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The book actually covers this. What they did is somewhat complex and involved obtaining leverage as much as the tax savings but basically they turned short-term
by hogFeast 7y ago
The book actually covers this. What they did is somewhat complex and involved obtaining leverage as much as the tax savings but basically they turned short-term capital gains into long-term gains. That saved something like $7bn, iirc, out of the $100bn in net profit they have generated...so it is not significant.
- vostok 7y ago> What they did is somewhat complex and involved obtaining leverage as much as the tax savings but basically they turned short-term capital gains into long-term gains. That sounds like misdirection. It's very common for hedge funds to use tons of leverage. It's not like getting this level of leverage is an unsolved problem. On the other hand reducing your tax rate from 37% to 20% increases your returns by 27%. Even that would be valuable, but the real number is probably even more than 27%.