Pro-tax university professors find a tax that they don’t like

A lot of my Facebook friends are university professors. As such they get, as part of their compensation, free tuition for their children (or, oftentimes, partial payment for tuition if they send their kids to other colleges). Some of them have graduate students, who get their fictitious tuition paid when on research or teaching assistantships.

All of these folks publicly supported Hillary Clinton prior to the election, denounced the Trumpenfuhrer’s hints about shrinking the government’s role in our society, and generally advocate for higher tax rates so as to enable the government to fulfill all of our collective dreams.

How are they reacting to the latest proposed tax law changes? With desperate lobbying efforts to preserve their own tax exemptions. Examples:

To my California friends and family, especially those who have children to educate: Republican representatives in these CA districts near you have BIG influence over *which version* of the tax bill—including whether it taxes things like tuition remission, etc.—eventually gets approved. It’s not an exaggeration to say the future of American higher education is at stake.

A crucial decision remains to be made between the House and Senate versions of the GOP tax bill. So here’s a plea to everyone who cares about the future of American universities: not only must we CALL OUR REPS, we must urge our friends and family to do so as well! I’m calling not just my own reps and senators but others’ too, identifying myself as a professor and trying to convey my sense of urgency about this bill.

[mass email to faculty at University of Chicago] Doubtless all of you are thinking about the potential effects of the Republican tax bill, which appears bent on directly attacking higher and lower education in the United States. …  The bill passed by the Senate *does not* include the grad student tuition waiver tax proposed by the House bill. …

For students like Mollie Marr, pursuing her M.D. and her Ph.D. in behavioral neuroscience in the OHSU School of Medicine, losing the tax waiver could mean dropping out of OHSU. Paying the estimated tax on top of her non-deferrable undergraduate student loans would leave her about $ 500 a month to live on. … students, staff and faculty to share their personal stories and perspectives about the impact of losing this tax waiver … Call and email your U.S. representatives and senators.  [official OHSU news release]

If universities actually are delivering something of value to professors’ children via tuition waivers, shouldn’t these good folks want to pay tax on that value? A core principle of U.S. income tax is that you pay tax on the fair market value of stuff that you receive in exchange for work. Also, if universities are delivering something of value to graduate students in exchange for work, why should a Walmart cashier have to work extra hours to make up for the tax not collected? (see Ugliest part of the Republican tax plan: What if universities were forced to calculate the value of a graduate education? for an exploration of what the imputed value of this tuition waiver should be, though)

These same folks have spent years on Facebook arguing for the government to collect more in taxes. Now they’ve found a tax that they don’t like!

Related:

Philip Greenspun’s Weblog

How you find more trading opportunities in this market

I was on a phone call with a former *star* futures trader who blurted, “this is the worst market I have seen in my life.”  He was referring to the lack of movement in e-mini futures.

During a private coaching session with one of our better senior traders, that trader stressed, “patience is the key in this market.”

One veteran trader with whom I gchat regularly has lamented, “I am just waiting for my market.”

Count me out as one who does not see trading opportunity.

We trade Stocks In Play and are not as reliant on overall market movement or direction for opportunities.  Having said that, it is crucial for firm Read more […]
SMB Capital

Find great levels in the S&P 500

This short lesson teaches the concept of using custom-period volume profiles to find great tradable levels. Apply this to your trading on your higher timeframe charts to help frame a contextual framework. Reach out to Merritt at mblack@smbcap.com if you’re interested in learning more about using powerful tools like this. Read more […]
SMB Capital – Trading Education

Peering through the fog to find the best sectors into year end

Written By: DragonFly Capital

screen-shot-2013-12-11-at-5-29-52-pm (1)

Do you remember that Christmas, a few years back, where the weather was so bad you did not know if Santa would be able to make it through to leave presents for all the kids? He focused and found Rudolph to light the way so he could see clear through the fog.

Heading into year end the same can be done to peer into the market and see what areas are ripe for some upside. Oh, not by using a flying red nosed reindeer. But by the most bass technical analysis. Here are two sectors that not only holding up well in the face of a tough market, be set up do move higher.

Consumer Staples, $ XLP
xlp

Consumer staples include stocks like Procter & Gamble ($ PG), Coca Cola ($ KO), Phillip Morris ($ PM) and CVS ($ CVS). This sector has moved in broad consolidation all year like the rest of the market. And had a strong pullback in August, like the rest of the market. But unlike the rest of the market it continues to make higher highs. Some will talk of the defensive nature of the sector and what that might mean in the business or economic cycle. But what is really important is that these stocks are strong and that means this is a sector to focus on for your portfolio.

Healthcare, $ XLV
xlv

Healthcare stocks are also showing strength. This group includes stocks like Johnson & Johnson ($ JNJ), Pfizer ($ PFE), Gilead ($ GILD) and Merck ($ MRK). They have had a strong trend higher for a few years but rest many indicators with the pullback in August that for many names, ended up even worse in September. But now there are testing resistance as they rise along the Median Line of the Andrews Pitchfork.

If you want strong stocks to bolster your portfolio focus your attention in these two sectors.

