Board 8 > Stock Topic 30

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Forceful_Dragon
06/14/21 12:59:29 AM
#351:


Can you use your corporation to purchase a computer for yourself to use and a house for you to live in? Y'know for business purposes to facilitate the further success of the business? Because then you could make some large expenses with gains that have only been taxed once right?

I'm much more familiar with individual taxes as compared to business Returns so I'm legitimately unsure.

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red sox 777
06/14/21 1:13:31 AM
#352:


Forceful_Dragon posted...
Can you use your corporation to purchase a computer for yourself to use and a house for you to live in? Y'know for business purposes to facilitate the further success of the business? Because then you could make some large expenses with gains that have only been taxed once right?

I'm much more familiar with individual taxes as compared to business Returns so I'm legitimately unsure.

I'm thinking probably not if all this business does is invest in stocks. Or rather, the corporation could buy the house, but if I'm going to live in it as my primary residence without paying rent I'm probably at least going to be imputed with personal income and taxed on it.

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Forceful_Dragon
06/14/21 1:15:08 AM
#353:


Wouldn't it also be your primary place of business? You can't sell stocks in a cardboard box.

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red sox 777
06/14/21 1:27:32 AM
#354:


There's probably rules regarding home offices. Hmm.

I think the primary benefit of this idea is to avoid state taxes. You would incorporate the corporation in a zero tax state and have it based in a zero tax state. If the only business the corporation does is trade stocks, I don't believe (without having researched this in depth) that it would be considered to be doing business in the state where its CEO/sole shareholder is living. If you ever want to cash out and transfer the funds to yourself as an individual, you would do it after having moved to a zero state income tax state.

I guess if that's going to be the position taken then I also would not want to claim my residence as my office. Since if the corporation has an office in the state it should also pay state corporate taxes....

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Zachnorn
06/14/21 7:41:34 AM
#355:


This reminds me that living in California sucks if you're into stocks, seeing as I'm taxed about 8-9.3% *on top of federal taxes* and the state makes no distinction between long and short term capital gains taxes so there's less benefit to holding to cash out later. This isn't great. I earn most of my money from a job though, so at least there's that. I'm considering just going long term with some good ETFs that focus on capital appreciation (to reduce taxes on dividends) and eventually just moving to Nevada and cashing out then. Meanwhile, I'd just use a broker that lets me borrow at 2% on assets that appreciate 10% per year and claim losses on that interest.

I'm also just considering moving out of California because the rent is too damn high (and buying a home is insane) but that's another topic.

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masterplum
06/14/21 7:48:37 AM
#356:


Lowering water tables in California combined with insane real estate prices means I will never ever live there.

At some point the state is going to run out of water and either real estate will plummet as people flee or it will burn to the ground.

Not a fan of their politics either (The NIMBY hypocrisy) but the bad investment side is what really keeps me away

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Zachnorn
06/14/21 8:08:10 AM
#357:


The only thing keeping me in California is my job. I work for a school district and have seniority, a pension, and full benefits. The district is underfunded, they have screwed me out of potential and actual money (barely making me ineligible for summer assistance, forcing use of vacation days), but damn the job is stable. I don't worry about losing the job. I have about 50k in cash in savings and I'm considering throwing it into stocks and bonds because I don't feel I need to have much if any savings because I learned that I can borrow against investments if I do get into a financial emergency at just 2% interest.

But at the same time, California has had problems for decades. In addition to the problems with water and real estate, we have some serious infrastructure problems. In the late 90s and early 2000s, we had a strained power grid. There are rolling blackouts when it gets too hot and people need air conditioning. Notice the present tense. 20 years later, they still haven't fixed it. The solution is to run ads to tell people to not use electricity during peak times. Not to mention the mess with traffic in every major California city.

The reason why I hadn't put all my money into investments sooner is because I was looking to leave (so I'd need money to cushion me) until the pandemic hit and I realized just how lucky I am to have a stable job. Then I kept my money in cash to try to invest in a home here. And I can't even do that. Now I have 17k invested and another 50k sitting around and in some ways, I'm still unsure what I should do.

