Dinar

Luca, I guarantee you that there a lot of people with plenty of cash flow which is not considered taxable income. Real estate is a perfect example.

When I was 24, single and living in Manhattan, I spent $20K per annum, and could not comprehend how senior colleagues would complain about not being able to make ends meet on $200K a year. The difference, aside from the fact that I was and am very frugal, was family. They had it, and I did not. Kids and wife tend to be very, very expensive in Manhattan.

Given that I came to this country penniless at the age of 13, and worked as a garbage man in college to pay bills, and know quite a few people who live on less than $40K a year today, I have a feeling that I am in touch with reality. I do not know where you take your family income statistics from, but I would be shocked if they were accurate. I highly doubt that the statistics account for cash income, which for many people double or more their reported income, as well as government transfers. You cannot imagine how many nannies in NYC, Boston, DC & LA/San Fran who make $50-$80K per year in cash and report zero income. Barbers that take cash only. A guy runs a neighborhood barbershop in Staten Island, makes $5K a week cash, how much do you think he reports? A neighborhood fruit stand clears $600K in cash revenue, and roughly $300K per year in cash income, what do you think this guy reports? Dog walkers, waiters, bartenders, tradesmen - electricians, carpenters, plumbers, and the list goes on. Similarly, how do you account for welfare, Medicaid - worth 10-50K per year, Section 8 housing, food stamps, free cell phone, broadband, gas/electricity, and the list goes on. You clearly do not take into account regional differences. In NYC, where there are plenty of unskilled jobs paying $25 per hour, a two adult household is hard pressed not to receive $100K per annum income if both adults work 40 hours per week, 50 weeks a year. A non-union doorman gets paid $55K a year in NYC, plus another $10k per year in cash. I am sure that the situation is different in rural Pennsylvania, and it is hard to find an unskilled job for $20 per hour. Similarly, there is a difference in cost of living by region. When a rent for a 3 bedroom apartment in Manhattan in a safe neighborhood starts at $9K per month, utilities are another $600 a month (that includes gas, electric, internet, cell phones) and medical insurance for a family is call it $50K per year, and shopping bill at Costco is $2000 a month for a family of six (the wife cooks), kids clothes and shoes that have to be replaced monthly, pray tell me how $350K per year to spend in Manhattan with a family of six is rich. It is in Kansas. It is in Boca Raton. It is not in Boston, Manhattan/Brooklyn Heights, San Fran. Passively sitting around is very hard. I did not know that making 10% per year on your investments was so easy. I wonder why the entire country just doesn't do it? Actually, it is quite difficult to do, at least for me. I have been investing since 1994, and I can tell you that I have compounded at around 18% per annum. To say that this was easy would be a complete lie. It was hard to sit in the market in 1994 invested in Mexican stocks and see a 90% drop in the Bolsa and not to sell. It was hard not to be scared in fall of 2008 and spring of 2009. Really hard not to panic in 2020. It was hard to be long Tel Aviv stock exchange on October 7th and not panic. But damn, I admire your balls of steel. Perhaps we have a different definition of rich. For me, it is not just being able to put food on the table, provide a roof, and medical insurance. It includes being able to live in a nice apartment where every kid has his/her own bedroom, pay for enrichment classes for kids, being able to take kids on vacation twice year and fly business class, being able to keep a car in Manhattan, being able to go to nice restaurants once a week, being able to go to opera/ballet/Carnegie hall/jazz club once a week, to send kids to private school in Manhattan, being able to gift a nephew a trip to African Safari for his 18th birthday, being able to help friends/relatives in their hour of need. You can NOT do this on $350K per annum in Manhattan. This lifestyle is $700K+ after-tax per annum in Manhattan.

@bargainman, actually the math is worse than you say. Say you have a $10MM portfolio, say you make a million a year. You can NOT spend a million a year. First, assuming that you live in CA/NY/NJ where most of these people live, you only have $500K post tax. Even if all income is long term capital gains, tax burden is 35% (assuming no job) and hence $650K post tax. $300K needs to be redeployed into the portfolio to keep up with inflation. So you can spend $350K per annum. Not bad, but hardly rich, and if you have a family in say NYC, you cannot afford luxuries once you spend $50K on health insurance (since neither of the parents work) and housing is another $150-$200K per annum. So yes, a retired couple in Pennsylvania is rich with a $10MM portfolio, but a young family cannot retire in NYC or even suburbs on a $10MM portfolio assuming a 10% return. (A house in a nice suburb of NYC can easily run you 1.5MM with a $35-50K annual property tax.)

I agree with 2,4, and 5. I would add the following: JOE, L'Oreal, Safran & Airbus, Ashtead, MSGE(ticker) , NEN (ticker), Tel-Aviv stock exchange. Also, Hermes which I do NOT own.

