Search found 3165 matches

by Jack
Sat Apr 12, 2014 10:41 am
Forum: Investing - Theory, News & General
Topic: Do you think the biotech sector will be hurt long term?
Replies: 56
Views: 5159

Re: Do you think the biotech sector will be hurt long term?

livesoft wrote:I liked this report about a certain flu drug:

"Millions wasted …"
http://www.bbc.com/news/health-26954482
Turns out that Gilead was the developer of Tamiflu and receives royalties from Roche. The royalties for Tamiflu amounted to more than half of Gilead's revenue in some years.
by Jack
Sat Apr 12, 2014 12:37 am
Forum: Personal Finance (Not Investing)
Topic: Wife to work as a Contractor - Advice needed
Replies: 30
Views: 3749

Re: Wife to work as a Contractor - Advice needed

She will not be able to deduct commuting expenses unless she has a home office. If she is not working from home, then her place of business is the place she works. You can't deduct commuting expenses to your place of work, the same as a regular employee, although she can deduct travel expenses if she is required to go to other job sites from her regular office.

If she has a home office, then her place of work is home and she can deduct travel expenses from her home office to other job sites.
by Jack
Sat Apr 12, 2014 12:14 am
Forum: Investing - Theory, News & General
Topic: Why does Vanguard use average return iso compound annual?
Replies: 99
Views: 11260

Re: Why does Vanguard use average return iso compound annual

The SEC has apparently decided to do away with logic and redefine the meaning of average and investment companies apparently have caved in ... I speak up when the SEC, against all logic, redefines average to mean anything but, and I would like to see the investment industry do the same. The SEC isn't making anything up. They are very logically using the geometric average defined by Pythagoras over 2500 years ago. There are three Pythagorean means (averages) -- arithmetic, geometric and harmonic. Each has its purpose for different types of data. The arithmetic average, the only one you seem to be familiar with, is inappropriate for the purpose of explaining compound growth. The geometric average which the SEC specified is the correct averag...
by Jack
Fri Apr 11, 2014 1:04 pm
Forum: Personal Finance (Not Investing)
Topic: Tax deductions from charities
Replies: 31
Views: 11212

Re: Tax deductions from charities

You are responsible for your tax return and its claimed deductions, not what some third party web site tells you.

The IRS is very clear that the exemption for benefits received is limited to annual memberships of $75 or less. Perhaps some organizations are considering that to be $75 per person and including children. You will have to ask them.

http://www.irs.gov/pub/irs-pdf/p1771.pdf
by Jack
Fri Apr 11, 2014 1:36 am
Forum: Personal Finance (Not Investing)
Topic: Tax deductions from charities
Replies: 31
Views: 11212

Re: Tax deductions from charities

letsgobobby wrote:I don't know. It's common practice among non profit museums for the entire basic family membership to be 100% tax deductible. Perhaps it's like synagogue or church dues?
That is not the case. The IRS only allows you to deduct the portion that is not a direct benefit to the donor. For example, you can look at this page for the New York Metropolitan Museum of Art. If you click on each membership level, they will indicate the portion allowable for a tax deduction.

https://secure.metmuseum.org/secure/membership/member

There is an exception for certain annual membership dues that are $75 or less.
by Jack
Thu Apr 10, 2014 6:31 pm
Forum: Investing - Theory, News & General
Topic: Do you think the biotech sector will be hurt long term?
Replies: 56
Views: 5159

Re: Do you think the biotech sector will be hurt long term?

I am sure there are other avenues that could be pursued. If you gave the same subsidy to a life saving drug that you give to a luxury electric sports car, that would help the price by $7500 or so... The pharmaceutical industry is already the most subsidized business in the world. Setting aside for the moment that they are given almost all of their basic research for free from government funded institutes, they are also the beneficiary of almost $1 trillion per year in government issued patent monopolies. The government will haul away your competitors and put them in jail if they try to make a drug more cheaply than the patented drug. This amounts to a government collected sales tax of more than 10,000% on prescription drugs that is transfe...
by Jack
Wed Apr 09, 2014 12:48 pm
Forum: Personal Consumer Issues
Topic: Expensive med. test not covered by insurance
Replies: 81
Views: 12960

