Democrats fumed when, in the 2017 tax reform package signed by the Trump administration, many taxpayers in blue states were denied the deductions they had become accustomed to for their high state and local taxes. New Senate Majority Leader, Chuck Schumer, is from New York, one of the hardest-hit states. Wealthy homeowners in New York and other high tax states will benefit most when Schumer and the Biden administration reverse the reform. Bloomberg reports: Democrats have been trying to restore unlimited SALT deductions since the 2017 tax law capped the benefit at $10,000. Lawmakers from … [Read more...]
Archives for January 2021
Stocks: Are You Sticking Your Neck Out Too Far?
There’s no doubt some stocks are in a bubble. When the bubble will pop is another matter. But pop it will. It’s why I want you to take inventory of what stocks you own, and why you own them. What are they worth? Are you sticking your neck out too far? Has there ever been a better time to be with an advisor who’s got your back? I’d love to talk with you. Jeremy Grantham of GMO fame wrote in "Waiting for the Last Dance" on Monday: Another more measurable feature of a late-stage bull, from the South Sea bubble to the Tech bubble of 1999, has been an acceleration3 of the final leg, which in … [Read more...]
Gavekal Chairman: Renewables Bubble is “Stupidest” Ever
Gavekal chairman, Charles Gave, calls the renewables bubble "the stupidest that I have seen in my career." When Tesla is trading at 1,000 times trailing earnings, it's not hard to see why. Greg Ip reports in The Wall Street Journal: Whether investors one day regret paying so much for Tesla Inc. stock, they have done the planet a favor. Their enthusiasm enabled the company to raise enough money to stay afloat until it could profitably mass produce electric cars while accelerating other manufacturers’ rollouts. Tesla, trading at more than 1,000 times trailing earnings, is only the most … [Read more...]
Why Buying Bonds Matters in Times Like These
In times like these, you need to be in touch with your money. Literally, overnight, we’re on the cusp of losing the Senate and much, much more. Making sure your financial plan is airtight is front and center like never before. I want you to get out a piece of paper (do it now) and draw a line down the middle. Write down what you own on the left side, and what you owe on the right. Your goal is to make sure that what you owe is not only less than what you own but that it gets down to ZERO. You’re not being helped by the Fed holding rates at zero. When you lose money simply by saving … [Read more...]
Texas Commissioner: ESG “Concern About Emissions Will Do More Harm Than Good”
Wayne Christian, a Texas Railroad Commissioner, is sounding the alarm over ESG investment trends that he says could put American oil companies out of business, and leave the world buying oil from companies in countries with the worst environmental practices. Michael Tobin reports for Bloomberg: A commissioner for Texas’s powerful energy regulator said the newfound popularity of ESG investing could result in record industry bankruptcies and the loss of millions of jobs while doing little to help the environment. Republican Wayne Christian, who sits on the three-person Texas Railroad … [Read more...]
Be Prepared for Another Great Lockdown, Recession, or Reset
How fast life changes. America's favorite pastime used to be baseball. Now it's trading stocks and betting on sports—real or fantasy. When I walk down Main Street, there's not a whole lot going on. Everyone's trading from home. Real estate prices, an equation of supply or lack thereof, are through the roof. City dwellers have new hobbies (after trading stocks while "working" from home), skiing in Big Sky or sailing in Newport. What's not to like? Prices always go up, right? Remember the Great Recession when the subprime crisis hit? Do you remember the revelry on Main Street USA, when you … [Read more...]
Quantumscape Suffers Price Collapse
On the first trading day of the new year, shares of Quantumscape Corp fell over 40%. Since just December 22, shares are down over 62%. It turns out that a company that hasn't even produced a product yet may not be worth as much GM or Ford, which have been producing vehicles for over 100 years. Take a look at Quantumscape's performance since November below: MarketWatch writes of the stock's collapse: It isn’t clear what is driving Quantum stock down. There are no new research reports from Wall Street analysts, though there is a cautious post on Seeking Alpha, the crowdsourced … [Read more...]
When Dollars are Plentiful YOU Proceed with CAUTION
When dollars are created out of the air, they’re wasted. When dollars are too easy, there’s too much of them. And they’re misallocated. What could possibly go wrong? The virtue of making money year after year after year, and saving a little bit as you go, is that you don’t need to make monumental decisions about what to do with it. You create a plan. You save on a consistent basis and over time you look back and are pretty amazed at what you’ve amassed. (You can teach a grandchild how to do this here). The more government injects itself into the money equation, the more the natural law … [Read more...]
Permanent Stimulus
In The Wall Street Journal, Phil Gramm and Mike Solon make the case against the developing state of "permanent stimulus" that is capturing Washington D.C. They write: When President Obama’s last Treasury secretary, Jack Lew, made the extraordinary claim that the Obama economic recovery failed because Washington “stopped [spending] too soon last time, and fiscal tightening after 2010 slowed the recovery” it sounded like another over-the-top argument for more stimulus. But with President-elect Joe Biden now making it clear that the recent $900 billion stimulus will “at best only be a down … [Read more...]