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Zachnorn
06/14/21 9:04:19 AM
#358:


Whoops RCON is down 15% today

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ChainLTTP
06/14/21 9:04:42 AM
#359:


Zachnorn posted...
the state makes no distinction between long and short term capital gains taxes so there's less benefit to holding to cash out later.
wtf seriously? that state needs to be nuked
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Sunroof
06/14/21 9:07:17 AM
#360:


Zachnorn posted...
Whoops RCON is down 15% today

Welp, this one sucks. I dont have enough knowledge on what is going on with it, seems like a shorting situation. Ill probably hold a bit longer because why sell for such a big loss, but those could be famous last words.
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Zachnorn
06/14/21 9:12:58 AM
#361:


ChainLTTP posted...
wtf seriously? that state needs to be nuked
Yeah, so the only thing that helps me by holding for a year is that my federal tax will be lower by about 7%. So I still have an incentive to hold, just not at the state level.

Sunroof posted...
Welp, this one sucks. I dont have enough knowledge on what is going on with it, seems like a shorting situation. Ill probably hold a bit longer because why sell for such a big loss, but those could be famous last words.
Not sure. But I only put $100 as my bet. Not sure if I'm going to hold or take my losses.

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Sunroof
06/14/21 9:29:15 AM
#362:


Well, this would be an even more attractive entry price for those interested. Lol..
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Zachnorn
06/14/21 9:40:30 AM
#363:


I'm considering buying some more. But it's a gamble for sure and I probably shouldn't gamble too much more.

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Sunroof
06/14/21 9:41:29 AM
#364:


Yeah I dont blame you. Im not putting anymore in. I think if you hold it for a week or two it could go back up but i dont know beyond that.
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Sunroof
06/14/21 9:47:16 AM
#365:


Looks like RCON just announced a direct offering and thats why its going down today. And insider trading probably happened on Friday for everyone else to have known ahead of time. Wow.
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masterplum
06/14/21 9:51:34 AM
#366:


Why did you get in RCON to begin with?

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Sunroof
06/14/21 9:55:43 AM
#367:


I had leftover money from options, and was looking at stocks that went down a lot Friday. Saw RCON went down 60% and saw no bad news with it. On my experience, those stocks typically recover a bit toward the end of the day. And it did, I was actually up around 10% at one point. I just didnt do a stop on it because I didnt put a ton of money into it. Then it ended up sinking.
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Zachnorn
06/14/21 10:17:08 AM
#368:


Sunroof posted...
Looks like RCON just announced a direct offering and thats why its going down today. And insider trading probably happened on Friday for everyone else to have known ahead of time. Wow.
Someone's gonna get investigated!

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Sunroof
06/14/21 10:19:12 AM
#369:


RCON is now my biggest loss of all-time, and I didnt even put in my usual busty amounts! This undid months of conservative plays. Lesson learned, take gains when you have them.
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Zachnorn
06/14/21 10:21:44 AM
#370:


It's a risk. Because at the same time, you could have lost out on potential gains by holding.

Don't play with money that you'll miss if you lose it. That's the rule with gambling but it also applies to investing. Especially on gambles like RCON

I was going to put $500 as that has been my gain for the year. But I'm glad I only threw $100 on it, so I lost about $20.

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Sunroof
06/14/21 10:22:27 AM
#371:


I lost around $11k. Ouch!
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red sox 777
06/14/21 10:41:43 AM
#372:


Be really careful about buying a stock if it is moving big and you have no idea why. Someone probably does know.

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Sunroof
06/14/21 10:44:28 AM
#373:


As was the case here. I was used to the mantra of, if a stock goes down for no reason, buy. Difference here was the amount that it had gone down.
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red sox 777
06/14/21 10:47:29 AM
#374:


That only applies if you believe the reason it's gone down is no good reason, i.e. people are panic selling/hitting stop losses. If you have a small company, especially foreign, it's relatively more likely there is some other reason.

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masterplum
06/14/21 10:48:00 AM
#375:


Looking at the chart, it looks like it was still regressing to the average price before the spike.


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ExThaNemesis
06/14/21 10:51:43 AM
#376:


Bitcoin over $40k again!

COME WIT IT NOW

*bulls on parade*

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Zachnorn
06/14/21 10:54:37 AM
#377:


Wishing I bought bitcoin when it was around 31k.

Oh well.

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Sunroof
06/14/21 10:58:01 AM
#378:


These crypto swings are great if youve been selling at the highs and buying at the lows. I dont think anyone here has been swing trading them? Or maybe just averaging down?
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ChainLTTP
06/14/21 11:08:16 AM
#379:


Anyone swing trading crypto is a madman (unless you're friends with Elon Musk and know when he is about to do some sweet market manipulation)
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frankftw
06/14/21 11:12:52 AM
#380:


Yeah, this is all prime accumulation time. Especially if you're bought into the S2F(X) macro forecasts.

