Standing Ovations Lead to Encores At first glance bands and brands may seem worlds apart, but after close consideration it’s clear that they differ by little more than a letter. Both strive to create fans, going beyond what it takes to capture customer attention and delving into the realm of loyalty. Brands that maintain top shelf positioning in consumer’s minds and win market share and wallet share connect with people at a much deeper level than their competitors.

So next time the Rolling Stones, KISS, Elton John, Aerosmith, Madonna, Neil Diamond, or any other legendary band invades your town, go to the concert. Experience firsthand the emotions you and the thousands of people around you feel, and think about how to capture some of that in your brand, whether that brand is a product or yourself. These bands prove that forging emotional connections with fans and fortifying them over time leads to long term revenue streams. That requires getting under their skin, into their souls, and connecting to something even fans have a difficult time describing.

But they feel it; they know it’s there.

It’s what happens when girlfriends get together and dance around to “Holiday” by Madonna. Or when guys get together and play air guitar to AC/DC’s “You Shook Me All Night Long.” The emotions are different, the intensity the same. The combination of emotion and intensity creates within people a devotion to the music they love and the bands that create it. It’s what keeps classic rockers performing night after night, city after city. It’s what keeps people buying new releases of old favorites. It’s what brings audiences to their feet, screaming for another encore when the band has already played three.

Although Graham teaches that you should buy when Mr. Market is yelling “sell,” there’s one exception the intelligent investor needs to understand. Selling into a bear market can make sense if it creates a tax windfall. The U.S. Internal Revenue Code allows you to use your realized losses (any declines in value that you lock in by selling your shares) to offset up to $3,000 in ordinary income.12 Let’s say you bought 200 shares of Coca-Cola stock in January 2000 for $60 a share—a total investment of $12,000. By year-end 2002, the stock was down to $44 a share, or $8,800 for your lot—a loss of $3,200. You could have done what most people do—either whine about your loss, or sweep it under the rug and pretend it never happened. Or you could have taken control. Before 2002 ended, you could have sold all your Coke shares, locking in the $3,200 loss. Then, after waiting 31 days to comply with IRS rules, you would buy 200 shares of Coke all over again. The result: You would be able to reduce your taxable income by $3,000 in 2002, and you could use the remaining $200 loss to offset your income in 2003. And better yet, you would still own a company whose future you believe in—but now you would own it for almost one-third less than you paid the first time.13 With Uncle Sam subsidizing your losses, it can make sense to sell and lock in a loss. If Uncle Sam wants to make Mr. Market look logical by comparison, who are we to complain?