Sunday, June 30, 2013

The Almost Liberated Woman, Cont'd.

Following up on a recent post, here are two ads that illustrate the changes wrought in the 1960s.

From 1963, a Chase nest egg ad features a well-dressed woman watering her plants. (Shouldn't she have had staff for that?)

Half a decade later, in 1968, Peck and Peck shows us a woman more interested in growth stocks than growing plants. (Welcome to the Go-Go Years!)

Thursday, June 27, 2013

Are Apples Collectible?

Christie's thinks so. First Bytes, an online auction, features this Apple-1 from 1976, the first product of the Apple Computer Company.

Also up for bid, and considerably cooler, this 20th anniversary Macintosh from 1997. Features include leather wrist-rests and a Bose sound system with external subwoofer.

The online auction ends July 9.

Wednesday, June 26, 2013

Taxing Same-Sex Marriage

Uncle Sam is expected to profit from the spread of same-sex marriage. (Divorce is another matter.) Upper-income couples could see their federal income tax bill grow thousands of dollars bigger.

One possible result: increased demand for tax-sensitive investment guidance.

Monday, June 24, 2013

Did You Save Your Confederate Money?

At the NY Times store, this $500 Confederate bond goes for $340. Not face value, but still . . . .

The Rocky Road to Manderley

Someday the effort to stage an American production of the European musical Rebecca – frustrated by a scam we mentioned here – will inspire a hit Broadway farce. Meanwhile, read David Kamp's entertaining synopsis, The Road to Manderley.

Where else will you find a real-life story in which at least three key characters, plus a considerable amount of money, turn out to be imaginary?

Saturday, June 22, 2013

There’ll Always Be A Tax Haven

Even today, the sun seldom sets on the fragments of the British Empire. See this Telegraph slide show.

The fragments aren't as insignificant as their size suggests. Many have become thriving financial centers, including . . .

Anguilla: a population of fewer than 16,000 and a reputation as a tax haven.

Bermuda: a popular haven for corporations, especially reinsurance companies.

British Virgin Islands: the corporate tax rate is a less than punitive 0%.

Cayman Islands: probably the first locale people think of when they hear “tax haven.”

Gibraltar: where The Girl With the Dragon Tattoo stashed her millions.

Turks and Caicos: about 30% of GDP comes from “financial services.”

Until we get a world government (let's not hurry) tax havens will continue to lure business and spice up the practice of wealth management. Unfortunately, personal visits are seldom necessary.

Turks & Caicos beach

Related Posts:
The Girl With the Family Office
Shelters for Hedgies

Nicely done

Video by Loring Ward.

I never posted a video before.  If this doesn't work, here's the You Tube link:

The point is the importance of professional advice.

Sunday, June 16, 2013

1968: The Almost Liberated Woman

Bet the imaginary heiress in this 1968 Chemical Bank ad could have spiced up the plot of Mad Men. Her $300,000 was equivalent to a couple of million today.

Women were getting more attention in financial advertising in the 'Sixties, though they weren't quite liberated. (Yale College admitted its first women students, rightly described as superwomen, in 1969.) In Chemical's view, men were unlikely to spring for more than a custody account. Women would need an investment manager. You can see the contrast in the two ads shown here.

Wednesday, June 12, 2013

The Power of Graphics

When marketing financial products and services, often we're called upon to present facts and figures. Facts are facts and figures don't lie. But facts cam be slanted and figures – well, the message may depend on how you look at the figures, how you depict them.

Here's a remarkable example from today's papers. The WSJ shows T-bond yields taking a shocking leap as Global Tumult Grips Markets.

The NY Times takes the long view of bond yields and delivers a different message. Perhaps it's just the End of an Era.
Whether it's time to panic or to sit back and accept the inevitable is a question beyond the province of this blog. Personally, ten-year bond yields of little more than 2 percent don't sound like the end of the world.

