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Amazon Is Going to Crush This Entire Group of Companies

Amazon.com Inc. (Nasdaq: AMZN) is about to strike at a new target.

“It’s a matter of when, not if,” David Larsen told clients in a report last Thursday.

Larsen is an analyst at Leerink Partners, an elite boutique brokerage firm that’s an expert on health care stocks.

From my 20 years on Wall Street, I know that Leerink’s analysts are top-notch.

When they say something, you pay attention … which is exactly what many of you need to do now.

Because if Amazon enters this market, it would pose an immediate threat to many of your stocks.

 These are popular, dividend-paying stocks that I’m certain many of you own.

And that’s terrible news for you and your portfolio.

See, here’s what happens when Amazon targets your stock…

First, they start going down.

Second, as the business that your stock controls gets “Amazoned,” it keeps going down.

In this case, it’s a business that’s seen as safe. It has many barriers to entry, according to one of the CEOs who’s being targeted.

However, an analyst at a consultancy believes otherwise.

“They are disruptive instantly if they do it differently,” says Linda Cahn at Pharmacy Benefit Consultants.

So, what’s the business that Amazon is getting ready to disrupt?

Ripe to Be Amazoned

It’s the prescription drug market.

You may not have known this, but before you get your drugs from your local drugstore, they go through quite a wild ride.

Just take a look at this infographic to see what I’m talking about:

drug-middlemen-pbms

(Source: USA Today)

This convoluted pipeline enriches middlemen. It also makes drugs more expensive by as much as 36%.

This is a big deal. Total prescription drug spending in the U.S. was $457 billion in 2015. And it’s set to skyrocket to $610 billion by 2021, according to recent research.

The current system is a gold mine for the middlemen — companies like Walgreens Boots Alliance Inc. (Nasdaq: WBA), CVS Health Corp. (NYSE: CVS) and Express Scripts Holding Co. (Nasdaq: ESRX) get rich off of us.

That’s because in the end, all the extra cash comes from you and me, most directly through higher copays at the pharmacy and from rising health insurance rates. Finally, we also pay through our taxes when we pay for government programs like Medicare and Medicaid.

In other words, this group of companies is ripe to be Amazoned.

Transparency and Efficiency

You see, Amazon specializes in bringing price transparency and efficiency to the businesses it goes after. That’s because these are businesses that make their money because they lack transparency and efficiency.

“Amazon could bring transparency into a marketplace that is entirely lacking,” says Cahn.

Amazon poses a real, direct threat to the big drugstore companies, according to Leerink Partners.

I agree. And the stock market is noticing and beginning to price in this threat.

Already, the stock of CVS is down 28% from its high point hit in May 2016. Walgreen is down 27% from its high in August 2015. Finally, Express Scripts is down 37% from its high point in July 2015.

I believe that these companies are going to get destroyed by Amazon. That’s because their only true competitive advantage is information.

It used to be hard to get information about drug prices and pharma spending. However, this is no longer true.

This information is now available widely. And in Amazon’s hands, it’ll become a flamethrower that destroys the profits these middlemen businesses generate.

Death Traps for Your Money

When Amazon enters this business, it’ll cut prices. We know this because of other businesses that have been Amazoned. It’s also the first thing that Amazon did when it got control of Whole Foods, which it recently acquired.

With that, the profits margins of CVS, Walgreens and Express Scripts are going to be crushed. Their stocks will follow.

Now, many of you are going to be tempted to buy these stocks. They are going to look cheap. And they’ll keep looking cheap. But don’t be lured into them.

I believe these companies are death traps for your money. They are doomed. Amazon and innovative companies like it are going to crush them until they are gone.

Regards,

Paul Mampilly
Editor, Profits Unlimited

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Source: Banyan Hill

Bitcoin Feels the Pain as Stocks Inch Higher

Stocks moved slightly higher on Thursday in a quiet holiday session. Bitcoin provided a dose of excitement, however, with prices falling back below $14,000 in the wake of reports of a possible regulatory crackdown in South Korea — including requiring exchanges to verify user identities to fight money laundering activity — and work of another “hard fork” before the end of the year.

In the end, the Dow Jones Industrial Average gained 0.3%, the S&P 500 gained 0.2%, the Nasdaq Composite gained 0.2% and the Russell 2000 gained 0.3%. Treasury bonds declined, the dollar fell, gold gained 0.4% and crude oil added 0.5%.

