NO SPECIAL RIGHTS – JUST SPECIAL TAXES
This couple was together 44 years, recognized by New York State and by Canada as legally married. Yet the surviving spouse was docked $350,000 in estate taxes because she is gay. Why is it fair to treat some married New Yorkers differently from others? The ACLU will argue it is not. That, indeed, it is unconstitutional.
Few people today would condone the way religion was used to justify slavery, oppress women, or keep inter-racial couples from marrying. This report from Faith In America explains how religion-based bigotry continues to affect millions of people, driving some of the youngest and most vulnerable to suicide. Share it – lovingly – with your pastor?
HOMEOWNERSHIP FOR A RETIREE
Mike Blankenship: “I get more like $35,750 net a year on $2.75 million at 2%. A 2% return is $55,000, leaving $35,750 after 35% is sliced off for taxes. I can’t find $80,000 anywhere. Can you elaborate?”
☞ It’s calculated like an annuity, where you are not just withdrawing investment income, but drawing down your principal as well – in this case, all the way to zero by age 100. That’s how it got up to $80,000.* I should have been clearer in explaining that.
Gene had asked how much of his $3 million net worth he could tie up in his home. I gave a very conservative answer, because it’s easy to spend more when you’re 80 or 95, if you’ve been too frugal; painful to run out of dough if your assumptions prove not to have been conservative enough. That said, sure: instead of a $250,000 house or condo, if Gene can’t find one he loves, he’d likely do fine with a $500,000 unit (and its higher property taxes, maintenance, and insurance) and thus “just” $2.5 million in investments to support him rather than the $2.75 million I had used in my example.
My main point was simply this: that I’d turn his question around. Rather than try to know the maximum he can prudently spend on a home, I’d look for the least expensive home that would make him happy and then run the numbers to confirm he can comfortably afford it. He can always trade up later.
*To do the actual calculation, you need to visit a website like this one.
Suggested here a couple of months ago at $10, this slipper maker yesterday reported a seemingly great quarter, with earnings up 81%. So the stock opened up at $11.21 – but then dipped below $10, to close at $10.26. The problem? “The DFZ conference call was not at all optimistic,” reports my friend who follows this one. “The better earnings were mostly the result of stores wanting their holiday inventory earlier this year, so orders slipping from both last quarter and next quarter into the reported quarter. But warm weather has resulted in a slower than expected start to the holiday season, and then looking out into next year, raw material cost pressures are going to start being quite significant, necessitating cost increases. The only good news was that they are within 120 days of announcing an acquisition and they have previously said, more-or-less, that they’d be looking for 15% return on invested capital from any acquisition, so this could be a very good use of cash. This is a good management team, and ultimately I believe they will generate reasonable returns for owners of the business, but the near-term stock reaction could be unpleasant, especially once the sole analyst following the stock [and what would a footwear company be without a sole analyst? – A.T.] cuts estimates, which she will have to after this call. There is a really big buyer at 10.25 currently, so hopefully the stock is cheap enough that some value investor is accumulating and it has found a floor. It is a very, very cheap stock. In a rational world, it would be time to buy. But in the world where stocks tend to overreact by a factor of 3 to news that changes earnings expectations, this stock is unlikely to do well in the next couple of months relative to the market.”
I sold a third of mine. If I get to buy more at $8, I’ll be glad I did. If the market sees past these problems and it goes to $13 without dipping much first, I’ll be glad I didn’t sell more.
Guru adds this one to our latest speculative basket. “Will resolve its two overhangs by the end of the year,” he thinks, which could push the stock up from the current $4.60 to $7 or more. Remember, remember, remember: he’s often right but not always! So . . . only with money you can truly afford to lose.
FAMILY OF SECRETS
Amazon’s #1 best-selling book as I type this is George W. Bush just-released Decision Points. A good companion volume for a different perspective: Family of Secrets. “Shocking in its disclosures, elegantly crafted, and faultlessly measured in its judgments, Family of Secrets is nothing less than a first historic portrait in full of the Bush dynasty and the era it shaped. From revelation to revelation, insight to insight – from the Kennedy assassination to Watergate to the oil and financial intrigues that lie behind today’s headlines – this is a sweeping drama of money and power, unseen forces, and the emblematic triumph of a lineage that sowed national tragedy. Russ Baker’s Family of Secrets is sure to take its place as one of the most startling and influential works of American history and journalism.” – Roger Morris, former senior staff member, National Security Council, and author of Richard Milhous Nixon: The Rise of an American Politician and Partners in Power: The Clintons and Their America
Quote of the Day
To some, the glass is half full. To others, half empty. To an engineer, it's twice the size it needs to be.~unattributed
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