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ChainLTTP
06/14/21 11:17:01 AM
#381:


My one friend who first convinced me to buy BTC years ago told me last week that he is literally never selling his (he is in the top 1% of holders). His long-term plan is to just use it as leverage for loans and live off of it forever. Balls of steel.
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Sunroof
06/14/21 11:17:08 AM
#382:


Got my eyes on KSS if it keeps going down today.
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Forceful_Dragon
06/14/21 11:33:10 AM
#383:


ChainLTTP posted...
Anyone swing trading crypto is a madman (unless you're friends with Elon Musk and know when he is about to do some sweet market manipulation)

I don't know if you would call what i'm doing "swing trading", but I average my price down on significant enough dips, and then get out once I can realize a 2 or 3% gain (after factoring in binance fees). I keep half of my profits in USD and I leave half of the profit in the token i'm trading with. And then I look for a good moment to get right back in, and repeat.

By realizing a portion of my gains in the token I stand to gain more than just the 2-3% when the token goes up over time.

But I also don't Moonroof all my eggs into a single basket so when I gain 2% it's not an overall 2%, just 2% of that specific chunk of my investment. But repeat it enough times...

I've seen an 80% ROI so far since March 23rd, which I know is absolutely not sustainable, but it's nice for now. And even if the crypto world crashes around me I'll have realized enough of the gains in USD that i'll be in the black and I have funds ready to move into a big crash should one occur.

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ChaosTonyV4
06/14/21 11:43:35 AM
#384:


ChainLTTP posted...
My one friend who first convinced me to buy BTC years ago told me last week that he is literally never selling his (he is in the top 1% of holders). His long-term plan is to just use it as leverage for loans and live off of it forever. Balls of steel.

Whats the point? At this point he has more money than he could ever spend, why bother with loans?


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ChainLTTP
06/14/21 11:50:51 AM
#385:


ChaosTonyV4 posted...
Whats the point? At this point he has more money than he could ever spend, why bother with loans?
He doesn't have any "money" per se. He has Bitcoin that he will refuse to spend.
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Zachnorn
06/14/21 11:52:18 AM
#386:


ChaosTonyV4 posted...
Whats the point? At this point he has more money than he could ever spend, why bother with loans?
I used to think the same way and the answer is that it makes sense if you expect your investment to provide a higher rate of return than the loan interest because then you don't pay taxes on your gains.

This is exactly what I'm planning to do with ETFs, anyway. Let them appreciate and pay dividends, and use that as my emergency fund while I have income from my job or some other significant cash flow. After that ends, I'll sell some of my investments to fund my retirement. But some people would still get loans if they're wanting to will those investments to others. I don't plan to have kids or get married (I'm asexual and aromantic, likely will die alone) so I don't have anyone in mind for when I die besides perhaps charity so I might as well sell them at some point, otherwise I'd consider holding as well.

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ExThaNemesis
06/14/21 12:07:38 PM
#387:


Wow. I dinged CLOV at 14.08 and it's gone up above 15 literally right after I bought.

I don't know how I'm doing it these past few weeks but it surely can't continue.

Setting sell order for $20.

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ShatteredElysium
06/14/21 12:25:11 PM
#388:


ChaosTonyV4 posted...
Whats the point? At this point he has more money than he could ever spend, why bother with loans?

Tax purposes. That's basically what most rich people do to avoid paying as much tax as they should
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red sox 777
06/14/21 1:13:11 PM
#389:


Hertz doing great today.

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Zachnorn
06/14/21 1:22:33 PM
#390:


Trying to avoid debt is something that people without assets (besides their home and car) should do.

Leveraging assets is something that people with assets should do, especially in an inflationary environment since the value of the dollar is decreasing. This is why the rich often buy real estate on a mortgage when the rates are low. And, of course, utilize margin. From what I've read, it's basically a way to short the dollar.

For an extreme example, in the case of hyperinflation, you could theoretically get a mortgage on a home and a few years of extreme inflation later, pay it off with the amount of money that would buy you lunch.

