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COPYRIGHT 2004 FDCH e-media
Original Source: THE MONEY GANG
ALI VELSHI, CNNfn ANCHOR, THE MONEY GANG: Time now for more "Talking Stocks" on THE MONEY GANG with Eugene Profit of Profit Funds. He`s in Washington.
Eugene, we were just talking in the break more about this whole situation, because really, every day, someone is calling about MGM [Company: Metro- Goldwyn-Mayer Inc.; Ticker: MGM; URL: http://www.mgm.com/] .
PAT KIERNAN, CNNfn ANCHOR, THE MONEY GANG: MGM.
VELSHI: Because that`s a big one-time dividend on a stock, and we`re just wondering what all the angles are. What have you got?
EUGENE PROFIT, PRESIDENT, PROFIT FUNDS: Well, Ford Motor [Company: Ford Motor Company ; Ticker: F ; URL: http://www.ford.com/] did this a couple of years ago where they had a big cash distribution. And to some extent, it really qualifies as a return of capital. And I`m not going to give you tax advice, so don`t take it as that, but it certainly would not be considered a loss.
If someone is looking and saying, well, my stock price is $20 and it`s going to be $12, your cost-basis in your security is actually going to adjust as a result of the distribution.
So really, there`s no real angle to play in whether or not this dividend distribution would be effective in your portfolio one way or the other. I guess, if you wanted some liquidity in your portfolio, you could look at it as perhaps you were save in...
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