Defensive telecom stocks led the way with a 0.5% gain while consumer staples were the laggards, down 0.2%. Netflix, Inc. (NASDAQ:NFLX) gained 3.5% in an attempt to push back up and over its 50-day moving average. Altria (NYSE:MO) fell 1.6%. When Netflix and cigarettes are the height of the action, you know Wall Street is mostly shut down.

Conclusion

The overbought situation just keeps getting more and more ridiculous, with the weekly RSI indicator hitting levels not seen since the late 1950s as risk and worry fade away; replaced by ebullience and extreme confidence.

There is evidence that some areas of the market are braced for a possible changing of the tide come January, with the yield curve collapsing to its flattest levels since 2007, utility stocks rolling over, and the Nasdaq suffering mid-day sell-offs as traders exit crowded big-cap tech stock positions.

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Source: Investor Place

7 Hot Healthcare Stocks Set to Double in 2018

For investors looking for huge returns, these healthcare stocks to buy may well be the answer. While these stocks are inevitably risky with a lot riding on key clinical results, the results can be spectacular if trials succeed. For example, Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) shares are up over 500% in the past six months following stunning Non-alcoholic Steatohepatitis (NASH) data.

But the riskier the stock, the more important it becomes to check all possible data signals. Here we used TipRanks stock screener to pinpoint healthcare stocks with a “Strong Buy” analyst consensus rating. Applying these filters (“Strong Buy,” healthcare sector) led to an extensive list of hot stocks.

You can easily hone in on stocks that stand out from the crowd by looking at the average analyst price target. I scanned for stocks with recent “buy” ratings and upside potential of over 100% for 2018. In fact, all these healthcare stocks to buy ended up also having 100% Street support, as you can see from the screenshots below.

Let’s now dig further into just why these stocks make such intriguing investing opportunities right now:

Healthcare Stocks to Buy: TherapeuticsMD

Source: Shutterstock

This unique biotech specializes in women’s health issues. It’s potentially on the cusp of a big breakthrough with its softgel capsule, TX-004HR, for post-menopausal pains. The stock is currently trading slightly lower on the FDA’s announcement that it will take six months rather than two to review TX-004HR. The PDUFA crunch date for approval/ rejection now falls on May 29, 2018.

Crucially, analysts remain bullish on TherapeuticsMD, Inc. (NYSE:TXMD) outlook even after this setback. Noble Financial’s Caroline Palomeque reiterated her buy rating on December 20. She says the ‘stock pullback provides buying opportunity’ and notes that the six-month classification is due to regulatory process rather than clinical issues.

“Following the acceptance of the NDA resubmission for TX-004HR, the stock was down ~5% pre-market, in our view, due to the NDA resubmission being classified as a Class 2. We note that the overall news was positive, as the company was given a PDUDFA date by the FDA. The slight pullback may provide an entry point for investors.”

In the last three months, this ‘Strong Buy’ stock has scored an impressive seven “buy” ratings from the Street. These analysts have an average price target on the stock of $16.33, which indicates huge upside potential of over 165%.


Click to Enlarge

Healthcare Stocks to Buy: Synergy Pharmaceuticals

For investors who like risk, I recommend checking out Synergy Pharmaceuticals, Inc.(NASDAQ:SGYP). This gastrointestinal biopharma is heading for a critical January with multiple catalysts on the horizon. First, the FDA will announce whether Synergy’s key Trulance drug is approved for IBS-C (irritable bowel syndrome with constipation) on Jan. 24. The drug is already on sale for chronic idiopathic constipation (CIC).

So far, Trulance’s clinical trial results for IBS-C are very encouraging. Top Cantor Fitzgerald analyst William Tanner says “In our view, Synergy is likely to experience a significant acceleration in sales growth once it obtains a label extension … We believe it highly likely the FDA approves the indication [for IBS-C].” He has a $10 price target on the stock.

At the same time, SGYP must also demonstrate that it has $128 million in the bank on Jan. 31. The company needs this to receive the second tranche of its debt facility in February. Again, it is likely that SGYP will be able to secure the funds — but the risk is still worth noting.

Overall the stock has 100% Street support in the last three months. Five analysts have published SGYP buy ratings with an $8.60 average price target. Given the stock is trading at just $2.25, this suggests an eyebrow-raising 282% upside potential from the current share price.


Click to Enlarge

Healthcare Stocks to Buy: Global Blood Therapeutics (GBT)

Source: Shutterstock

Global Blood Therapeutics, Inc. (NASDAQ:GBT) is one of my favorite stocks right now. And I’m not alone. Top Needham analyst Danielle Brill recently raised her price target on GBT to $70, saying the company is her top pick going into 2018. GBT is currently developing its late-stage product candidate, voxelotor (previously called GBT440), for the treatment of sickle cell disease.

