Medicago Inc MDCGF

TAX LOSS SELLING vs. SANTA CLAUS RALLY

[diadon1945]

There should be no tax loss selling of MDG in December. Most investors in MDG have made very nice gains. However those selling other stocks as tax losses want to put their money into a stock that will likely make gains early in the New Year. MDG might benefit from people moving their money from selling tax losses into a stock which likely have very good news in the week of December 21!

This means that MDG could very well benefit from BOTH tax loss selling of other stocks AND a Santa Claus Rally. What is a Santa Claus Rally? Here is what one commentator says...

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As the name suggests, a Santa Claus Rally is when the stock market indices move higher. In fact, according to The Almanac Investor, the S&P 500 has averaged a 1.6 percent gain during this period since 1969. (The time period associated with the Santa Claus Rally is the last five trading days of December and the first two trading days of January.)

Of course, the time period associated with the Santa Claus Rally does not always see a rally in the stock market, and many investors believe these years are particularly ominous. In fact, many investors believe the years following the years in which there is no Santa Claus Rally are most likely going to be bearish years.

The Almanac Investor has a great little saying for this: "If Santa Claus should fail to call; bears may come to Broad & Wall."

What Causes the Santa Claus Rally?

Nobody really knows what causes the Santa Claus Rally. However, some of the following popular beliefs explaining why the stock market goes up seem to make their rounds each year:

• Investors are more optimistic around Christmas
• People are investing their Christmas bonuses
• Investment managers are trying to lock in tax reductions by selling some stocks and buying others
• All the market bears are on vacation

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 If MDG BENEFITS from both the tax loss selling season and the possible Santa Claus Rally AND the normal increase in share price in anticipation of the release of Phase I data...there could be a very nice increase in share price in December and January. Remember that good Phase I data will be followed by the announcement of regional partnerships and plant construction  and Phase II trials.
 
And with a major partner already owning a very high proportion of this company...when will they make a buy-out offer?