Core Viewpoint - The article discusses a tax strategy for investors to manage their tax liabilities by doubling down on high-conviction stocks that have declined in value, allowing them to reset their cost basis and potentially reduce future tax burdens [2][4][5]. Group 1: Tax Management Strategy - Proactive tax management can significantly reduce the amount paid to the U.S. government, thereby increasing retained wealth [3]. - The strategy involves identifying underperforming stocks, purchasing additional shares, and holding both positions for 31 days to avoid the wash-sale rule [4][6]. - After 31 days, the original shares can be sold to realize a tax loss, while the cost basis is reset to the new purchase price [5][9]. Group 2: Application to Chipotle - Chipotle recently approved a $500 million stock buyback, but concerns about weak earnings and high valuations persist among investors [2][9]. - The stock has fluctuated between $38.30 and $66.74 over the past year, recently trading around $32 after a significant drop [9]. - Investors looking to reset their cost basis could consider buying a December $36 call option expiring in 2026, allowing them to potentially record a tax loss after 31 days [9][10]. Group 3: Risks and Considerations - The double-down strategy is best suited for high-conviction stocks that have faced temporary setbacks [7]. - Call options can be used as a lower-risk alternative to directly purchasing additional shares, although they do not provide dividends [8][10]. - If the stock does not recover and remains below the call strike price, the investment in the call option could be lost, but the financial risk is lower compared to buying shares directly [10].