Is Google A Buy?

Today's post is by Jeff Braun of The Market Guardian. Today Jeff is taking a look at the giant we all know as Google. As hard as it seems to find a long position these days, Jeff thinks there may be one right under our noses. So sit back and enjoy as Jeff analyzes the giant.

Google remains a global leader in search, internet advertising! It was just announced today that Google Inc. (GOOG) expanded its lead in the U.S. Internet search market in February at the expense of rivals Yahoo Inc., Microsoft Corp. and, according to data published Tuesday by Hitwise Pty. Ltd. There is only a small amount of non-financial companies with $10+ billion of net cash on the books. The optionality of that war chest in this environment is huge. That plus core business spells attractive here to me.

Google (GOOG) may soon see increased federal sales as one of the beneficiaries of an expected uptick in federal spending on technology. It is well known that Federal agencies are testing Google tools as we speak and a key fan is Obama’s new tech hire!

Google (GOOG) just continues to find new markets to enter and in each new market they find ways to be more efficient and a better value than industry competitors such as print media and ad agencies. They will enable the Internet to compete in markets and methods we haven’t yet conceived. And the markets they are already attacking are huge providing abundant growth opportunities well into the future. I am convinced the conversion process of brick and mortar to digital has just begun.

I am thinking Twitter will get sold for $150m to $250m in the next 24 months. Will Google be the one buying them? Google has a short message for those wondering whether the search giant will soon buy the micro-blogging site Twitter: CEO Eric Schmidt “unlikely”

Here are some facts about Google (GOOG)

The historical high for (GOOG) was 741.79 on the 6th of November 2007. It has been 470 days since the historical high price.

The lowest price was 100.01 on the 3rd of September 2004. It has been 1629 days since that low price.

The largest volume day was the 20th of January 2006 when 41,182,900 shares were traded. It has been 1125 days since that big volume day.

The lowest volume day was the 24th of December 2007 when only 1,628,300 shares changed hands. That was 421 days ago.

Between 275-325 It may be time to start accumulating shares. 2-4 years from now I think you will be VERY happy.

Best of luck in the markets,

Jeff Braun

How to tell or refer a friend (short video)


What do you think? Is it time to consider a long position in GOOG? Be sure to comment and let us know your thoughts. For more on Jeff be sure to visit The Market Guardian.

Like Beijing, Capital Gains Can Be Confusing

With all the recent market action I decided to contact Ryan Gibson, from Traders Accounting, Inc., to help explain a bit about how the IRS taxes capital gains. Ryan has always been my "go to" guy when it comes to explaining and UNDERSTANDING the world of accounting and taxes for trading. Please be sure and visit his site for more helpful information, Traders Accounting, Inc.


It’s a good thing China made its debut on the world stage by hosting the 2008 Summer Olympics and not, say, a spelling bee. After all, athletes speak a universal language: run faster, jump higher, throw farther or score more points than your opponents and you’ll bring home the gold, and possibly a Wheaties contract.

But try to order dinner in Beijing? Now that’s tricky. Centuries of cultural isolation have limited China’s exposure to the rest of the world until now, which is all part of the excitement of this year’s momentous Summer Games.

Tricky also might best describe how the IRS taxes capital gains. While it may not be as indecipherable as a Beijing Chinese menu, tax treatment of capital gains and losses are far from a one-size-fits-all proposition, but depends instead on how those capital gains or losses were realized.

Not-so-simple Capital Gains/Losses

First, a short primer on capital gains. For tax purposes, all assets fall into two categories: capital and non-capital. Generally speaking, capital assets are things we acquire for personal use or investment: our home, furnishings, vehicles and other valuables such as jewelry and collectables. By contrast, non-capital assets, as the term implies, tend to be impersonal: sales to customers, accounts receivable, business supplies, hedging transactions and property used for business.

The distinction becomes clear at tax time, when capital assets are subject to capital gains and loss rules. Sales of non-capital assets, however, are taxed as ordinary income, and so fall outside this discussion. A Traders Accounting professional can be invaluable in clarifying your capital gains position and minimizing your tax exposure.

When a capital asset is sold, it either makes money (gain) or loses it (loss), based on what is called adjusted basis. Basis is the price you paid for the asset. Adjusted basis is your basis plus such additions as selling expenses or home improvements, and minus deductions for such things as depreciation or casualty loss.

If you held the asset for a year or less, it is considered a short-term capital gain or loss; if you held it for longer, it is considered a long-term capital gain or loss.

Here’s where it gets trickier. Losses you incur on the sale of some capital assets, including personal items such as your home, furnishings and vehicles, cannot be deducted on your tax return. Similarly, gains from the sale of personal capital assets may be taxable.

Capital Gains Scenarios

Let’s look at three typical gain/loss scenarios to see how they would be taxed under the capital gains/loss rules:

1. Short-term gains and losses: In this situation, you would combine your short-term gains and losses to produce a net short-term total. A total gain is taxed as ordinary income, but a loss can be deducted up to $3,000 on your return. If your loss exceeds $3,000, it can be carried over to the following year as a short-term loss.

2. Long-term gains and losses: Combine long-term gains and losses to arrive at a net long-term total. A total gain is taxed at the 15% maximum capital gains rate. A long-term loss is deductible up to the $3,000 cap and can be carried over to the following year as a long-term loss.

3. Short- and long-term gains and losses: First, combine short-term gains and losses to produce a net short-term total. Next, combine long-term gains and losses to produce a net long-term total. Now combine the two net totals. If the result is a gain, each type of gain is taxed at its applicable rate (see above). If it’s a loss, it is deductible up to the $3,000 cap. If your loss exceeds $3,000, deduct your short-term loss first and carry over the long-term portion.

Mixed Doubles: Short- and Long-Term Gains/Losses

So what happens when you end the year with a mix of short- and long-term gains and losses? Here’s how the IRS taxes the four possible scenarios:

·Short-term gain exceeds long-term loss: The short-term gain is taxed as ordinary income.

·Short-term loss exceeds long-term gain: Deduct the short-term loss to the $3,000 cap and carry over the balance.

·Long-term gain exceeds short-term loss: Deduct the long-term loss to $3,000 and carry over the balance. The net gain is taxed at the long-term rate.

·Long-term loss exceeds short-term gain: Deduct the long-term loss to $3,000 and carry over the balance.

If your broker charges you to conduct trades, don’t forget to subtract his or her fees from your gain. And be sure to read carefully the Form 1099 you receive from your broker. Some brokers record gross gains and losses, meaning they haven’t subtracted their expenses, while others record net gains and losses, meaning they’ve already done the adjustment for you. Always use net gains and losses when preparing your tax return.

If you have any questions or need some advice please visit my site Traders Accounting, Inc.

Ryan Gibson, AZCLDP
Traders Accounting, Inc.