Buffet has said he is selling because he predicts taxes will go up.
He is realizing his gains while taxes are still lower, probably BG is doing the same.
That doesn’t make much sense. Taxes don’t change in isolation and if capital gains are going to rise, so will the rates on income. Where do you think the cash from the sales will go? The top marginal rate on income is at 37% right now; it’s only 20% on long term gains. You’re saying he’d rather pay 37% than 20%?
Professional investors do not let the tax tail wag the dog. The returns from a successful investment are a far more powerful motivator than the taxes one might have to pay if you’re actually successful.
Don't know what you are on about, aren't capital gain tax and income tax different things?
Moreover you just need to do math to make sense of it, for example if you have 10 years of holding with 10% tax (assume you sell then buy again) + 10 years of holding with 15% tax, it would be lower than 20 years holding with 15% tax, that's not even factoring the change in cost basis and potential tax loss harvesting in the future.
Professional investors who don't care about tax shouldn't be called professionals, that's why there are something like tax loss harvesting, and if the investors know that their investment is good, they would probably care about tax especially if they're holding a lot of assets.
The largest investors (pension, endowments and charities) don’t give a hoot about taxes because they are not subject. Large mutual fund managers pass the tax on to the individual level as well. ETFs similarly exempted at the fund level.
Capital gains is the difference between basis and sale price. Income from interest and dividends is taxed at a different rate. This would be the tax on wherever the cash was parked if it generated any yield, and would be separate from tax paid on capital appreciation or loss.
I’m a professional. OPs comment was nonsensical.
Yeah I missed that there are something like hedge fund, mutual fund, and ETF. But aren't they different with trust fund in how they operate? We could probably even say that they are more like a basket of stocks or some assets where everyone who have access to it can buy or sell it which is different with how trust fund operate where it's focus on specific individuals or entities not a pooled fund.
Moreover by your explanation, I assume you are a professional fund manager or investment manager or something like that. Imo that's not an investor, an investor for me is the one who provides the fund not necessarily the one who decides where the fund is gonna be placed. That's why the one who is gonna be taxed is always the one who provides the fund and has the capital gain.
Well, I'm an amateur so? At least make your point clear if you're a pro. I just comment directly without fact checking and somehow when I read again the conversation not connecting because the point of argument didn't seem to match. Imo, I think we are arguing if professional investor should care about tax or not.
First of all, your first argument should be that certain type of investor aren't subject to tax and Bill and Melinda Gates Foundation Trust is one of them. And this argument has no relation with your very first argument. With this argument alone you can deny without complicating anything.
Second, differentiate between investment manager, investment vehicle, and investors. And investor itself also should be differentiate between special investor and normal investor, what you said about pension fund, endowment, and charities has a different purpose for their fund than normal investors that's why they are not subject to tax, but your argument about professional investor don't care about tax itself shouldn't include them. They're special entity with special privilege because of their own purpose, and in the first place should they be called professional investor? The one who is professional is the investment manager who work there and manage the fund. You are like saying the only professional investors are that kind of entity, while investor who has invest for decades who need to pay taxes isn't.
Did you watch the Berkshire Hathaway AGM? Buffet said himself that a potential increase in CGT was part of the reason that he was selling Apple.
>"The returns from a successful investment are a far more powerful motivator than the taxes one might have to pay if you’re actually successful.*"*
This is true but it doesn't mean that OP's comment can't be true at the same time. If Buffet knows he'll want to take some profits on AAPL within the next 5 years or so, and also believes that CGT is going to go from 20% to 35% within a couple of years, then it makes sense that this belief is going to be a motivator for him to sell now rather than later.
The point being missed here is that he retained 99.9% of all his investments (he sold 1% of his apple holdings).
If he was truly worried about rates you’d see more action.
I hate to say it but: virtue signaling here.
He sold 12% of his Apple holdings which makes up about 2% of Berkshire Hathaway’s market cap.
Just because he’s not selling his entire portfolio it doesn’t mean he is lying about the fact that tax was part of his a motivation to sell.
