Investing General Discussion

I made 40% on my QQQ puts today. This must be how Blazin makes the big bucks.

Blazin said:

Well I fell off the wagon again and sold 23 put contracts on SPY during today's dip (less scary if you don't do the math!). Solidly up on them by the close.

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Ps.. I did the math. Jeez.

Blazin said:

Well I fell off the wagon again and sold 23 put contracts on SPY during today's dip (less scary if you don't do the math!). Solidly up on them by the close.

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Damn man, one of these days I can fill one of those contracts without putting my whole account on the line, good for you though!

Fogel said:

So what's every ones take on AMZN? It had crazy earnings even above what people thought they would have thanks to the continued lock downs. And even if the lock downs end tomorrow it'll be awhile before businesses can recover. I was looking at its chart today and it's been beating its head against the 3140 resistance for over a month now and is over 10% down from it's last high of 3500 back when the entire market tanked back in the beginning of september.

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I think it ran up too high with Coronachan but everytime it hits 10% down people buy the dip. Its probably stuck in this range for a while. Its a monster and I own it at around 2900. I'm content to just let it sit and meander for as long as it takes. It may he dead money for a while though but eventually...

My totally uneducated opinion as a person who only has a basic understanding of the market; recession and bubble pop is coming first half of 2021. A lot of economic chickens going to be coming home to roost.

Locnar said:

What historically happens in January? I have a bunch of positions I need to dump then for tax reasons, but maybe everyone else has the same ideas and the market tanks in Jan historically? I have to decide to cut some losers now (for tax and margin interest purposes) or cut some winners in January (for tax and margin purposes)......

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Can you explain in detail what you mean by have to make trades in January for tax and margin reasons. I am guessing for tax purposes you don't want to realize gains in 2020 so you want to wait. Since I don't trade margin, what does the new year have to do with margin?

If you have winner positions but don't want to realize the gains until January, what if the market tanks end of Dec? Those gains all go away. I feel like I am missing something in your equation. Having made so much money trading that your tax bracket goes up is one of those problems more people wish they had.

Have you had a tax pro examine your taxable liabilities and calculated the numbers for you? Just curious. At the end of the day its all a numbers game. If you make 100k in investing profits and it runs up your taxable rate, it doesnt impact your other income. Tax rates are progressive so the additional income is what gets taxed at the higher rate not all of your income.

So hypothetically, lets say you are in the 24% bracket at the income cap of $163,300. You realize 100k in taxable short term gains in 2020. The first 44k of that gain would be taxed at the 32% bracket and the rest at the 35% bracket. So (44k *0.68) + (56*0.65) = $66,320 after profit gains on your 100k. That 100k doesnt impact your tax rate on the $163k in wage income you made during the year. Obviously this is napkin math and the granularity of your actual taxes will change things, but unless you have something in your personal situation that limits how much AGI you are allowed to have in a tax year this is the calculation you need to make.

Now if you banked a bunch of profit and spent it/invested it and did not put aside anything to cover the tax liability that was coming then that would be understandable. Again, without knowing your personal situation, a few hundred bucks to a CPA for an hour or two of his/her time might be a good investment. If you have already done it and waiting til January is the best scenario then ignore everything I wrote.

I have never wrapped my head around the idea of selling at a loss just to cover some gains. I prefer to dig into the asset itself and ask questions like "is it a good investment? Is it down because I made a bad trade or was there an unknown one-time event and its recovering? Why did I hold on to it until now if its a bad investment? etc". Again I may not look at things like some others do. Eating a paper loss specifically to lower taxes on a realized gain seems like bad math to me. Taxes on realized gains should be factored in to the profit of the trade and factored in accordingly. Likewise, risking paper gains that could evaporate just to save taxes on them just seems counter-intuitive. But, I may not be following what you are saying correctly.

Also - Here is the 10-year chart of the SPY. Decembers have been a mix of red and green.

fris said:

here's a good explanation of why people sell their loser stocks at the end of the year

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I guess my issue is I dont see holding something until Dec to sell it for a loss. If I screw the pooch on a trade I cut bait as soon as I can. I guess I didnt phrase my first post correctly. I understand the tax benefits of loss harvesting. I guess what I don't understand is holding a loser until Dec to sell it for the loss. It seems like a waste of capital to sit it in a loser "hoping" it recovers and if by Dec it hasn't then sell for a loss.

But I also watch my portfolio daily. If I was someone who looked at my portfolio 2 or 3 times a year then yeah I can see using Dec as an evaluation point for "do I want to keep this into next year or sell it as a loss". Meh, I am just peculiar about how I do things.

ps. the first 30% of that video was rough to get through. Blah, blah, blah and then advertising.

fris said:

Graham's definitely for those just above needing Dave Ramsey, not those well into investing. I only posted as a slightly educational video on the subject. i suspect the majority of those who read this thread don't have much invested beyond their retirement funds. those that post answers are in the know, so this topic is probably 2nd nature.

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He was cool. Just the intro was painful.

Fogel said:

BFT is up over 10% in early morning trading. Didn't see any new news that we cause a bump but they do vote on 12/21 for their paysafe merger

I also bought in on the other two Gores spacs since they'll probably be able to ride on the success of GHMI/LAZR, they're GRSV and GHIV. They're still at 10-11 too so good time to get in. The other spacs I'm interested in are already at 15-20.

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Mondays tend to be hopium day for SPACs. They tend to rise on Monday as the Robinhood crowd has spent the weekend on Discord getting pumped for the new week.

NIO looking to open sub-$40. They have been torn up since the new share announcement.