ERICOPOLY

I wish somebody would offer a variable annuity with a "self directed" investment option. Wouldn't that be cool. In effect, it's just an IRA brokerage account at that point. Did Fairholme ever get it's fund offered through AIG variable annuities? That was discussed on this board more than a year ago.

That won't get me any relief. I'd be hit with an "undistributed profits" tax if I intended this offshore company to be just a "personal holding company" for my passive investments. I'd still need some sort of contrived losses to offset the undistributed profits tax.

Moving to California, I have a desire to ensure that I'm not the one they turn to for fixing their budget mess. My marginal tax rate on short-term capital gains will be well in excess of 40%. But of course from time to time the best move is to trade a little (capturing some short term capital gains). Of course, maybe not if you only keep less than 60% of the gain. So what I need are some tax losses that aren't really losses. This involves leverage to an already fully invested portfolio. The leverage is merely for the sake of manufacturing tax losses. Idea: 1) Buy Berkshire at today's price and that's where the leverage comes from 2) Hedge the Berkshire holding 100% with deep-in-the-money SPY puts expiring December 3) When the SPY puts expire, replace with DIA deep-in-the-money puts expiring following November 4) When the DIA puts expire, replace with SPY puts expiring following October. The point here is that over the long term, you are clearly going to beat the market. You hold the Berkshire position "Forever", and over the long run take a short-term tax loss as the shorted index rises over the very long term. So you profit in two ways: 1) tax savings. If Berkshire rises 10% and the index rises 10%, you about 4% gain through tax savings. 2) Berkshire ought to beat the index over the long run. Margin interests costs might be an issue, so perhaps this is just a way to take some losses this year (a heavy marginal tax year) and shift the offsetting gains to a future year (2013 or 2014). I mention 2013 and 2014 because those are the years for which you can presently write deep-in-the-money BRK-B puts.

Question: can warrants be shorted? Can we for example buy the "A" warrant for $3.23 today, and then later sell short the "B" warrant after we're satisfied that the "B" warrant has rallied a ton? A "covered" warrant strategy.

Ray Dalio sold his entire BAC stake in Q1 after buying the entire stake in Q4. Now he can buy it again, then sell, then buy, then sell... will this ever end :(

Nope! Another $5/$2 common/warrants please! I would rather you wish for something else, like the $10 per share for AXP (March 2009 price).

Yup! BAC: +0.57% (on only 80% of average volume) Other banks: JPM: -1.30% (2x average volume) WFC: -1.58% (1.6x average volume) C: -1.51% (1.5x average volume) USB: -1.24% (1.3x average volume) Index ETFs: IWM Russel 2000: -1.1% SPY S&P500 -.86% DIA DJIA -1.01% Others: FRFHF.PK: -.73% BRK.B: -1.16%

The ROA figure is a bit strange. For the pre-crisis years BofA had much better ROA than JPM, yet people think JPM is some kind of best in breed and that BAC is garbage. Why was BAC's precrisis ROA so much better than JPMs? The BAC-originated stuff fared rather well in the crisis, so I don't think we can blame it on reaching for yield.

JPM traded down to $28 last year despite there being no rumors about it needing to raise capital. BAC traded down to $5 last year in the face of noisy capital concerns. Without those concerns, maybe it would have hit $7 and no further down? BAC at $7 now without capital concerns. JPM needs to go down another 20% to hit it's 2011 Euro-crisis low. This is why I think BAC's volume has come down lately.

Yes, by limiting private and corporate financial support to the political system. Instead we've gone the other way.

Meanwhile there are no headlines when Donald Trump sells a property with tens of millions of capital gains in it and reinvests the proceeds in another. With no capital gains tax! Yet we are outraged if owner of a common stock is able to sell and reinvest the money without paying capital gains. Whatever. I need more money so I can have a lobby to get some laws changed.

Once again the volume was below average (only slightly today). The other large peers (WFC/C/JPM) have trading volumes far in excess of normal. What's the significance of being a relatively low volume stock in a market full of high volume? Not many sellers, a big buyer trying to accumulate? Yes, I figure this is insignificant to most of you, but I'm interested in knowing why my dog is exhibiting strange behavior.

U.S. Senator Charles Schumer proposed legislation yesterday that would impose a capital gains tax on people who renounce their citizenship unless they prove their reasons don’t include avoiding taxes. Isn't that more lenient than the current "exit tax", under which you pay the capital gains tax no matter what your story is? Do I misunderstand him? I am very happy with Schumer and am quite surprised to see politicians for once being on top of their game. Saverin should not be allowed back to the US, EVER! and any investments he makes in the future should be taxed @ 30%.. What he did was disgusting and I am shocked the media thinks he only avoided $67mm.. I have it on very good merit that the valuation he used on his exit tax date was $18 per share. The amount is more in the realm of $400-500mm that he circumvented. I tend to agree. Getting taxed 37% on all US investments in Oz, capital gains are reduced by 50% if its long term. Doing massive tax planning, to plan for having to pay taxes in both countries - but I would never give up my Citizenship. I guess thats easy to say though because my taxable income will be nil due to exclusions. If one does give up his citizenship then its fair, but they shouldnt be allowed back in. The real problem is that the US is taxing residents of other countries. He is just trying to cope with it. I just find it mind boggling. All my life I've been a citizen of Australia residing in the US. I've never paid them a dime of tax on my earnings while living in the US.