Brill speaks of her “conviction for a positive outcome from Part A of the Phase 3 HOPE trial” in 1H18 after the latest data updates as voxeletor’s safety and efficacy profile remain encouraging.  Plus, Cowen & Co analyst Ritu Baral notes that a clinician presenting data ‘passionately underlined the large impact that the drug has had in these terminally-ill patients from a quality of life standpoint.’

With 5 buy ratings in the past three months, this healthcare stock has a firm ‘Strong Buy’ analyst consensus rating on TipRanks. Meanwhile, the $74.74 average analyst price target works out at 100% upside from the current share price. Indeed, with shares slightly off their $45.70 peak at $37.45, now is a good opportunity to buy.


Click to Enlarge

Healthcare Stocks to Buy: Alder Biopharmaceuticals (ALDR)

Source: Shutterstock

Good news for migraine sufferers- Alder BioPharmaceuticals, Inc. (NASDAQ:ALDR) is currently developing antibody-based treatments for migraine prevention. Its lead candidate, eptinezumab, has already passed a Phase 3 trial, PROMISE 1, for frequent episodic migraine. Now the drug is in a second Phase 3 trial, PROMISE 2, for chronic migraine with results due in 1H18.

The stock has pulled back 50% over the last year because the benefit compared to placebo was less than hoped. But Canaccord Genuity’s Sumant Kulkarni is still confident that the stock has outsized potential. He tells investors to buy the dip because of three key reasons:

  1. ALDR’s product is 100% bioavailable and starts acting within a day, while competitors appear to take longer to act. The product is dosed via quarterly infusions versus most competitors that are monthly injections.
  2. Physicians could be incentivized to administer ALDR’s IV product due to its procedure-based reimbursement.
  3. The migraine prevention market is worth a whopping $7.5-10 billion per year based on 36 million US migraine sufferers, of which ALDR expects to target about 5 million.

But he warns that big competitors could pose a headache for Alder- although it is still too early to be sure. Overall this ‘Strong Buy’ stock has scored five buy ratings in the previous three months.

These five analysts are projecting (on average) upside potential of 110% from the current share price to $23.


Click to Enlarge

Healthcare Stocks to Buy: TG Therapeutics (TGTX)

Source: Shutterstock

If you’re looking for a ‘Strong Buy’ stock with over 200% upside potential, look no further than TG Therapeutics, Inc. (NASDAQ:TGTX). This biopharma is focused on developing novel treatments for B-cell malignancies and autoimmune diseases. Raymond James analyst Reni Benjaminrecently attended an investor event with TGTX. He left the event bullish and released a note maintaining his ‘Strong Buy’ rating on the stock.

“The key ttakeawaysfrom the analyst event in our opinion include: 1) Dr. Owen O’Conner’s analysis of the space leads to one conclusion: PI3K delta’s have robust clinical activity and that TGR-1202 represents the best in class when it comes to tolerability. In our opinion, both are important when it comes to combining with other therapeutic modalities approved for CLL (chronic lymphocytic leukemia)” says Benjamin.

TGTX scores an impressive five “buy” ratings in the last three months — and no hold/ or sell ratings. Overall these five analysts anticipate that the stock will hit $25.83 from the current $8.40 share price.


Click to Enlarge

Healthcare Stocks to Buy: Achaogen (AKAO)

Source: Shutterstock

This innovative biopharma is working on treating serious multi drug-resistant infections. And Achaogen, Inc. (NASDAQ:AKAO) has just announced that it has a new CEO to lead key drug Plazomicin to fruition.

“We see the management transition as a positive for Achaogen, especially given Mr. Wise’s experience in scaling and leading commercial organizations. As Achaogen prepares for the potential commercialization of Plazomicin, we see this as a move in the best interest of the company” writes top Mizuho analyst Difei Yang.

She says Plazomicin has greater potential than rival drugs and boasts impressive survival benefits.

Achaogen has received only buy ratings in the last year- with five buy ratings in the last three months alone. As the stock is now trading at $11, the average analyst price target of $26.20 works out at 138% upside from the current price.

Indeed, Needham’s Alan Carr wrote in November, “stock is undervalued at current levels. Reiterate buy.”


Click to Enlarge

Healthcare Stocks to Buy: Five Prime Therapeutics (FPRX)

Source: Shutterstock

Five Prime Therapeutics, Inc. (NASDAQ:FPRX) is a clinical-stage biotech company discovering and developing novel protein therapeutics. The company is initially focusing on cancer and inflammatory disease. Shares tanked back in November after investors spooked out about before the release of clinical results for pancreatic cancer. However, the results actually revealed better-than-expected response rates.

