Month: August 2000

Steve Bujenovic: “What to do now. I bought 100 shares of a large funeral service company called Service Corp. (SRV) two years ago at $35/share and now the stock is $2.50. (How this company failed I still can not understand because the last I checked people are still dying in record numbers.) Question: Should I admit defeat, sell and collect my $250 or keep my pride and stick it out? (I try not to think about the $3200 already lost.)”

Knowing nothing about the company – but assuming you bought this stock in your own taxable account, not an IRA — I’ll tell you what I often do in situations like this. I’m not saying it’s smart, but it’s what I do. I’d buy another 100 shares, wait 31 days to satisfy the IRS’s “wash sale” rule, then sell the first 100 shares for a tax loss.

You will be left with a $3200 tax loss that could chop your tax bill several hundred dollars.

If SRV goes to zero, you’ve lost $3,500 instead of $3,200 – pretty much the same thing. But if it should gradually recover — and especially if you tucked away 200 or 300 shares as tax-selling later this year drove it down even further – then a few years from now, you might have recouped your loss.

Is this rational? Only slightly. But on the remote chance the stock does do well, you will not feel like killing yourself (and becoming an SRV customer) for having bought at the top and sold at the bottom.

An impish friend urges: “Proofread carefully to see if you any words out.”

Another friend mailed me an extraordinarily generous $20,000 contribution to the Democratic National Committee, but the Post Office decided not to deliver it because she had used a square envelope. It wasn’t a big envelope, but there was no denying it was a square envelope – five and three quarters inches on a side – and I guess the Post Office figures we all know there is an 11-cent “non-standard surcharge.” So after it came back to her for more postage and she phoned to tell me this, I walked down to get it. (For 33 cents the Post Office would have carried a rectangular envelope 8,500 miles to a rural hut up the side of a volcano on Maui, but to take this square envelope 1,000 yards, it insisted on an extra 11 cents.) When I got home, I noticed that she had written in the memo, “to Gore’s success.” This, of course, invalidates the check. (Party committees cannot accept checks that appear to be earmarked in any way for a specific race. Although we at the DNC are aware there is a Presidential campaign underway, and that many of our contributors have an interest in it, you can just imagine how our democracy could be subverted if a check with such a memo were deposited.) I am awaiting a replacement, and have asked the donor to check the dimensions of her envelope with the Postal Service first.

A Jewish friend writes: “Did you know that Bush recently proclaimed June 10th ‘Jesus Day’ in the State of Texas? It’s right there on the Texas web site. I think Jesus was a hugely great man; but what about the separation of church and state? I thought Christmas and Easter were already pretty good Jesus days.”