I can believe that this is correct, but I don't know. I didn't know about the option of adding the loss to the later basis. I think of a wash sale as affecting the tax accounting of something that has already happened, not corrupting your basis calculation for the future. But I don't know all of the details.

I'll be asking my own tax person, because I blundered into a wash sale last year. One of my aggressive mutual funds soared in the first half of 2021, then plummeted, so that it finished in the red for the year. Even so, it made a massive capital gains distribution toward the end of the year. A few weeks later, I decided to offset some of the gain by selling a chunk of it at a loss.

So why was that a wash sale? Because the capital gain distribution had been automatically reinvested in new shares. That purchase, which I was aware of but hadn't initiated, was less than 30 days after my sale. Had I been clever enough to specify lots, I could have avoided the wash sale, but the issue wasn't on my radar, and now it's too late, probably.

So maybe this trick about adding the wash loss to my basis for a later sale will come in handy. Thanks for alerting me to it.

 

[Folster]

I took a look at WMT after its fall and still find it overvalued for my taste. It's probably close to fair value, but I would want a discount for such a slow grower with low margins. I came up with a target price of about $86. I set a price alert at $90 and will take another look if it is triggered. Doubtful, but if the market can get irrationally high, the opposite can also be true.

 

[elindholm]

HPQ back below 35, after it briefly surged following Buffett's big investment in it. I wonder whether I should consider sliding some of my IBM assets into it.

You must be registered for see images attach

 

[Folster]

HPQ back below 35, after it briefly surged following Buffett's big investment in it. I wonder whether I should consider sliding some of my IBM assets into it.

You must be registered for see images attach

I looked at HPQ a while back when it was around $28. It was a screaming buy on my model. There doesn't seem to be a lot of growth potential, but they had a spike in revenue in 2021 likely due to people and businesses investing WFH spaces. I know my company shelled out a ton for monitors and laptops from HPQ for us to work from home.

Most analyst projections show little to no revenue growth in the future and their dividend 2.89% while above average, doesn't blow you away like a T or VZ. This is likely why the stock is unloved. But a company that kicks off consistent earnings and cash flow still has value.

While HPQ may not be growing they are significantly increasing share holder value with buybacks. They reduced outstanding shares by 28% over the past 5 years.

I'd want a big margin of safety to invest in a slow/no grower. With a 15% required rate of return, I calculated a target price of $32, but maybe it can get back below $30 to make it even more appealing.

 

[Devilmaycare]

GSAT might have a little run this week. It jumped 8.5% today to $1.40 (+.11). I've been holding about 1000 shares for awhile now and might buy a few more tomorrow morning to average down. The reason for today's jump and why it might run some more is that Apple's WWDC starts next Monday. There's been rumors since last summer that Apple is going to use the band that GSAT owns (qualcomm already added support to the modem chip) in the iPhone. We had a similar run with GSAT last September right before the iPhone 13 announcement. It got up to about $2.70 then.

The main question I have on the stock right now is when to sell. I haven't decided yet on if I think Apple will really add support or not. If I decide no, then I have to sell after whatever run it has this week. If it looks like they might add it then I think I have to gamble and let it ride.