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Still time before Christmas. Contact me at greg@dragonflycap.com and use the code SANTA in the message to get either an annual subscription for $ 556 (10% off) or an annual subscription plus my book signed for $ 600.

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Want to learn more about Dragonfly Capital Views?
Dragonfly Capital Views Performance Through December 2015 and sign up here

Dragonfly Capital

American companies find out what the 2015 tax law is… on December 16, 2015

When operating a business in one of the highest-tax jurisdictions in the world (Tax Foundation), presumably it is important to know what tax rates and regulations are. When did the rates that affect decisions made in 2015 become known? Today! Well, since President Obama hasn’t signed the bill yet, maybe next week some time. Forbes explains what’s there with “Tax Deal Makes Permanent R&D Credit, Generous Child And College Breaks”:

R&D Credit: businesses, rejoice! The biggest ticket item of all the 52 extenders has finally been made permanent, as well as bigger and better. Beginning in 2016, businesses with less than $ 50 million in gross receipts will be free to use the credit to offset alternative minimum tax. [See this article on alternative minimum tax for corporations and this example.]

Enhanced Section 179 deductions: In recent years, taxpayers have been entitled to immediately deduct up to $ 500,000 of the cost of qualifying asset acquisitions (with a phase-out beginning at $ 2 million). These threshold were due to plummet to $ 25,000 and $ 200,000 respectively, beginning on January 1, 2015.

100% exclusion on Section 1202 stock: as I wrote about here, changes made in 2009 and 2010 to Section 1202 — which allows a taxpayer who sells qualifying small business stock held for longer than 5 years to exclude part of the gain — increased the exclusion from 50% to 100% (subject to limitations). This 100% exclusion was made permanent for stock, bringing great relief to investors who acquired QSBS stock in 2015. [i.e., if you have a PhD in accounting you can avoid paying capital gains tax on appreciated small business stock]

Enhanced American opportunity tax credit: From 2009 through 2017, taxpayers have been entitled to a $ 2,500 credit for four years of post-secondary education, with phase-outs beginning at $ 80,000 (if single) and $ 160,000 (if married filing jointly). In 2017, however, the credit was slated to return to an $ 1,800 annual maximum with lower phase-out thresholds. This deal makes the enhanced credit a permanent fixture in the law. [more welfare for U.S. universities]

Obamacare came under fire as part of the negotiations, as the agreement would pause the 2.3% excise tax on medical devices in 2016 and 2017, while the start of the so-called Cadillac tax on high-cost employer-sponsored health insurance would be delayed from 2018 to 2020. [i.e., the only parts of Obamacare that we like, apparently, are the ones where the government is giving us money]

Because the earned income credit is a lightning rod for fraud, taxpayers will not be permitted to file amended returns claiming the credit for a year when they did not have a valid social security number. The same holds true for the child tax credit; a taxpayer may not file an amended return claiming the credit for any year in which they did not have a valid ITIN (taxpayer identification number). In addition, taxpayers convicted of fraud in claiming the earned income credit will be barred from claiming the credit for ten years, while those found to have recklessly disregarded the rules will be prohibited from claiming the credit for two years. A 20% penalty will also be applied to the refundable portion of improperly claimed credits, reversing an earlier court decision. [i.e., the dream of simplifying the American welfare system with a negative income tax doesn’t work because we are too devoted to fraud]

I look forward to paying my accountant to figure out what all of this means…

Related:

  • previous Forbes article that describes the federal tax code as “about as permanent as a Kardashian marriage.”

Philip Greenspun’s Weblog

How We Find The Best Setups

It was an incredible week in the market. Monday started with a strong down trend and by Friday the SPY closed at its highest level since ten days earlier. Outside of the indexes themselves there were some incredible risk/reward opportunities in individual stocks. In this short video I explain some of the techniques we used to identify and trade the stocks that had the best chance to trend intra-day.

Steven Spencer is the co-founder of SMB Capital and SMB University which provides trading education in stocks, options, forex and futures. He has traded professionally for 19 years. His email address is: sspencer@smbcap.com. No relevant Read more […]
SMB Capital – Trading Education

Find Relative Strength in High Dividend Large Cap Consumer Names

Written By: DragonFly Capital

There is blood on the street today. No getting around that. As I write this there are only 12 names in the S&P 500 that are not down on the day. Twelve for you English majors. 97.5% of the names in the index are down. Days like this lead the debate towards a long term downtrend vs possible capitulation. Volume does not side with the capitulation story though.

But for those of you looking longer term days like today are an opportunity see what names are shining. And by shining I mean not down 3%. One sector seems to stand out above the rest. High Dividend Large Cap Consumer stocks. This should not surprise. they have been strong through the sell off. Here are a few to note:

Campbell’s Soup, $ CPB
cpb

Less than less than 4% off its all time high made last week.

Clorox, $ CLX
cvlx

Has continued to rise since the August 24th pullback.

Reynolds American, $ RAI
rai

Up on the day and approaching all-time highs,

Get my ebook, Markets for 2015 and Beyond, a long term forecast with all proceeds going to charity.

