From: Ramez Naam (Exchange) (ramezn@EXCHANGE.MICROSOFT.com)
Date: Sun Oct 12 1997 - 13:39:05 MDT
> From: Natasha V. More (fka Nancie Clark)
[SMTP:natasha@extropic-art.com]
> The most recent Extropy Investment Group met this past Tuesday evening
Natasha, just out of curiosity, could you share with us your target
annual growth rates? I myself have found it fairly straightforward to
make 40% annual returns over, say, a 5 year period, as long as one is
willing to ride out a few ups and downs. I'm curious as to what other
extropians see as viable investment targets and strategies.
For the record, my next strategy (as yet untested - awaiting capital) is
simple:
1) Pick a nascent industry with a potential for stellar growth in the
next 20 years. (E.g., biotech, space exploration, nanotech).
2) Identify the 10-20 market leaders.
3) Research and weed out those that seem to be on the verge of collapse,
while promoting those with good strategic assets (good research
staff/connections, key patents, etc..)
4) Divvy up your funds among the 10 or so stocks.
5) Hang on tight for a decade or two, making the minimum possible number
of stock transactions.
My favorite hidden feature of this strategy is that most of your income
is essentially tax-deferred. Why? Because stocks in a nascent,
high-growth industry are growth stocks. Thus your return on investment
is in the form of higher stock prices. Stock price gain is taxed as
capital gains rather than income. Capital gains tax is only due when
you sell the stock. Thus rather than losing 30% of your earnings each
year (and having that compound over a decade), you only lose the capital
gains rate at the very end.
mez
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