Re: Expensive med. test not covered by insurance

$5 huh? The sample has to be shipped to the testing facility, handled by a technician, who is probably under management, there are secretaries, insurance costs for malpractice, reports to be generated, disposal costs of the blood/urine and container. If all of that is contained in the $5 I would hate to be the manufacturer that actually provides the DNA testing equipment to this company. It must be crazy trying to argue the price of the DNA sequencer down to $100. If the actual sequencing costs just a few dollars but the overhead is $4000, that is one horribly messed up medical system. The technology improvement of DNA sequencers is much like the improvements in silicon chip design -- the cost has been cut in half every two years for the l...
by Jack
Wed Apr 09, 2014 12:19 am
Forum: Personal Consumer Issues
Topic: Expensive med. test not covered by insurance
Replies: 81
Views: 12960

Re: Expensive med. test not covered by insurance

As is typical in the U.S. medical system, you are being gouged. As indicated in this article,
http://www.nytimes.com/2013/05/21/opini ... -test.html

the true cost of genetic testing is about a nickel a gene. They could sequence all 20,000 of your genes for about $1000. But in your case they are probably testing no more than 100 genes related to possible diseases, about five bucks worth. Yet they are billing you for $4000.

This is about par for the course in U.S. medical care, the worst in the world.
by Jack
Tue Apr 08, 2014 4:38 pm
Forum: Investing - Theory, News & General
Topic: Help me understand Michael Lewis' "Flash Boys"
Replies: 175
Views: 40739

Re: Help me understand Michael Lewis' "Flash Boys"

gw wrote:Again, once you make a choice to have fragmented markets (which can be defended) under continuous trading (good luck outlawing it), there's no stopping the speed race.
That's true, but you are assuming your conclusion, otherwise known as begging the question. Your assumption is that continuous trading is the only option. Synchronized batch trading is the solution to that problem, including fragmented markets.

Competing on speed adds no value, no pricing information to the market. Traders should compete on information, not physics.
by Jack
Mon Apr 07, 2014 1:15 am
Forum: Personal Investments
Topic: The Unthinkable Disaster: What If Your Account Disappeared?
Replies: 43
Views: 7326

Re: The Unthinkable Disaster: What If Your Account Disappear

Phineas J. Whoopee wrote:Mutual fund assets are held by a custodian, a separate firm. Vanguard uses JP Morgan Chase, which is in that business.
Would that be the same JP Morgan Chase who illegally removed money from customer accounts in the MF Global case? Customers are still fighting to get their money back. They may never get it all back.
by Jack
Sun Apr 06, 2014 8:53 pm
Forum: Personal Consumer Issues
Topic: Best ways to show daily news to 9 year old
Replies: 28
Views: 3262

Re: Best ways to show daily news to 9 year old

Exposing your child to TV news should be considered child abuse. Don't afflict your child with your own bad habits.

Get a couple of tablets and read together with your child from more selective news sites, including local news.
by Jack
Sun Apr 06, 2014 8:37 pm
Forum: Personal Finance (Not Investing)
Topic: Do I need an accountant? Small business with 55 k in revenue
Replies: 8
Views: 901

Re: Do I need an accountant? Small business with 55 k in rev

Lafder wrote:Any home office deductions will be recaptured when you sell your home. So it may or may not be worth the hassle to declare them.
The new simplified home office deduction option for 2013 allows $5 per square foot up to 300 square feet. No depreciation and no recapture involved.
by Jack
Sun Apr 06, 2014 1:50 pm
Forum: Investing - Theory, News & General
Topic: Gordon equation-stock buybacks
Replies: 11
Views: 1638

Re: Gordon equation-stock buybacks

The Modigliani-Milller response to that is if the shareholder sells stock in proportion to the buyback, and reinvests the money received in a diversified portfolio , that's the same as having received a dividend. That is not what M&M say. You keep misrepresenting M&M's work. In fact, appropriate to the title of this post, that is precisely Gordon's criticism of of M&M, that dividends provide the opportunity for alternative, less risky reinvestment strategies. The assumption of M&M is that your only option for reinvestment is to reinvest in the same stock (or its equivalent). They most certainly did not say that reinvesting in a diversified portfolio was equivalent. Why do you insist on making things up? They never said that...
by Jack
Sun Apr 06, 2014 12:10 pm
Forum: Investing - Theory, News & General
Topic: Help me understand Michael Lewis' "Flash Boys"
Replies: 175
Views: 40739

