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Sell ASR after bad trading update?

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Contributor
I am a long term investor and wonder what the view is on this forum on whether I should sell my ASR holdings after yesterdayÂ’s bad trading update. I only saw the SENS this morning. The share dropped nearly 4% between 4:30 when the SENS came out and close of trade. I have a profit of about 30% on this share. Any opinions and advice is much appreciated
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Super Contributor
It would appear that you've only held the share for just over a year, so you will find it difficult to convince SARS that you're not trading, therefore you're profit will be not be of a capital nature so will be taxed at whatever your tax rate is.If you want to speculate in shares I would suggest split your portfolios
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Super Contributor
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Contributor
Good point. I have been accumulating them over the last year but have not held any portion for more than a year. My account is not currently split. Would the tax man then deem me to be a trader on my entire portfolio? Do you have any idea what sort of time frame you would need to hold a share before the Tax man thinks I am a trader?
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Super Contributor
I stand to correction, but I think three years, but even then I don't think you can go and sell half your portfolio, and expect to be taxed on capital gain only. In the last 15 years I may have sold 4 shares, I only use CFDs and SSF for trading. I am thinking of having a small portfolio for trading small cap shares that one can not get on CFD or SSF so as totally divorced from my other portfolios.
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Super Contributor
SARS will look at your entire trading portfilio and the number of times , you have traded and not one specific shares.
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Super Contributor
get expert help from SARS...don't take advice from "pretenders"
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Super Contributor
Curtain closure " The VI has spoken"
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Super Contributor
you judge a person's intelligence by the way they speak, write or post... you can forgive the "fat finger" or chat "speak", but this is just bad: "not one specific shares. "...mixing verbs and nouns, interchanging plurals with nouns; who knows what losses these people sustain in trading because surely they may be challenged at adding and subtracting?
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Super Contributor
Dear VI This is a trading platform and not an editorial site. Substance over form has greater emphasis. Profit is the ultimate objective and not my editorial errors. So "go and suck on a lemon".
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Super Contributor
I was going to say to Jo Soap( and now I have ) that as a "long term investor" he is going to find this a lonely place ( given that this is a "trading site" (sic).I have been wondering for some time whether or not the site could be divided up into traders and in investors ... But at least he got some good advice to seek proper advice on his tax matters.
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Contributor
Thanks Partridge. I did hang on and hopefully it has done its major down yesterday and the day before. Still well up on this share. Maybe the trading update looked worse to me than it did to the market.
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Contributor
Thanks Partridge. I did hang on and hopefully it has done its major down yesterday and the day before. Still well up on this share. Maybe the trading update looked worse to me than it did to the market.
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Not applicable
the trading update is shocking. Worse than analyst forecasts, and it puts ASR on a PE of around 20 now - which is really high for a resource stock. So you are now faced with a matter of simple mathematics. Sell now, and lose around 20% of your profits to tax - or ride out the pullback (cause i seriously doubt it is done yet). Thing is - will it pull back more than 20%? I am not so sure. BHP and KIO are both still sitting strong - so there is obviously a lot of faith in the iron ore market going forward. For me, I am up 80% (was 90% at one point) on ASR - and I chose to ride out. They have increased production - iron ore prices recovering, and rand exchange in their favour. If I sell now - I introduce a new - and worse risk, that the stock doesn't pull back and I miss out on another rally.
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Contributor
Thanks Skaap. Appreciate the thoughts. I am still up 26% (was 30%) on one portfolio and 44% on another. Like you I think I will ride it out. The share is not a huge percentage of my total portfolios.
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Super Contributor
1) Nice recovery since yesterday; 2) SimonPB regards this share as a buy for '2013; c) consensus view on "detailed forecasts" is to SELL.
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Super Contributor
In other words, something we all know,and that is ......"nobody knows"
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Contributor
Thanks PHD. Have printed out the guide and will read it.
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Valued Contributor
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