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Topics - Orca

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Shares / Readjusting portfolio.
« on: April 03, 2019, 10:07:44 pm »
With the ALSI in an upturn since the start of the year at long last it may be time to readjust one's portfolio.

I have neglected doing research over the past 5 years and just let my stocks slide so I must do something to keep a roof over my head.

STXIND has revived after a long slumber. We all must recall that she was the best performing ETF for many, many years doing a consistent 30%+ pa. Seems she will or is determined to get her status back and doing fine as of late. My first stable pick.

CML my old favourite stock for years and without her I would never have been able to retire early has at long last also revived. For the past 2 months she has once again been obeying the Bollinger Bands and the 20 SMA as she did for many years.
The performance of the ALSI has aided in this and if it continues for another month then CML will once again be as predictable as she always was. At this stage she has pushed above the upper BB and needs to get back to the 20 SMA.

These are my 2 picks and will wait for some retractment before buying.

Shares / Tax dilemma with foreign investments.
« on: May 28, 2018, 06:34:01 pm »
I have posted about this some years ago but as more investors have gone into foreign markets I will bring it up again.

According to SARS, if you exchanged Rands to USD and invested in any foreign market then all your calculations must be in USD. Your gain or loss must however be converted to Rands only AFTER the calculation.

This can make a huge difference so be careful. Here is an example and please correct me if I had a brain fart.

If the FX rate was R16 and you bought R160k worth of ACME shares then you will have $10k worth of shares.
Now 3 years later you sell when the share has increased in value to $10 300. but the Rand has strengthened to R12. Then;

Calculation 1. (As required by SARS)

Purchase Cost: $10 000.00
Proceeds:         $10 300.00
Gain:               $     300.00

Now you convert to Rand. $300 x 12 = R3 600.00
Your gain for SARS is R3 600.00.

Calculation 2. (your actual loss- yes - loss)

Purchase Cost ( in Rands): R160 000.00
Proceeds in Rands:            R123 600.00 (12 x 10 300 )
Loss:                                R 36 400.00

A huge difference as SARS does not allow currency movements in foreign investments.

Shares / Selling your shares after 3 years.
« on: February 12, 2018, 03:51:51 pm »
Listening to Simon Brown's podcast this morning tells me he has not heard of Section 9C of the Income Tax Act.
In short, a listener wrote to Just One Lap to say he sells his shares every 3 years to make use of the R40k exclusion amount and to readjust his base cost upward. This method will prevent him getting a huge tax bill when he retires.

Simon's argument was that SARS will eventually see this as tax evasion and tax it as revenue.
This is not so as the Section 9C was written in such a way to exclude "intention" that Section 8 allows. So holding on for the 3 year duration does not give you or the state the right to chose the gains as Capital or Revenue. It has to be seen as Capital only and taxed as CGT.

Shares / Preference Shares.
« on: November 27, 2017, 01:38:41 pm »
I should have invested all my money in this preference share 3 years ago and I would still have all my capital left. Instead I now have a drawdown of about 40%.
It pays out 12.5% pa monthly and the only tax you pay is Withholding tax on dividends and your capital is guaranteed for the 5 year investment period.

Shares / Calculating CGT on USA shares.
« on: August 17, 2017, 04:40:56 pm »
This sprung into my head today. When selling your US shares do you take exchange rate depreciation/appreciation into account or just use the gain in $ and multiply it by the bank rate on the day you sell?
It can vary by a huge amount.

Shares / Be careful of DTA wording if emigrating.
« on: August 14, 2017, 08:02:46 pm »
A Tax Lawyer sent me this as I was querying my Portugal tax that was supposed to be exempt. I did much research on this beforehand and it seems like estate agent websites and lawyers unscrupulously stated that Portugal is a tax haven and will not pay tax for 10 years. How wrong was I.

I am particularly talking about selling of shares as CGT here.

"It looks as though you just got confused by the wording of the DTA, namely by what "property" means. Colloquially, this word is often used as a substitute for real estate, but legally it means anything that is owned by a person or entity, and it is divided into two types: "real or immovable property" which is any interest in land, real estate, growing plants or the improvements on it, and "personal or movable property", which is everything else, such as securities, pieces of furniture, you name it. Since capital gains are generally made by reselling securities and not other items of movable property, the expression "movable property" is often replaced by the more common word "securities".

Article 13 (5) of the DTA is standard: Gains from the alienation of any property other than that referred to in the preceding paragraphs of this Article, shall be taxable only in the Contracting State of which the alienator is a resident. "Property" here means any type of property, whether immovable (real estate) or movable (securities, such as shares or bonds). Since the preceding paragraphs refer to immovable property (i.e. real estate), property "other than that" mentioned in this paragraph is movable property (securities). So this paragraph stipulates that securities capital gains may only be taxed by the country of residence of the taxpayer.

