Donation Made to Northeastern Illinois University

Because of some great trading by our partner, KDK Options (link to blog here), we are able to make another donation to Northeastern Illinois University's College of Business. This donation marks the smallest period between charitable donations.

Charity for Keane Venture Capital and Consulting revolves around healthcare and education. Recipients have included Shriner's Hospital of Chicago, Northeastern Illinois University, and the No Shave November organization. Tax deductions are not taken on charitable donations. 


** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Another Donation Made to Shriner's Hospitals Chicago

Hello

Because of the hard work of KDK Options (through options trades), KDK Fund (through Ford dividends), and Bullied Comics (through royalties from book published by Mascot Books), Keane Venture Capital and Consulting was able to make another donation to Shriner's Childrens Hospital in Chicago.

KeaneVCC is proud to be able to share some of its revenue with worthy charitable organizations. The focus has been on health and education with donations to Shriner's Hospital in Chicago and Northeastern Illinois University this year.

  
 ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Two Tax Cut Views From The Wall Street Journal

by Michael Keane


As we continue to analyze the results of the tax cut, a curious thing happened. The Wall Street Journal put out conflicting articles on the subject. In one recent article this week written by Richard Rubin and Theo Francis (link here), the amount of money that has been repatriated by US corporations due to the changing tax law is currently at about 20% of the Trump Administration's expectations. This is presenting (or compounding) a higher risk for the US deficit in the next few years. But in an Opinion piece (link here) by Stephen Moore, the analysis is that the corporate tax cut is quickly and assuredly going to pay for itself and then some through GDP growth.

One of the areas that the US government expected to help nullify the hike in the deficit was corporate profit repatriation. If you follow the evidence presented in the first article, and current levels of repatriation continue, the government will not be able to deal with the deficit.If you follow the second article, the rise in GDP will do more than enough to cover the deficit initially created by the cut and overtake the issue of repatriation.  

Because the opinion piece came after the repatriation article, and filled with scattered non-evidence based data points, it might lead one to believe it was written as a rebut. But as always, time will tell where the Trump administration's economic decisions lead. In a thankful way, the decisions and moves have been big, so the results continue to be clearer.

KeaneVCC continues to follow this topic. Previous posts can be found here. 



  ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Updates on Week Ending July 14th (Trade on Banks, Healthcare Lobbying, Bullied Comis, more)

The  week had some activity to it for KDK Options, and KeaneVCC.

KDK Options - There was a trade in financial ETF XLF. The update on the trade can be found here.

KeaneVCC - The following post discusses a New York Times article from Andrew Jacobs on how Healthcare companies have used their lobbying to influence US governmental policy on breastfeeding. The post is here.

KeaneVCC - Bullied Comics continues to develop its YouTube channel. A link for it is here. 

 ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**
 

Healthcare Industrial Complex Hits Babies

In a landmark move, the United States as a government has sided with corporations and attempted to block a policy promoting breast feeding. In a New York Times article by Andrew Jacobs (link here), the US delegation went so far as to threaten the sponsors with trade sanctions. It took sponsorship by the Russian delegation for the US to fall in line. 

This event puts the topic of the Healthcare Industrial Complex into focus. This adds to the growing evidence that corporations involved in healthcare are involved in actions that are focused on profit rather than healthcare and use their ability to bully governments (even the government of the United States) to act on their behalf. The fact that babies' health is now part of the equation through formula profits is disturbing.

In addition to using their lobbying efforts to affect US governmental policy, corporations continue to control high prices on the most needed formulas and influence insurance companies coverage decisions. Blue Cross Blue Shield is one of those insurance companies that has denied prescriptions to the most expensive formulas even though it was the only formula not to create problems that caused blood in the baby's stool.

Please take the time to communicate with your politicians and companies like Abbott, and Nestle about these issues. A large threat to sell shares owned (we all likely own shares through retirement funds) or a large scale publicity campaign are probably two of the most effective. Even President Trump has started tweeting about high drug prices. But we'll get into that chicanery in a later post.

 ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

  

Wall Street Journal's Article on Boomers' Retirement Troubles

There is an article written by the Wall Street Journal that investigates the reasons why Baby Boomers are less wealthy and comfortable than previous generations entering retirement.