Five-star Wells Fargo analyst Jim Birchenough reiterated his buy rating on the stock on November 7. He says a 10% response rate in 2nd-line+ pancreatic cancer, with 13% 6-month control rate, represents an impressive result beyond that seen in chemotherapy. The analyst notes that this is in a patient population not responsive to anti-PD1 therapy alone.

Similarly, top Nomura Instinet analyst Christopher Marai says the recent selloff in shares of Five Prime Therapeutics appears unfounded. The data highlights “remarkable durable responses in patients not expected to respond,” Marai tells investors in a research note.

Five Prime is still a ‘Strong Buy’ stock according to the Street, with four recent “buy” ratings. These analysts believe (on average) the stock is capable of spiking over 230% to hit $73 in the next 12 months.

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Source: Investor Place

Your Big Forecasts for 2018

As 2017 comes to a close, my suitcase is calling to me. See, at the end of every year, I like to skip town for a little R&R after celebrating the holidays.

It’s become sort of a tradition with me. (This year, it’s Peru.)

I’m sure you have some of your own unique holiday traditions as well. Maybe it’s going around your street caroling, taking a night to see the Nutcracker, buying three Christmas trees at once … or just making sure the entire extended family can get through a night without the police getting involved.

Here at Banyan Hill Publishing, we also have an “end of the year” tradition: Our editors like to take this time to look ahead to the new year and make their big stock market predictions.

These are the main insights you’ll want to know when you ring in the new year.

So this time, we decided to share those stock market predictions in a week-long special series in Sovereign Investor Daily and Winning Investor Daily. Each editor shared their prediction on what the big movers and shakers are going to be in 2018 — and how you can take advantage of them.

 In case you missed those important nuggets, some of those stock market predictions included…

Paul Mampilly: Our tech expert Paul Mampilly is forecasting Apple’s fall next year. As he wrote, “2018 is the year where I believe you’ll start to see that this once-great American company has peaked.”

And it’s because of one big reason…

It’s a big call, so if you missed it, be sure to read the forecast by clicking here.

Matt Badiali: Our expert in all things natural resources, Matt Badiali, sees one unexpected metal rising in 2018 — platinum. As he says, “In 2018, demand for platinum will rise 2% to 8 million ounces. Supply will fall by 1% to 7.75 million ounces … It wouldn’t surprise me to see platinum prices rise 25% next year.”

To read more, click here.

Ted Bauman: Meanwhile, our asset protection expert let you in on 12 ways you could save on your taxes before the end of the year. His handy list is your one-stop shop to prepare you before the tax law changes in 2018.

You can read about it right here.

To read the rest of our editors’ stock market predictions— on everything from bitcoin to the overall market — just click here.

Now, as you might remember from last week, I also asked you to make some stock market predictions for 2018. Here are a few examples of what was on your minds:

  • A political shake-up is in the works … Some of you said there’s going to be a big shake-up in Washington. Fisher Y. writes: “I believe President Donald Trump will be ousted sooner or later in the 2018.”

 

  • Next year, a sell-off is coming … Vic G. writes: “I believe that we may very well find the markets off of their current levels by 10% to 20% or more by the end of 2018. There is too much political smoke coming from Washington. Though the market remains solid, the threat of bad news causing an immediate sell-off is real. Especially with stocks at an all-time high and investors continuing to chase the bull market. Merry Christmas, and thank you to the entire staff at Banyan Hill. I’ve had a very profitable year and look for that to continue in 2018.”

 

  • Cryptocurrencies are going to be big … Lastly, we saw a huge amount of interest in the cryptocurrency market’s next move. Francis K. writes: “Finding just one good crypto currency to invest in and hold for three to four years might be extremely profitable.”

Thanks to everyone who wrote in! And keep it coming. You can always reach us at SovereignInvestor@banyanhill.com, or you can leave a comment at BanyanHill.com!

With all that said, I hope you get to kick back, relax and enjoy the holidays with those closest to you. It’s been a great year, and I can’t wait to see what 2018 brings for us all.

Regards,

Jessica Cohn-Kleinberg

Managing Editor, Banyan Hill Publishing

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My Prediction for 2018 — This Forgotten Metal Will Soar

It was a brutal six years for the mining industry. While some metals saw their prices rebound in 2017, others didn’t.

There is a formula for rising prices — demand must exceed supply. In some cases, like zinc, a lack of investment meant supply fell below demand. Copper, whose price rose 27%since early 2016, is another metal that will struggle to meet demand.

