Subject: IC940729A: 30% tax, invest style, money market

From: "Gray Zhu, 800-289-2498, 212-279-6700" <[email-masked]>
Date: Fri, 29 Jul 94 19:23:21 CDT

==================   IC940729A: Investment Club  ======================

1. About the 30% tax withhold .......................... Ken Gu, Bob Ge
2. Investment style .................................... Jian Yuan 
3. What is short-term money market? .................... Gray Zhu
_______________________________________________________________________
   (be sure to read the Disclaimer in the end if you have not read)

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1. About the 30% tax withhold

>From: Gu Quanzhong - Chealth <[email-masked]>

It all depends if you file tax return in the US.  If you do, you can request
for exemption of that 30% withhold.  Ask for the exemption form from the
mutual fund family.  I never had any trouble when I was in F-1.  Good luck,
Ken

>From: [email-masked] (Xiaobin Bob Ge)

I'd invested in mutual fund for several year before I got my PR. I did not
heard the "30% withheld". At least Fidelity won't do that to their
investors. By the way, if you target at 12% upper solid return without much
risk, mutual fund may not be a good choice. Or at least not the only
choice. One thing people should always keep in mind before an investment
decision: term-yield-risk-amount. I don't surprise for your consideration
here since so far this club only encourage people to go for stock or mutual
fund.

I am high appreciate Gray's contribution to the Club to date, I hope
we can have more people to speak out and share their information and
knowledge about investment.

>From: Gray: You have to file W-8 correctly, call the funds and ask them
about the tax problem.

=============================================================
2. Investment style ... Jian Yuan

From: Yuan Jiang <[email-masked]>
Subject: Investment style

Sorry for not responding the questioning on my investment style soon.
Busy time comes again.

Yes, my investment style has the element of that of traders.  But if you
stick to the classical "investor style" of investing, it means investors
will alsway be bottom feeders.  Small investors are suppose to buy stocks
then profit from the future gains of the companies.  However, we all know
that the stock price =equity+future gain.  The future gain is already
discounted in the stock price.  You pay for the future gain in advance.  How
much gain you actually get in the future?

I'm not criticizing anyone's investment style.  It's a complicated market
and each one entitles their own.  I was just trying to share mine with
others.  The reason that my style resembles that of traders' has a lot to do
with the fact that I know a certain industry well, better than most of the
stock analysts.  I'm fully aware the drawbacks.  The tideousy mentioned last
time is one.  The other problem is that I get short term gain but loss long
term one.  For example, I first bought Texas Instruments at ~$33 (1990),
then sold them when it reached ~$40 a few months later.  If I had held on
them, them are ~$80.

1.5 year ago, my friend D-M Tang asked me how I felt about DEC.  I told him
that DEC could be the second Wang -- going bankruptcy because it did not
have good products.  Most of the analysts thought the problem was that DEC
had good technologies but lossy marketing.  Now we know how much has
improved since the marketing guy was picked to be the CEO.  We see too much
wasteful money spent on marketing but not enough on technologies.

My current stock picks are Apple Computer and Pinnacle Microsystems.  I
bought them 2-3 months ago at $30 and ~$15 respectively.  I wanted to buy
more Apple during the past market low (at $25-26) when Gray suggested "buy".
I did not have the time to do my homeworks.  Now Apple is back up again.

Good luck,
Yuan

=================================================================
3. What is short-term money market?

>From: [email-masked]
>What do you mean by short-term money market? Is that simply equivalent to CD?
>If not, how can I find out info on how to invest in short-term money market?

Gray: Money market instruments are debt securities with 1 year or less
until maturity: (They are all defined on the Wall Street Journal)

Treasury Bill: a kind of Gov't Bonds
Jumbo CD: $100,000 demomination
Commercial papers: corporate short term debt, maximum maturity 270 days.  
Banker's acceptances: Discounted time draft - payable at specific time in
	the future.
Federal Funds: Excess reserves or useable funds loaned overnight among
	commercial bank
Repurchase Agreement(Repo): Securities sold (pledged as collateral) to 
	raise temporary capitcal, to be bought back at same price plus 
	interest.
..

By putting money into money market, you are putting into money market mutual
funds. Because of short-term and some of the securities are secured, it is
low risk and of course low return - similar to or slightly higher than one
year CD. Banks, Mutual Fund Companies, and Brokerage firms offer money
market accounts - you can put cash into the accounts, call them for
details. With a mutual fund company, you can switch your money between a
normal growth or income fund and money market fund. But, there maybe
restrictions to the B share (back-load). With a brokerage firm, when you
sell your stocks or funds, the money can be sweeped automatically to money
market.

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