Ask Rande 10,000+
- Kirk
- mdorsey
- Katrina75
- Rande
- Rande
- Katrina75
- stocksystm
- bonesie
- bonesie
- Thruhiker
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» Kirk - Retained Earnings
RandeBOWG now has about a negative $5.9M in retained earnings.
Doesn't that mean the company is worth, to someone with positive earnings, their current tax rate times those retained losses? Say they are at the 34% rate then the losses alone would be worth 0.34x$5.9M or $2M
It is interesting that this is the current market cap even though the cash in the bank alone is $4.3M!
Am I missing something? Can larger fish with profits buy smaller fish with losses to get their accumulated losses added to their books? I know I did this in the early 1980's with some real estate until Mr Regan closed that loop-hole and said you had to have your money at risk.
-- posted by Kirk
» Katrina75 - A "Beginner Thread Question"
What are the futures that we see on CNBC? For example, tonight we see Dow Futures at negative triple digit numbers. Does this indicate the direction of the Dow tomorrow?Also, what was the Dow and the S & P on 9/21/01? That is considered by many to be "a" bottom...maybe "the" bottom.
Thanks in advance!
-- posted by Katrina75
» Rande - Just checking in.
Just checking in....Tax losses: so long as transaction costs are minimal or non-existent and you have the intent of reestablishing the position (either with a "proxy" or be reacquiring the same security after 30 days or by doubling up), then the bigger the loss the better. If you're just going to get out of the position and go to cash or something, then the smaller the loss (or bigger the gain) the better.
Kirk on BOWG losses -- Congress has always been vigilant about a practice it has called "trafficking in Net Operating Losses (NOLs)." Through the years, provisions have been enacted to discourage this practice. The Code can operate to disallow NOLs when an acquisition of control of a corporation has, as its principal purpose, the avoidance of tax by enabling the acquirer to secure tax benefits it would not have otherwise enjoyed. So long as a sound business motivation can be demonstrated, however, those NOLs could be like money in the bank.
Thru -- Yes, indeed, deadline for "doubling up" is Friday.
MD -- Great advice. In fact, all things being equal with respect to estate tax planning and dispositive wishes, waiting until age 70 1/2 (if possible) when minimum distributions are required is the best way to go. Tax-deferred compounding can be a precious thing.
-- posted by Rande
» Rande - Re: A "Beginner Thread Question"
In response to message posted by Katrina75:Kat,
Futures contracts are like options -- they're derivatives ("derive" their value from the underlying asset they represent). Index futures can be bought and sold or settled in cash at expiration. After-hours futures trading may or may not provide an indication of the next day's market behavior. 99% of all investors should ignore them. Here's a link:
http://www.investorwords.com/f3.htm#futu...
A standardized, transferable, exchange-traded contract that requires delivery of a commodity, bond, currency, or stock index, at a specified price, on a specified future date. also called futures contract.
As for your second question, the Dow closed at 8238.51 on 9/21/01 and the S&P 500 closed at 965.80.
-- posted by Rande
» stocksystm - Re: A "Beginner Thread Question"
In response to message posted by Katrina75:The Dow futures shown after hours on CNBC (around 6 p.m.) are meaningless. They are always extremely closely correlated to what the market closed at. The S&P and NASDAQ futures are more meaningful since they indicate what traders felt about any news coming after the closing bell. The Dow closed at 8,235 and the S&P closed at 965 on September 21. That day may have marked the bottom; I hope ;)
-- posted by stocksystm
-- posted by Thruhiker
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