Re: Help me understand Michael Lewis' "Flash Boys"

Asynchronous does not mean that there is no timing involved. In an asynchronous design, the timing is quite complex and subject to design errors. That is why almost all digital circuits use synchronous logic today. Asynchronous just means that independent computational units run at independent speeds. Those independent asynchronous units are then synchronized with each other using a handshake protocol. For example the arithmetic unit and the instruction decode units operate independently at their own speed, but the results of the two unit must be synchronized before they are combined. There are two primary ways of doing this in an asynchronous design. One involves insuring that all critical data paths have the same propagation delay. This w...
by Jack
Sat Apr 05, 2014 3:44 pm
Forum: Investing - Theory, News & General
Topic: Gordon equation-stock buybacks
Replies: 11
Views: 1638

Re: Gordon equation-stock buybacks

You should be aware that Modigliani and Miller amongst others have pretty much answered your objections. Modigliani and Miller is a toy model with some important simplifying assumptions suitable for Econ 101. It assumes that there is only one stock in the universe, that stock buybacks occur at fair market price, and that you only have two choices -- dividend or buyback of one stock. None of these simple assumption hold in the the real world, which is typical of many Econ 101 concepts. A stock buyback is a risky market-timing, stock-picking exercise. Rather than allow the shareholder to re-invest dividends efficiently in the diversified total stock market, the CEO makes a decision for you to take all of your dividends and invest them all in...
by Jack
Sat Apr 05, 2014 1:55 pm
Forum: Investing - Theory, News & General
Topic: Help me understand Michael Lewis' "Flash Boys"
Replies: 175
Views: 40739

Re: Help me understand Michael Lewis' "Flash Boys"

From NASDAQ:
The NASDAQ Opening Cross process means that all investors have access to the same information and their orders get the same treatment. This brings fairness and transparency into the marketplace and that can be a highly active time of the trading day.
Gee, why can't we have fairness and transparency all day long by having synchronized crosses every 5 minutes, 1 minute, 1 second, or 500 milliseconds. Pick a number.

Global synchronization is trivial. Your $50 GPS mapper is synchronized to universal time to an accuracy of a few nanoseconds.
by Jack
Sat Apr 05, 2014 12:48 am
Forum: Investing - Theory, News & General
Topic: Why is Joe Brennan defending high frequency trading?
Replies: 54
Views: 10132

Re: Why is Joe Brennan defending high frequency trading?

adios_logic wrote:Gus Sauter said this a couple years ago “We’ve measured our transaction costs and over the past 15 years, they’ve been cut by about 60 percent,” Sauter said. “That results in hundreds of millions of dollars a year in savings to investors in our funds.”
Fifteen years ago quotes were fractional in which the smallest bid/ask spread possible was 1/16 of a dollar or 6.25 cents. Today bid/ask spreads can be one penny due to decimalization. The conversion to decimal pricing in 2001 alone accounts for a 60% reduction in transaction costs. Forget high frequency trading.
by Jack
Fri Apr 04, 2014 10:31 pm
Forum: Investing - Theory, News & General
Topic: Why is Joe Brennan defending high frequency trading?
Replies: 54
Views: 10132

Re: Why is Joe Brennan defending high frequency trading?

rnitz wrote:Wow. Aside from the mistakes regarding Jack Brennan and Joe Brennan, this strikes me as quite political.
Sorry about the name confusion. As cfs kindly pointed out above, McNabb actually replaced Brennan a while back.

But aside from that, pointing out facts is now considered political? It is well documented that Vanguard votes their proxies supporting management initiatives and against shareholder initiatives at a much higher rate than other mutual fund companies. Why would pointing that out be considered political? That is an investor issue directly related to investor returns.
by Jack
Fri Apr 04, 2014 6:39 pm
Forum: Investing - Theory, News & General
Topic: Why is Joe Brennan defending high frequency trading?
Replies: 54
Views: 10132

Re: Why is Vanguard defending high frequency trading?

manwithnoname wrote:I think its John Brennan not Joe Brennan.
Sorry about the confusion. Joe Brennan is cited from the Bloomberg article in the original post talking about HFT. He is the head of the Equity Index Group at Vanguard overseeing 80 funds. John Brennan is the CEO.
by Jack
Fri Apr 04, 2014 5:54 pm
Forum: Investing - Theory, News & General
Topic: Why is Joe Brennan defending high frequency trading?
Replies: 54
Views: 10132

Re: Why is Vanguard defending high frequency trading?

cacophony wrote:Why is Vanguard defending high frequency trading?
Vanguard is not defending high frequency trading. Joe Brennan, CEO of Vanguard, is defending high frequency trading (albeit with some reservations).