As I said in my previous email, "The problem is that both the OECD model convention and the vast majority of DTA's state the opposite, i.e. that capital gains on the disposal of securities may only be taxed by the country of residence of the beneficiary. As a result you may say that such capital gains will as a rule be taxed by Portugal in the hands of Portugal-resident taxpayers, whether or not they hold NHR status, at the optional rate of 28% (or at 35% if the source is a blacklisted tax haven) on the balance of gains less losses."
So I am afraid that by the looks of it you will have to pay a 12k tax bill on account of a confusion over the meaning of one word! "

No deductions allowed on CGT at all. No exempt amount either. So I will just have to pay it. At least it the fixed rate of 28% is much lower that the 43% odd I would have had to pay in SA.

Looking at relocating to lower CGT countries now.

Belgium 0%

Croatia 12%

Isle of Man 0%

Poland 19%

Spain 23%

UK 11,100 annual exemption

Shares / "Rights Issue" and tax?
« on: July 26, 2017, 11:05:11 am »
My IRP3b shows the shares I received for a rights Issue under "Corporate Action" and not under "Purchases". How is this treated by SARS? I cannot find anything on this.

Shares / The Rand.
« on: June 28, 2017, 11:26:59 pm »
I have always been positive on the ZAR strengh and will continue to do so. There is always doom and gloom with politic interference but so far the zar has done fine despite this interference. I may on the long term be wrong but who knows? Scroll to the right.

Shares / Wanna make money? Buy CIL.
« on: December 07, 2016, 11:03:43 pm »
Not yet in the cross hairs of institutional investors but will shoot the lights out when they do. 

Shares / How is your portfolio doing?
« on: October 21, 2016, 09:53:17 pm »
Not sure if this will take off but I will start. This is not the Challenge but your real portfolio.
Today up 0,93%

Shares / SAB exit and ETF's.
« on: September 29, 2016, 11:25:30 am »
It will be interesting to see how the TOPI and related ETF's will behave as from tomorrow. It will now be replaced by Impala Platinum that is a fraction of the weighting SAB had.

Off topic / 2016 elections.
« on: August 04, 2016, 09:08:34 pm »
The 2016 polls show that the DA can no longer be called the "white madam's" party and Mymoney who is black and married to a white, can no longer be seen as a puppet for the whites.

A mere 8% of SA's population is white and 8% is coloured. The sheer number of voters that voted for the DA is proof that the DA is no longer a "whites only" party and can no longer be accused by the ANC of being this.
This only proves that many blacks that did not grow up during the apartheid era and are now becoming educated and can see through the ANC and their corruption and self enrichment and are now in the DA camp.

History has shown that ruling parties in Africa always start in urban areas and with time diminish to rural areas where the unfortunate unschooled live. Their strongholds diminish to rural areas and then disappear.
Zim is a good example where his war veterans in the cities are now rebelling against Rob as he retreats to the rural areas. 
This is now happening in SA.

Shares / Cuba embraces US and now the EU.
« on: February 02, 2016, 12:57:48 am »
Cuba, a country with outdated cars and technology has now been accepted into the new world with the EU lifting sanctions and embracing it into it's fold.
A much sought after holiday destination that was denied to many outsiders has now been declared open.
This can only mean growth for the country equal to Dubai.
Investing in Cuba in this market turmoil can be the only way to fortune.
Now to find out what to invest in.

« on: December 10, 2015, 08:01:08 pm »
Today the STXIND was up by 1.6% while the DIVTRX was down by 4.7%.
Some may think why this happened as the two have been following each other trend wise with the DIVTRX doing somewhat better over the past year and a half and now the sudden downfall of the DIVTRX.

The 2 ETF's hold different stocks in their portfolios. The STXIND is only in industrial stocks while the DIVTRX is not. The INDI is overweight in SAB and NPN while the DIVTRX is overweight in Banks and Financial Services, the hardest hit sector today.

The industrial sector will never go out of favour as it is the heart of any country's growth. Charts have confirmed this.

I am now doubting if I made the right decision to put half my money into DIVTRX and nothing into STXIND.

The Investor Challenge / Taking gambles peeves me off.
« on: November 06, 2015, 11:54:38 pm »
I wonder how many contestants in the competition would actually buy the stocks for real.
I do as I am managing other peoples money. Taking a gamble will send you either to the top or the bottom. But as I said, it is a gamble for shear desperation of winning the competition and no consideration of money management for clients.
Perhaps I got it wrong and misread the whole intention as stated.


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