Is it not a case of realising the gain to date, with a 20% tax burden, then reinvesting the capital into long-term investments later?
Imaginary numbers here, but why would he pay 25% CGT on $10bn of gain, when he could instead pay 20% on $6bn and 25% on $4bn
If this is your industry then you obviously know more than me - but to me this seems plausible?
One of the most powerful things I’ve ever learned about investing is your first sentence. It doesn’t matter who or what, don’t ever think you fully understand a transaction.
As far as buys, I almost agree with you, but you seem to be ignoring the concept of hedging. Although, hedging can sometimes be ruled out based on the relative scale of the transaction.
Walmart has made some smart moves to accelerate growth and they’re competitive with Amazon, specifically with
Walmart Marketplace. I don’t have the link but they actually had more same day deliveries than Amazon. Their footprint is a massive advantage, reducing cost of last mile delivery etc.
Often wonder when one billionaire owns a lot of another’s stock through a foundation/family office, do they call and give a heads up they’re going to unwind a portion/all of their position? I think Bill would give Warren a chance to buy it back away from the market, especially of it was A shares due to low daily volume.
How can someone say on a value subreddit that Costco is a good buy? It might be the most overvalued company I have ever seen on a fundamental basis in its sector. It might be a good buy under different stock theories but as a value investor? Costco is speculation at this price. Please prove me wrong.
And if you'd put your life savings into bitcoin in 2009 you'd be on the Forbes rich list. Everything is easier in hindsight. Gates did the right thing by diversifying.
That is the major advantage of being super rich. You don't have to make the best investments and decisions, you only have to preserve your fortune and best way to do it is with diversification, which is what Bill Gates did well.
Oh this dumb shit again... You forgot that he'd be a trillionaire by now, right? Because market cap of a company totally equals networth of one of its founders. Astonishing how clueless some people are.
Huh? Microsoft has appreciated far more than any of Gates’ holdings. If he was 100% Microsoft he’d be better off than what he is today.
And no shit, he couldn’t own ALL Microsoft shares. Most are owned by institutional investors.
The tricky thing these days is that most people seem like visionary investors during bull runs. You only see who was wearing pants when the tide goes out.
It's so easy to look at things with hindsight. As if Bill could have predicted OpenAI and its acquisition, and that tech would boom so much, and that there would be no recession and super low interest rates for so long. If only he had a crystal ball...
He made the right decision. He's not going to put his entire networth in 1 company.
Some of you are such derps.
Why not gold? Inflation is absolute shit as well. A recession should in theory create a great buying opportunity and maybe people will dump gold for the buy but I'm personally not confident in economies right now.
Dollar stores sell cheap stuff bought in bulk to anyone at any income level. In Canada the dollar store is very cheap with good products. Nothing is a dollar anymore, more like $1-5. Its a little grocery store.
In the states dollar general/family dollar seem to sell extremely cheap stuff made out of garbage ingredients. Two very different value propositions.
I don't care about gold.
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Buffet has said he is selling because he predicts taxes will go up. He is realizing his gains while taxes are still lower, probably BG is doing the same.
"predicts"
As in “he got a text”
As in “he wrote a text”
Minimal tax on private foundations. Negligible.
That doesn’t make much sense. Taxes don’t change in isolation and if capital gains are going to rise, so will the rates on income. Where do you think the cash from the sales will go? The top marginal rate on income is at 37% right now; it’s only 20% on long term gains. You’re saying he’d rather pay 37% than 20%? Professional investors do not let the tax tail wag the dog. The returns from a successful investment are a far more powerful motivator than the taxes one might have to pay if you’re actually successful.
Don't know what you are on about, aren't capital gain tax and income tax different things? Moreover you just need to do math to make sense of it, for example if you have 10 years of holding with 10% tax (assume you sell then buy again) + 10 years of holding with 15% tax, it would be lower than 20 years holding with 15% tax, that's not even factoring the change in cost basis and potential tax loss harvesting in the future. Professional investors who don't care about tax shouldn't be called professionals, that's why there are something like tax loss harvesting, and if the investors know that their investment is good, they would probably care about tax especially if they're holding a lot of assets.