Joe Brennan also defends enormous compensation packages for CEOs (he just happens to be one). He also defends the suppression of most shareholder rights initiatives in proxy voting of Vanguard mutual fund shares. Joe Brennan's interests are not necessarily the same as your interests. As much as you would like to believe that Vanguard is entirely separate from Wall Street, Vanguard is very much involved in Wall Street and needs to play nicely.
by Jack
Fri Apr 04, 2014 2:11 pm
Forum: Investing - Theory, News & General
Topic: Help me understand Michael Lewis' "Flash Boys"
Replies: 175
Views: 40739

Re: Help me understand Michael Lewis' "Flash Boys"

Another tactic co-located high frequency traders use is quote stuffing. To do this, they flood the exchange with phony orders that they will later withdraw, maybe milliseconds later. The idea is that lots of orders at the same price make the price "sticky", giving them a few more milliseconds of time to execute their arbitrage strategies. Again, this isn't market making. It isn't adding liquidity. It is actually slowing down price discovery, so hindering the market. Added: Since they are co-located, they can stuff the queue with phony orders. The new orders go out on the network and everyone sees those new orders and reacts to them. But since they are co-located, they can then withdraw those orders before the other traders even se...
by Jack
Fri Apr 04, 2014 12:53 pm
Forum: Investing - Theory, News & General
Topic: Help me understand Michael Lewis' "Flash Boys"
Replies: 175
Views: 40739

Re: Help me understand Michael Lewis' "Flash Boys"

Here is one way it works. Let's say the guy across the street from your house is selling his car. He has a sign on it that says "First one to show up with cash in hand gets it." You decide to take up that offer and head for his door, but your next door neighbor, a high frequency car trader, is spying out his window. As soon as he sees you heading up the steps to the door with cash in hand, he sprints out in his high speed running shoes and gets to the door one step before you. He buys the car at the agreed price and turns around and offers to sell to you for $100 more. Now you don't have to take that offer, but you really need a car and the high frequency car trader is watching all of the people selling cars and he will always get...
by Jack
Sun Mar 09, 2014 3:56 pm
Forum: Personal Finance (Not Investing)
Topic: Separate Health Insurance For 19 Year Old
Replies: 41
Views: 3273

Re: Separate Health Insurance For 19 Year Old

It's perhaps worth mentioning that insurance brokers don't get commissions on student health plans.
by Jack
Sun Mar 09, 2014 12:55 am
Forum: Personal Finance (Not Investing)
Topic: Separate Health Insurance For 19 Year Old
Replies: 41
Views: 3273

Re: Separate Health Insurance For 19 Year Old

http://www.uhs.wisc.edu/ship/faqs.shtml#1 How is SHIP affected by the Affordable Care Act (ACA)? SHIP coverage already equals or exceeds the level of coverage for student health plans under the ACA and satisfies the individual mandate. Don't know how it can satisfy the mandate when it has a pre-ex waiting period, a lifetime max and annual max on Rx, all of which make it non-compliant with ACA. It probably doesn't cover maternity either. ... Must be one of those things where they make it up as they go along... Nope, you are looking at last year's plan effective August 2013 through August 2014. The new 2014 plans will be fully compliant with the ACA essential benefits including maternity, no pre-existing conditions, and no lifetime maximums....
by Jack
Sat Mar 08, 2014 9:59 pm
Forum: Investing - Theory, News & General
Topic: second part of the series on preference for cash dividends
Replies: 13
Views: 1710

Re: second part of the series on preference for cash dividen

Keep in mind that the interests of taxable and non-taxable investors may differ on this issue. About 70% of shares are held in tax-deferred acccounts but a vocal taxable minority strongly prefer corporate dividend policies that are favorable to themselves. Some insist that there is zero, zip, nada, not a bit of difference between the risk of dividends and capital gains, a position that just coincidentally saves them lots of money from dividend taxes. This is not a trivial matter. Last year the S&P 500 companies spent $400 billion for stock buybacks while only $280 billion for dividends. This means that 60% of companies' free cash from earnings is not going into shareholders' pockets for efficient reinvestment, but instead is spent by ma...
by Jack
Sat Mar 08, 2014 5:18 pm
Forum: Personal Consumer Issues
Topic: OMG, There Goes Coinstar?
Replies: 38
Views: 5952

Re: OMG, There Goes Coinstar?