In 2018, a different metal’s price will begin its rise…

Platinum’s New Trend

Here’s a six-year price chart of platinum:

Despite a 6-year decline in the price of platinum, it wouldn’t surprise me to see platinum prices rise 25% next year. Here's why it will happen.

You can see the steady decline from 2011 to 2016. The price fell by more than half to January 2016. There was a brief rebound that year. Then the price collapsed to its lowest price in two years earlier this month.

The question is: Why do I think this trend will change in 2018?

The answer is simple … supply can’t keep up with demand. In 2017, the supply/demand number was almost even. According to the World Platinum Investment Council, 2017 will end with a small deficit, around 15,000 ounces.

However, that same group expects the gap to expand. In 2018, demand for platinum will rise 2% to 8 million ounces. Supply will fall by 1% to 7.75 million ounces. That means the deficit will be 250,000 ounces.

An Extreme Low for Platinum Prices

In the past, this kind of deficit was enough to draw platinum sellers out. However, the platinum price is sitting at an extreme low. Without a significant increase in price, there won’t be an incentive for sellers. That’s one reason I expect platinum prices to rise in 2018.

But there’s another reason … sentiment.

One of the reasons that copper prices rose so rapidly in 2017 was the idea that electric vehicles would spur demand. That’s right, the price of copper rose because of expected demand. On the opposite side of the coin, platinum prices fell because of a lack of expected demand.

Platinum’s main commercial use is in diesel catalytic converters. In the wake of the Volkswagen scandal, where the company admitted to faking diesel efficiency, the perception of diesel cars fell. And so did the perception of platinum.

In other words, investors didn’t think demand for platinum would come, so they didn’t buy platinum. And so, the price fell.

From a supply perspective, platinum is far worse off than either zinc or copper. Platinum isn’t widespread. Most of the existing mines are deep, old and running out of metal. There aren’t many new platinum mines on the horizon.

Add that to low prices (which spur demand) and a stronger European economy (that prefers diesel cars). That will change platinum’s fortunes in 2018. It wouldn’t surprise me to see platinum prices rise 25% next year.

Good investing,

Matt Badiali

Editor, Real Wealth Strategist

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Source: Banyan Hill

Here’s Where to Look for 2018 Profits

If you’re looking for the best place to invest in 2018, one of your best bets is to put on your investment banker’s hat and bet on “M&As” — mergers and acquisitions.

The biggest of 2017 — the proposed Disney-Twenty-First Century Fox tie-up for $52 billion — is just the beginning.

Tax reform is one piece of the puzzle. It promises to free up billions in corporate cash held in overseas accounts, and lower the corporate tax rate to 21%.

The attitude of American consumers is another component. Consumer spending hit a one-month record not seen since 2009, when the U.S. economy was just emerging from the recession and financial crisis.

 But the key element is what I’ll call corporate sentiment. In other words, CEOs and their boards go through their own cycles of optimism and pessimism, which affects how a company decides to put its excess cash to work.

2018: The Year of Mergers and Acquisitions

The change is evident in a recent Deloitte “M&A 2018” survey of 1,000 executives at large corporations and private equity firms.

  • For one, a rising number of companies — two-thirds of those surveyed — say their cash reserves increased and “the primary intended use of that cash is for M&A deals.”

In recent years, companies indicated they were most likely to pursue organic investments — growing a business in-house — as the most likely use of their cash reserves.

  • But as the report notes, “that’s no longer the case. Predominately, companies now say they are seeking M&A opportunities, with 40% citing that as their No. 1 intention.”
  • In addition, nearly two-thirds of the companies “anticipate the average size of transactions in the next 12 months will exceed those in the past year.”

We’ve already seen a step-up in mergers and acquisitions as the year draws to a close. The analytics firm Dealogic pegged November as the second-largest month ever for M&A activity since it started keeping records in 1995.

A Low-Risk Play

What’s the best way to play this kind of trend?

You can bet on individual stocks. For instance, Bristol-Myers Squibb Co. (NYSE: BMY) and Biogen Inc. (Nasdaq: BIIB) are sometimes mentioned as potential buyout candidates in the pharma sector.

Among the hard-hit retail sector, Nordstrom Inc. (NYSE: JWN) — with its stock down 40% since 2015 — has been mentioned as a potential buyout target.

In the tech sector, Akamai Technologies Inc. (Nasdaq: AKAM) shares leapt 14% on Monday on rising prospects for a buyout.

