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Don't ignore luck

Sometimes, we make money simply because of luck. Failing to appreciate this can be an expensive mistake.
Don't ignore luck

A few weeks ago, a friend thought about dumping his Ashtead shares but instead sold only a few because to have sold the lot would have incurred a capital gains tax liability. “If I’d held them in an Isa I’d have dumped them all” he says.

Strictly speaking, this was silly (as he knows). Ashtead shares will rise or fall regardless of your tax position, and it’s better to have a taxable gain than a loss, so your tax position shouldn’t determine your stock-picking decisions.

And yet my friend’s decision made him money: his remaining Ashtead shares have risen 20 per cent since then.

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