Price today on close, page-180

Agree with you that long term holding of good trades is generally a good strategy.

However, the calculations you have mentioned are quite wrong. I thought I'll let it go but when I saw so many people relying on those calculations, it won't be fair for them to live with misunderstanding. 

Other than the saving of CGT discount for stocks held for more than 1 year, it doesn't cost a single cent more, no matter how many times you sell and buy at the same price. If you sell and buy 2% cheaper(due to 2% fall), you have 2% more profit(minus 20% CGT on that 2%). Only extra cost is the transaction cost(trading fee) which is generally around 0.1% 

To keep it simple, I'll use a full tax rate as 40% and if you keep the stock for more than 1 year, tax rate as 20%

Bought a stock at $2, deployed capital:  $2

Scenario 1:  Sold after 2 years at $22
Profit:  $20
Tax at 20%:  $4 
Total profit:  selling price($22) minus deployed capital($2) minus tax($4) :  $16

Scenario 2: Sold after 1 year, bought at the same price as selling price and sold again after another 1 year: 
Sold after 1 year at $12.
Profit: selling price($12) minus deployed capital($2) minus tax($2) :  $8
In hand:  $8
Now let's buy back at the same price as sold i.e. $12, we need to add $4
So, deployed capital:  $4 at this point
Sold again after another year at $22  (profit made $10 as $22 minus $12)
Total profit:  selling price($22) minus deployed capital($4) minus tax($2):  $16

Scenario 3: Stock sold at $12 but bought back at $10.
Sold after 1 year at $12.
Profit: selling price($12) minus deployed capital($2) minus tax($2) :  $8
In hand:  $8
Now let's buy back when stock has retraced back to $10, we need to add $2 to in hand money
So, deployed capital:  $2 at this point
Sold again after another year at $22  (profit made $12 as $22 minus $10)
Total profit:  selling price($22) minus deployed capital($2) minus tax($2.40):  $17.60

Scenario 3 profit is more than scenario 2.
Bottomline is that if you buy back a stock at 20% retrace, you just pay the CGT on that retraced value and rest of the profit. 

Same formula applies if you sell the stock and re-buy in less than a year.

Cheers