But such investments are all-or-nothing bets. A better way is to invest through an exchange-traded fund (ETF), such as the IQ Merger Arbitrage ETF (NYSE: MNA). It’s up 5% this year, and up 24% in the last five years.

If you’re looking for the best place to invest in 2018, one of your best bets is to bet on “M&As” — mergers and acquisitions.

(Source: TradingView.com)

The ETF, developed by New York Life Investment Management LLC and managed by IndexIQ Advisors LLC, invests across a range of publicly announced mergers and acquisitions candidates. It’s a good, low-risk way to play the coming explosion of deals in 2018.

Kind regards,

Jeff L. Yastine

Editor, Total Wealth Insider

Right now, an untapped ocean of energy—found underneath all 50 states—is about to transform the world’s energy industry. In fact, there’s enough of this energy in the first six miles of the earth’s crust to power the United States for the next 30,000 years. Wanna know this untapped energy source? Learn NOW! And as companies rush to extract this energy from the ground, they’ll need the help of one Midwestern company’s technology to make use of it. This is your chance to take advantage of John D. Rockefeller-type fortunes. Early Bird Gets The Worm...

Source: Banyan Hill

12 Insanely Profitable Tax Moves to Make Now

Editor’s Note: Welcome to our week-long special series! Our editors for both the Sovereign Investor Daily and Winning Investor Daily are looking ahead to 2018 and providing their insights into what they believe will be the big movers and shakers for the new year. They are also looking at critical steps you can take to preserve and grow your wealth. Happy reading! — Jocelynn Smith, Senior Managing Editor

 

Most people know the 1967 World War II film The Dirty Dozen … at least by name. It’s become shorthand for any set of 12 things that can be advantageous to do, even if they seem a bit disreputable.

The IRS, for example, publishes a Dirty Dozen list of tax scams every year. It includes both scams perpetrated against taxpayers, and those perpetrated by taxpayers against the IRS.

For my final Sovereign Investor Daily article of 2017, here’s my Dirty Dozen list of tax steps you can undertake before December 31 to wring the maximum amount away from Uncle Sam before the law changes in 2018.

Every one of them is a direct consequence of the Republican Party’s looming federal income tax changes. And every one of them is perfectly legal.

 Good Federal Income Tax News … and Not So Good News

Let’s start with a review of the structure of the new federal income tax system — good and bad.

On the plus side, as of Friday last week, the GOP tax plan included lower marginal tax rates for all income brackets, at least until 2027.

All else being equal, that will reduce most people’s taxes at first:

Here’s my Dirty Dozen list of tax steps you can undertake before December 31 - each is a consequence of the looming federal income tax changes.

In addition, owners of pass-through businesses such as limited liability companies (LLCs), partnerships and S corporations will now be able to deduct 20% of their profits from their personal income taxes, up from 17% at present.

For example, if your LLC earns $100,000 in profits, $20,000 of that will be tax-free. The remaining $80,000, plus whatever you draw in salary for yourself, will be taxed at the rates above.

The increase in the standard deduction will result in far fewer households itemizing their deductions. Currently about 30% of households do; under the GOP plan only 5% would do so, since the standard deduction would be higher. Many lower-income households will benefit from the higher standard deduction.

Make Hay While the Sun Shines

That’s the good stuff. But for many of us, the news isn’t all good.

Above all, the combination of the elimination of the personal exemption, a cap of $10,000 on deductions for state, local and property (SALT) taxes, and a limit on mortgage interest deductions will mean that many households — especially in high-tax states — will end up paying more tax.

Nevertheless, this creates simple tax moves that you can undertake between now and the end of the year. They are all based on the principle that if you maximize your itemized deductibles now, lowering your 2017 federal income tax bill, you’ll come out ahead … because you won’t be able to deduct them in 2018.

If you anticipate that your itemized deductions in 2018 will be less than $24,000, you won’t benefit from itemizing.

But if you prepay some of 2018’s deductible expenses now — adding them to your 2017 itemized deductions and reducing your federal income taxes this year — you’ll be able to benefit from them one last time. For example:

1. Give more to charity before December 31. (Note that if you’re thinking about donating stocks to charity, and you own different lots of the same company’s stock, donate the most valuable lots this year. Under current law, you can donate the shares that have appreciated the most to get the largest charitable deduction. Under the new law, you will have to sell the shares first in, first out.

2.  Prepay your 2018 property taxes in full. (Under the final version of the tax bill, you are unfortunately not allowed to prepay 2018 state and local income taxes, but property taxes are fair game.)

