The Ricks Report
November 6, 2017
NUMBERS OF $IGNIFICANCE
MORE AND MORE RENTERS – The 111.4 million households that existed in the United States on 9/30/09 were split between 75.3 million owners and 1 million renters. The 119.1 million households in the United States on 9/30/17 were split between 76.2 million owners and 42.9 million renters (source: Census Bureau).
LESS RUSH TO DRILL – Since peaking at 958 operating oil rigs nationwide as of Friday 7/28/17, the number of oil rigs in use in the United States has declined in 11 of the last 14 weeks (including the last 5 weeks in a row) to 898 operating rigs as of Friday 11/03/17 (source: Baker Hughes).
FED JOBS – Janet Yellen’s 4-year term as Fed Chair expires on 2/03/18. President Trump announced on 11/02/17 that Jerome Powell will replace Yellen as Fed Chair. Yellen could, if she chooses, stay on as a member of the Fed’s Board of Governors for 6 more years through 1/31/2024 (source: Federal Reserve).
WINNING AT LIFE WITH GREGORY RICKS
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“Taxes are what we pay for a civilized society.”
U.S. Supreme Court Justice Oliver Wendell Holmes’s statement is engraved on the front of the Internal Revenue Service building in Washington, D.C. Some people agree with the sentiment. Others believe it to be a logical fallacy.
It’s likely the tax plan proposed by House Republicans last week had all of them talking, regardless of position on the opinion spectrum. Some of the changes suggested in the proposal include:
 13 Tax Quotes By Famous People In Positions Of Power – Kay Bell – http://www.bankrate.com/finance/taxes/tax-quotes-by-famous-people-in-power-1.aspx#slide=3
- Reducing current marginal income tax brackets from seven to four (12, 25, 35, and 39.6 percent). The New York Times reported, “While the lowest income rate would increase, typical families in the existing 10 percent bracket would most likely be better off because of a larger child tax credit and an increase in the standard deduction.”
- Repealing the Alternative Minimum Tax.
- Increasing the standard deduction to $12,000 for individuals and $24,000 for married couples, while eliminating personal exemptions (the $4,050 exemptions you claim for yourself, your spouse, and your dependents).
- Repealing state and local tax deductions.
- Reducing (and eventually eliminating) estate taxes.
- Setting the corporate tax rate at 20 percent. Financial Times wrote, “This will not increase wages or growth by much, and nowhere near the wild claims made by its proponents. But a lower rate combined with a broader tax base is not a terrible idea…To pay for the cuts, the tax law writers have gone after corporate deductions…”
- Eliminating medical expense deductions. The Hill explained, “Under current law, the IRS allows individuals to deduct qualified medical expenses that exceed 10 percent of a person’s adjusted gross income for the year. The bill would repeal that itemized deduction, effective in 2018.”
In addition to headline news about tax reform, investors contemplated the appointment of Jerome Powell as the next Chair of the Federal Reserve and embraced strong earnings. The Standard & Poor’s 500 Index, Dow Jones Industrial Average, and NASDAQ closed at record highs last week.
|Data as of 11/3/17||1-Week||Y-T-D||1-Year||3-Year||5-Year||10-Year|
|Standard & Poor’s 500 (Domestic Stocks)||0.3%||15.6%||23.9%||8.7%||12.8%||5.6%|
|Dow Jones Global ex-U.S.||0.9||21.6||22.9||4.0||5.4||-0.9|
|10-year Treasury Note (Yield Only)||2.3||NA||1.8||2.4||1.7||4.3|
|Gold (per ounce)||0.1||9.3||-2.6||2.8||-5.5||4.6|
|Bloomberg Commodity Index||1.2||-0.7||3.9||-9.6||-9.1||-7.1|
|DJ Equity All REIT Total Return Index||1.2||7.0||14.0||7.2||10.2||6.8|
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
 Six Charts That Help Explain the Republican Tax Plan Alicia Parlapiano – https://www.nytimes.com/interactive/2017/09/27/us/politics/six-charts-to-explain-the-republican-tax-plan.html
 3 Game-Changers for Investors in the New House Tax Plan – https://www.kiplinger.com/article/taxes/T055-C032-S014-3-game-changers-for-investors-in-house-tax-plan.html
 You must be a Premium Subscriber to read –https://www.ft.com/content/ee5a97ce-c07e-11e7-b8a3-38a6e068f464 (
 GOP tax bill would eliminate medical expense deductions -Nathaniel Weixel – http://thehill.com/policy/finance/358437-gop-tax-bill-would-eliminate-medical-expense-deductions
 Trump picks Jerome Powell to succeed Yellen as Fed chair – Jeff Cox – https://www.cnbc.com/2017/11/02/trump-picks-jerome-powell-to-succeed-yellen-as-fed-chair.html
 Nasdaq, S&P 500 and Dow close at record highs as Apple and Qualcomm rally -Fred Imbert – https://www.cnbc.com/2017/11/03/us-stocks-apple-earnings-jobs-report.html
ARE YOU BULLISH ABOUT PET TECH?
