Where are you getting the 1.5% figure? It does not sound right and is not
at all consistent with the S&P 500 (more like 9%):
http://politicalcalculations.blogspot.com/2006/05/mapping-sp-500-performance-since-1871.html
Regardless,
your figure is perhaps unrealistic (at least in the last couple of decades) to
use in any current analysis given that your average bank account would pay the
same with zero risk.
Just to be clear; I'm very much against the tax
and believe that it is more likely to fail than to be passed. But, at the same
time, it would not surprise me in the least to see it go through, even
globally. We're living in turbulent times.
Mike
--- In amibroker@xxxxxxxxxps.com,
"Edward Pottasch" <empottasch@...> wrote:
>
> let me
add to that:
>
> did you know that over the past 100 years the
stock market only returns about 1.5% per year? Let's assume this is the return
you can expect in your pension fund. How many trades can the manager make
before you are losing money when they tax you 0.25% per trade?
>
>
> ----- Original Message -----
> From: Edward Pottasch
> To: amibroker@xxxxxxxxxps.com
> Sent: Tuesday, December 08, 2009 9:00 PM
> Subject: Re:
[amibroker] Re: Traders Tax
>
>
>
>
> if
they think they will make easy money on this they are fools. Trading volumes
increased because costs are low and access is easy. Taxing it 0.25% will kill
it off completely. If they do it to win votes then wait for Joe Six Pack
finding out that he is paying for this tax in his pension fund as well. These
pension fund managers will know how to charge Joe Six Pack for all additional
costs they encounter. Don't they understand trading is a zero sum game? If
they are worried we push up prices then I can say I shorted oil today (for a
trade). Let them look at management of listed companies paying themselves 400
to 600 times that of the average worker. Then they can win some votes
too.
>
>
>
>
> ----- Original Message -----
> From: Mike
> To: amibroker@xxxxxxxxxps.com
> Sent: Tuesday, December 08, 2009 8:34 PM
> Subject: [amibroker]
Re: Traders Tax
>
>
>
> I suspect that investors
would hardly notice the tax. Depending on the frequency at which they move in
and out of stocks, it would likely end up being comparable to a mutual fund
management fee.
>
> The ones most at risk, including myself, are
high frequency traders. The tax would seem to be aimed at hedge funds that
constantly take micro profits, quickly moving in and out of positions.
>
> Unfortunately, it severely impacts day traders and swing
traders too. It is not uncommon for high frequency traders to have several
hundred trades in a year. With smaller accounts that can be hundreds of
thousands in volume, and several million dollars in volume for larger
accounts. At those rates, that amounts to tens of thousands of dollars in
additional taxes.
>
> If politicians only consider the impact as
it relates to investors (the vast majority), then the tax appears well
targeted at Wall Street. It is only retail traders (minority) that are at risk
of being put out of business.
>
> The bigger impact is, I
believe, what impact it would have on capital leaving the US for opportunities
elsewhere.
>
> If US markets are worth the premium for their
stability, liquidity and diversity, then capital will remain and the
politicians will pass the tax. If capital is expected to flee, the tax will
not be passed.
>
> If even just a few of the larger worldwide
exchanges agreed on a tax (in order to leave nowhere for capital to flee),
then the countries involved could reap huge revenues. After the amount of
money that has been poured into trying to save the respective economies, that
revenue stream has got to look pretty appealing right now!
>
>
Mike
>
> --- In amibroker@xxxxxxxxxps.com,
Nick de Peyster <nickdepeyster@> wrote:
> >
> >
The odds of this passing strike me as extremely low. So far the government has
been extremely supportive of the financial sector ... is there any evidence of
a change in the winds?
> >
> > I would think this trader
tax might hurt momentum investors rather than traders (especially
counter-trend traders).
> >
> > Reason being that the
momentum investors tend to count on the counter-trend traders to provide
liquidity. Of the two, the countertrend traders have the shorter holding
period and smaller gains so the tax will hit them most heavily.
> >
> > So what will happen is that the countetrend traders will become
more selective to offset the tax. Pre tax the countetrend trades will become
more profitable although after tax it won't make a difference.
> >
> > The momentum investors will take a bath, because there will be
fewer countertrend traders on the other side.
> >
> >
> >
>