Tax loss Season

I buy stocks that are collapsing because of tax loss selling

[Tax loss Season @TaxlossSeason]

Alnylam, $ALNY: down 60.65% this year, through Monday. $156.47.

The worst performer this year among stocks worth more than $20 billion, per StatMuse.

Two days did most of the damage:
July 30: down 28.3%, after its heart drug Amvuttra missed estimates and it cut its outlook.
October 29: down 25.1%.

What's left:
Third-quarter product revenue: $1.29 billion, up 52%.
Amvuttra alone: $1.13 billion, up 65%.
Cash and securities: $3.59 billion.

Watch the headline profit. Of the $2.17 billion it reported last quarter, $1.87 billion was a one-time, non-cash tax benefit.

A drug growing 65%, priced like something broke. Worth owning in January?

[Tax loss Season @TaxlossSeason]

ServiceNow, $NOW: down 33.39% this year, through Friday. $101.97.

It makes software that big companies use to run their IT, HR and customer service. Founded in 2004. Based in Santa Clara, California.

The day it broke: October 29. Down 26.95% in one session, from $150.13 to $109.67.

The quarter wasn't bad. Revenue: $4.106 billion, up 20.5%. Earnings missed by 2 to 3 cents. The outlook for one key growth number came in at 18.5%, vs. 19% expected.

Half a point of guidance took a quarter of the stock price.

Worth owning in January?

[Tax loss Season @TaxlossSeason]

The tax-loss deadline, in plain English:

Your sale has to happen by December 31 to count for 2026.

The IRS goes by the trade date, not the settlement date. Sell on December 31, and it counts for 2026 even though it settles in January.

December 31 is a Thursday, and it's a full trading day.

Watch the short days: the market closes at 1 p.m. Eastern on November 27 and December 24.

And it's closed November 26 and December 25.

Don't wait for the last afternoon of the year to find out your broker is on hold.

[Tax loss Season @TaxlossSeason]

Figma, $FIG, beat its own forecast by $16.4 million on Wednesday.

Third-quarter revenue: $391.4 million, up 43%.
Customers who stay spend 31% more than a year ago.
Cash: $1.7 billion.
It raised its full-year forecast by $33 million.

The stock: $18.44 at Thursday's close. Down 51.5% this year.

The problem is the next number. Its fourth-quarter forecast is $402 million to $404 million. Only about 3% more than this quarter.

When a growth stock slows down, the price falls faster than the growth.

Is a 43% grower at half price a tax-loss sale or a January buy?

[Tax loss Season @TaxlossSeason]

Tax-loss horoscope for November:

Aries: you will sell a loser, then buy it back in 29 days.

Taurus: you will refuse to sell anything because it "might come back."

Gemini: you will harvest a loss and immediately feel like a farmer.

Cancer: your stock will rise 4% the day after you sell it.

Leo: you will explain the wash sale rule at dinner. Everyone will leave.

Virgo: you will sell nothing and blame the market.

[Tax loss Season @TaxlossSeason]

Trimble, $TRMB, fell 17.3% on Wednesday.

It closed at $54.25, down 31.2% this year.

What happened: nothing bad, exactly.

Revenue: $966.8 million, up 7%. Wall Street expected $966.5 million.
Earnings per share: 86 cents. Expected: 86 cents.
Recurring revenue: $2.56 billion, up 11%.

What changed: operating margin slipped to 14.7% from 16.7%, and fourth-quarter guidance only matched what Wall Street already expected.

In line everywhere, and it still lost a sixth of its value in a day.

Worth owning in January? It's a business that still grew 11% in recurring revenue. The question is how many sellers are left.

[Tax loss Season @TaxlossSeason]

Tax-loss earnings calendar, this week:

Wednesday, before the open: Insulet $PODD, down 47% this year.

Thursday, after the close: Wynn Resorts $WYNN, down 38%. Kratos $KTOS, down 47%.

Friday, before the open (expected): Charter $CHTR, down 47%.

All four are down between 37% and 48% this year. One good quarter can change a December. One bad one can make it worse.

[Tax loss Season @TaxlossSeason]

Rules I live by in December:

1. Don't buy a mutual fund right before its year-end distribution. American Funds estimates Growth Fund of America's at December 16.

2. Wait at least 31 days before buying back what you sold at a loss. The wash sale rule covers 30 days before and after the sale.

