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.
> >
> >
>
>
>