Broker Check


                                                                                                 May 30, 2004

Philip A. Fisher


            The last great Wall Street sage who experienced the 1929 crash died on March 11, 2004.  His career spanned 74 years and his first book, Common Stocks and Uncommon Profits appeared in 1958 and was the first investment book to make the New York Times bestseller list.

            For decades, big names in investing claimed him as a mentor, role model or inspiration.  His views created the passive long-term growth stock school of investing.  He advised investors to always think long term and to have a low turnover of a portfolio.  Buy what you understand (Peter Lynch) and not too many stocks (Warren Buffet).

            He advised that technology offers society a bounty in the decades ahead that is vastly underestimated even by technologists.  Still, it is as powerful to invest in companies adopting technology as those creating it.

            What a legacy!! Forbes 4/26/04 p. 142


Health Club Exercise Costs May Be Deductible

            in limited situations according to the IRS.  Workers can have flexible spending accounts cover the cost of a health club membership only if they can prove that a doctor diagnosed a condition requiring exercise to be done at a gym.  They must also show the membership would not have been purchased otherwise.  Therefore, a renewal of a membership subsequent to a doctor’s prescription will not qualify.  But, additional fees paid for a prescribed exercise program can be reimbursed.

            The club dues are still not a deductible expense. Kiplinger Tax Letter 5/7/04


Boomers May Not Retire

as expected.  Baby boomers are generally healthier than members of any previous generation and able to withstand the rigors of work.  Moreover, many boomers want, and need, extra income to see them through their later years.  Possibly because of the amount of retirement savings they lost in 2001-2002.

While the press trumpets the unemployment rate and mass early retirements, companies such as American Express, Procter & Gamble, Eli Lilly and National Starch and Chemical Co. are looking into holding onto seasoned workers and looking to other phased retirement options, flexible schedule and new benefits, like elder care advice to cope with the fact that in the near future 75 million employees will be leaving the workforce.  This mass exodus of baby boomers, which is about to start, will leave gaping holes in institutional memory and experience.

In fact, the good news for boomers is there may be a war for baby boomer talent.  This is good for the wealth of baby boomers willing to keep working if the details of schedules and benefit plans can be negotiated.  Half of the baby boomers born between 1946 and 1964 expect to work beyond the traditional retirement age and 43% want to work part time according to research for Metropolitan Life Insurance Co. Crains 6/7/04 p. 20


No Theft Loss For Stock Decline

            due to a corporate scandal.  Some clients asked if a loss they suffered when corporations disclosed accounting irregularities or other misconduct was tax deductible.  Any loss is taken only in the year the shareholder sells the stock. IRS Notice 2004-27


Tenants in NYC Rent Controlled Apartments

            who have a regulated rent in excess of $2,000 per month are subject to deregulation when the tenant’s income exceeds $175,000 for each of the two preceding years.  A tenant had a ten room, 3 bath apartment on Park Avenue whose fair market value was $11,500 per month, but was only paying $3,950 per month.  The family income exceeded $175,000 for two consecutive years.  Realizing that, an amended tax return was filed showing a lesser amount.  The New York State Court of Appeals ruled that the housing agency, the DHCR, did not have to blindly accept an amended return showing less than $175,000. Classic Realty LLC v. New York State Division of Housing and Community Renewal, 2 N.Y.3d 142 3/30/04 

            Make sure you do not repeat that very expensive mistake, not using the services of a CPA to do tax  planning!           

            If you have any questions about the foregoing or any other financial matters, please call us.  If you want to read more, visit the AOHL Newsletter Archives at 

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