Phineas J. Whoopee wrote:
Jack wrote:
Phineas J. Whoopee wrote:If I were really cranky I'd save all my post-1982 pennies ('cause they're mostly zinc) for years and years hoping someday I'd have to pay some unjust charge, solely so I could pile all those worthless little metal disks on the hapless county clerk's, who personally would have had nothing to do with it, desk.
While currency and coins are legal tender for debts, nothing requires one to accept all forms. For example it is quite common to refuse bills larger than $20. Likewise they can refuse to accept 2000 pennies. Even banks may refuse pennies if not rolled.
Well, sure, if you want to get all accurate about it.
PJW
Sorry, my apologies.
by Jack
Sat Mar 08, 2014 5:08 pm
Forum: Personal Consumer Issues
Topic: OMG, There Goes Coinstar?
Replies: 38
Views: 5952

Re: OMG, There Goes Coinstar?

Phineas J. Whoopee wrote:If I were really cranky I'd save all my post-1982 pennies ('cause they're mostly zinc) for years and years hoping someday I'd have to pay some unjust charge, solely so I could pile all those worthless little metal disks on the hapless county clerk's, who personally would have had nothing to do with it, desk.
While currency and coins are legal tender for debts, nothing requires one to accept all forms. For example it is quite common to refuse bills larger than $20. Likewise they can refuse to accept 2000 pennies. Even banks may refuse pennies if not rolled.
by Jack
Sat Mar 08, 2014 4:44 pm
Forum: Personal Consumer Issues
Topic: OMG, There Goes Coinstar?
Replies: 38
Views: 5952

Re: OMG, There Goes Coinstar?

FrugalInvestor wrote:I can't fathom that anyone would pay nearly 10% for this service - but then I'm a Frugal Investor. :wink:
If you exchange your coins for gift cards, there is no fee. For example Home Depot, Staples, Sears, JCPenny, Amazon, iTunes, etc. May be handier than finding a bank that will take your coins.
by Jack
Sat Mar 08, 2014 2:09 pm
Forum: Personal Investments
Topic: Paying $1,000/yr to Vanguard ! Please Help Me
Replies: 40
Views: 8714

Re: Paying $1,000/yr to Vanguard ! Please Help Me

Mazz wrote:[OT comments removed by admin LadyGeek]
There already is one called the Thrift Savings Plan that is almost free, only 0.027%, but you have to work for the federal government to get access.
by Jack
Fri Mar 07, 2014 2:03 pm
Forum: Investing - Theory, News & General
Topic: second part of the series on preference for cash dividends
Replies: 13
Views: 1710

Re: second part of the series on preference for cash dividen

I believe that total return strategies when properly executed will outperform over the long haul in after tax dollars which is why I do it. But you are in a distinct minority as a taxable shareholder. Up to 70% of shares are held in tax-deferred accounts such as pensions, 401(k)s, IRAs, and endowments. Why should companies select dividend policies that serve a minority of their taxable stockholders? I don't think it is a coincidence that company managers and board members happen to be in that minority of taxable shareholders. As economist Myron Gordon (known for the Gordon Equation) pointed out, capital gains are inherently more risky than dividends. A dividend is cash in hand while a capital gain is a speculative bet on future price incre...
by Jack
Thu Mar 06, 2014 1:25 am
Forum: Personal Finance (Not Investing)
Topic: S-Corp worth it given my financial situation?
Replies: 16
Views: 3260

Re: S-Corp worth it given my financial situation?

