why wouldnt i, page-7

To trade or invest is a very perplexing question for many and I guess it comes down to the individual's choice and methodology of accumulating wealth. Me personally as far as UMC is concerned I see myself as a long term investor. I have in the past, present and will in the future trade certain stocks but I see UMC as a keeper for some time yet. Regrettably back in February I incurred a taxation bill and I sold off some UMC to pay this, but in hindsight maybe I should have sold off some of my BHP instead. As Joel says hindsight is always a perfect science. I know many posters on this UMC forum and their investment strategy as far as UMC is concerned is aligned with mine.

I know Joel is an astute trader but he told me back in November that UMC is not one to trade but to hang onto for the long term. I thought I would just clarify that as there has been a contrary view expressed on this forum by another poster as regards to Joel's investment strategy in regard to UMC.

I originally got into UMC in Jan 2007 and have accumulated more bits and pieces along the way. Shortly after I got in the share price took a dive and I received one of the best pieces of advice I could have ever been given from Bungy and that was ---- DO NOT SELL ONE SHARE. I have maintained this strategy through thick and thin until I owed some money to Mr Swan in February but I will be once again applying this into the future with regard to UMC.

I am running two accounts with UMC, a SMSF account which only incurs a 15 percent tax on profits and also a private account which incurs a full marginal rate but about half the rate on investments held for more than twelve months. That is it in simple terms but Theincorporator could clarify it more precisely as he is an expert with regards to taxation.

The thing about trading UMC is that we do not really know what is around the corner. It appears the management have the intention of taking the company to producer status but who knows, everything is up for sale at a price. If you were to sell UMC stock on the next big move up and then try and get in again on the dip (if that is possible) then you would be resetting the capital gains tax clock back to zero once again thus forgoing the reduced rate of capital gains for another twelve months. If within that period a takeover did occur and we either received script or cash for our UMC shares you could be exposed in my view to your full marginal rate for your profits resulting from such a transaction. Also some maybe only sitting on small capital gains (on paper) at present but what if the share price suddenly shoots up to three dollars as did BRM on a JORC announcement.

I believe there are a few big players and instos who have UMC under the microscope at present and are looking for an opportunistic way in. There is not much liquidity in this stock for those big players except at announcement times so in my view they will be looking forward to all the fools buying on rumour and selling on fact with the view of picking up all their stock when they dump. If this occurs the UMC share price may well receive a re-rating and may continue to climb even further especially after a JORC announcement. I do not intend to be one of those day traders giving my valuable UMC shares to bargain hunting instos. Anyway that is my view and some of the reasons I have for my investment strategy in UMC.

And finally a message for long term investors ===> KEEP YOUR FINGER OFF THE SELL BUTTON.