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red sox 777
06/14/21 1:30:26 PM
#391:


Yeah, debt is great with the caveat that you never want to be foreclosed on/margin called. If that happens you are forced to (1) sell your assets at the worst possible time and (2) deleverage at the worst possible time. As long as you avoid that it's a great way to juice your returns.

IMO the nice thing about home mortgages is that (1) are generally non-recourse loans, meaning if things come down to it, you can just default, give them the house, and walk away without owing more money, and (2) despite being non-recourse, you can't get margin called as long as you keep making the payments. That is, even if the value of the house goes below the loan balance, they can't foreclose on you as long as you have been making payments on time.

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Zachnorn
06/14/21 1:41:13 PM
#392:


That's why I want to get more into real estate. It's the best method for using leverage.

Sadly, too many people know about it so the market is pretty broken right now.

When the stock market crashes, I'm probably going to leverage up. I've read stories of people using 20k of margin on Boeing when the March 2020 crash happened with the logic that Boeing is too big to fail and too much a symbol of American engineering, that the US government wouldn't let Airbus, a European company, dominate the business. Those people made a lot of money.

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ChainLTTP
06/14/21 1:46:14 PM
#393:


Ha, I should have done that too. Boeing was the biggest layup of the dip and I think might have even been what spurred this topic series?

Anyway I made some nice gainz on it.
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red sox 777
06/14/21 2:25:21 PM
#394:


Yeah there were lots of incredible deals last Spring. I'm really proud of our generation, by the way, for mostly rushing to buy that crash. People know how this game works this time!

I saw a video of Warren Buffett describing his experience in the early 50s trying to sell stocks to people. He found a manager in an insurance company that was a very sound business and was trading at a P/E of less than 3. The manager believed in the business and had his career invested there, but he refused to buy the stock because he didn't trust stocks. Buffett explained that at a P/E of under 3, this was effectively lending money at a 35% interest rate even if there was no growth, but the manager just wasn't interested. Probably he or his family had lost a bunch of money in the Depression and he had gotten from that that all stocks are bad.

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Sunroof
06/14/21 2:27:43 PM
#395:


ChainLTTP posted...
Ha, I should have done that too. Boeing was the biggest layup of the dip and I think might have even been what spurred this topic series?


I created this series because I recognized the market took a massive hit. I followed the market prior to Covid but didnt invest in anything besides my 401(k). Seeing an opportunity, I moved a bunch of my money into a brokerage account, posted for advice, and here we all are a year later.
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Zachnorn
06/14/21 2:47:04 PM
#396:


For years, I didn't invest in stocks because the "wisdom" of those around me is that I'm going to lose money on them. These were people that dealt with the crashes of 1987, 2000, and 2008 and as someone that has been poor and is afraid of losing money, I decided to just keep it all in savings.

I live at home and my mom often asks about my finances. She's discouraging me from investing even still because she thinks I could lose a lot of money. I could, sure, but as long as I don't make a lot of bets, I'm more likely to make some money if I'm invested long enough in good stocks.

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Sunroof
06/14/21 3:41:27 PM
#397:


So theres a Fed Meeting later this week, something about interest rates when Powell speaks. If its good news, market goes up. If its bad news, market goes down. Simple enough. But leading up to it, Im not sure what the market will do (meaning the next two or so days).
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ChainLTTP
06/14/21 5:47:59 PM
#398:


red sox 777 posted...
Yeah there were lots of incredible deals last Spring. I'm really proud of our generation, by the way, for mostly rushing to buy that crash. People know how this game works this time!

I saw a video of Warren Buffett describing his experience in the early 50s trying to sell stocks to people. He found a manager in an insurance company that was a very sound business and was trading at a P/E of less than 3. The manager believed in the business and had his career invested there, but he refused to buy the stock because he didn't trust stocks. Buffett explained that at a P/E of under 3, this was effectively lending money at a 35% interest rate even if there was no growth, but the manager just wasn't interested. Probably he or his family had lost a bunch of money in the Depression and he had gotten from that that all stocks are bad.

I wonder what would happen now if we had a Depression-level event in the market. I feel like people are too savvy to ever let that happen because anyone with cash would be buying the dip before it could totally crater.
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Sunroof
06/14/21 6:27:40 PM
#399:


Id really like tomorrow to be a green day.
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Zachnorn
06/14/21 6:31:01 PM
#400:


Today has been a green day for me thanks to AMC and Beyond Meat.

Memes helped my portfolio today.

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