Stock Portfolio

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DoingHomework
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Re: Stock Portfolio

Postby DoingHomework » Fri Nov 09, 2012 4:46 am

Matthew Clinger wrote:Ticker Shares
XRX 241
GPK 260
SUP 89
BAS 62
CLD 78
AIZ 42
BRP 90
PL 59
PRU 27
RGA 29
SYA 134
HUM 22
WLP 26

There's 4 extra shares there at Nov 7th's prices. That leaves me enough for the entry fees and enough left over to make 1 sell, which in turn gives me all the money I need to sell the rest. Agreed on not reinvesting the dividends. Agreed on cash earning no interest.


Nope. We need to use Nov 8 prices since you published your list after market close on Nov 7. It makes a slight difference. Also, check your numbers for BAS.

Slight differences might be important at the end.

Also, it's a taxable portfolio. Can we assume 15% federal tax and 5% state tax on dividends and capital gains?

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Re: Stock Portfolio

Postby bpgui » Fri Nov 09, 2012 4:53 am

DoingHomework wrote:Also, it's a taxable portfolio. Can we assume 15% federal tax and 5% state tax on dividends and capital gains?

I think we should wait and see what our congress-critters do regarding taxes

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Re: Stock Portfolio

Postby DoingHomework » Fri Nov 09, 2012 5:25 am

bpgui wrote:
DoingHomework wrote:Also, it's a taxable portfolio. Can we assume 15% federal tax and 5% state tax on dividends and capital gains?

I think we should wait and see what our congress-critters do regarding taxes


Ah, but that just illustrates one of the uncertainties of investing! We buy today and don't know what taxes will be like when we have to pay them next year after selling or receiving dividends, right?

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Re: Stock Portfolio

Postby bpgui » Fri Nov 09, 2012 5:53 am

DoingHomework wrote:
bpgui wrote:
DoingHomework wrote:Also, it's a taxable portfolio. Can we assume 15% federal tax and 5% state tax on dividends and capital gains?

I think we should wait and see what our congress-critters do regarding taxes


Ah, but that just illustrates one of the uncertainties of investing! We buy today and don't know what taxes will be like when we have to pay them next year after selling or receiving dividends, right?

Which is why we need to use the tax rates that ate in effect at the time we receive dividends or sell holdings.

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Re: Stock Portfolio

Postby Bichon Frise » Fri Nov 09, 2012 6:11 am

If going the taxable route, I am sure our good friend, if he had money to invest in the first place, would be in the 0% LTCG. Not that LTCG's are likely applicable to his approach.

An aside, there another internet loon who pushes Values investing. Hocus.
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!

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Re: Stock Portfolio

Postby VinTek » Fri Nov 09, 2012 8:10 am

DoingHomework wrote:Also, it's a taxable portfolio. Can we assume 15% federal tax and 5% state tax on dividends and capital gains?

Assuming a starting portfolio of $20K for someone who'd have an AGI no higher than $35,350 seems a bit of a stretch. I'd either lower the value of the portfolio or raise the tax rate.

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Re: Stock Portfolio

Postby Matthew Clinger » Fri Nov 09, 2012 1:16 pm

if you care to find out the opening for Nov 8, we might use that. However, I am not going to use Nov 8th's close as the point. I made those picks based on the 7th's closing information.

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Re: Stock Portfolio

Postby Matthew Clinger » Fri Nov 09, 2012 1:18 pm

Yeah, BAS was supposed to be 162, not 62.

You'll note though that I made the portfolio before the opening of the 8th. So there's no way I'd be using the 8th's closing data.

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Re: Stock Portfolio

Postby Matthew Clinger » Fri Nov 09, 2012 2:21 pm

So tell me if this looks right to you. I pulled the Nov 8th opening prices off finance.yahoo.com.

Ticker 2012 12 08 Opening Price Amount bought
XRX 6.37 241
GPK 5.93 259
SUP 17.31 88
BAS 9.50 162
CLD 19.65 78
AIZ 36.69 42
BRP 17.2 89
PL 25.75 59
PRU 54.35 28
RGA 51.89 29
SYA 11.45 134
HUM 70.17 22
WLP 57.85 26

So here are the opening prices on Nov. 8th.

VTI 71.6 279

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Re: Stock Portfolio

Postby DoingHomework » Fri Nov 09, 2012 7:01 pm

Matthew Clinger wrote:if you care to find out the opening for Nov 8, we might use that. However, I am not going to use Nov 8th's close as the point. I made those picks based on the 7th's closing information.

But that is a serious error. No one can buy after the close. The best you can do is put an order at the close then hope it executes where you expect. You could put in a limit order too but then we would have to decide what to do with failed orders.

I already giving you the benefit of the doubt by excluding the bid ask spread that would be paid if you did it for real. There is virtually no spread on vti so that actually helps you a lot.

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Re: Stock Portfolio

Postby DoingHomework » Fri Nov 09, 2012 7:03 pm

Matthew Clinger wrote:Yeah, BAS was supposed to be 162, not 62.

You'll note though that I made the portfolio before the opening of the 8th. So there's no way I'd be using the 8th's closing data.


Actually you can get the 8th closing price but not that on the 7th. Your puny orders will also not get the 8th opening price in most cases.

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Re: Stock Portfolio

Postby Matthew Clinger » Fri Nov 09, 2012 8:55 pm

And you'd propose what? Making a random number generator, entering the high and low for the day, and using that to generate stock prices? Ridiculous.

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Re: Stock Portfolio

Postby bpgui » Sat Nov 10, 2012 5:47 am

Matthew Clinger wrote:And you'd propose what? Making a random number generator, entering the high and low for the day, and using that to generate stock prices? Ridiculous.

It'd actually be more realistic than your idea.

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Re: Stock Portfolio

Postby DoingHomework » Sat Nov 10, 2012 8:41 am

Matthew, we're not giving you a hard time. We are trying to get you to see the reality. These little realities are extremely important because they are what make or break any investing scheme.

If you are going to design a portfolio you always need to do it for a future purpose. Usually you need to think in terms of days or weeks. By letting you pretend to get the next day's closing prices we are giving you a major advantage already. I could demonstrate the math to you but let's just say that investing returns are all about uncertainty and reducing time lags eliminates uncertainty.

Bpqui has a great point about taxes. We should probably change the rules and do as he says - charge taxes based on what Congress does. How would you like to deal with that?

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Re: Stock Portfolio

Postby Justus » Sat Nov 10, 2012 3:17 pm

Matthew, for the purpose of the contest, will you be reporting on when to sell the stocks and what price to set the limit order?


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