The 2018 Income Picks

Tue, 2017/12/26 - 8:01am | Your editor
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My former favorite FAANG stock (the one I use the most) is Apple, and it is looking rather weak at the wending of the year. Its deliberate move to slow down older models is clearly unfair to its customers. And its new phone, the Apple X which costs a few cents under $1000 (before tax) is having issues both on supply and demand—supply because the phone is being produced too slowly in Asia and demand because the high price-tag makes buyers hyper-cautious.

I liked AAPL mainly because it had the largest offshore cash cache which can be repatriated to the US for investments or dividends under the Republican tax reform package. But before the money sails across the Atlantic, the European Union is requiring that Ireland and other havens get some more loot than they had been taxing Apple for earlier.

The impact on other FAANG shares is hard to call but I suspect that in the last week of the year people will start taking their profits on Apple stock which earlier looked like something to hold on to. If you have tax losses they will theoretically be worth less in future years because of the new tax code rates, so you may as well book your gains in 2017. Tax-loss carry-forwards are among the middle class tax breaks perhaps biting the dust now. However the way it will work depends on how the IRS writes the new rules, which may change matters.

My husband early in 2017 talked about buying a few bitcoins, in the presence of me, his sophisticated investor wife, and our son, the Chartered Financial Analyst (under the 3-year CFA system.) We advised him very strongly not to even think about buying a crypto currency and at our last family gathering early in Dec. for the bar-mitzvah of his second child we apologized deeply to him for having kept him out of a stellar investment.

Since that time the bitcoin has risen and then fallen rather sharply as holders decided it was a high-risk volatile investment. It had been that from the start and at several stages in between, but this time the losses were bigger in dollar terms even if they were parallelled earlier in percentage ones. On Christmas Day in open Asian markets, the crypto currency fell another 25%. The sellers were probably Israeli, Korean, and Japanese. Today in the very same markets, bitcoin gained back 10%.

At this stage we are avoiding cryptos leaving them to punters like the Turkish newsagent we go to for our daily papers here in London. On Boxing Day (today, the day when Britons put their presents into boxes to regift them later) I did not see him at all. However, the local fox, which I call Blondie because its fur is lighter than usual, is still on the town here at Mudchute Manor.

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