Just would like to say I started with $1000 in my E-TRADE account & I'm over $4000 just a few months later and would have more if I would have just listened to your advice more. I'd like to say "Thanks and keep up the good work!"
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Tax-Loss Selling Bargains
December 4th, 2007
Well, it's December, and that means tax loss selling. And tax loss selling means some poor performing stocks will be under temporary downward pressure. For penny stock investors, this means it's bargain hunting time.
Tax loss selling, combined with market risk, as detailed in my previous blog entitled, 'Penny Stock Time is Upon Us,' means that this may be the single best time to be getting involved with penny stocks.
Some of you may not be familiar with the concept of tax loss selling, so here's the skinny:
- If you make money on a stock, you pay capital gains tax.
- If you lose money on a stock, it goes to offset or decrease your capital gains tax.
- For example, you made $10,000 on one stock and lost $8,000 on another. You would only pay capital gains tax on the $2,000 difference.
- The key, however, is that you must sell any stocks before the end of 2007, or else the capital loss applies to 2008, and you won't get the benefit for another year. This results in a log-jam of people unloading losing positions near year end.
Of course, when a lot of people are corralled into selling as a herd, stock prices become artificially and temporarily depressed.
Given the weakness in the overall penny stock markets, you could imagine that a lot of jaded investors will be dumping their underperforming (and already undervalued) shares into the open market.
If you have your eye on any special penny stocks, now is the time to get ready to scoop up some deals. Watch closely over the next few days and weeks to pick your moment(s), then make your move.
I have not seen such wonderful buying opportunities like these in many, many years. January is starting to look like a possibly stellar month for some of these strongly overlooked companies, and I am looking forward to many good months in 2008.
The 1-2 punch of tax loss selling and market risk have created dozens and dozens of excellent buys. There are swarms of examples, with just about every sub $3 stock feeling the pressure.
Here's one of my favorite companies, and it has become one of my favorite examples. (So you know, I am a shareholder) Yangaroo (YOO on the Toronto Venture Stock Exchange) has 10 cents per share in cash, but was recently trading at 8 cents. This also completely ignores the strong balance sheet, rapidly growing revenues, strong management team, and the fact that they are leaders in a growing industry.
There are lots more just like this company, and I will reveal them to subscribers of Peter Leeds Penny Stocks on tuesdays and thursdays, as always. If you are not a subscriber, sign up today and get started instantly, online, right now.
Disclosure: Peter Leeds owns several hundred thousand shares of YOO. He may increase or decrease this position on the open market, without warning, and without reporting the transactions here, or elsewhere.