Friday File: Tax Loss Season Begins, a Look at Toast, and more…

Gold vs. Cryptos, 100 Baggers, and some updates from the Real Money Portfolio

By Travis Johnson, Stock Gumshoe, October 1, 2021

Today we’re starting with a little update on the portfolio, and that’s going to give me a chance to follow up on some reader questions about gold and cryptocurrencies. Then we’ll move on to Toast (TOST), a company I like but a stock that I can’t justify yet, a bunch of other minor updates on our Real Money Portfolio companies, and if you’ve signed up for the extra credit assignments, a little homework.

As we close out the third quarter and look toward the end of the year, I’ve got a little shuffling to do to take advantage of tax laws. I am taking tax losses in two smaller gold royalty companies, Triple Flag (TFPM.TO) and Nomad Royalty (NSR and NSR.WT.TO warrants), both of which have dropped considerably this year as gold has fallen.

This is not an assessment of the prospects for those particular stocks in the next few months, but realized losses in my taxable accounts are valuable to me and I typically go through and book some of those losses each year — and, at the same time, look for possible bargains late in the year, as other investors begin to harvest taxable losses in November and December. Sometimes, stocks that I really like for the long term but which are having a bad year can dive into a bit of a downward spiral with tax loss selling, and it’s good to be ready for that. Not much has done terribly this year, of course, unless you did all your buying at the February peak for some of the more speculative names, but there could well be some SPAC survivors that fall too far, and at this point both the gold mining and crypto mining plays are candidates for tax loss selling (or possibly buying, if that selling is overdone in November and December).

The prices of those two stocks I just sold will very likely be driven more by gold prices than by anything those companies do. And this is not a bet against gold, specifically, I actually don’t want to dramatically reduce my gold exposure, so I’m moving most of that capital from these sales into Royal Gold (RGLD) shares. After my wash sale period has expired in early November, I’ll look at Nomad and Triple Flag again, assess their prospects, and see if I want to re-enter those positions ...

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