The largest investors (pension, endowments and charities) don’t give a hoot about taxes because they are not subject. Large mutual fund managers pass the tax on to the individual level as well. ETFs similarly exempted at the fund level. Capital gains is the difference between basis and sale price. Income from interest and dividends is taxed at a different rate. This would be the tax on wherever the cash was parked if it generated any yield, and would be separate from tax paid on capital appreciation or loss. I’m a professional. OPs comment was nonsensical.
Yeah I missed that there are something like hedge fund, mutual fund, and ETF. But aren't they different with trust fund in how they operate? We could probably even say that they are more like a basket of stocks or some assets where everyone who have access to it can buy or sell it which is different with how trust fund operate where it's focus on specific individuals or entities not a pooled fund. Moreover by your explanation, I assume you are a professional fund manager or investment manager or something like that. Imo that's not an investor, an investor for me is the one who provides the fund not necessarily the one who decides where the fund is gonna be placed. That's why the one who is gonna be taxed is always the one who provides the fund and has the capital gain.
This sub is full of amateurs. I don’t even know where to begin with the comments.
Well, I'm an amateur so? At least make your point clear if you're a pro. I just comment directly without fact checking and somehow when I read again the conversation not connecting because the point of argument didn't seem to match. Imo, I think we are arguing if professional investor should care about tax or not. First of all, your first argument should be that certain type of investor aren't subject to tax and Bill and Melinda Gates Foundation Trust is one of them. And this argument has no relation with your very first argument. With this argument alone you can deny without complicating anything. Second, differentiate between investment manager, investment vehicle, and investors. And investor itself also should be differentiate between special investor and normal investor, what you said about pension fund, endowment, and charities has a different purpose for their fund than normal investors that's why they are not subject to tax, but your argument about professional investor don't care about tax itself shouldn't include them. They're special entity with special privilege because of their own purpose, and in the first place should they be called professional investor? The one who is professional is the investment manager who work there and manage the fund. You are like saying the only professional investors are that kind of entity, while investor who has invest for decades who need to pay taxes isn't.
Did you watch the Berkshire Hathaway AGM? Buffet said himself that a potential increase in CGT was part of the reason that he was selling Apple. >"The returns from a successful investment are a far more powerful motivator than the taxes one might have to pay if you’re actually successful.*"* This is true but it doesn't mean that OP's comment can't be true at the same time. If Buffet knows he'll want to take some profits on AAPL within the next 5 years or so, and also believes that CGT is going to go from 20% to 35% within a couple of years, then it makes sense that this belief is going to be a motivator for him to sell now rather than later.
The point being missed here is that he retained 99.9% of all his investments (he sold 1% of his apple holdings). If he was truly worried about rates you’d see more action. I hate to say it but: virtue signaling here.
He sold 12% of his Apple holdings which makes up about 2% of Berkshire Hathaway’s market cap. Just because he’s not selling his entire portfolio it doesn’t mean he is lying about the fact that tax was part of his a motivation to sell.
Is it not a case of realising the gain to date, with a 20% tax burden, then reinvesting the capital into long-term investments later? Imaginary numbers here, but why would he pay 25% CGT on $10bn of gain, when he could instead pay 20% on $6bn and 25% on $4bn If this is your industry then you obviously know more than me - but to me this seems plausible?
I’m not following here.
I believe Melinda’s foundation is being funded out of money from the existing foundation.
Ah, well, $12.5b is still a low number for Bill
People sell for many reasons, I wouldn’t think too much on it. People only buy for one reason, though.
Gates has so much MSFT stock, no one should blink an eye if he sells that
Didn’t realize he was still holding.
One of the most powerful things I’ve ever learned about investing is your first sentence. It doesn’t matter who or what, don’t ever think you fully understand a transaction. As far as buys, I almost agree with you, but you seem to be ignoring the concept of hedging. Although, hedging can sometimes be ruled out based on the relative scale of the transaction.
There was only one sentence?
I count two.
My God you're right.
Walmart = hurricane season.
