Tim Hortons Trade, continued…

BTW, I forgot to mention, if I had held Tim Hortons for over a year and made it a long-term capital gain, it would have been in a 15% taxable bracket and my ultimate tax bill would have been only 5% of all the cash I took out of my position.

Invest in peace…

Here is a rare glimpse into an actual trade of mine and how I avoid taxes.

On July 14th I bought 901 shares of Tim Hortons (THI) for $55.48 a share  for a total of $49,987.48. (Don’t buy based on number of shares, buy based on the amount of cash you’re willing to invest.  In this case, $50,000)

On August 26th I sold 155 shares at $81.36 for a total of $12,601.80.  Now, most people would think I am now taxed on $12,601.80, but this is wrong.  I just cashed out that amount to pocket gains and lower my risk.  What I am taxed on is the following:

155 shares times original price was $8,599.40

I sold those 155 shares for $12,601.80.  I am now taxed on the gains of those shares only, so I only pay taxes on $4,002.40.  At 30% tax bracket that means I pay total taxes of $1,200.72 on a $12,601.80 sale, or 10%.

Now, I have $12,601.80 cash, I still have 746 shares worth $60,694.56 (more than I originally invested) and I don’t pay the small tax bill for 10 months.  If Tim Hortons (or any other stock I own) happens to go down, I now have $12,601.80 to buy more shares of that stock, essentially getting more power without investing any other money and speeding up the compounding my moving the cash to something that is down and will raise sooner.

This is how AIM works, this is the strategy I’ve used for 10 years and this is how you avoid huge tax bills when trading stock.

Invest in peace…

What stocks are good for a recovering economy?

Well, I think we can all say that the doom and gloom economy is over and we are doing ok.  So what stocks can you take advantage of?

Simply put, the middle class and lower class will go out to restaurants more and take in more entertainment.  Movies, Amusement parks, things they couldn’t afford in the recession (even though if you didn’t lose your job, you made the same amount of money and it’s all silliness and never affected you.)

So, with that said I have taken up positions within the last month in:

Tim Hortons (THI) - Best coffee place in Canada and parts of the north.

Cracker Barrel (CBRL) - I drive way out of my way to eat here when I’m back east.  Best restaurant ever.

WWE (WWE) - I sold this in the $30’s and it tanked to the $10 range and I bought a crapload of it.  It’s up to $14.58 already.  

I still have positions in Coke (KO) and Pepsi (PEP) because people drink that constantly.  

I still have a position in Disney (DIS) because it’s Disney.

And my biggest position is still Apple (AAPL) because they are going to knock shit out of the park September 9th and have the greatest quarter in the history of the world this Christmas and there’s nothing anyone can do to stop them.

Invest in peace…

Great article from the Simple Dollar

Way to go CNNMoney!  Only took you an hour and 17 minutes to be completely wrong.  This is why you don’t listen to news about the stock market!  All these ‘reporters’ just make shit up.

Invest in peace…

Great catch over at Daring Fireball where Gruber points out that Bloomberg’s headline doesn’t match the name of the story in their URL. Kissing Samsung’s ass in the headline seems to be the thing to do in ‘journalism’ these days. $5 bucks says Samsung paid for the better headline.

Great list of books everyone should read over at www.thesimpledollar.com Go check it out, get them, read them, learn from them, then kick ass.

Invest in piece…

Google Glass is just a bad idea all around. Don’t be evil…

The secrecy of the iwatch…my theory.

Steve Jobs famously said they had cracked the problem he had with TVs, causing everyone to speculate that Apple was making a TV and a ring would be the remote control.

I think the iWatch will have Siri, just like Dick Tracy, you’ll be able to tell your watch what you want to do and Siri will do it.

HomeKit has tons of Siri code in it. Your watch will be your key, your garage door opener, your lighting controls and your tv remote. If they did this, which I think they did, it will be genius. One controller to rule them all that is never lost, always at your side.

Invest in peace…

Ahh, it’s been awhile my friends….

So, things have been quiet in Undertrader land because I’m letting my stocks do their thing.  

Apple (aapl) split nicely, and will post the largest quarter in the history of histories this Christmas, so I’m letting that run.  May even buy more.  iPhone 6, iPad, iWatch and an AppleTV that has apps that you can play games on, making it the best selling console at Christmas is my bet.  

Berkshire Hathaway (brk.b) is what it is, so letting that run.

Realty Income Corp (O), pays an insane dividend, so letting that sit.

Pepsi (pep) pays a decent dividend, this one is a good holder.

Liquid Metal (LQMT) is a long-term bet.  Apple is doing to use the shit out of liquid metal in their future products and I think that’s going to create a run of companies looking to use the technology in their products.  This is a cheap, high, high risk call on my part, but I think it will pay off.

Disney (DIS) has Star Wars and Pirates of the Caribbean and Pixar and Avengers all coming.  Pays a little dividend, too.  This is going to fly in 2015.

Coke (KO) is a no brainer long-term investment.

Senior Housing Properties (SNH) pays an insane dividend as well, so thank you for the free money SNH!

Mattel (MAT) was beaten down so I bought it on it’s huge dip.  Up 2+% on it right now, but I bet I’ll make 10% by the end of the year.

Target (TGT) bought this a long time ago, held it through the credit card crisis and bought some more, lowering my cost basis.  This is a strong company, they’ll do fine long-term.

WWE (WWE) rode this to $30 and sold it, it got hammered with the hammer of hammers down to $11 and I bought it again.  Pays a little dividend, has tons of room to grow and once they open up the WWE Network to other countries, should have a constant stream of world-wide income.  They aren’t going out of business anytime soon and are finally starting to make some new stars.

Anyway, so I’m happy with my lineup right now.  If I were to buy something today, Twitter (TWTR) might be a good one, it’s down 49% from it’s high.  They need to find a way to be more profitable.  Liquid Metal is down 44% from it’s high, which would be a high risk I might take, Avon (AVP), Target (TGT) and Whole Foods (WFM) are all down over 20% from their 52 week highs and I’d look into them, too.

Invest in peace…