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Anyone has study on year end tax loss selling strategy?


Gopinath
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I was wondering if anyone has study/ historical results on the other side of the tax loss selling crowd? Buying cheapest companies in the year end(now), sell them in the following year after the price returns back to normalcy??

 

Given that there have been some stock prices decimated, especially oil stocks and many of the recent spin offs, I wonder if there is something that we can pick up.

 

Thanks!

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I was wondering if anyone has study/ historical results on the other side of the tax loss selling crowd? Buying cheapest companies in the year end(now), sell them in the following year after the price returns back to normalcy??

 

Given that there have been some stock prices decimated, especially oil stocks and many of the recent spin offs, I wonder if there is something that we can pick up.

 

Thanks!

 

How is that a tax loss strategy? You are making a gain right?

 

 

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I have been doing this for decades and I expect this to be a banner year for implementing this strategy.

To implement this strategy you look for a company that has been a loser for the year and selling at year lows or multi year lows in December and is experiencing increasing volume. Institutions and individuals will often sell their losers in December to trigger a tax loss to offset gains. The sellers sell fro tax reasons the buyers are buying because of valuation reasons. The selling will start to recede as we approach the end of the year and natural supply and demand forces cause a  pop in the stock. This is called tax bounce or year end or January effect.  It is most pronounced in companies with smaller floats and mkt caps. It is he single most consistent trading strategy that I have encountered. I have been actively looking at the energy sector as being a lucrative area as well as the mining sector. Good luck and good hunting.

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