You don't get it do you? China is thriving, US in going down the flames according to Luca! He looks at everything through that prism! Inconvenient facts like millions trying to immigrate to the US from China do not distract him from his vision!

@Luca, when you make statements that the US has only shitty service jobs, the only thing you show is your ignorance. Do you know that there is a massive shortage of plumbers, electricians, carpenters & other construction workers in the US? Massive shortage of doctors, nurses, et all? (In NYC today, there is a four month wait to see a dermatologist for instance.) Do you know how much these people, including skilled tradesmen make? Why is working a service job shitty? Just because you do not like it does not mean it is shitty. I do not know what you do for a living, but I am sure I can find plenty of people who will not like what you do. Does this mean that your job is shitty? You remind me of good old Karl...

I do not know what will happen to inflation, macro, etc... I do know that a) there are millions of people in corporate America, and even more in the public sector who sit around all day and either do nothing, or actively hinder output. So if either the government or large companies or universities start firing deadwood, productivity will soar. At Harvard for instance number of administrators & other bureaucrats has doubled on a per student/professor basis in the past several decades I believe. b) The welfare state is becoming bigger and bigger and destroying any incentive to work for unskilled and low skilled labor. If it ever gets cut back, watch millions re-enter the labor force, with huge upside to GDP, and downside to inflation. In NYC today, it is more profitable to develop homeless shelters in Manhattan on UWS (home of $4000 per sq foot condos) than to turn an existing building into luxury housing.

https://www.schwab.com/learn/story/beware-taxes-on-discounted-munis

What context do you need to justify supporting Hamas? This individual supports Hamas and extolled the October 7th terrorist attack on Israel.

@Viking, take a look at this article, claims that reinsurance rates are up 50%. I am trying to find out if that is true, have people heard anything? https://nypost.com/2024/01/06/real-estate/america-is-running-out-of-home-owners-insurance/ I spoke with a friend who buys catastrophe bonds, and he informed me that premiums are unchanged from the high levels achieved last year. This is despite last year being a very profitable year.

oh, and let's not forget, the current receipients of Rhodes' scholarships are not scholars but activists. Look at the Harvard winner this year - a supporter of Hamas if I am not mistaken and will be majoring in progressive activism!

@Spekulatius, you are a snob! I remember going to my house of my aunt's father in law in a city of two million people in the USSR in the 1980s (the guy was very well respected doctor, and a crippled veteran of World War II), and he did not have a normal bathroom. As in there was no toilet period. So yes, every time I visited him, I had to use an outhouse. Man, you Germans are spoiled! By the way, there is an old Russian joke that there are just two problems in Russia - fools and roads, and just two Russian generals that are any good - General Moroz (freeze) and General Bezdoroszhie (no roads.)

Let me guess your first passport was from Czechoslovakia or was it GDR?

In my opinion, the biggest problem Nestle, and many other consumer staples is face is essentially zero volume growth. With zero volume growth, hard to grow above inflation, and hence fair multiple is call it 16-20x free cash flow, so you want to buy say at 10? Nestle is unlikely to ever trade at a p/e of 10, unless it is a market where every is down 40%.

@ValueArb, your numbers are off. Federal long term capital gains rate is 23.8% (you are forgetting Obamacare surtax) and qualified dividend tax rate is 23.8% for the same reason. Also, state income tax rates have generally risen in that time frame. For instance, CT went from 0% to 7%, NJ from 6% to 11%, and NY from 6.6% to 11-12%.

Twenty five percent in USD

MURA - Mural Oncology

I would bet a nice bottle of champagne that you are NOT correct. Call the IRS or your accountant or tax lawyer or find a relevant passage of the tax code.

@lnofeisone, check with your accountant. From what I remember, you have to declare the accretion above the 0.25% every year, and you WILL get taxed on it.

What exactly are you referring to?

@Xerxes, thank you for the post. I was only long Campari in the spirits space, and sold it after the CEO announced his retirement. I am still long Dior, but I would not be a buyer here.

You do not understand a very simple concept. Capitalism cannot function without rule of law. You do not have a rule of law in China. Oh, and the article is talking about tens of thousands. When I mentioned it to my friends from high school who are Chinese and live in an area with a lot of Chinese people, they stated that there has been a flood of people recently out of China in their neighborhood.

As opposed to you, the masses have zero faith that CCP is either working or will solve these problems. Man, I wish you had spent thirteen years of your life living under communism, like I did. You'd have a different perspective on CCP.

AIV, BELFB, BTI, CI, CLPR, Evolution AB - EVO SS, GHC, Heineken Holding, JOE, Keck Seng Investments, MCEM, Melrose PLC - MRO LN, NEN, PM, Tel Aviv Stock Exchange, VSTS