America is great again.
There's no denying it – from a stock market perspective, it doesn't get any greater than this. Forgive me for not believing but how can you deny how easy it is to make Millions in this market. It's the largest cash giveaway of all time – and all you have to do is play along. Out Long-Term Portfolio, for example, is just under 250% at $1.75M and we're being CONSERVATIVE – with 77% of our portfolio in CASH!!! (have I mentioned how much I like CASH!!! lately?) yet still, the EXACT SAME POSITIONS we just reviewed on Nov 17th at $1,698,372, are up another $51,171 (3%) in just 12 days.
At that rate of return (6%/month), we'll have $3.5M by the end of next year and why not – certainly we're working hard for it, right? Well, that's sort of the problem – we're not working for it at all and neither are the companies represented by these stocks – they are not growing profits or revenues to cover these gains – they are simply getting more and more expensive. Now, clearly a lot of the exhuberance in the market is about the forthcoming tax cuts but – even if we assume they are going through – how much of an impact will they really have when US Corporations only paid $444Bn in taxes last year?
That's on $3.5 TRILLION in profits so, on the whole, an effective tax rate of about 13% so how much will lowering the Corporate Tax Rate to 20% really accomplish? All it's going to do is lowe the rates for the companies that aren't already cheating by hiding their earnings overseas or funneling profits through partnerships so they can show losses to offset the gains. Will they effectively pay 10%? 9%? Even at 9%, they are only saving $130Bn yet the market is up TRILLIONS in anticipation of these cuts.
The ENTIRE market cap of the S&P 500 at the 2009 lows was $6Tn and today we are testing $24Tn with just 5 stocks; - FB, AAPL, AMZN, NFLX and GOOGL (FAANG), making up $1Tn. I'm old enough to remember when a Trillion Dollars was considered a lot of money, but not these…