Billionaire investor Warren Buffett, on the heels of releasing his annual report, said 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. Believe me when I tell you that I appreciate the methods Warren Buffett deploys to make money. One big one being that at the core of his methods he’s America's #1 stockbroker. Between … [Read more...]
These 14 Simple Tax Changes are Needed Now
America desperately needs a tax overhaul to fix a system that has become unwieldy and difficult for business. Reforms could boost the economy, and even the thought of tax reforms has sent markets soaring. Here, from Fidelity, are fourteen tax changes that could show up in any potential reform package. Tax rates: The Trump plan and the House plan would both cut the top rate to 33 percent from 39.6 percent, raise the lowest rate to 12 percent from 10 percent, and collapse the number of brackets — different tax rates at different income levels — to three from seven. The Senate leadership has … [Read more...]
Is the Old Retirement Model Broken?
In an interview with Fidelity Viewpoints, Stanford Center for Longevity founding director Laura Carstensen says the old model of retirement just won't work anymore. Life expectancy throughout most of human evolution was somewhere between 18 and 20 years. Life was short. By the mid-1800s life expectancy had reached the mid-30s in the United States, and in 1900 it was 47 years. By the end of the century, life expectancy had reached 77. It gained 30 years in one century—that’s unprecedented. More years were added to average life expectancy in the 20th century than all the years added in all … [Read more...]
IRS Fraud Getting Better, but Risks Remain
Since peaking in 2014 at 766,000, the number of reports of tax-ID theft involving federal returns has dropped dramatically. But risks remain to tax filers who don't protect themselves. Thieves are using new methods to get access to tax filers' information in order to file false claims in their names, and then pocketing fraudulent refunds before anyone knows what's happening. Laura Saunders writes in The Wall Street Journal: And thieves are constantly trying to defeat new detection efforts. In some recent schemes, phishers pretend to be high-level executives requesting W-2 information for many … [Read more...]
Epic Rally Squeezed Short Money Until it Really Hurt
The shorts got squeezed after Trump’s speech. The fast money didn’t look very smart here. Stock market gurus are out in full force explaining the reasons for the rally. But I have not heard the real reason from a single person. To get to the answer, let’s start by reviewing an annotated chart of DJIA futures. Please click here for the annotated chart. To find out what happened today, we’d have to know how large players were positioned going into Trump's speech, which took place after the close of the stock market. (Positioning, in this context, means aggressive short selling or buying … [Read more...]
The Fed Signals a Rate Hike for the First Time in 2017
Fed officials are attempting to prepare the market for a rate hike in March as best they can. They proclaimed loudly on Tuesday that March is the right time. The market is listening. On February 22nd traders pegged the chances of a March rate hike at 35%, by Tuesday night odds had risen to an 82% chance. Early morning trading on Wednesday appears to show even more confidence in a March hike. Also illustrating the market's confidence in a March hike is the movement in the 12 month Treasury bill, which is typically sensitive to expectations of Fed funds rate moves. You can see in my chart … [Read more...]
How Much Surprise are You Looking for in Retirement?
Your answer to this question is probably not a whole lot, at least in terms of your investment portfolio. Some surprises may be great, like if you've saved more than you needed, but you could also be devastated by not planning for things like medical expenses. In The Wall Street Journal Glenn Ruffenach writes that retirees often find themselves in surprising situations, whether for better or worse. The surprises ran the gamut, from the wonderful to the devastating. Many readers told us they were surprised that their savings are holding up just fine, although several said that household … [Read more...]
Is Nascar’s Stunning Decline Now Irreversible?: Part II
Yesterday I wrote about the decline of Nascar: Lot's to think about in terms of why there has been such a huge decline in Nascar's ratings as we enter Daytona 500 weekend. Reporters at The Wall Street Journal analyze Nascar's decline. Nascar threw a bash at Kansas Speedway in October to thank Sprint Corp. for being stock-car racing’s top sponsor for 13 years. More than 800 Sprint employees received hot dogs, burgers and seats to a nail-biting race. One thing was missing: a new sponsor. Despite knowing for two years that Sprint was leaving, Nascar didn’t announce a replacement until … [Read more...]
Is Nascar’s Stunning Decline Now Irreversible?
Lot's to think about in terms of why there has been such a huge decline in Nascar's ratings as we enter Daytona 500 weekend. Reporters at The Wall Street Journal analyze Nascar's decline. Nascar threw a bash at Kansas Speedway in October to thank Sprint Corp. for being stock-car racing’s top sponsor for 13 years. More than 800 Sprint employees received hot dogs, burgers and seats to a nail-biting race. One thing was missing: a new sponsor. Despite knowing for two years that Sprint was leaving, Nascar didn’t announce a replacement until December, when it said energy-drink maker Monster … [Read more...]
The Story of the Largest Insider Trading Investigation in History
If you want to get the inside story on hedge fund manager Steve Cohen, read Black Edge by Sheelah Kolhatkar. What stood out to me was how retired teachers, and the collective billions they’ve saved through pensions, had their money managed by Stevie who, in essence, is a day trader. A very rich day trader. What happens to the pensions when guys like Cohen run out of buyers? He’s not that far removed from being the next Long Term Capital Management, which went bankrupt and needed a bailout. Here’s a review by David McClintick of the WSJ that got me into the book and an interview with author … [Read more...]
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