As an S-Corp your W-2 salary would be subject to employee and employer sides of FICA. If your combined compensation exceeds the FICA max, I believe you can get the excess employee social security taxes back but not the excess employer taxes. Your medicare payments will be limited to your W-2 salary. This is an important point when you have a W-2 job in addition to an S-corp. The thing to keep in mind is that for a sole proprietorship, you pay 2.9% Medicare tax on all income above the $117K social security cap. On the other hand, a sole proprietorship refunds both halves of excess FICA contributions, while an S-corp refunds only the employee half. Since S corp distributions are taxed as ordinary income, there is no difference between S corp...
by Jack
Wed Mar 05, 2014 10:41 pm
Forum: Personal Consumer Issues
Topic: Adventurous Grand Canyon Trip
Replies: 18
Views: 1904

Re: Adventurous Grand Canyon Trip

Browser wrote:You can still jump into Colorado if you hike to the bottom of the Canyon, but you'll probably either die of hypothermia or drown in the swift current. How much do you know about this anyway?
Huh? What? I've spent weeks in the Canyon at a time and traveled its length hundreds of miles and swam in it almost every day. I'm still alive.
by Jack
Tue Mar 04, 2014 1:00 pm
Forum: Investing - Theory, News & General
Topic: Get ready for the Dow at 6,000 by 2016: Pro
Replies: 46
Views: 8902

Re: Get ready for the Dow at 6,000 by 2016: Pro

What happens if I take the mean of Harry Dent Dow 6000 and Kevin Hasset Dow 36,000?

Should I use the arithmetic mean or the geometric mean or the weighted mean?

How do you take a "weighted" mean of two airheads? Is it zero?
by Jack
Sun Mar 02, 2014 4:30 pm
Forum: Personal Finance (Not Investing)
Topic: Paying IRS taxes with a credit card when e-filing
Replies: 7
Views: 1100

Re: Paying IRS taxes with a credit card when e-filing

If your credit card charges a 1.87% fee but rewards are 2.00%, then you save 13 basis points by using your card. On a $10,000 tax bill this earns you $13. How much do you value your time? I would be inclined to just write a check.
by Jack
Sun Mar 02, 2014 12:03 pm
Forum: Investing - Theory, News & General
Topic: Stocks that Don't Pay Dividends - Greater Fool Driven?
Replies: 73
Views: 7805

Re: Stocks that Don't Pay Dividends - Greater Fool Driven?

So we agreed, buybacks have exactly the same effect as dividends in terms of returning cash to shareholders? No, as I stated above, I don't agree with that at all, which is why I prefer dividends to buybacks. Modigliani-Miller, in particular Dividend Irrelevance Theory, is a useful first order approximation but has some essential underlying assumptions that don't hold in real world portfolios. The first assumption is a simple model portfolio consisting of single stock and that re-investments occur in that same stock. But in the real world this is only true for buybacks, not dividends which can be re-invested more diversely. The second assumption is that the stock is always fairly priced. Since the CEO makes market timing decisions as to bu...
by Jack
Sun Mar 02, 2014 10:51 am
Forum: Investing - Theory, News & General
Topic: Stocks that Don't Pay Dividends - Greater Fool Driven?
Replies: 73
Views: 7805

Re: Stocks that Don't Pay Dividends - Greater Fool Driven?

Buybacks move the share price up ... No wonder people seem to be obsessed with buybacks, they believe buybacks increase share price. Presumably they get equally excited about stock splits. Ceterus paribus, a buyback does increase the stock price because it increases the EPS. One cannot simultaneously believe in the Modigliani-Miller hypothesis, which you cited above, and that buybacks increase share price. The exact same math applies in both cases. Buybacks decrease the cash holdings of a stock by precisely the same amount that they reduce share dilution. The two effects are a wash according to Modigliani-Miller math. (Not that I blindly subscribe to Modigliani-Miller. I think buybacks in the real world are at least as likely to reduce sto...
by Jack
Sat Mar 01, 2014 11:53 am
Forum: Investing - Theory, News & General
Topic: Stocks that Don't Pay Dividends - Greater Fool Driven?
Replies: 73
Views: 7805

Re: Stocks that Don't Pay Dividends - Greater Fool Driven?

ogd wrote: Buybacks move the share price up ...
No wonder people seem to be obsessed with buybacks, they believe buybacks increase share price. Presumably they get equally excited about stock splits.
by Jack
Sat Mar 01, 2014 11:11 am
Forum: Investing - Theory, News & General
Topic: Stocks that Don't Pay Dividends - Greater Fool Driven?
Replies: 73
Views: 7805

Re: Stocks that Don't Pay Dividends - Greater Fool Driven?