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Dragonfly Capital Views Performance Through September 2015 and sign up here

Dragonfly Capital

How Many Trades Do You Find Each Day?

Hi Bella,

First of all I would like to thank you for everything that you do for us traders. I’ve just started to read The Playbook and I’m sure it will help me develop as a trader. I’ve one question though, in Playbook you write that we should archive trades in our Playbook that makes most sense to us. Well I need to tell you that I’m happy if I catch one trade daily, even though I’m an intraday trader, and here is my question: how many trades (daily) do you or your guys at SMB can find and trade on average ?

Thank you for your time and best regards.

 
@MikeBellafiore

Yes, you should archive one play each Read more […]
SMB Capital – Trading Education

A tool to find your best trades

The bionic trader uses technology to gain an edge. Here is a quick tip on how to use Microsoft Excel’s pivot table tool to sort through trade history to find hidden edges.

I have more examples on using Excel to find edges. Email me — afalde@smbcap.com — with the subject: “Excel Edges” to receive more tips and videos on tools that can help you gain edge.

 

-Andrew Falde

No Relevant Positions. Options Risk Disclosure. Read more […]
SMB Capital – Trading Education

Options Trading as a Career: How to Find it

What does it take to become a successful options trader?

This is a very complex question, but we will try to give a few brief thoughts on the subject. Most people believe that to be a successful options trader, it simply requires learning one of the many options trading strategies that provide the trader an edge over the market over time. Does this mean that taking a $ 5,000 weekend seminar or weekend course will arm you with all that you need to start making money the day after the course is over? Hardly.

New options traders often fail to see what is truly required after you learn a particular strategy. It’s not as simple as reading about a trade method, then taking a test and getting Read more […]
SMB Capital – Day Trading Blog

Find a Way!

Years ago as an aspiring professional golfer, I had a conversation with a veteran (PGA) Tour player.  I asked him what he thought some of the differences were between a guy like him and the guys on the next level down.  Both might go out and shoot 65 on a given day, but what was the missing ingredient for the guys below the top level?  They had plenty of game, but just couldn’t get to the next level.  What set him apart?

His response surprised me with how simple it was.  He said that a Tour player would almost always find a way.  He’d find a way to hit the fairway on the narrowest hole on the course.  He’d find a way to grind out a par after a poor shot.  He’d find a way.  It was about will, about focus, and attitude – not merely gaining distance or accuracy or putting in more practice.

It translates into trading.

Great traders don’t necessarily find better trades than those who struggle.  But they do find a way to limit the damage on their poor positions.  They find a way to get involved in a move – on some timeframe.  They keep learning even though they have plenty of past successes to reminisce about. They have a will about them, a focus, which prevents their mistakes from becoming catastrophes the way a struggling trader might.  Their attitude promotes success, not rationalizations for a shrinking account.

Stop accepting excuses for your underperformance.  HFT’s are prevalent in today’s markets, find a way to co-habitate with them (pun intended).  Elections happen and cause some uncertainty.  Terror threats emerge from time to time.  Market volume dries up periodically.  Find a way in spite of it.  Those who are successful always find a way, no matter the conditions.

Trade Like a Bandit!

Jeff White
Subscribe to our Stock Pick Service to get our trades.


TheStockBandit.net

How to find the best stocks into the close

Good afternoon Mr. Bellafiore,
I hope this message finds you well.  I received your email by attending the event you spoke at in DC (which was really Rockville, MD).
I read your blog everyday & find it extremely helpfull for my trading.  I also completed the SMB Foundation ealiear this year.  That’s an incredible program!
The reason I’m reaching out is b/c I have a problem identifying stocks to trade in to the Close.  Could you right a blog or respond to this email in regards to that subject?
Even to be more specific, could you write about identifying stocks in to the Close w/o using the radar?
I look forward to starting Trader Development soon.  Many thanks in advance for your time.
Bella Responds

1. My first option is to stick with a stock I have been trading all day that is In Play.  You will have paid for very important intraday information that you can use to make excellent risk/reward trades into the close.  An example of a stock you might stay with all day was HPQ on Friday.  Even thought it didn’t move into the close below 23.40 and it was most likely gonna tank and above 23.70 it could have found 25.
2. If you sit on a trading desk or trade on a virtual floor a good exercise is to ask others what they are trading.  Shark what are you trading?  Kevin what are you looking at?  Andrew what do you have?  This gives you some ideas for you into the close.
3. The SMB Radar that we developed has an in play ranking.  Anything above a 3 on the in play ranking should get your attention into the close.  Technology allows us to build tools to save us a lot of time.  If you asked me this question 5 years ago I might answer something about looking at highs and lows filters.  But we can do better than that today.  We can narrow our search down to stocks truly In Play.
4.  A squawk box helps.  Keep that on and you will most likely hear a chirp about Chairman Blankfein hiring a defense attorney and getting first dibs on the GS shorts.
5. In this market ETFs and market stocks have worked well.  You want to rip through your charts and have select prices that are most meaningful in your market stocks.  If C gets above what price is it a great long?  If C gets below what price is it a great short?
How do you find stocks to trade into the close?
Bella

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SMB Capital – Day Trading Blog