Investing General Discussion

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Creslin

Trakanon Raider
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Furry said:
China doesn't care about pelosi, that's not the point. Taiwan is what they'll invade, and the preparation they'd need would be massive, so We'd know in short order if they plan to invade within 1-2 months.
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Markets are so retarded, did anyone actually think the invasion would start like the second the plane landed?
 
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Sanrith Descartes

Sanrith Descartes

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PLTR over $11

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Sanrith Descartes

Sanrith Descartes

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Gravel said:
It's funny, a week ago I was thinking to myself that I'd sell once it hit $10 again since it kept hitting it and dropping back down. For some reason I decided against it.

Granted, I'm still massively red on it.
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I nearly did the same with SPIR when it breached $2 last month. With my previous profits in it i was close to even. I held it because i love the model and sector. Its tough sometimes holding stuff that may need a 5+ year horizon. PLTT and SPIR are my two stocks like that.
 
Aldarion

Aldarion

Egg Nazi
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Question about trading interfaces. I'm on Fidelity but this may be a more general issue.

TLDR: Why is the calculation of cost basis all fucked up when you buy shares over multiple days?

Say I buy 100 shares at $100, then a week later buy another 100 shares at $50. My real cost basis is now $75, and Fidelity shows my cost basis as $75. All good.

Then later I sell 100 of the shares. By default of course it sells the first lot (this setting can be changed - this isnt my question). No problem.

But now it shows my cost basis is $50. This is complete bullshit; shares are fungible. The instant I bought that second lot of shares the true cost basis for all my shares became $75.

Worse, it carries this error through to profit/loss calculations. Lets imagine the stock is now selling at $55. Fidelity would now tell me my investment is in the green.

Is there a way to turn off this error? Or if this is a school of thought thing, and some people prefer to think about it the way Fidelity does, does anyone know what setting to change to make it report cost basis correctly (as I've described it here)?
 
Jysin

Jysin

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Because your lots are priced individually (tax / accounting reasons).

First lot
100 shares at $100

Second lot
100 shares at $50

Currently own 200 shares with an averaged cost basis of $75.

You then go an sell that first lot. Your profit / loss for the sale of those 100 shares are based at the $100 price paid on that lot. Then you are only left with the second lot of 100 shares at a cost basis of $50.
 
Sanrith Descartes

Sanrith Descartes

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Jysin said:
Because your lots are priced individually (tax / accounting reasons).

First lot
100 shares at $100

Second lot
100 shares at $50

Currently own 200 shares with an averaged cost basis of $75.

You then go an sell that first lot. Your profit / loss for the sale of those 100 shares are based at the $100 price paid on that lot. Then you are only left with the second lot of 100 shares at a cost basis of $50.
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This Up Here GIF by Chord Overstreet
 
Aldarion

Aldarion

Egg Nazi
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Jysin said:
Because your lots are priced individually (tax / accounting reasons).

First lot
100 shares at $100

Second lot
100 shares at $50

Currently own 200 shares with an averaged cost basis of $75.

You then go an sell that first lot. Your profit / loss for the sale of those 100 shares are based at the $100 price paid on that lot. Then you are only left with the second lot of 100 shares at a cost basis of $50.
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Of course, I guess I was unclear in my post. I understand that the different lots were bought at different prices.

The question is how to turn that nonsense off for cost basis and profit calculations.

Whether one prefers to track cost basis that way or not (I think it is absolutely nuts but customizable interfaces are a good thing), there is an objective error in how its reported now in terms of profit/loss. I would rather the profit loss was accurate, currently it is not. The true profit loss is based on a cost basis of $75 in my example, everything else is an accounting fiction. Right now, as it stands, Fidelity would say "this is green, you can sell it at a profit" which would be false.

If the answer is, there is no way to turn that off, then OK. Just curious if there was a setting I was missing.

Obviously this stuff can be tracked with spreadsheets etc. instead but I was hoping to fx it in the interface itself.
 
Sanrith Descartes

Sanrith Descartes

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Aldarion said:
Of course, I guess I was unclear in my post. I understand that the different lots were bought at different prices.

The question is how to turn that nonsense off.

Whether one prefers to track it that way or not (I think it is absolutely nuts but customizable interfaces are a good thing), there is an objective error in how its reported now in terms of profit/loss. I would rather the profit loss was accurate, currently it is not. The true profit loss is based on a cost basis of $75 in my example, everything else is an accounting fiction.

If the answer is, there is no way to turn that off, then OK. Just curious if there was a setting I was missing.

Obviously this stuff can be tracked with spreadsheets etc. instead but I was hoping to fx it in the interface itself.
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You could have manually sold half of each lot and your problem is resolved.
 
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