In the absence of tax effects (such as a difference between dividend tax rates and capital gains) then share buybacks have an identical effect as dividends ... Also they increase the share price This is incorrect. They don't have identical effects and buybacks don't increase share price. Dividends take cash out of the company and distribute it to shareholders. This reduces the share price by the amount of dividend given to the shareholder. Buybacks do not change the share price, which is why managers with stock options prefer buybacks to dividends. Buybacks increase share price the same way stock splits increase your portfolio value, which is not at all. Granted there may be a small bump in share price due to irrational exuberance, but mat...
by Jack
Fri Feb 28, 2014 10:50 pm
Forum: Investing - Theory, News & General
Topic: Stocks that Don't Pay Dividends - Greater Fool Driven?
Replies: 73
Views: 7805

Re: Stocks that Don't Pay Dividends - Greater Fool Driven?

But you didn't answer my question as how to get dividends out of Apple if Apple is hoarding dividends. No. I answered your question. Again, you are confusing your cash flow with the company's cash flow. Personal income to you is not the same as distributing dividends from the company. You wish to optimize your withdrawals for tax purposes. But it should be noted that about 70% of all equity shares are held in tax-deferred accounts -- pensions, mutual funds in 401(k) and IRA accounts, and endowments. The percentage of people who are taxed on dividends is small, primarily high-income individuals (and I realize that many people on this forum might fall in that minority and have strong feelings on the issue). So the question is why company man...
by Jack
Fri Feb 28, 2014 10:26 am
Forum: Personal Investments
Topic: Are 20 somethings handicapped bc of inflation and little SS?
Replies: 162
Views: 15588

Re: Are 20 somethings handicapped bc of inflation and little

newbogleb wrote:For every $1 of Social Security tax paid this year, the benefit that will be paid in the future is $0.75. Source: social security report sent to me a few years ago.
You might want to refresh your memory. That is not what the social security report said at all.
by Jack
Thu Feb 27, 2014 9:50 pm
Forum: Investing - Theory, News & General
Topic: Stocks that Don't Pay Dividends - Greater Fool Driven?
Replies: 73
Views: 7805

Re: Stocks that Don't Pay Dividends - Greater Fool Driven?

All things being equal - I would rather realize taxable income or gains based on my preferred schedule by selling shares. Rather than be forced to pay taxes on a regular schedule through dividends. Why - precisely - would someone NOT want control over when they realize taxable income-gains from their investments? Apple holds $150 billion in cash reserves. Let's say you own Vanguard Total Stock Market Fund. How do you propose getting your dividends out of Apple on your schedule? Sell some of my TSM. Money is fungible. It doesn't matter if "Apple" tracks it as a dividend or a capital gain. The appropriate appreciation will be recognized in my TSM fund to reflect that value AND I can realize that value by selling TSM. Easy. Even bet...
by Jack
Thu Feb 27, 2014 5:41 pm
Forum: Personal Finance (Not Investing)
Topic: Early Retirement and ObamaCare
Replies: 26
Views: 4074

Re: Early Retirement and ObamaCare

I have read that the age you can become subject to recovery is 55. Typically a person who might be on Medicaid under the new ACA would switch to Medicare at age 65, so there is 10 years of potential exposure. Below are some notes I posted elsewhere: You are referring to the Medicaid Estate Recovery provision of the Omnibus Budget Reconciliation Act of 1993. This law requires states to recover money received for Medicaid from estates. This is nothing new. It has been around for 20 years. What is new is that the ACA makes many more people eligible for Medicaid than previously. Some things to keep in mind regarding Medicaid Estate Recovery. 1. It applies only to Medicaid benefits received after age 55. Most people revert to Medicare at 65. 2....
by Jack
Thu Feb 27, 2014 5:32 pm
Forum: Personal Finance (Not Investing)
Topic: Early Retirement and ObamaCare
Replies: 26
Views: 4074

Re: Early Retirement and ObamaCare

Phineas J. Whoopee wrote:The asset limits, in Medicaid-expanding states, apply only to recipients 65 and older.
The same is true in non-expanding states. No more asset tests for those under 65.
by Jack
Thu Feb 27, 2014 1:00 pm
Forum: Personal Finance (Not Investing)
Topic: Recognizing losses in a sole proprietor
Replies: 4
Views: 1039

Re: Recognizing losses in a sole proprietor

Business account or no business account makes no difference. As a sole proprietorship you don't even need a business account and can run your business out of your personal account if you like.

