Recovery or Dead Cat Bounce?

[Nyden]

This is definitely not advice or meant to be accurate, but I have 'heard' from some sources that the problems with the banking system and credit markets in Australia hasn't even come to light completely yet - and Australia is in for some more pain before there is any real recovery.

Oh, you've heard.

See, I've also 'heard' (the little quotation mark things make it OK) that everything I own is going to skyrocket, and that you all need to buy in before you miss the boat forever. See how that works?

 

[sammy84]

hehe, just think of all the brokerage expenses added up along with the CGT expenses (without using the discount method) that you could have used to compound from . feels like such a waste just thinking about it.

of course - if you want to look at the bright side - day trading will be helping the government with their deficit lol

The fact that you think day traders have CGT expenses and high brokerage expenses show that you have no idea. Use IB and brokerage can be around US$1.
Your probably trading on comsec paying $20 commissions, holding stocks that are losing value so you can hit the 12 month holding period, and carrying a lot of risk over the weekend. Been there, done that, not my cup of tea

 

[IntrinsicValue]

Often, traders don't pay CGT, they pay ordinary tax - because they're actually traders as a profession, and not investors.

Try paying the bills with a buy and hold strategy mate, you'll be living on the street in a month.

you cannot discount ordinary tax though. so isn't that pretty much the same thing as paying full tax like as if it were CGT not held after 12 months?

 

[IntrinsicValue]

Your probably trading on comsec paying $20 commissions, holding stocks that are losing value so you can hit the 12 month holding period, and carrying a lot of risk over the weekend. Been there, done that, not my cup of tea

nice assumption there in bold. you act like you know my investments so well.

 

[Nyden]

you cannot discount ordinary tax though. so isn't that pretty much the same thing as paying full tax like as if it were CGT not held after 12 months?

Yes, and? Do you not pay full tax on your personal income as well? You don't seem to appreciate that some people are able to make a fantastic living off of trading - without needing to have any other additional sources of income. Many traders have a portfolio for the future as well, but it really is apples and oranges.

 

[nomore4s]

nice assumption there in bold. you act like you know my investments so well.

But it's alright for you to make assumptions about daytrading? You obviously have very little understanding of how daytraders actually operate.

you cannot discount ordinary tax though. so isn't that pretty much the same thing as paying full tax like as if it were CGT not held after 12 months?

Did it occur to you that traders that trade for a living are actually running a business and therefore can claim business expenses and pay tax like any other business?

No matter what profession you are in, if you make money you are going to pay tax.

 

[MrBurns]

From Crikey, this is just about as good a place to post this as anywhere else -

The chart below gives a pretty clear picture of the challenges that lie ahead for the US and the rest of this systemically interconnected financial world, as we all try to struggle through the hangover left by the near collapse of the global economy in late in 2008.

The green and the red stuff in the graph is the extra money the US Federal Reserve has added to its balance sheet to support the US and global economies. (US banks, currency swaps, new lending funds, US commercial paper). There's an awful, awful lot lot, more than any one can comprehend. Simply trillions of dollars which has been was used to stabilise the global and various economies from the threat of implosion after Lehman Brothers fell over and a number of other banks creaked and tumbled.

The Fed beefed up its balance sheet and that's what is holding up the world economy at the moment, with modest assistance from the Bank of England, the Bank of Japan and the European Central Bank. The ship has steadied, but rocky shoals lay ahead, or jagged mountain peaks.

The next step is to dismantle this monster mountain of money before it ends up causing its own set of dislocations: say a surge of inflation after the deflationary effects have run their course; or another recession if the play dough is pulled away too quickly.

To say the Fed and the rest of the financial world are in uncharted waters ranks, quaintly, as something of an understaement. As any climber will tell you, the worst falls usually take place on the descent.


Our thanks to Crikey fiscal vigilante Julian Gillespie for this lovely Fed graph:

 

[MrBurns]

here's the graph

 

[IntrinsicValue]

But it's alright for you to make assumptions about daytrading? You obviously have very little understanding of how daytraders actually operate.



Did it occur to you that traders that trade for a living are actually running a business and therefore can claim business expenses and pay tax like any other business?

