While high tax Northern states are desperately attempting to find ways around new rules in the tax reform legislation passed at the end of 2017, the South is cheering them on. The problems stem from high state and local income and property taxes in the North that will no longer be fully deductible for federal tax purposes. Meanwhile, in the low tax South, those issues aren't a concern, and a lower federal corporate rate looks great to the states that have made themselves attractive to big employers with Right to Work laws and low state taxation. Cameron McWhirter and Arian Campo-Flores … [Read more...]
Archives for January 2018
Consumer Economy is Hot
Fourth Quarter GDP was released this morning and the first estimate came in short of 3%, but the details of the report were positive. Inventory drawdowns detracted three quarters of a point from GDP in the fourth quarter. Personal Spending rose at a 3.8 percent annual rate with durable goods soaring double digits. Look for upward revisions to fourth quarter GDP when new numbers are released next month and in March. The durable goods orders numbers that came out today also showed strength. This is a separate series from GDP. Durable goods orders were up 2.9% in December vs expectations of a … [Read more...]
It’s Only ‘Safety First’ That Will Make You Money: Part I
Originally posted February 28, 2017 on Yoursurvivalguy.com. Billionaire investor Warren Buffett, on the heels of releasing his annual report, said, Monday, that the stock market isn’t in a bubble and “measured against interest rates, stocks actually are on the cheap side compared to historic valuations.” In the same interview, he also warned “That doesn’t mean the stock market can’t go down 20% tomorrow.” A buying opportunity he’d welcome with open arms. It’s good to be Warren. It’s funny how life works because, coincidentally, later that day I was speaking with clients who live in the … [Read more...]
Dick Young’s Research Key: Anecdotal Evidence Gathering
Originally posted on September 5, 2017. After a nearly 40-year sabbatical, I am pleased to announce that a newly reconfigured Young’s World Money Forecast is set for its revival. Investors will have a cutting-edge, unique global investment tool that they can draw upon daily. If your life savings, your business pension fund, or your company IRA program is based on the historical research, writing and advice from Dick Young, you will be off and running with Young’s World Money Forecast (YWMF) back on your side. YWMF is aimed at investors like you who hold dividends, interest, and … [Read more...]
RIP Warren Miller
Legendary ski filmmaker Warren Miller died last night at his home on Orcas Island, WA. He was 93. He will be missed. When I was growing up in Mattapoisett, MA the closest mountains were around a four hour drive away. We would go skiing on long-weekends and most February vacations. I remember the ski trips in junior high with the ski club. It was my first taste of freedom. Before each season it was a big deal when a Warren Miller movie came to town. It was usually shown around October at our junior high school. I remember leaving the auditorium with my friends and how pumped up we … [Read more...]
Is there a Private Equity Bubble?
The FT points to conditions of froth in the private equity market. Is private equity in a bubble? It may be, but private equity isn’t the only equity market where bubble conditions are dominant. Check out the U.S. stock market for example. It is an indication of the feverish conditions in private equity that buyout groups are not only setting new records for fundraising, they are also turning money away at their fastest ever rate. CVC identified demand of €25bn-€30bn from investors while raising its new €16bn fund last year: more recently Bridgepoint, the private equity owner of Pret A … [Read more...]
A Difficult Phrase to Say: “Enough Already, I’m Retiring”
When a client of mine called it quits from a successful career working for start-up companies in California, he was young enough to keep working, but old enough to realize the cost was too high. He was stressed out, out of shape, out of the country at times, and plain old tired of the endless hours it takes to get a company off the ground. But not having something to do every day can be terrifying and not having a steady paycheck even more so. Sometimes it’s hard to say, “enough already, I’m retiring.” But he did it. He retired. We talked about part-time work and nothing came of … [Read more...]
Main Street Comes Alive, Demands Lending after Tax Cuts
Regional banks are noticing a big boost in demand for borrowing from manufacturers, retailers and distributors who have been missing in action since the financial crisis hit. The tax cuts are causing optimism that is fueling businesses' desire to expand. Jenny Surane writes: After struggling with slowing loan growth throughout much of 2017, U.S. regional bank executives said the promise of lower taxes spurred a pick-up in commercial loan demand in the fourth quarter, as well as a rise in consumer spending on credit and debit cards. That, along with increased interest rates, prompted many of … [Read more...]
Thousands of Truckers Needed as Economy Booms
Trucking companies, already shorthanded are anticipating even more growth in the economy and are working hard to hire more truckers. The trucking firms are also charging more. Brian Baskin and Jennifer Smith report that compared to last year, companies are charging 22% more for trucking goods. They write: “Can you find trucks? Can you find drivers? That’s the biggest factor,” said Ravi Shanker, an analyst with Morgan Stanley. “You’re probably going to get a lot of freight... but at the same time hiring drivers is going to be really hard.” J.B. Hunt Transport Services Inc., which arranges … [Read more...]
The Death of Value Investing
Value investing is dead, or so one might have assumed based on the relative performance of value portfolios during the current bull market. Value investors have been fighting a losing battle over the last decade. The chart below compares the difference in the performance of value stocks, as measured by the Russell 1000 Value Index and the Dividend Achievers Index to growth stocks as measured by the Russell 1000 Growth index. Each line on the chart represents the difference in the 5-year compounded annual growth rate of the value index and the growth index. As you will note, value stocks … [Read more...]
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