Skip to main content

May the Force be with You!

As millions of people, I was eagerly waiting for Star Wars: The Last Jedi. I even did advance booking  for all my team members back in Oct. The movie did meet the expectations of all the hype. The story line is kept simple and even though it was a bit long, it kept audience engaged. Now the wait starts for Episode 9! 2019 is going  to be big year with Cricket World Cup, GOT final season and Star Wars Final Episode!
The final details of tax bill is out. Let's take another look at some of the "Good, Bad, Ugly" aspects we discussed back in Nov. 
  • Tax brackets went back to 7 but still simplified with lowest starting at 10% and highest at 37%. Generally its good since overall rates have come down for everyone
  • Corporate tax rate reduced from 35% to 21%. They could have settled down with 22% and given more tax cuts to individuals. But we know who controls GOP so this was expected
  • Expands child tax credit - thanks to Marco Rubio. Looks like he is one of the rare ones in GOP who is looking after not so fortunate. Well done Marco!
  • AMT for individuals is still kept. I can't understand how this goes with supposedly simplification of tax-code. They should have got rid of this and instead kept AMT for corporates
  • Changes on how corporate taxes are calculated. It's generally good so that we don't need repatriation debate again. Companies can pay taxes where they earn and bring back money at will without too much financial engineering
  • Education benefits - removed proposal of taxing tuition waiver. Someone must have gotten wiser that higher education is critical for US competitiveness!
  • The most ugly part (specially for CA, NY, NJ residents) of not able to deduct state taxes remains. These are BLUE states and GOP don't give a damn about them. It's politics after all!
  • The biggest tax reforms after 1986 is marginally positive and would sail through congress next week and President Trump would claim as "Biggest Christmas Gift" for American people.
What does it means to stock markets which are already at all time high? Should one follow "Buy the Rumors, Sell the News"? Based on many experts, these tax reforms are:
  • About 50% priced in markets
  • Should marginally improve GDP growth above 2%
  • Should increase corporate earnings by about 5%
  • That means we could see stock markets heading higher by end of year and well into spring. Q4 results and Q1 forecasts would decide overall direction beyond that.
Given all the news and discussions around Bitcoin, you may want check out well-written article in New York Times by Prof. Robert Shiller. 
Bitcoin = Ambiguity + Animal Spirits (there is no economics at play here) and hence no one can predict it's price.
Happy Holidays and May the Force be with you in 2018!
/Shyam

Comments

Post a Comment

Popular posts from this blog

2024: The year of.....

Wishing you a joyful New Year filled with laughter, love, and unforgettable moments, surrounded by cherished family and friends. May the 2024 bring similar gains as in 2023! I had great 2 weeks break with travels to Turkey with family and then solo trip to Palm Springs. Both places are amazing and definitely worth a visit if you get chance. Talking about gains in 2023 - Here is recap of 2023.. Inflation fallen below 4% and heading towards 3% Unemployment firmly below 4% Real wages growing above 4% GDP growth around 3% Markets: S&P notching one of the best year with 24% gains while Nasdaq doing even better with 40% gains thanks to Magnificent-7 (or TAMMANNA) many of which had triple digit gains My personal recommendations did exceptionally well - many of which were up by high double digits (e.g. INTC) and some of them had triple digit gains (e.g. META) All in all - 2023 was great year.  As calendar changed to 2024, what's in store for new year? This is election year in many coun
Post a Comment
Read more

Roaring 20s....Again!

About 2 years back coming out of COVID pandemic, I wrote blog titled " New Roarin' 20s.."  It covered what happened in 1920s and what are the factors now which would trigger new roaring 20s. Do check out the blog...almost all factors are valid even now. 2022 went sideways due to inflation pressures which triggered historical steep rate hikes by central banks which led to tech companies taking more measured approach and laying off 200,000 employees....all of that changed in Nov'22 when ChatGPT was launched...even though I had mentioned AI/ML as one of the factor in my previous blog, ChatGPT really captured the imagination of the world and changed the outlook of AI instantly similar to what Netscape did with the Internet and iPhone did with the mobile. The singular concept of "Language is the Interface" made AI accessible instantly to billions of normal people....And now without mentioning AI, no talk starts or ends in tech world..and despite onsite of most-aw
Post a Comment
Read more

It was not meant to be...

I imagined today' day (Nov 19, 2023) little differently than what it turned out to be..had a watch gathering at my place with few friends for India vs Aus ICC Cricket World Cup Final. Both teams deserved to be in the final - India winning all games in this tournament and Aus winning last 8 games after initially losing 2 games at start of tournament. The match was being played at the biggest stadium in the world (over 132,000 capacity) and over billion people tuning in...maybe most watched single sports event ever. After Australia won the toss, they choose to field (that's what most likely India wanted). India started well but then wickets kept dropping and India ended with total of 240 all out. That's when all of us knew that the dream of winning third world cup is over...despite one of the best bowling squad India ever had....The score was just not enough even for the best bowling to defend against one of the most professional and mentally strong team....No wonder Australi
Post a Comment
Read more