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I think you hit on the real problem. About 30% of Americans, (60% of white Americans), want to hear those lies as it makes them feel better about their circumstances. Fox tells them it's people of color, women who want equality, people who don't fit gender stereotypes, non-Christians and all those woke Democrats who support the rights of those groups. We're still fighting the Civil War in this country.
One thing we can likely agree on is that student debt is a huge problem in the US only made worse by the two administrations pausing debt payments over the last three years without messaging the importance of making payments while interest rates were suspended.
I think Roberts was clear after the hearing on Tuesday, this is an issue that should be addressed by Congress. However I don't think a lack of loan forgiveness will be the major economic issue. It appears that in September, student loan repayments will begin again for over 40MM Americans. In aggregate, those required payments are somewhere between $100-200B a year in discretionary spending that's no longer discretionary. It will have an impact on the economy as I suspect the great majority of these debtors live paycheck to paycheck.
When you're down 97% already, you've been annihilated. Now the trick will be to raise enough money to get through the next year plus before interest rates begin coming down and housing begins moving up again. Market cap is less than $1B with 13%+ shares shorted. It's not a big investment for a many SPX companies if they want to get into this space. I've been out for a long time, just interested in watching how this unfolds.
Let's be clear, I wasn't making the argument that the investor class, (that's us), is paying more than working folks, only that taxes on wages are still low - for now. There's a reason we focus on qualified dividends, there is zero federal tax up to $83,350. New Mexico charges about 3.5% on that total. Each state handles capital gains a bit differently. Florida and Texas along with a few other states have no capital gains tax. It's the reason billionaires like those states.
The 10-year treasury note is sitting just under 4%. It hasn't been this high since last November. National mortgage rates are close to 7% again. They had dropped two months ago to 6%. A 6-month to 2-year CD is now paying 5% to 5.1% depending on duration. That drops to 4.6% at five years. Equities are surely getting some competition.
Putin may not be winning in Ukraine but he's still laughing about Brexit. Most folks in Britian now realize they were punked. Of course if Trump would have won, there would be no Ukraine by now and very likely no US involvement in NATO. As much as I've railed in the past about NATO poking the bear with regard to Ukraine, once he invaded, we have no choice as a democracy, really the democracy the world depends on to help defend their freedom and help rebuild their country eventually. Sometimes it sucks to be us but the alternative is much worse.
I think federal income taxes are fair, even low for middle class people at this time. For a married couple making $83,550 a year their income tax is calculated like this:
$83,550 - $27,700, (standard deduction) = $55,850
10% of the first $20,550 or $2,055
12% of the remaining $35,300 or $4,236
For a total of $6,291 or 7.5%.
There is a poison pill in the 2017 Trump tax bill, (of course there is), that phases out the current standard deduction at the end of 2025. Taxes on the middle class will increase substantially if this is not extended by Congress...LOL, I'm sure that will happen.
I think you're right about the court issues but it's very difficult to price JNJ correctly until we understand how the split will be valued and if the dividend will stay with JNJ, partially stay with JNJ or move on. I suspect for JNJ to be viable over the next decade or two they'll have to reform themselves as a biotech company like PFE is doing. I prefer PFE for now but JNJ is always on my watchlist.
If it weren't for BBBY, Kohl's, (KSS), would be the biggest clown suit in big-box retail. They were expected to earn 98 cents / share in Q4, they lost $2.49 / share. Well done.
Ever-After foods? Do their marketing people not understand how close that is to Here-After foods. Sounds like a mortuary company..:)
Most Americans won't jump on the lab-meat train but there's plenty of poor folks around the planet who will serve as lab subjects. Let's see how long it takes for these "foods" to come down in price and be approved for SNAP.
It appears Biden's plan for student loan forgiveness is dead in the water. We'll know for sure in June. From Reuters:
Still holding off on JNJ until I can understand the impact of the impact of the consumer healthcare spinoff and it appears the talc issue isn't going away.
Now that two consecutive quarters of declining GDP doesn't mean we've had a recession and an inverted yield curve doesn't mean we'll have another recession upcoming, this is I suppose a useless post. So be it. This is a chart of the 10 year / 3 month yield curve. It's massively inverted. The standard 10-2 is worse.
SPX is toying with 4,000 again. Energy sector is again the worst performing sector, down 1.2%. Oil, (WTC), is flat at about $75.