No matter what profession you are in, if you make money you are going to pay tax.

what assumptions have i made? all i said was that there are a lot of tax and brokerage expenses added up together that could have been used to compound. that's fact.

in relation to claiming deductions. so what you're saying is that day traders incurring these expenses can claim these as a deduction, therefore it's good enough? expenses don't matter because you can claim as deductions right? in reality you are only claiming your tax bracket only on those expenses, the rest could have been compounded and doesn't change the fact that the whole expense gone could have been used to compound. why don't we all ask our tax accountant to up his tax fees because essentially it's the same thing as what you're saying. "we can claim it anyway as a deduction"

you can't even halve that income on your TR. therefore u're paying more tax than someone who - over the long run - gets the same yearly average compounding ROR as a day trader and defers their tax liability

 

[nomore4s]

what assumptions have i made? all i said was that there are a lot of tax and brokerage expenses added up together that could have been used to compound. that's fact.

in relation to claiming deductions. so what you're saying is that day traders incurring these expenses can claim these as a deduction, therefore it's good enough? expenses don't matter because you can claim as deductions right? in reality you are only claiming your tax bracket only on those expenses, the rest could have been compounded and doesn't change the fact that the whole expense gone could have been used to compound. why don't we all ask our tax accountant to up his tax fees because essentially it's the same thing as what you're saying. "we can claim it anyway as a deduction"

you can't even halve that income on your TR. therefore u're paying more tax than someone who - over the long run - gets the same yearly average compounding ROR as a day trader and defers their tax liability

No what I'm saying is it is the same as running any business - there are expenses involved and they pay tax like any other business.

How you can compare a daytrade who draws his income from the the markets to your longer term investment approach is beyond me. Apples and oranges really. Anyway I'm done with this conversation.

 

[MRC & Co]

I'm sniffing a challenge coming on (looks for TH).

I'm yet to see one of these junk talkers (obvious newbs) step upto the plate.

Know where the hills are IV? Start running.

 

[prawn_86]

If your making your investment/trading/business decisons based on tax alone, then you are way off. Produce a profit first, worry about tax later.

IV - check out this thread for what some daytraders can do, and then tell me you can match that return with a buy and hold portfolio
https://www.aussiestockforums.com/forums/showthread.php?t=12683

 

[Gordon Gekko]

Some more "green shoots"

G





http://zerohedge.blogspot.com/2009/06/trimtabs-ceo-provides-realistic-view-on.html

 

[MrBurns]

If your making your investment/trading/business decisons based on tax alone, then you are way off. Produce a profit first, worry about tax later.

A very wise associate of mine years ago also said the same thing.

 

[nunthewiser]

good lord

gimme a break

yes i daresay those investors from 2 years back are thanking there lucky stars they invested instead of running a shorter term trade approach

great tax benefits lol oops ang on, they may need a profit first

anyways horses for courses ........have noticed one thing tho ,............. very easy for so called experts and guru,s that appear here to slag off any other strategys they obviosly cannot make work themselves instead of having a deeper look at why they cant

being classed as a trader has quite a few beneficial advantages tax wise actually and i suggest you go see a GOOD accountant if pain persists

 

[knocker]

This is a dead cat bounce. Will take another two years for all the **** to settle.

 

[beamstas]

IntrinsicValue

What a legend

I bet he knocks back high paying jobs

He's scared he'll pay more tax

 

[moXJO]

Possible Golden cross on S&P 500

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=062F7428-1871-E587-E1C0FE716BAC517E

Of course it may just bounce off and go down. Still something to watch for.

 

[RayG]

Possible Golden cross on S&P 500

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=062F7428-1871-E587-E1C0FE716BAC517E

Of course it may just bounce off and go down. Still something to watch for.

Thanks for that moXJO, it will be interesting to see which way it breaks. Seems like it can do anything except go sideways, so I guess that will be what happens.

I am curious, how many of the bearish posters on this thread missed the rally and are now waiting for a drop, just to get back into the market?


Regards
Ray

 

[Aussiejeff]

"Here, kitty, kitty..... got a nice surprise for ya!"

*BLAM*

*Meee-ooooowwwwwwccchhhh!*