Now you can complain about this Zuckerberg guy too -- or perhaps you won't, maybe only if he further reduces taxes while leaving the country: Tax specialists are paying attention to something else: how half a dozen of the firm's luminaries, including founder Mark Zuckerberg, appear to be using a perfectly legal maneuver called a grantor-retained annuity trust, or GRAT, to avoid at least $200 million of estate and gift taxes on their own Facebook shares. http://online.wsj.com/article/SB10001424052702304543904577395971333422002.html?mod=WSJ_PersonalFinance_PF14 Meanwhile, ideally, the asset soars in value, and that growth is outside of the grantor's estate. When the GRAT's term ends, the asset goes to the beneficiaries—usually into another trust set up for their benefit. The result: no gift or estate tax on the appreciation, even though it has been transferred. Here is an example, using figures from the Facebook offering document: Messrs. Zuckerberg and Moskovitz each disclosed "annuity trusts" holding 3.4 million and 14.4 million Facebook shares, respectively. The value of each share when the trusts were set up was less than $1.85, according to the prospectus. After contributing their stock to the GRATs, the two founders would, over time, take payments equal to the original value of the gift plus a small return, Mr. Bergner says. What if by some chance Facebook stock tanks? The stock would then be returned to the original owner. One question remains: Neither Mr. Zuckerberg nor Mr. Moskovitz appears to have children. So who are these trusts' beneficiaries? Mr. Bergner says it is possible to name unborn children—as well as future spouses and current friends or relatives—as beneficiaries of a GRAT.

I dropped all my leverage when the stock was in the upper $9 range, and wrote some 2014 $15 strike calls for 82 cents. I bought the calls back in when they were down as the price fell 50%. Today, I bought a big chunk of common, and my leverage comes via the $5 and $7 2014 calls. In order to keep the volatility decay from being a drag on my returns, I put a small amount into the 2014 $10 calls that I sold $12 calls against. So if the stock is over $12 at expiry, the small amount tied up in that bull spread will gain about 6x (enough to pay for the current options premium embedded in my calls, plus an extra gain to just enjoy). Then I also have some $10 strike 2014 calls for speculation, but only about 3% of portfolio. I'll roll them into 2015 calls when available.

U.S. Senator Charles Schumer proposed legislation yesterday that would impose a capital gains tax on people who renounce their citizenship unless they prove their reasons don’t include avoiding taxes. Isn't that more lenient than the current "exit tax", under which you pay the capital gains tax no matter what your story is? Do I misunderstand him?

A couple of questions: How low did the BAC "B" warrants trade last December? How high did they go for at the peak in March?

On Monday we will have a new BofA presentation webcast: May. 14, 2012-- Bank of America Chief Executive Officer Brian Moynihan will present at the Deutsche Bank 2012 Global Financial Services Investor Conference in New York on Monday, May 21, 2012 at 2:30 p.m. ET A live audio webcast of the presentation will be accessible through the Bank of America Investor Relations Web site http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-newsArticle&ID=1695615&highlight=

Down to 30 cents now... too late to buy canned food with it. Maybe some dried beans from the bulk food section. You could always write the 2013 $11 strike call for 20 cents and try to make 10x your money on the 10 cents that you leave on the table (if the stock hits $11+ at expiration). Then you could use your 20 cents of cash and buy some 2014s -- or do whatever you choose with it. Writing the covered calls is always better when the stock is up a lot higher than now, but I presume that's not the advice you want to hear right now.

BAC's volume was also rather light today at only 67% of average volume. All of the other large banks (JPM, WFC, C, even USB) had large (above average) volumes. For nearly three hours BAC was significantly outperforming even USB. If you remember (how can we forget) last Summer/Fall BAC was the most volatile of the bunch. Well, enough about that.

I didn't realize he was gay. Does Romney have him mixed up with somebody else? ::)

Here is somebody that compiled some stats: http://www.cnn.com/2012/05/14/opinion/frum-mann-ornstein/index.html?hpt=us_mid Sixteen months into the George W. Bush administration, Memorial Day 2002, only 13 executive-branch nominations awaited confirmation by the Senate. At the corresponding moment in the Obama administration, Memorial Day 2010, 108 nominees were awaiting action by the Senate. This comparison is supported by another academic study. The confirmation process got gradually slower between the 1960s and the 1990s. Then, suddenly, in the second Clinton administration, the confirmation process seized up.

No kidding. For a moment there I was just giddy that BAC and IWM were down the same amount (I bought puts on IWM to hedge). Well at least my MBI position is holding up. Something has to outperform the hedge

Strange to see it down 1/2 as much as JPM and WFC on a big "Euro-fears" day.

American real estate through the lens on an Australian property investor: http://www.smh.com.au/business/property/us-faces-biggest-land-shortage-in-history-property-investor-20120513-1ykri.html ''In more than 30 years as a developer, I have not seen anything quite like it. For property professionals, America is back where Australia was in 1992 - in some areas, even better,'' he told BusinessDay. Mr Drapac himself has substantial financial assets but has also acquired Melbourne backers. ''We have approached a handful of clients, but many more have come to us - a large percentage of Melbourne's established real estate investors,'' he said. ''There is the allure of a one in 100 years event in the US. The Australian dollar is high, and opportunities in Melbourne are relatively limited. They would like to capitalise on that.''