No matter where your sympathies fall, this will be an important issue for investors to follow. The Supreme Court is set to hear arguments today with regard to student loan forgiveness. Their decision will be made in early summer and student loan payments will begin two months after that time. That is, 40 million Americans, (I've also read this is now closer to 45MM), will be making student loan payments, paying off debt, instead of buying consumer products. In an older document the Fed says the average student loan payment is $393 a month. If we split the difference between the 40MM borrowers we know existed in 2020 and the presumed 45MM that that exist today, that's $200B a year in payments. That should put at least some minor drag on the economy. Report is from Investopedia.
Fed document: https://www.federalreserve.gov/publications/2017-economic-well-being-of-us-households-in-2016-education-debt-loans.htm
If you've been following the backlash against the Saudis in Arizona over their use of water to grow feedstock for their animals the story below makes a lot more sense. As AZ turns more blue than red, water is about to get more expensive. I'm sure they've made a sweet deal with Ukraine. Of course the MSM has buried the lead. According this report; Saudis are "humanitarians".
Dems have been annoying the hell out of me over the last few months with their idea that stock buy-backs are somehow the devil's own idea. It's good to hear WB weighing in on this subject:
All US markets are signaling they'll open up this morning. It's not too surprising given this is the last day of the month. Market action during the day will give us a better idea how the market will perform when there isn't large flows of cash coming in. Yesterday we lost 3/4 of our early morning gains and SPX 4,000 was a hard ceiling.
There was a nice bump up this morning as brokerages and banks began their normal month end buying for their client's retirement accounts. We could only hold on to about 25% of that gain but I'll take it. There should be an upward bias over the next 2-3 trading days as additional funds are invested. If it's weak, it doesn't portend strength over the next few weeks. The chart below is a 2-day chart. SPX 4,000 is still the ceiling.
I agree. I'm never too impressed with a bounce near the end of the month or the first trading day of a month. Retirement money is coming in and it's mandatory that it be invested. March should provide some buying opportunities.
They're a bit late to the game at this point. I believe they have a year or so before PM can start selling their products in the US. MO lives on Marlboro and the massive margins on that product in the US. At this point I prefer BTI over the next couple of years.
I traded MPW in the summer of '21 and again in the summer of '22. Under 4% profit, never held it long enough either time to receive a dividend. Found I was sleeping like a baby...woke up crying every couple of hours...:). Might make an interesting trade if they lower the dividend and MPW falls a bit further. It's difficult to get very interested in a stock where 18% of the shares are shorted and funds from operations don't cover the dividend. I noticed the COO is retiring this year.
Western Union, that one made me laugh. Better brush up on my Morse Ccde.
I'm holding more cash than usual while I wait to hear if the Fed will saber rattle in March.
OK, that's funny. No, no mate, we're not here to conquer, we just need a decent paying job.
Speaking of mispricing, the market is currently pricing GOOGL as if they will slowly go out of business. They are currently trading at a P/E discount of 11% to the SPX average. This from Barron's:
Your timing has always been better than mine. I'm moving more and more into fixed income.
Like this idea and it's definitely the future but the next year is going to be a serious test.
I see he's no longer couching his MAGA love and racism in intellectual arguments. The white male haters of black folks, brown folks, asian folks, native / island folks, queer folks and uppity women and children are getting ready to put all these folks and those of us who think equality matters more than supremacy in our place. Apparently we're being too complacent. Unfortunately every human lifetime evil will rise and we'll have to go to war with it; 202X, 1940, 1860, 1776. It seems inevitable to me.
Ukrainians are fighting for their right to exist and we have people in our government and media supporting Russian fascism along with pseudo-fascist support from some NATO countries like France, Hungary and Italy. MTG is the voice of the Republican party and wants to divide the country in half. She doesn't want a civil war unless we try to stop her and her followers. That sounds to me like the trailer trash version of King George III, Robert E. Lee or Hitler warning us a war is coming. I don't think these traitors realize we're nice until it's time to not be nice.
Will get some of mine for sure. No reason to have all your money in the market when bonds, notes, etc. are paying over 5% and the Fed has the knives out.
The Supreme Court heard the Gonzalez vs. Google case this week where the plaintiff is suggesting that Google is partly responsible for a death committed by terrorists because Google curates results based on an algorithm they've produced.
Congress passed Section 230 of the communications act 27 years ago that roughly says internet providers are more like a book store than a newspaper. That is, they're not editing and providing their own content, just serving up what others have provided. Section 230 is likely no longer providing enough guidance and the justices were hoping the two sides would provide some ideas on how to solve the issue. I believe it was Kegan who got a laugh when she said something like, We're not the 9 most expert internet minds.