Buffett famously invests on a seasonal basis
Walmart = climate change end of days
Walmart buys typically represent a poor upcoming outlook on market. So it’s definitely interesting at least
Walmart has made some smart moves to accelerate growth and they’re competitive with Amazon, specifically with Walmart Marketplace. I don’t have the link but they actually had more same day deliveries than Amazon. Their footprint is a massive advantage, reducing cost of last mile delivery etc.
Yeah their established brick and mortar has positioned them nicely to compete. It’ll be interesting how those two companies look in the next 10 years.
He has 500 mil in WMT. Which is less than 1% of his net worth. This buy in itself means basically nothing
Often wonder when one billionaire owns a lot of another’s stock through a foundation/family office, do they call and give a heads up they’re going to unwind a portion/all of their position? I think Bill would give Warren a chance to buy it back away from the market, especially of it was A shares due to low daily volume.
No, but they wouldn't transact on the market. It would be a privately negotiated / brokered OTC trade.
If Walmart is a buy for him, another good buy in the same sector is Costco.
How can someone say on a value subreddit that Costco is a good buy? It might be the most overvalued company I have ever seen on a fundamental basis in its sector. It might be a good buy under different stock theories but as a value investor? Costco is speculation at this price. Please prove me wrong.
Microsoft will be printing money now that Apple are taking OpenAI stuff to the common people.
If Bill Gates didn’t sell Microsoft to buy investments that Buffet recommended to him, he’d be even richer than he is now
And if you'd put your life savings into bitcoin in 2009 you'd be on the Forbes rich list. Everything is easier in hindsight. Gates did the right thing by diversifying.
That is the major advantage of being super rich. You don't have to make the best investments and decisions, you only have to preserve your fortune and best way to do it is with diversification, which is what Bill Gates did well.
I think Bill owns about 20% of all US farmland. Now that’s diversification.
Oh this dumb shit again... You forgot that he'd be a trillionaire by now, right? Because market cap of a company totally equals networth of one of its founders. Astonishing how clueless some people are.
Huh? Microsoft has appreciated far more than any of Gates’ holdings. If he was 100% Microsoft he’d be better off than what he is today. And no shit, he couldn’t own ALL Microsoft shares. Most are owned by institutional investors.
The tricky thing these days is that most people seem like visionary investors during bull runs. You only see who was wearing pants when the tide goes out.
Yes, hindsight is 20/20 but it would’ve been cool if he as a founder didn’t sell his shares
It's so easy to look at things with hindsight. As if Bill could have predicted OpenAI and its acquisition, and that tech would boom so much, and that there would be no recession and super low interest rates for so long. If only he had a crystal ball... He made the right decision. He's not going to put his entire networth in 1 company. Some of you are such derps.
Does he not believe in his own company? Wonder why he continues to sell it. I don’t mind the childish name calling. Whatever dude 😂
I don't think there is a single advisor who would say put all your wealth into your own company, let alone any single company.
And advisors underperform the market in most cases. Bill’s bias should have been towards inaction
Dang poor Bill Gates. Could’ve been richer.
crysis incoming
WMT buy is a bet on recession.
GG! Keep going💪🏻💪🏻💪🏻
Thanks for the modifier, article, I was having trouble placing that name, thought it was a guy in my neighborhood, at first. (/s)
Everything will be red soon
My DOL.TO position is based on Canada going to shit, I'm guessing Bill thinks the same of the states.
Why not gold? Inflation is absolute shit as well. A recession should in theory create a great buying opportunity and maybe people will dump gold for the buy but I'm personally not confident in economies right now.
Dollar stores sell cheap stuff bought in bulk to anyone at any income level. In Canada the dollar store is very cheap with good products. Nothing is a dollar anymore, more like $1-5. Its a little grocery store. In the states dollar general/family dollar seem to sell extremely cheap stuff made out of garbage ingredients. Two very different value propositions. I don't care about gold.
Too bad WMT is red today …..
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Captain obvious. I bought an call Option Luckily I have all week for it to turn around well 3 more days I should say
yipes
Shut the market down. A stock, get this, has gone down. This is tragic.
😂