<p>I deleted the post. I don’t want to see that post. :)</p>
<p>Ah, I missed the post. Now I’m intrigued. </p>
<p>I love my DDD! Hold 'em or fold 'em?</p>
<p>DDD did have a nice day.</p>
<p>I probably should have just bought the 510-525 call spread in aapl, but that would be too simple. :)</p>
<p>After watching goog and Ibm after hours, I think I will try to fill my donut around 540 in aapl.</p>
<p><a href=“Plan for Tax on Financial Trades Advances in Europe - The New York Times”>Plan for Tax on Financial Trades Advances in Europe - The New York Times;
<p>That euopean tax on financial transactions is probably coming to the USA. It is a bad tax because it does not address those who were responsible for the financial crisis. Investors didn’t do anything to justify being taxed. Investors were the victims. A better tax would be on people borrowing through mortgages. Most of the people who went under during the financial crisis won’t be able to get mortgages for several years, but when they do it would make sense they pay for the protection against a future financial crisis.</p>
<p>I’m somewhat stunned by all of the new taxes being proposed in general. I read an article in the Lowell Sun (MA) about how people on the street view Governor Patrick’s new tax proposals. The comments were that people were just hit with the payroll tax and they’re being hit by rising costs for a lot of things that they buy and that an income tax and gasoline tax hike would be coming at a time when costs are rising in a bunch of areas. It seems insensitive. There were also some comments that the higher taxes should apply to the wealthy - those making over $1m/year. I don’t think that there are a lot of people in MA making over $1m/year so I don’t know how much taxing them would bring in. It seems as if everyone is desperate for revenue - companies, governments, your landlord, etc.</p>
<p>I just checked my wife’s account last night with her. Her notable standouts are TNA (+22%) and PBA (+57%). She’s has TNA for about a month. She’s had PBA for a long time (they bought out PVX which she originally had). ORCL has done nicely (don’t recall the gain) and BCE is up 1%. Losers are NEM and MFC though I have MFC in her account as a long-term hold and it does pay dividends. The gains far outweigh the losses.</p>
<p>NH government went to the Democrats this past election: House, Senate and Governor. I don’t think that they have any plans to raise any taxes though. That’s the nice thing about NH: it doesn’t matter which party is in power - they all work to keep taxes low.</p>
<p>California has raised so many taxes in the last few months it is probably the highest taxed state.</p>
<p>People voted for tax increases. I voted no. I think taxes are too high in California. On the plus side, the deficit is gone. The state’s finances look a lot better.</p>
<p>I fixed my donut hole in aapl. I have no idea if the stock is going up or not, but
I make money between 513 and 557. I guess I can go do something else now. </p>
<p>Trading small amounts of options is very difficult with Schwab because of the flat fee they charge per trade. I really should switch to IB or some other firm, but I have inertia. Plus, I didn’t think I was going to be trading so small. :)</p>
<p>I have a bid to buy some tax free zero coupon bonds today.</p>
<p>6 percent compounded tax free for 23 or so years.</p>
<p>I think for an after tax return that is good. </p>
<p>I am curious to see my allocation. </p>
<p>I hope we don’t have hyper inflation. That would really suck.</p>
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<p>Maybe people are used to it there. I was used to the taxes in MA and then moved and the feeling was shock.</p>
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<p>If the people want them then they want them. In MA, it doesn’t look like the people want them. I think that the idea of asking the people via referendum is a good one.</p>
<p>No clue on Apple. I had no clue on IBM or GOOG either.</p>
<p>But the good earnings reports from Oracle (last month), IBM (yesterday), and SAP (this morning) indicate that enterprise software is doing quite well.</p>
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<p>Particulars?</p>
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<p>There’s no way to know.</p>
<p>We could be in a low-growth environment for a long time. The Fed’s printing $85 billion a month and the economy is growing slowly though inflation is showing up in some areas. What if they stop doing that? 23 years is a long time.</p>