3. Use losses against gains first. Only $3,000 of extra losses comes off your income each year.

4. The market closes at 1 p.m. Eastern on Christmas Eve. Don't plan your selling for that afternoon.

5. Don't wait for December 31. Everyone else is waiting for December 31.

[Tax loss Season @TaxlossSeason]

Lawyer: "DraftKings, where were you on February 13?"

DraftKings: "Down 14%. My 2026 revenue guidance came in under expectations."

Lawyer: "And since?"

DraftKings: "Down 39.32% this year. $20.91 at Friday's close."

Lawyer: "Was anyone else involved?"

DraftKings: "Prediction markets. Bank of America found 9.5% of my users also used Kalshi in June, up from 4% in January."

Lawyer: "Anything in your defense?"

DraftKings: "About 12 times forward earnings. Earnings on Thursday."

Lawyer: "The jury will return in January."

[Tax loss Season @TaxlossSeason]

The other side of tax-loss season: tax-gain harvesting.

In 2026 a single filer pays 0% on long-term capital gains with taxable income up to $49,450. Married filing jointly: up to $98,900.

If your income is under the line, you can sell a winner, owe nothing on the gain, and buy it right back at a higher cost basis.

The wash sale rule only applies to losses.

[Tax loss Season @TaxlossSeason]

Fair Isaac $FICO: down 57.9% this year through Friday. $711.23.

Its 52-week high was $1,858.91.

What happened: on September 29 it fell more than 25% after FHFA Director Bill Pulte said Fannie Mae and Freddie Mac would merge their pricing grids into one, with VantageScore listed next to FICO. In October it cut 15% of its workforce, and Wells Fargo downgraded it.

What's left: $2.39 billion in revenue over the last year, up 24.1%. About 15 times next year's expected earnings as of last week, per Stockanalysis.

Earnings Wednesday.

Is the credit score company worth owning in January?

[Tax loss Season @TaxlossSeason]

Why Halloween matters to mutual funds:

Funds have to pay out 98.2% of their capital gains for the year ending October 31. Miss it and they owe a 4% excise tax on the shortfall.

So October is when funds dump losers and tidy up the books.

Starting tomorrow, the selling is mostly us. Regular people, sitting on red numbers, getting ready for December.

[Tax loss Season @TaxlossSeason]

"The miss is on us."

That's the CEO of Fidelity National Information Services after cutting guidance in August.

The stock is down 42.1% this year, through Thursday. It now trades at about 6.5 times forward earnings.

An honest CEO at a single-digit multiple. Worth owning in January?

[Tax loss Season @TaxlossSeason]

Check out my website if you want to find good tax loss companies
https://t.co/RazV3PQFWU

[Tax loss Season @TaxlossSeason]

My uncle buys the ten worst stocks in the S&P 500 every January.

He doesn't read 10-Ks. He reads the "worst stocks of the year" list, prints it, and tapes it to the fridge.

My aunt calls it "the loser list."

He calls it "the list of stocks somebody had to sell."

He's been doing it since 2003. He won't tell me his returns. He did buy a boat.

[Tax loss Season @TaxlossSeason]

The worst stock in the S&P 500 this year is AppLovin. Down 62.2%.

In its last reported quarter, revenue grew 53%.

It made $863 million of free cash flow in that one quarter.

The worst stock of the year isn't always the worst business. Sometimes it's just the most crowded exit.

[Tax loss Season @TaxlossSeason]

What a $10,000 tax loss is worth:

Against short-term gains in the 24% bracket: $2,400 off your tax bill.

Against long-term gains at 15%: $1,500.

With no gains at all: $3,000 a year against ordinary income, and the rest carries forward.

Same loss. Very different value. That's why the timing of the sale matters.

[Tax loss Season @TaxlossSeason]

Two trading days left for mutual funds with October 31 fiscal year-ends.

Today and Friday.

October 31 is a Saturday. After Friday's close, whatever losers are still in the portfolio go on the annual report.

If a beaten-down stock you own drops today or tomorrow for no new reason, check whether funds own a lot of it.

[Tax loss Season @TaxlossSeason]

You: buying the Anthropic IPO at a $1.8 trillion valuation, 55x first-half revenue annualized.

Me: buying the stocks fund managers are dumping this week because they don't want them on the October 31 report.

We are not the same.

[Tax loss Season @TaxlossSeason]

Reddit $RDDT down about 40%.

Nike $NKE down about 39%.

Oracle $ORCL down about 35%.

A social network, a sneaker brand and a cloud company, all on the tax-loss list.

Which one should I dig into first?