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Robert Williams is pitching his special report, "H. Well, sort of — until you get to the math. Except, of course, finding a string of wins like that in the present and the future is an entirely different game than finding them in the past.
I guess the only thing to do is go through the H.
So here we go… this is the basic pitch: They do have recesses planned around the holidays, so there will be the Thanksgiving recess from November if you want to put some extra weight on that particular date. So on or around that date, Robert Williams is telling us to expect huge gains from his H.
You might remember that, it let companies like Pfizer and HP and IBM pull back lots of foreign income — which they used for stock buybacks and other priorities, helping to boost some of their stock prices.
Here are his words: Putting the next 35 years of profits into play right now. Even beyond the cherry picking of a few companies that reacted most aggressively to the dividend tax hike at the end of His argument is that US companies will somehow pre-book 35 years worth of profits, and that investors will be excited and drive the share prices up as a result?
Taxes are an important consideration, but for most companies they are not the primary consideration. What would that mean? Investors have never been willing to give Apple much credit for its cash pile, and if the territorial tax system remains in place that seems unlikely to change just because the cash pile grows a bit.
That would be impossible. What would the gains for that look like if you use the options strategies Williams says he recommends for Extreme Alpha?
So what does that mean? You buy, lets say, 10 contracts, each representing shares. Or you can bet on a specific stock that would benefit from a tax holiday because it has an unusually large overseas profit pile, like Apple or Microsoft, which will increase your cost but possibly generate a larger potential return.
But you can make that speculation without putting much money at risk, so you can make your own call on that pretty easily. What, then, do we think about the prospects for actual movement in the overall stock market over the next month or two as a result of whatever tax deal might come before Congress?
Well, the market is not cheap. And the market expects tax cuts. First the House and Senate have to pass the FY18 budget or something they can call a budgetwhich is in the process of being amended on the Senate floor today, and they probably have to include some deficit allowances to give room for tax cuts without cutting spending and a reconciliation measure in that bill.
Assuming no rules get changed, the practical matter is that you need to use reconciliation to pass tax cuts, and you need an approved budget before you can have a reconciliation process, so the budget comes first. No one really knows yet, but this is how I think of it: Money has to go somewhere.
And to further that boost to higher income families, the tax plan also includes a lower tax rate for pass-through entities — which means that high-earning business owners whose businesses are structured as LLCs or S-Corps would pay a lower tax rate on that corporate income than they do on their individual income taxes.
So that, again, could create more cash flow for the higher-end earners who are most likely to put their extra cash into assets like bonds and stocks. So there is certainly some potential for tax cuts to boost the market over time. That expectation waxes and wanes sometimes, as the President shoots his agenda in the foot with his various Twitter vendettas, but the market clearly assumes that we will at least see a tax cut this year, if not a substantial tax reform.
Real permanent tax reform will likely require at least 60 Senators, so there would have to be meaningful and thoughtful work contributed by both sides of the aisle stop laughing!
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