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TGA - Thorn Group

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robusta said:
Don't forget to include the tax you have to pay on all those capital gains.
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robusta said:
Not intended to be, I don't consider myself smart enough to trade stocks short term and make money but one of the advantages I have with a longer holding period is tax.
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Don't get so hung up about tax, robusta.

From the thread on MCE to which brty drew our attention earlier today:
https://www.aussiestockforums.com/forums/showthread.php?t=27450&p=796079#post796079

specifically

Looks like MCE has copped a bit of a battering this morning down under 5 dollars.

I bought at 4 and 5 dollars last year.

Looks like I should have sold when it hit 9 but I didn't want to pay the large capital gains tax
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The last SP on Friday was just 71 cents. Paying a bit of tax is nothing in comparison to that sort of capital loss.
 

Thats a bit disingenuous Julia, the two things are not really connected. Robusta is talking about the issue of the CGT liability in trading in good shares, and the reality that fundamental investors holding for the long term growth and yield have the advantage of not attracting CGT. The example you quote is someone choosing not to sell at all, shares in a dog of a company that were in freefall, just to avoid a potential CGT exposure. (Ironically they probably did manage to avoid a CGT exposure!)
 
Not disingenuous at all. If you refer to the link I provided you will see just one example of what is a quite common phenomenon, i.e. people not taking profits while they can in order to avoid tax.

However, it's unlikely you and I will agree on much, so I'll respectfully decline to further this discussion with you.
 

Again, Robusta wasnt suggesting not taking a profit to avoid CGT, he was pointing out one of the benefits of his strategy of holding for long term growth and yield as opposed to trading - less exposure to CGT.

I am not asking you to agree with me, merely pointing out that you are creating a strawman argument.
 

+1

Is it not already a known fact that Julia frequently creates stawman arguments on this forum anyway? Anyway to illustrate Robusta's point - assuming the prospects for the company is and will continue to be great which obviously MCE was not:

 
You may need to Google the Australian version of that TikoMike, in the USA in a lot of cases there is no CGT if you have held for greater than the minimum defined periods.

Currently I am in the second highest tax bracket and my tax is $17,547 plus 37c for each $1 over $80,000 pa.
In comparison the second lowest tax bracket pays 19c for each $1 over $18,200 pa.

Which tax bracket would I be financially better off in at the end of any year I wonder ?
I will gladly pay more tax anyday.

I would gladly take profit and pay the CGT rather than riding a stock down because you may become a trader.
Look at WES as an example, down from $40 to $15 and now back to todays price which is around the same as it was in June 2007.

Look at QAN, would you rather have taken profit at the obvious turn down in May 2013 and pay the CGT or be still holding it now :bad:

The point that seems to be missed is that taking a CGT hit is better than riding a stock down as in the examples above or even holding a stock that is trading sideways when the same money could be put to use on a stock that is increasing in value.

Try a graphing this, sell QAN on the turn down, take the profit, buy BOQ two weeks later with the funds from the QAN sale and pay the CGT on the QAN profit when due
(How is that "outperform" % figure looking now TikoMike ?)

Caution. Following my process may result in your family/friends disowning you because you run the risk of being called a trader, especially if they find out you paid CGT
 
TikoMike said:
+1

Is it not already a known fact that Julia frequently creates stawman arguments on this forum anyway?
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Really?!! That's completely news to me! I've never experienced Julia to be that way inclined!

Anyway to illustrate Robusta's point - assuming the prospects for the company is and will continue to be great which obviously MCE was not:

View attachment 54595
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Whilst I have no problem with people considering all relevant factors in their investment decisions (inclusive of CGT implications), if one were to take the time to perform the requisite mathematical operations for the reproduction of those percentages, one would immediately discover that numerous unstated assumptions would need to be made. So in effect, the only thing that your regurgitated chart truly illustrates is a lack of competence upon the part of its author.

To me this is simply further evidence of the fact that some people simply aren't intelligent enough to realise how truly unintelligent they are, or to put it another way, some people are too stupid to know that they're stupid!
 
cynic said:
Really?!! That's completely news to me! I've never experienced Julia to be that way inclined!
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+1



Agree, those percentages in the graph don't account for the reason for selling, ie, the stock has failed to continue performing or as I have shown above with QAN has rapidly declined.
 
Boggo said:
I would gladly take profit and pay the CGT rather than riding a stock down because you may become a trader.
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Again, more strawman arguments, no one is saying they would avoid a profit to minimise tax, or so as not to become a trader. The only statement that has been made in relation to tax was that one of the advantages of a strategy of holding shares for capital growth and yield as opposed to trading is a reduction of CGT exposure.

Its a bit like saying that an advantage of holding as opposed to trading is that you avoid transaction costs, its a simple fact, that doesnt mean that anyone would advocate making a loss to avoid transaction costs.

I can only think that this defensive and poor use of argument is a reflection of some members taking the original comment an attack on trading as a strategy, I dont believe this was the case or the intention.
 
oldblue said:
Could someone on this CGT thread redirect us to the TGA thread, please?

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Happy to oblige! I bought in late June, and although they are a long term hold in my portfolio, I am very happy to see them up over 13% in the 3 months since I purchased.
 

When I think the correct decision is to sell I do not even think about the Tax implications. My comment earlier on this thread was related to the advantages of holding good growing businesses for the long term without constantly trading in and out of them and incurring brokerage and tax costs.

Once again I do not doubt that many on this forum make money from TA and trend following techniques but I do not consider these techniques suit my temperament nor can I see an edge I can exploit over my chosen strategy.
 


compound annual return since listing now 22%+ (excludes franking benefits)

And that's over a period that covers the GFC.

Not a bad effort for some lazy working $$$$$

No need to be called off side by market price action – a pretty simple hold based on business performance metrics.

Effective interest free loan from the government in the form of deferred tax liability working a treat for the long term holder – not to mention the CGT discount amount that is ignored as a permanent difference.


Ps
Happy Hawthorn Day for yesterday
 
robusta said:
... I do not consider these techniques suit my temperament nor can I see an edge I can exploit over my chosen strategy.
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It's a cool strategy, from my point of reference.
Nothing wrong with being a value investor in spirit and occasionally deciding to sell.



You are a target because you vigorously defend your chosen strategy.
Some that have a go, cannot see that you are happy to find a path by heuristics.
 

Value investors sell all the time for all sorts of different reasons.

I have to admit to needing to look up the definition of heuristics I does seem to accurately define my learning experience.

+1 regarding Craft's post above, I would like to copy it to the letting profits run thread.
 

Stupid is a stupid does.

How about some ‘requisite mathematical operations’ workings out to illustrate the author’s incompetence and proof your conclusion.
 
craft said:
Stupid is a stupid does.

How about some ‘requisite mathematical operations’ workings out to illustrate the author’s incompetence and proof your conclusion.
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The author was just using the concept of ceterus paribus to demonstrate something in insolation. It is common in economic theory and science in general.

The only assumptions that were made are those assumptions made by the 'intelligent' people in this thread to win a forum argument / debate that only exists in their own minds.

If it is the guy with the same last name (Schwab) that I believe it is he is worth $4.3 billion. Sounds very incompetent.
 
Wise old Polish saying:
"Jesteśmy biedni bo jesteśmy głupi!
Jesteśmy głupi bo jesteśmy biedni!!"

Translates roughly to:

We are poor because we are stupid!
We are stupid because we are poor!!
 
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