Special Report: It's That Time Of The Year Again
US and Canadian tax loss season. One person's loss is another's opportunity.
Here’s the situation:
The end of the North American tax year is approaching. Many institutional and retail investors sell their badly performing stocks to realise a tax loss, which they can then offset against gains elsewhere and pay less tax.
As a result of all the selling, companies that have done badly get even more beaten up. But come January the selling stops, and the stocks usually rally.
So the trade is to buy as tax loss selling climaxes, then flip in January-February as normality resumes. The climax of North American tax loss selling will come this week.
In the really beaten up crapcos, you can often realise 50% gains, even doubles sometimes, in as little as a month. (It’s also an opportunity to pick up cheap stock in companies you like the look of with a longer-term timeframe in mind).
Given that resource stocks have been total dogs this year - again - there are plenty of opportunities. They are already seeing a lot of selling, but my guess is that the selling will probably climax on Wednesday and Thursday of this week (Dec 20-21).
I’ve spent the weekend looking at hundreds of charts, and I think I’ve found some beauties, so here, for paid subscribers, follows a list of nine target companies.