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Marion Contrarian

Marion Contrarian
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  • Note on Own REITs and MLPs in a Tax Deferred Account [View instapost]
    That's a REALLY good tip, as I'd guess that paying taxes from your IRA would be considered a withdrawal, right Ed?

    Not that the AMOUNT would be a problem, but the paperwork would be...
    Apr 5, 2013. 01:43 PM | Likes Like |Link to Comment
  • How Does High Frequency Trading Affect The Market And You? [View instapost]
    I've been burned a number of times by setting automatic stops, so I generally set stop alerts and manually (rather than automatically) confirm the trade.

    Unfortunately, one can't (or won't) always monitor trades during the day. To reduce the "damage" from HFT order triggers, a trader could set triggered stop orders to trade for a price delta constrained by expected ranges relative to the prior day's market close (e.g., stop loss price at prior day's close minus 2x ATR or other volatility-based stop). At the risk of additional transaction costs, this could be backstopped by a constrained buy order if the stock subsequently rises by a similar predetermined amount.

    You might end up with a larger, or smaller position than you intended, but you could always readjust it later.
    Mar 31, 2013. 01:21 PM | Likes Like |Link to Comment
  • Here's What Jim Cramer Didn't Mention About IRAs [View article]
    Quick question: Do the MLPs (and other IRA assets) receive a stepped-up basis upon transfer of IRA to one's heirs? If so, this would seem to be great deal.
    Feb 14, 2013. 09:50 AM | Likes Like |Link to Comment
  • My Mad Method: Replacing The MLPs In My IRA, Part 2 [View article]
    You might want to confirm with a tax professional (which I am not), but if you DON'T sell you MLP positions in your IRA, wouldn't they receive a stepped-up basis in when your heirs get the assets?
    Feb 14, 2013. 09:47 AM | Likes Like |Link to Comment
  • My Mad Method: Replacing The MLPs In My IRA, Part 2 [View article]
    Rather than diversifying BETWEEN your two IRAs, it might serve you well to diversify WITHIN EACH IRA. You'll achieve the same objective of diversification and won't have diversity of performance.

    Downside, of course is twice the transactions, but if you're not actively trading your positions, that would be a non-issue.
    Feb 14, 2013. 09:43 AM | Likes Like |Link to Comment
  • 7 Investments With Low Correlation To The S&P 500 [View article]
    During a market crash, correlation goes to one as liquidation of assets to meet margin calls, raise cash, as well as general panic puts everything on sale (except inverse ETFs on a short-term basis).
    Nov 2, 2012. 12:03 PM | Likes Like |Link to Comment
  • Large Caps With Over 3% Yields Going Ex-Dividend Next Week [View article]
    I'm a bit unclear on your specific strategy regarding dividend stocks.

    Do you buy shortly before the ex-div date to capture the dividend, and then sell the stock after it recovers from the temporary dip due to dividend offset (days/weeks later), or are you a longer-term holder (in which case timing may be less critical)?
    If shorter term, how far in advance of the ex-date do you buy (as many stocks rise in anticipation of the dividend)?

    Do you sell (ATM/OTM) calls against the long position to boost yield?
    Jul 27, 2012. 05:56 PM | Likes Like |Link to Comment
  • I'm Still Bullish On Costco [View article]
    Referring to your second Mid-Point Spread Chain table, I'm unclear how the 8.7% return is calculated -- If the Jul 75/80 Put credit spread yields a net premium of 0.40, wouldn't the (non-annualized) percent return be based on the ($5) difference in the strikes, and thus be 8% (0.40 / 5.00) since $5.00 is your maximum (unmanaged) risk?
    Jun 7, 2012. 01:12 PM | Likes Like |Link to Comment
  • Master Limited Partnerships: Dark Clouds Ahead? [View article]
    Since the taxpayer is entitled to an annual $1K exclusion of UBTI, perhaps this strategy could still minimize the overall tax liability.

    On the other hand, if one has the resources to hire a competent tax lawyer to get a ruling on the approach, they probably have an investment that would far exceed $1K per annum. Perhaps they'd pursue it for the "rest of us"....
    Apr 26, 2012. 05:45 PM | Likes Like |Link to Comment
  • Master Limited Partnerships: Dark Clouds Ahead? [View article]
    Alternatively, "just pay the tax."
    Presuming that the MLP is a compelling investment from a total return standpoint (after considering tax consequences), don't let the (tax) tail wag the (profit) dog.

    Not certain that anyone has validated my other suggestion farther down the comment chain, which is to disclaim the depreciation (within a Roth, specifically) to avoid the recapture issue. While logistically challenging, it >might< be a valid strategy.
    Apr 26, 2012. 05:41 PM | Likes Like |Link to Comment
  • Master Limited Partnerships: Dark Clouds Ahead? [View article]
    MLPs pay "distributions", not "dividends", the majority of which are return of capital -- until your adjusted basis (reduced by the cumulative distributions) reaches zero. After that, the distributions are taxable (in a taxable account). In a tax-deferred (IRA) account, withdrawals are taxed regardless of source. In a tax-exempt (Roth) account, withdrawals are not taxed (according to CURRENT law).

    The great debate surrounds whether or not recapture of depreciation constitutes UBTI. However, if one doesn't offset income by claiming depreciation within an IRA, wouldn't the distribution stream be considered "RBTI" - related to the business and thus not taxable?

    Perhaps the IRA (owner or custodian) should file every year to treat the distributions in this manner (i.e., not claiming depreciation) if UBTI would otherwise apply?
    Apr 18, 2012. 06:05 PM | Likes Like |Link to Comment
  • Master Limited Partnerships: Dark Clouds Ahead? [View article]
    Why are recapture of depreciation and depletion considered "unrelated" ?

    Additionally, within an IRA, why would you claim these anyway?
    Apr 18, 2012. 05:52 PM | Likes Like |Link to Comment
  • ETFs On The Rise [View article]
    From the title, I was expecting a list of ETFs that were currently providing relatively higher returns -- not a subtle ad for Dorsey-Wright ETFs.

    This article provides nothing new.
    Apr 17, 2012. 08:27 AM | 1 Like Like |Link to Comment
  • Analyzing Tuesday's Noteworthy Insider Trades [View article]
    Mel Daris provides some current analysis in this recent SA article:
    Apr 11, 2012. 03:38 PM | Likes Like |Link to Comment
  • Analyzing Tuesday's Noteworthy Insider Trades [View article]
    RE: Caterpillar "Insider" Buys

    Make sure you dig into the SEC filings before you jump on "insider buying".

    First of all, 405 shares isn't that earth-shaking, representing only 0.5% of Lavin's current holdings.
    Second, the purchase was by his daughter, and was offset by sales by Lavin.
    Third, Lavin SOLD 11,000 shares since then (but still owns around 80k shares directly, as well as 23k shares represented by derivative instruments.

    As a matter of fact, net INSIDER SELLING over the first quarter was around $24M
    Apr 11, 2012. 12:42 PM | 1 Like Like |Link to Comment