Morning folks, happy T-eve day. Stock markets are flattish, oil down, gold flat. Volume and attention paid to the paid to the markets this week will be low.
I’m thankful for a lot of things, like my family. And for:
*the miraculous healing and growing that my youngest daughter Amaris has done
*all the doctors and nurses who have helped us take care of her
*friends, family and community that have helped so much as we’ve needed to give so much attention, time and care to Amaris
*another year of strong business personally and economy globally which enable me to provide for my family
*and so much more.
As I told John Stossel on 20/20 a few years ago, “there’s never been a better time or place to be alive in the history of the planet than right here, right now.”
So thanks to all of you for being a part of Trading With Cody.
Here are some highlights from this week’s Chat Room discussion where you can find me most weekdays or leave me a question or comment in there anytime. And of course today, I’ll see you at http://twc.scutify.com/members or on the Trading With Cody App at 2pm ET today for this week’s Live Q&A Chat session. You can also just hit reply on this email and ask me anything and I’ll include it in the transcript.
Q. Your thinking on the Pfizer-Allergan merger announcement? Maybe not a huge surprise to the market . . . but will this added stick-in-the-inversion-eye with Congress hovering over that issue, and just the hugeness of it all affect the investor view of biomed, pharma — and our IBB puts, especially — at all?
A. $PFE – $AGN merger: Taking out competition and increasing lobbying power and cutting costs and avoiding taxes that pay for the courts, roads, armies, police, fire, water, infrastructure, corporate subsidies and even pays for most of their product makes me angry as a citizen, but it’s good for their shareholders.
Q. A reshaping of a portion of this question: specifically the January $300 IBB puts. I realize they are/were a hedge. As deep in the hole as they are, when does one close out this hedge?Assuming it’s matched or exceeded gains against it was hedged, looking at it by itself right now, do you see any hope/reason to hold onto it during the closing time/increasing premium, or is it time to let go. Specifically, what do you see happening in the med space between now and then that might give it a blip up?
A. The $IBB puts are still acting as a hedge as long as you have them on the sheets. There’s always a risk that the broader stock markets tank before the puts expire which make this hedge kick in and help. In the meantime, I’ll just let them ride and expire worthless if the markets continue higher/steady as I actually expect and am positioned for.
Q. If it is true that our corporate tax rate is not competitive with other countries, then why the anger?
A. It is not true that “our corporate tax rate is not competitive with other countries.” Using loopholes that their own lobbyists wrote into the tax code, most major corporations in the US pay less than 20% income tax on their reported earnings, and nobody ever includes the wild subsidies like free factories, 0% interest rates, and so on that major US corporations get too. Companies that leave the US continue to get those domestic subsidies and use our infrastructure and economy but will lower their overall tax rate even more and pay even less of their fair share of taxes. Small businesses and middle class individuals pay a much higher percentage in tax than major US-based corporations.
User Comment: Funny I was just thinking about this the other day. I am part owner of an IT staffing/contracting company and now that it is coming end of year, we are faced with the “problem” of company profits. Instead of having that money to invest and grow our company, we are going to get hit with 40+ percent taxes on our profits because we are an S corp. Obviously having profits is a nice problem to have, but small businesses really get screwed as I would much rather hire 3 or 4 internal employees to help grow our company, yet our hands are tied as we have to pay Uncle Sam instead. I think the govt should do something like instead of paying x amount in taxes, if you spend that money in hiring new people, you do not have to pay the taxes on profits. Common sense solution but they will never do it…
Cody: Great info. I think the tax code has to be much simpler to navigate. Maybe make it a law that the entire income tax code for individuals, small businesses and giant corporations fits on less than 10 pages.
Q. Cody Looking to get into gold coins. Which do you believe are the safest yet most easy to utilize if conditions arise to that level. What source is most reasonable and reliable? Thanks and happy T G
A. Short answer: Best way to buy $GOLD coins is to buy them from a local dealer you get to know and trust or on Apmex on eBay. Read this eBook I wrote called “Everything You Need to Know About Investing in Gold and Silver” for more details.
Q. Are we selling twtr? Don’t you think someone will buy it soon?
A. Yes, I’m selling TWTR. Maybe some bigger company will buy them, but maybe not anytime soon and maybe not at all. I don’t like to own a stock to bet on it getting bought — I want to bet on visionaries and strong balance sheets and strong growth and TWTR has been disappointing me on all those fronts for the last three quarters.
Q. If I want to get into Amazon and Google, should a person just jump in, no matter how high it is, or wait until it goes below a certain number?
A. I always suggest starting with a 1/3 or a 1/5th sized tranche to get started and then going slow and using weakness to add more.
Q. Thoughts on Mobile Payments and whether or not Apple Pay has bombed or succeeded?
Cody: “48% of millennials said they would do most of their holiday shopping with debit cards, and 36% said they preferred cash. Mobile payments are still unpopular; only 14% of U.S. adults with smartphones or similar devices plan to make even one mobile payment during the holiday season, according to Bankrate.” Is mobile payment overhyped/dead already or is it just the top of the first inning still? The question is what inning is mobile payment in? 1st or 8th? And speaking of mobile payment innings: This week we saw Square roll out readers to accept Apple Pay and Apple strike an agreement with China UnionPay to bring Apple Pay to China through UnionPay’s point-of-sales network.