Year End Double Bargain

Year End Double Bargain


– Something happens each
year as the markets wind down to the last few weeks
and months of trading, and it can often mean that
there’s a lot of good companies trading at undervalued prices
just before they spring back to realistic values. (upbeat electronica music) Each year, as we approach the
last few weeks of trading, the last few months, you’re
gonna have some investors who have a stock that they
bought which has declined in price over the year. They’re going to,
sometimes, sell those shares because that takes a capital
loss, they have loss money and they can take that
capital loss and use it to offset capital gains
they’ve made on other stocks which increased in price. So if you made $100 profit
on IBM, but you lost $100 on Tesla shares, then
you could use the loss to offset the gains and pay no tax. That’s the case for most
people in most areas, it’s not the case for
everybody, I’m not giving you tax advice here, I never
actually give advice to anyone. Understand you’re gonna
see a lot of this tax loss selling even when the investors
believe in the company, they think the shares are
going to increase in price, they’re still going to sometimes use that to offset gains they’ve
made on other stocks, and since we’ve had such
a strong market lately, a lot of people are in a profit position and that’ll make them more
likely to take capital losses on stocks that they’ve
already lost money on or that are down in price
since they bought them. Now this is especially
important when it comes to thinly traded shares,
or lightly traded shares, if a company’s small, not
a lot of stock trading back and forth, if all of a
sudden it’s in a losing position and there’s a good
block of traders who all conglomerate and share
the shares to take that capital loss together, you’re
going to have a lightly traded stock, which is having
to deal with a whole bunch of people who are selling just
before the end of the year, that pushes the stocks down
to even lower undervalued prices after the stocks
have already come down from where you bought
them in the first place, now there’s a bunch of selling
that’s gonna push it down, squeeze it down, even lower. And generally, well I mean,
always, after January 1st, that benefit from tax
loss selling is eliminated so it stops, it gets that
artificial influence, that artificial trading to
stop, and so that’s when the shares start, in January,
swinging back towards realistic valuations. You could get a stock
that you had people bought at four dollars, and it
dropped to two dollars, they all sell it near the end of the year, push it down to $1.50, and
then you pick up the shares, if you’re watching it, that’s
the stock you wanna buy, you buy other shares, and
then as of January 1st, that selling pressure stops. Since this is a temporary
and artificial influence, it may present some compelling
buying opportunities. Tax loss selling bargains
are one part of the two parts of the year end double bargain. The second part is based
more on the broader markets, and the more heavily
traded blue chip stocks. I’m talking about some of
the bigger corporations we’ve seen do so well over the last year, they’ve increased in price
so people are gonna see a lot of capital gains on
that, and they’re gonna have to pay tax on that, unless
they can offset those gains by capitalizing, or actualizing
losses that they’ve taken on other stocks that
have declined in price. This is way easier than I’m
making it sound, I know, I’ve just been back onto
caffeine so I’m trying to wake up here, this is,
the two aspects of the double bargain, you got the tax loss selling, and on the other hand
you’ve got a ton of stocks which have done really well. A lot of people are going to be looking to minimize their taxes
this year more than usual, and the thinly traded stocks
are the ones that are really going to be impacted by the
tax loss selling but present greater values and greater
opportunities for you. In my opinion, if you’re watching
any stocks that you like, really high quality companies
that you wanna buy anyways, watch them very closely,
cause if they’re thinly traded this year, there’s been some
people who have made money on stocks, so they’re gonna
look for ways to pay less tax, they may sell those losing
positions even if the company is great and they believe
the company is gonna increase in price, they still maybe
selling their losing positions, so there’s gonna be a lot
more selling of these stocks, and that means that there’s
gonna be a lot of opportunities where you can buy those
shares at undervalued prices.

10 Comments

  • ThunderGod

    October 14, 2018

    First view of this quality video 🙂

    Reply
  • Luminary Wins

    October 15, 2018

    Dow 10000 To 12500 here we come! Massive Stock Bubble will end badly!

    Reply
  • Dominick Masonry

    October 15, 2018

    Sounds like a guy should buy at the bottom around the end of November

    Reply
  • Alexandre Mongeon

    October 15, 2018

    Great opportunities for everyone! Thanks for the video, Peter!

    Reply
  • James Crane

    October 15, 2018

    yes, I have seen that in certain stocks. Some things do not change Thanks

    Reply
  • Files Shared

    October 15, 2018

    Biggest crash of our lifetimes and won’t move up for decades. The Great Depression set stock holders back 25 years, and we were on a gold standard.

    Reply
  • Grey Matter

    October 15, 2018

    Thank you Peter

    Reply
  • Poker1989

    October 16, 2018

    Looks like you live in a beautiful area. What town is that?

    Reply
  • batk0427

    October 16, 2018

    Many will be running for the exits thinking the sky is falling when we're just getting rid of our losers for write offs. Happens every year. I'll take their shares.

    Reply
  • Wayward Son16

    October 16, 2018

    A couple of companies that I follow recently announced bought deals to underwriting firms. Could you please discuss in a future video what this action may signal to a stockholder or potential buyer for one of these companies? Thanks!

    Reply

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