3. Prepay next year’s mortgage interest.

4. Prepay any outstanding student loans.

5. Prepay medical expenses that you know you will incur next year, such as a scheduled procedure.

6. If you live in a state that charges sales tax on automobile purchases up front, buy a car before the end of 2017 so you can add that tax to your 2017 itemized deductions.

The same logic also works in reverse. For example:

7. Since you’ll face a $10,000 cap on SALT tax deductions next year, if you live in a high-tax state like New York or California, try to move some future earnings into 2017, boosting your SALT taxes — and thus your itemized deduction — for 2017.

8. Similarly, if you expect to get an annual bonus early next year, ask for it to be prepaid in December.

9. If you’re a consultant or on retainer, see if you can get clients to prepay some of next year’s invoices now to boost your 2017 earnings.

There are also some more arcane strategies you can adopt:

10. If you’re planning to undertake a 1031 swap in 2018 for something other than real estate — say, business equipment or artwork — do it now. From 2018, 1031 swaps will be limited to real estate only.

11. If you’re thinking of converting a traditional IRA into a Roth IRA, run the numbers to see if you will be better off doing it before the end of 2017 to increase your taxable income, which you can offset with some of the itemized deduction strategies above. (Bear in mind that you can do a Roth conversion even if your income exceeds the cap for Roth contributions.)

12. For the pièce de résistance, consider converting yourself into a limited liability company. Depending on your income level, you could double your tax savings by quitting your job today and returning tomorrow as a paid consultant.

Remember, these are all perfectly legal.

But I’d go ahead and look for an experienced tax attorney anyway … after all, with the train wreck that’s headed our way because of this hasty change to the federal income tax law, we’re all gonna need all the help we can get in 2018.

Kind regards,

Ted Bauman

Editor, The Bauman Letter

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill 

What To Expect From Gold In the New Year

Despite the rapid approach of the holiday season – with plenty of investors going on vacation – there has still been plenty of financial news to contemplate. Of course, the biggest news item in the world of investments has been the rapid rise of the price of bitcoin, along with the launch of bitcoin futures.

Actually, “rapid rise” is putting it mildly, as the price has basically gone straight up. The craziness and popularity of cryptocurrencies is probably why we’ve heard almost nothing about gold. It seems like a long time since the masses were clamoring for every ounce of gold they could get their hands on.

These days, gold is barely an afterthought. Who needs precious metals when you can buy bitcoin… or so it seems.

Of course, many investors know better than to fully write off gold. Interest in the yellow metal has always been cyclical There’s no doubt gold will rise again, probably about the time this whole cryptocurrency bubble bursts and investors start panicking.

At least one big options trader is very bullish on gold as early as next month. He or she executed a sizeable trade in January options of SPDR Gold Shares ETF (NYSE: GLD) called a risk reversal. This strategy uses premium from short puts to help finance a long call positon.

Once again, it’s extremely bullish and a bit risky depending on your perspective. The risk reversal can lose the call premium on a down move and even more on the short puts if the price of GLD drops below the short put strike.

On the other hand, if you believe there is a floor to how far gold can fall by January, this type of strategy can be a good, cheap way to bet on gold’s upside.

In this case, the trader bought the January 19th 124 calls and sold the 115 puts at the same time, with GLD around $119 per share. The trade was done for a $0.07 credit, 2,100 times. So, if GLD stays around the current level, the trade makes a small amount of money. Below $115, the trader loses $210,000 per $1. But, above $125, the position makes $210,000 per $1 move higher.

The best part is the risk reversal collects a small amount between $115 and $124, which is a pretty wide range. Basically, it eliminates the negative effects of time decay while still allowing full participation on the upside.

Moreover, gold likely does have a floor as GLD hasn’t been below $115 in almost a year. Plus, with the cryptocurrency mania and other political events, investors aren’t going to stray too far from gold. Gold may be ignored right now, but it isn’t forgotten.

If you’re bullish on gold, you can skip the risk reversal since you likely won’t be trading 2,100 contracts. Instead, buying the calls straight up isn’t a bad idea with how cheap they are right now. The January 120 calls are only trading for $1.00. Getting to $121 (the breakeven point) seems like a very reasonably possibility with a month to go to expiration.

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The No. 1 Stock to Own for 2018

My windshield was smashed. Everything of value in my car was gone. They had rifled through every single thing in my car, leaving a mess.

That’s what happened to me the first time I took my car to New York City.

This was in 1989. My entire summer job’s earnings were in this car that I had paid $800 for.

It was a nine-year-old, unpleasantly yellow two-door Toyota Tercel. Still, it worked, and best of all, I had a car for the first time since I’d come to the United States.

