RE: Extropy Investing Group

Ramez Naam (ramezn@EXCHANGE.MICROSOFT.com)
Sun, 12 Oct 1997 12:39:05 -0700


> 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?=A0 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.=A0 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.=A0 Why?=A0 Because stocks in a nascent,
high-growth industry are growth stocks.=A0 Thus your return on =
investment
is in the form of higher stock prices.=A0 Stock price gain is taxed as
capital gains rather than income.=A0 Capital gains tax is only due when
you sell the stock.=A0 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=20