But either way, you can only deduct business expenses that are spent on your business. You can never deduct personal expenses regardless of what account you draw them from. Where the money comes from or from what account is irrelevant. You must classify all spending as business vs personal and only deduct the business spending. You save receipts to prove business spending for a business deduction. The IRS could care less where the money comes from.
by Jack
Thu Feb 27, 2014 12:39 pm
Forum: Investing - Theory, News & General
Topic: Stocks that Don't Pay Dividends - Greater Fool Driven?
Replies: 73
Views: 7805

Re: Stocks that Don't Pay Dividends - Greater Fool Driven?

leonard wrote:All things being equal - I would rather realize taxable income or gains based on my preferred schedule by selling shares. Rather than be forced to pay taxes on a regular schedule through dividends.

Why - precisely - would someone NOT want control over when they realize taxable income-gains from their investments?
Apple holds $150 billion in cash reserves. Let's say you own Vanguard Total Stock Market Fund. How do you propose getting your dividends out of Apple on your schedule?
by Jack
Thu Feb 27, 2014 12:49 am
Forum: Personal Finance (Not Investing)
Topic: Reasons not to file and suspend??
Replies: 19
Views: 2109

Re: Reasons not to file and suspend??

Can you have the older higher earning spouse file and suspend at 66, allowing the younger lower earning spouse to file at 62 so the younger can collect a combination of their own benefit and the spousal benefit? Meanwhile the older spouse would collect a restricted spousal benefit from the younger spouse between 66 and 70 before unsuspending their own benefit.

This would be combining the file and suspend strategy with the restricted benefit strategy. Don't know if both spouses can collect spousal benefits from each other at the same time.
by Jack
Thu Feb 27, 2014 12:18 am
Forum: Personal Finance (Not Investing)
Topic: Re: Billing for annual physicals
Replies: 73
Views: 11636

Re: Billing for annual physicals

That article that you shared has nothing to do with this alleged "superbilling" you describe. It had to do with an admission status for a patient in the hospital and has nothing to do with billing. Actually, it has a lot to do with hospital billing and payments. The ACA introduced the Hospital Readmission Reduction Program to provide incentives to reduce costly preventable readmission of patients to hospitals. At one time about 20% of all Medicare patients admitted to a hospital were readmitted within 30 days. There are penalties imposed if a hospital has higher than average rate of readmissions. The penalty can be up to a 3% reduction of all Medicare payments to that hospital. Hospitals will code patients as observational status...
by Jack
Wed Feb 26, 2014 4:19 pm
Forum: Investing - Theory, News & General
Topic: Inflation question
Replies: 30
Views: 3621

Re: Inflation question

This shows two things. First, the amount of currency in circulation is only a small part of the money supply. Second, it is currently 31% which is way higher than I thought, and, yes, after years of slow, steady increase it seems to have quadrupled rather suddenly, so I wonder, yeah, what's with that? Anyone know? As Oicuryy pointed out, MB consists of currency plus Federal Bank reserves. Currency is only about $1.2 trillion. Banks buy just enough currency from the Federal Reserve keep their ATMs full and customers walking around with money in their wallets. The amount of currency generally tracks the consumer price index, as you would expect, because people generally keep about the same amount of purchasing power in their wallets -- enoug...
by Jack
Wed Feb 26, 2014 3:52 pm
Forum: Investing - Theory, News & General
Topic: Inflation question
Replies: 30
Views: 3621

Re: Inflation question

I'd like to *bump* this thread because I think the last poster asked a good question that I do not know the answer to. The other reason I'd like it answered is because I went on a tour of one of the gov't printing offices, and the tour guide admitted how much currency was being eliminated each month (from ware/tear) versus being newly printed and the printing amount was higher. The Treasury printing presses do not actually create a single new dollar. The Federal Reserve keeps track of the demand for physical cash, for example banks need to fill their ATM machines, and requests that the Treasury print enough bills to meet demand. Then the Fed sells the bills to a bank that needs them to fill their ATMs, for example. So for every dollar bill...