March, finally!   Might be my advancing age but winters seem to be getting longer.  Perhaps the pull for seniors to migrate to Florida is genetic.

As we turn the corner towards spring, here’s some observations and thoughts rattling around my noggin.

Tax Season

Tax reporting stress is on, full throttle.  It is perfectly understandable that law-abiding taxpayers are fervently trying to fill their tax document shoebox for their tax preparer but allow me to add a word of caution. 

The outrageous complexity of the tax code, especially the detailed information now required on investment 1099 forms, makes it most difficult to gather accurate tax data in time to file your tax return by April 15th

Here’s a secret.  It doesn’t cost anything to file an extension past April 15th - you have until October 15th to file - and many tax preparers like extensions because it allows them to balance out their tax workload during and after the tax season.

It is wiser to wait for your final investment data, even if it means filing an extended return, than rush to file a return and then receive a corrected 1099 or K-1.  A corrected tax form means an amended tax return, which does increase your tax preparation costs.

Who knows, if you inform your tax professional that you want to file an extension, he/she might even give you a Starbucks gift card in appreciation.

Millennial Ignorance

I’ve been watching the rising profile of Alexandria-Ortega Cortez (“AOC”) with some concern.   She is a devout socialist and went from tending bar to winning a House congressional seat last fall representing New York City in a stunning political upset.

When she opens her mouth, nonsense often spills out and yet she is developing quite the following on social media and is now a leftist media star.

She led the push that forced Amazon to pull the plug on their new headquarters project in New York City this month.  Sure, the project was chock full of corporate welfare in the form of future tax breaks, but Amazon promised to create 25,000 new jobs paying more than $100,000.  

The massive corporate investment would have helped to revitalize the city.  No good, said AOC, because housing costs would go up for the local residents and all the jobs were to be non-union, so she and others chased Amazon away.

Here’s the rub:  The $3 billion in corporate welfare was in the form of future tax breaks; Amazon was not to be handed billions in cash to build the complex.  Analysts estimated the tax incentive package could generate $30 billion in future tax revenue for the city.  Yet to paraphrase AOC during her victory lap, she wants the three billion saved by the project cancellation to be spent on the city’s decrepit subway system now.  Hello, there was no check!    

She made a similar embarrassing comment about the math involved to shift defense spending to pay for universal free health insurance and – get this – she has an economics degree from an Ivy League university.  In Millennial vernacular, OMG.

I don’t have the space to chronicle more of her outrageous comments, but there’s a growing interest in socialism among young adults, fueled by their illiteracy about financial and economic matters.  I saw a study where two-thirds of all Americans would fail a basic financial literacy test; for Millennials, I bet the percentage is even higher.

This mainstream ignorance enables the likes of AOC to create a political platform based on ridding the world of farting cows (I kid not), free health insurance, government income payments to every citizen and the banning of fossil fuels in twelve years – and it germinates.

I don’t have answers to the financial illiteracy problem – you can’t force people buy health insurance or learn finance - but I know enough that socialism is a bad, dangerous economic model.  

No society in human history has survived based on the economic model of universal free stuff.  Yet the promise of all the free stuff you want seems to be music to the ears of the manipulated illiterate. 

As Margaret Thatcher said best: “The problem with socialism is that at some point you run out of other people’s money.”

China Trade Talks

All six of you who read our blog from cover-to-cover know that we were bullish heading into ’19 rebounding off the bizarre 4Q18; so far that forecast has been correct.  One of our two caveats was the ongoing China trade tempest.  March 1st was to be the witching hour, at which date Trump was prepared to levy massive tariffs on all Chinese imports if a new trade deal was not struck.

Just this week, Trump announced a stay on the new tariffs, citing good progress in the trade talks.  China’s stock market surged 6% in one day on the news.  Trump and China both need a trade deal badly and one will materialize in 2019.  It will be welcome news for stock investors and iPhone purchasers alike.


Caveat #2 is the risk surrounding a “hard Brexit” event.  Great Britain is scheduled to leave the Economic Union on March 29th and there’s drama about what will actually happen on that date.   Many doomsday opinions are floating around, others claiming the economic impact is being over-hyped for political reasons.

I can’t form an opinion on the stock market impact due to Brexit because it is such an unprecedented event.   The fact that GB never relinquished their currency to adopt the Euro will help alleviate the economic discomfort much quicker.   Keep on eye on this headline political issue over the next few weeks.

Party Likes It’s 1998

This cycle feels so much like 1998.  In mid-1998, the economy was booming during the tech bubble.  The stock market suffered a short bear market, then reversed, and 1999 was proved to be an extraordinary year for US stocks.  Then 2000 brought a recession and a nasty, three-year bear market.  Is 2020 the new 2000?

Until next time, be well….Tim