Unfortunately the attorney for Gonzalez was arguing that any content served up that caused harm would make the provider open to a lawsuit. In other words, toss out Section 230. Google's lawyer argued that there should be no change to 230. Anything can happen of course but it seems like the justices will not make changes to 230 but wait for Congress to take on this problem. This might be one of the few things where bi-partisan support can be found.
Congrats, that's a great profit.
EVA is a producer of wood pellets as a replacement for coal and was one of my favorite "environmental" stocks in 2020 and 2021. I sold when the stock got so popular that its earnings and growth didn't appear to support the price. It continued up in early 2022 but has been sliding down ever since and is currently back at ~$42 which is where I originally purchased shares. Unfortunately there are currently three major problems with EVA which will keep me on the sideline for now.
1. It may not be an environmentally superior product to coal and environmental groups have turned on them. They may also have begun clear-cutting forest to keep up with demand. I'm not taking sides here, just pointing out that when ESG folks turn on you, a reasonable portion of investors will not own your stock.
BTI is one of the core holdings in my income account. After ~18 months holding it is up 14% mostly due to an excellent dividend and one partial sale and repurchase a year ago when it moved up to $43.80. BTI, (BAT:UK), yields 7.3% at the current price. Payments are made in British Pesos which has recovered somewhat from last October's low.
This Cigarette Maker Is Rolling Out New Products. Its Stock Could Soar 25%
British American Tobacco is a sleeping giant of the United Kingdom stock market that may be about to wake up.
The stock has blown hot and cold in recent years, though. Shares are down 30% over five years—but that might be about to change. The company is building an impressive portfolio of alternatives to cigarettes, while a pending regulatory decision over its Vuse Alto vaping product could provide a near-term catalyst.
Another big reason to hold the stock amid these uncertain macroeconomic times: the company’s attractive 7.4% dividend yield. Quarterly dividends are also paid to holders of BAT’s American depositary shares (BTI).
BAT owns cigarette brands including Camel, Lucky Strike, Pall Mall, and Dunhill as well a range of vapor and heated tobacco products. The London-listed company, founded in 1902, has more than 52,000 employees worldwide and operates across more than 180 countries.
There were plenty of positives to take from the tobacco giant’s full-year earnings earlier in February, despite declining cigarette volumes in the U.S. The company said it expects its “new category” segment—which includes vapor, heated tobacco, and oral tobacco products—to be profitable in 2024, a year ahead of schedule. The unit is also on track to meet BAT’s target of five billion pounds sterling ($6 billion) in revenue by 2025.
But the share price reaction was negative, which Deutsche Bank analyst Gerry Gallagher attributed to the lack of a stock-buyback announcement. BAT said the board has decided to take a “pragmatic approach” to prioritize strengthening its balance sheet.
The market was expecting a buyback of £1 billion to £2 billion, Gallagher said. He noted the positive commentary around new-category revenue and said the bank’s analysts remain “committed buyers” of the shares. He has a £40 price target on the stock, 26% above Wednesday’s close.
Revenue and earnings look set for solid growth in the coming years. The tobacco giant reported revenue of £27.7 billion in 2022, and analysts expect that to rise to £28.8 billion this year and £30 billion in 2024. Profit is estimated to rise from 371.4 pence a share last year to 392.3 pence in 2023 and 417.5 pence next year. BAT’s Vuse vapor brand is one of its trump cards. The company said in 2022 that it had become the market leader in the U.S., the world’s largest vapor market.
But Vuse is also holding the stock back. Vuse Alto is pending market authorization from the U.S. Food and Drug Administration. New legislation passed in March 2022 requires companies to submit a premarket tobacco-product application, or PMTA, to keep vaping products on the market.
Two other Vuse products—Vibe and Ciro—were authorized last year, but their menthol variants were denied last month. If Vuse Alto gets the green light from regulators, it could be a significant catalyst for the stock. While there is uncertainty about U.S. cigarette demand and the Vuse Alto regulatory decision, the current valuation incorporates “much of those downside risks,” says J.P. Morgan analyst Jared Dinges.
The stock is cheap, trading at 7.5 times estimated 2024 earnings, compared with the industry average of 9.93, according to FactSet.
BAT has an appealing dividend yield amid tough economic conditions, and at best there’s plenty of upside ahead, if investors can see through the smoke.
Back up over SPX 4,000 this morning but sellers are coming in as they have been all week.