So, of course, one of the first things I did when I got back to college … was drive it to New York City.

Back then, New York City was crime-ridden. Bryant Park, which is now a fancy place, had so much drug activity that you’d see needles scattered through the park.

So, why am bringing this up to you today? You see, the stock market is a bit like New York City in the 1980s. There is incredible risk if you’re buying the wrong stocks, and you’ll end up losing more than you bargained for…

Learning the Hard Way

People had warned me: Don’t take your car to New York City. Just take the bus.

Or if you take your car, park it in a paid parking lot. They told me my car would be safe because someone was watching the lot.

Of course, I didn’t follow any of this advice. I was a poor college student, and the idea that I was going to stand around waiting for a bus, then pay $12 for round-trip tickets seemed silly when I had a car.

Paying $15 for parking also sounded ludicrous, especially when parking on the streets of New York City was free.

You can say I learned my lesson the hard way.

To repair my windshield cost $100. The value of the things in my car was another $40. Then, to add insult to injury, I was ticketed because I stayed over the time limit for the spot I parked in. That was another $50.

Following the guidance of people who had experience would have saved me valuable money.

Right now, if you make the wrong moves in the market, I believe you’re going to find yourself in a similar position. Not, however, if you look to mega trends.

The Lens of Mega Trends

You see, many people think that the market is too expensive. They use backward-looking statistical measures like cyclically adjusted price to earnings, or CAPE, to justify their view.

However, the problem with CAPE is that it’s incredibly backward-looking. It looks backward, when stock markets look forward.

And when you look forward using the lens of mega trends like the Internet of Things (IoT), CAPE looks wrong. Completely wrong. The reason for this is productivity growth.

Productivity leaped by 3% in the last quarter. That’s the fastest level the U.S. economy has experienced in three years.

Most economists think this is a fluke. However, the stock market is a better forecaster than any economist. The S&P 500 is up 3.2% since this was announced.

I believe this is the beginning of a huge rise in productivity growth that’s going to go on for years, thanks to these mega trends.

 More Money in Your Pocket

The causes of productivity growth are hard to see in the data today. However, I believe it’s the early dividend due to the rising use of IoT technology like Big Data, artificial intelligence and robotics. These technologies are being used in more countries and in a rising number of industries.

This is why I am optimistic about where the prices of stocks can go in the U.S. and many parts of the world. In fact, the No. 1 stock for subscribers of my Profits Unlimited service is up over 200%, and it’s an international sensor/chip company that’s involved in every facet of the IoT.

As productivity rises, we’re going to see this stock and others continue to rise.

The bottom line is, doing the right thing now means more money in your pocket later. And based on what I’m seeing today, I believe that the right thing to do is own stocks in general, and then to focus on those that are exposed to rising growth and productivity.

Regards,

Paul Mampilly

Editor, Profits Unlimited

In this exciting NEW VIDEO, Wall Street legend and former multibillion hedge fund manager Paul Mampilly pulls back the curtain on the biggest investment opportunity in the market today. What insiders are calling “The Greatest Innovation in History,” this revolution will mint more millionaires and billions than any technology that came before it. Right now, the current market for this technology is just $235 billion, but given how fast this technology is moving experts predict it will soar to $19 trillion by 2020. But 8,000% growth is just the beginning—and now’s your chance to get in on the action. [CONTINUE TO VIDEO]

Source: Banyan Hill

Delta Air Lines, Inc. (DAL) Confirms $25 Billion Airbus Jets Purchase

The airline announced that it would be buying these A321neo jets for $25 billion to go along with an optional 100 more of the aircraft. Delta Air Lines announced the move through a filing with the U.S. Securities and Exchange Commission.

The company added that it expects deliveries of the aircraft to begin in the first quarter of 2020 and continuing to arrive through 2023. Delta added through the SEC filing that it now expects its operating margin of its fourth quarter to be 11%.

The company previously said that it expected this figure to be between 11% and 13% in its previous forecast. Airbus beat out Boeing Co (NYSE:BA) for the move as Boeing and Delta have had a fraught relationship in recent quarters.

The disagreements between the two companies began in October following Boeing’s success in lobbying the U.S. Commerce Department to pass trade duties of roughly 300% of Delta’s decision to order CSeries jets from Bombardier Inc (OTCMKTS:BDRBF).

Delta has made no mention regarding whether or not the disagreement between the two companies affected the airline’s decision to go with Airbus for the deal.

“This is the right transaction at the right time for our customers, our employees and our shareholders,” CEO Ed Bastian said in a statement today.

DAL stock gained 2.8% on Thursday.

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