<p>Sounds like it wouldn’t be a bad place to throw some money into though. You could always hedge with a precious metals miner.</p>
<p>23 years is a long time. Muni bond yields, while coming down, are historically high compared to treasuries. If treasuries yields normalize, these munis should be able to handle an increase of 1 to 2 percent in treasury yields. There is a big interest rate risk. </p>
<p>These bonds are like savings bonds. Paying about $235 per bond and you receive $1,000 in 23 years.</p>
<p>I haven’t bought them yet. Pricing is not firm yet. Projections are for a 6 percent yield. Should know today. If yields end up lower, I might not buy these bonds. The last deal I did, prices of the bonds ended up 2 percent higher than expected knocking yields down about .2 percent. Those bonds weren’t zeroes.</p>
<p>If taxes change, zeroes could suck. Paying taxes every year on interest that isn’t received
for 23 years doesn’t sound good to me.</p>
<p>Are they callable?</p>
<p>You’d figure that there would be at least one recession in a space of 23 years so it would give you a chance to get out if you wanted to. It’s hard to imagine the tax laws changing on ZC bonds but I guess that anything is possible these days.</p>
<p>I assume that these are CA obligations?</p>
<p>Yes. Well…they are local bonds, not bonds of the state.</p>
<p>Callable is a great question. The offering has interest paying bonds and zeroes. The bonds that pay interest are callable. I don’t think the zeroes are callable. I should know this. I am not buying that many bonds so I didn’t bother asking. I will if I buy them. Usually, the zeroes aren’t callable.</p>
<p>I am not going to sell the bonds. I am going to hold them to maturity. These bonds aren’t that liquid. </p>
<p>I am not sure where you are going with callable. Callable means the
borrower can call the bonds from me at a price and time. I can’t force the borrower to buy back the bonds. I don’t have a put on these bonds. I don’t really want to be called on bonds. That usually means interest rates have dropped. There is reinvestment risk.</p>
<p>Hmmmm… I reread the email. Looks like the zeroes are callable in
2022. I sent an email for clarification.</p>
<p>My mother bought zeros for our son a long time ago. Great interest rate but they got called early. I didn’t pay attention so they went to the State unclaimed money fund. It’s only a few thousand so I haven’t bother to file the forms to petition to get the money back. I’d have to find our statements which would take a few hours I think.</p>
<p>The problem with callable is that you get a great interest rate and you think you have it made until you don’t.</p>
<p>You are right. I think these zeroes are callable. I am going to buy them anyway, but being callable is a definite negative.</p>
<p>A few thousand…I think
I would get thst money even though it is a pain in the @@@.</p>
<p>Edit: the bonds are callable.</p>
<p>Just curious… callable zeros must be callable at a price below par. When is the first call date and call price and yield to call? If the issuer wants them back at par before maturity? that would be a little bit dumb.</p>
<p>Zero coupon taxables I guess you have to pay tax every year on interest you don’t receive. That’s why my UST zeroes are in my IRA. Tax free muni zeros you shouldn’t have to pay (federal) taxes on ever, so it would be dumb to hold them in an IRA, and even dumber to hold in a Roth IRA. no wait, it would be dumber to hold in a traditional IRA because you would be converting tax free income into taxable income. </p>
<p>Way back when, I proposed an innovative new product, zero-coupon perpetual bonds. They never got off the ground. They were just too hard to price. :D</p>
<p>BCE, I bought some BCE last week for my dividend portfolio.
How bout that IBM, huh?</p>
<p>“Way back when, I proposed an innovative new product, zero-coupon perpetual bonds. They never got off the ground. They were just too hard to price.”
:)</p>
<p>Right now the projected yield is 6% compounded for 23 years…
So you take par which is 100, or a 1,000 a bond.
To receive 1,000 in 23 years at 6 percent compounded…the bonds will be priced around 23ish.</p>
<p>So, you buy the bonds for 230 and you make 6 percent compounded until maturity or when the bonds are called. After 9 years is the first call date. So if called after 9 years you would receive approximately 368 per bond after 9 years. If it was 10 years before the bonds were called you would get 368 + 6 percent of 368. I am just estimating. I am not doing the calculations. I am sure I am a few dollars off.</p>
<p>You’re the bond guy. :)</p>
<p>Aapl… Boring numbers.</p>
<p>Down 5.1%.</p>