Why is RIVN market cap ($12 bln) only equal to cash on hand??

[thedole]

It's all time value of money and money is no longer free (in real rate term).

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[140 degrees]

All this talk about tax loss harvesting, it's worth mentioning that the most effective way is to offset the current year capital gains (short and long term). If one's loss exceed the capital gains, then the loss is capped at only $3K/yr and one has to carry the loss forward.

Also there is a wash rule, so that you cannot buy the same or similar stocks within the 30 day-period, and still take the loss.

As for 0% cap gains tax for married filing jointly applies to AGI so part of the cap gains will be taxed at 15% for above $83K. I have no idea why any married couple that has AGI less than $83K would be buying any Rivian or vehicle that costs $80K+.

As for the 15% cap gains tax until $517.2K, if one's cap gains are beyond $250K, there is an additional medicate tax of 3.8% on the top of 15% (part of Obama Care implemented then).

Personally, I'm not a fan of loss harvesting strategy in general. Yes it makes sense to offset the capital gains; however, depending on the underlying stock's ability to regain the loss or into profit within a year, it would depends all on the individual lot costs and not the average cost.

I know many of you know this stuff but just in case for others. Not in the financial industry, just have lots of personal stake in the market.

In my opinion, tax law isn't fair to people who make the majority of their income as wages. My father was a farmer and he managed his affairs to always be in a low tax bracket. If a year was profitable, he would buy a new pickup or tractor and then deduct investment credit and depreciation from his income. Still too high? Then he would buy next year's fertilizer or not sell part of this year's crop. He had an 8th grade education, but he was a smart guy.

There are many small business owners and investors who might report less than $80K in income, but can easily pay cash for a Rivian while pocketing a nice tax deduction to keep their AGI income low. [Clarification: Only small business owners who use the truck for their business can deduct.]

If I came across as telling people what to do regarding their investment strategy, I apologize. I thought these were good questions, and was just giving an example of how tax loss harvesting can work. I believe in using the strategy, but your mileage may vary.

 

[mkg3]

It's all time value of money and money is no longer free (in real rate term).

What does TVM (i.e., NPV and IRR) even mean in this discussion? If you're using short term T-Bill/Money Market annual yield of ~5% as a cost of capital, its nothing compared to either cost avoidance (i.e., loss harvesting) or FV of shares that are underwater currently.

I suppose if one is very risk averse, then Rivian is probably not a stock to be involved with. The upside of Rivian is much higher than 5% yield within this coming year. Of course there is a downside that says lot worse; hence, risk tolerance.

 

[mkg3]

In my opinion, tax law isn't fair to people who make the majority of their income as wages. My father was a farmer and he managed his affairs to always be in a low tax bracket. If a year was profitable, he would buy a new pickup or tractor and then deduct investment credit and depreciation from his income. Still too high? Then he would buy next year's fertilizer or not sell part of this year's crop. He had an 8th grade education, but he was a smart guy.

There are many small business owners and investors who might report less than $80K in income, but can easily pay cash for a Rivian while pocketing a nice tax deduction to keep their AGI income low. [Clarification: Only small business owners who use the truck for their business can deduct.]

If I came across as telling people what to do regarding their investment strategy, I apologize. I thought these were good questions, and was just giving an example of how tax loss harvesting can work. I believe in using the strategy, but your mileage may vary.

As you point out, there are always exceptions and I should not make a generalized statements. Of course there are people that can afford it and make sense to buy Rivian with little to no earned income on paper.

My point was just for ordinary couple filing jointly, since the numbers being thrown out were for that particular case. Vast majority of people around the $83K AGI filing jointly are working employees and not business owners, I believe.

 

[Redline]

Tons of July $17.5 calls being bought....almost as if some news is coming...

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