Early in the last century, authors like Anna Sewell (Black Beauty) and Jack London (White Fang) wrote stories that encouraged readers to understand and empathize with animals. Today, entrepreneurs are developing devices to help people better understand pets. Here are a few innovations in the pet-tech space that may (or may not) become household necessities or in-demand holiday gifts:
- Remote control pet interaction. You may be sitting in your office, miles from home, but that doesn’t mean you can’t pull out your smartphone and fling a treat to Fido or shine a laser for Boots to chase. That’s right, interactive pet cameras let you see, feed, talk to, and play with your pet when you’re far away.
- Pet insight software. A tech writer at Slate wrote, “For the most part, [my cat’s] feelings, daily activities, and health are a black box to me.” Apparently, it’s a common issue. Entrepreneurs have invested $10 million to develop “deep learning software that can analyze the huge quantities of pet video…to learn more about animal behavior and how it’s linked to animal health issues and moods.”
- Fitness trackers for pets. Pet owners who suspect their animals are too sedentary may want to invest in smart collars for their pets. Some collars track temperature, heart rate, heart rate variability, activity, calories burned, and more. Once a normal baseline has been established, pet owners may be able to spot anomalies that signal health issues.
- Robotic pets with artificial intelligence. Perhaps, you just don’t have the time to feed, walk, and play with a pet. Maybe, you travel too much or dislike the household wear and tear associated with pets. If you want a pet that behaves perfectly and requires less care, you may want to consider a robotic alternative that’s “packed with an array of sensors, cameras, microphones, and internet connectivity, as well as far more advanced AI backed by cloud computing to develop the dog’s personality,” according to The Guardian.
It’s a high-tech world, after all.
WEEKLY FOCUS – THINK ABOUT IT
“Lots of people talk to animals…. Not very many listen, though…. That’s the problem.”–Benjamin Hoff, Author of The Tao of Pooh
 Jack London’s The Call of the Wild: “Nature Faker”? | EDSITEment – https://edsitement.neh.gov/lesson-plan/jack-londons-call-wild-nature-faker
 This start-up is using AI to figure out what our pets are trying to tell us – Lora Kolodny – https://www.cnbc.com/2017/10/25/petcube-raises-10m-from-yc-almaz-capital-to-understand-dogs-cats.html
 Go Ahead, Put a Fitness Tracker on Your Pet – Christina Bonnington http://www.slate.com/articles/technology/technology/2017/11/go_ahead_put_a_fitness_tracker_on_your_pet.html
 Sony brings its AI-infused robotic dog Aibo back from the dead – Samuel Gibbs – https://www.theguardian.com/technology/2017/nov/01/sony-aibo-ai-robotic-dog-back-from-dead
 Quotes About Animals: Why Animals Are Important to Us – https://www.dogquotations.com/quotes-about-animals.html
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Investment advisory services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Adviser. SEC registration does not imply any level of skill or training. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein.
* These views are those of Carson Group Coaching, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including loss of principal.
* Consult your financial professional before making any investment decision.
*Carson Group Coaching prepared this newsletter. Carson Group Coaching is not affiliated with the named broker/dealer. *LPL Compliance Number is 1-664109*
https://www.ft.com/content/ee5a97ce-c07e-11e7-b8a3-38a6e068f464 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/11-06-17_FinancialTimes-The_Good_the_Bad_and_the_Ugly_of_US_Tax_Reform-Footnote_4.pdf)