Tuesday, June 11, 2013

Tax Reform? You Should Live So Long

Let's get income tax reform done in 2013, urges the Billings Gazette. This former Congressman believes tax reform can happen. Most taxpayers, not to mention most voters, probably hope he's right.

Before you get your hopes up, read Stan Collender: No Tax Reform Before The End Of This Decade. Collender is an old Washington hand and erstwhile staffer on Congressional tax committees. The last great effort at tax reform took three years to achieve, he points out. And Congress was relatively functional in those days. What's more, the 1986 Tax Reform Act had a dynamic champion in Dan Rostenkowski.

If we can update the corporate tax and classify carried interest as income by the time Obama leaves office, we should count ourselves lucky. 

Perils of Investing in Show Biz

From Vanity Fair:

Justin Bieber Con Artist, Who Wheedled $1 Million Out of California Investor, Faces Sentencing

Monday, June 10, 2013

Millionaires: No Longer Worth Marrying

These days, The New York Times laments, mere millionaires have to keep working; they can't afford to retire. Decades of inflation have reduced $1 million to nonwealth:
In 1953, when “How to Marry a Millionaire” was in movie theaters, $1 million bought the equivalent of $8.7 million today. Now $1 million won’t even buy an average Manhattan apartment….
 Remarkably low bond yields make 2013 an especially tough time to retire with a mere $1 million. Or maybe not. Truth is, retirees usually get the short end of the stick, one way or another.

 In 1980, for instance, Treasury bonds yielded double digits – around 10%. After the high taxes of the era, a retiree netted maybe 6%.  No, strike that. In 1980 a retiree netted less than nothing. That year the inflation rate was 12%.

As The Times suggests, retirees need common stocks in order to achieve positive returns. And they shouldn't let Mr. Market's mood swings scare them. That's easy for wealth managers to say, difficult for ordinary people to do.

Oddly, Mr. Market's mood swings don't scare anybody, even the most timid millionaires, when for no good reason he sends the Dow up 30%.

Tuesday, June 04, 2013

“High Income” vs. “Wealth”

High-income folks aren't necessarily High Net Worth – a distinction worth preserving, but probably a lost cause. Credit James Taranto with giving it the old college try:
The relationship between annual income and wealth is analogous to that between caloric intake and body weight: The former obviously contributes to the latter, but they are not the same thing. 
To characterize somebody with a high annual income as wealthy is like assuming anybody who gorges himself at a meal must be fat. Wealthy people can have a low annual income, too. Think of dissolute trust-funders squandering their inheritance--in our analogy, the equivalent of obese starvation dieters.
 Actually, the trust-funders' low income occurs only after they've shrunk from wealthy to affluent. Nevertheless, Taranto makes worthwhile points about how the burden of the federal income tax is analyzed. The flip side of the mortgage-interest deduction, for instance, is higher tax on renters and taxpayers who own their homes outright.

Monday, June 03, 2013

Can Insider Trading Be Curbed?

The New Yorker's James Surowiecki looks at the boom in insider trading, fueled by fierce competition among thousands of hedge funds. Roughly 8,000 hedge funds exist. Eight thousand! On average they underperform the market.

Surowiecki suggests the value of insider information would decline if companies announced every material happening as soon as it happens. Would companies agree to make that information available to competitors? In any case, faster disclosure might not help.

Some companies, Surowiecki notes, no longer even report quarterly earnings. Considering the Wall Street farce that beating quarterly estimates had become, that seems like a plus.

Acme CyberGlobal today reported first quarter earnings of $2.15 a share, exceeding analyst estimates of $2.14 per share. This marks the nineteenth consecutive quarter in which Acme's earnings have exceeded estimates by exactly one cent. 
Hedgers caught trading on insider information receive tough sentences these days. As legal threats to notable hedge funds have mounted, nervous investors may head for the exits. Even Steven Cohen's SAC Capital Advisers, Bloomberg reports, could be reduced to a multi-billion-dollar family office.