WSJ Retirement Article

Some (but certainly not all) reasons are below:

- Healthcare

 - Supporting parents up to and including now.

- Accessing retirement during their working years

- Paying for their children's college education.
  

Effects of Tax Cut Are Emerging

We are 6 months into the new tax structure. Results are starting to emerge in terms of what corporations and individuals are doing with their new tax savings. A series of blog posts was written about possible results earlier in the year. They can be found individually below:

- Part 1 - Likely Outcomes

- Part 2 - Corporate Responses

- Part 3 - Earnings

- Part 4 - Debt Load

Former Federal Reserve Chairman Ben Bernanke recently wrote an article on the topic. The link to the Bloomberg article is here. 

There are some items that are becoming clearer now that the second quarter is coming to an end.

- Cap Ex is losing the battle against buybacks and increased dividends
- Earnings have increased, supporting stock prices
- Debt load is not looking to decrease
- Because the decision making of how the tax bill benefits would be distributed was given to the top, the advantages up to this point are clearly staying at the top.

  ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

 

Waymo gains Taxi License in Arizona

by Michael Keane

Per a story written by Jonathan Gitlin fron Ars Technica (story link here), Alphabet's Waymo has been granted a license to operate as a taxi in the Phoenix, AZ area. This should add leverage to the autonomous driverless vehicle industry as more and more of the public will have access to its use. Fiat Chrysler should also see some added marketing and advertising coverage from this as more of their vehicles will be on the road and available for the public to experience.

Getting more eyes and experience behind the driverless vehicles is paramount to continue to develop the technology, and the attitude of the public. While there will be issues, it seems that step by step, driverless vehicles are becoming more of a reality. The likely jump in revenue is not far behind for Waymo and Fiat Chrysler. 

Part 4 - The Debt Load of the Tax Bill

by Michael Keane

Part 4 of the series on Likely Tax Bill Outcomes will focus on the debt load increase that has been created by the bill. There is a correct feeling of danger towards the idea that this will add over $1 trillion to the nations debt without a backstop or plan if the debt does not look to be paid off after a couple of years. If this is the case, it will be just another unfortunate financial burden that the Boomer and X generations (I am considered part of Generation X) will put on Millenials and beyond.

There is an ideology that the tax benefits from the increased profits from both corporations and individuals created will more than cover the current debt that has been saddled on the taxpayers. While this may sound like a probable process, greed and envy tend to get in the way of the plan. The likely scenario will be much different than this. Previous similar actions have been met with less capital expenditures and higher dividends to investors from corporations. Individuals that receive the most financial benefits will likely save and not spend the majority of their tax bill savings. There is also the issue of rising rates which will reinforce the issuance of dividends and increase savings.

This tax bill could not come at a more peculiar time. The Federal Reserve is about to start unloading their massive balance sheet. The administration is presenting a budget that increases spending. Adding all three actions up at the same time does not sound like good fiscal planning. The securities markets are going to need time to digest this action. You can look for ten year interest rates to continue to climb north of 3 percent in the next 6-12 months. If it moves quickly, ripple effects will be felt in the stock market and the economy as a whole.  It is strange that Republicans who champion the idea of fiscal conservatism are in charge. These actions on the tax bill clearly show that regardless of party, fiscal responsibility has some serious blinders on. It's kind of a bummer.

You can find the links to parts 1-3 below:

- Tax Bill Likely Outcomes (Part 1)

- Corporate Responses to Tax Bill (Part 2)

- Here Come The Earnings (Part 3)

 ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**



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Week Ending 2/10 Review (KDK Options trades, Donation to Shriners, more)

The week had some activities worth noting.

KeaneVCC

- A donation was made to Shriners Chicago Hospital A link to the post is here.
- The KeaneVCC blogs of KeaneVCC, KDK Options, and KDK Fund recieved over 500 views for the month of January. 
- M&M's are now advertising on KeaneVCC blogs!

KDK Options

 - A spread trade in the Canadian Dollar $FXC was sold for a profit. A link to the post is here. 
 - A spread trade in Bank of America $BAC has started. A link to the post is here. 


** This blog is used for informational purposes only. It should not be used as a recommendation to buy or sell any security. Do your own due diligence before trading or investing. If you would like up to the moment communication on KDK Options trades, email at kdkoptions@gmail.com **

Donation to Shriners (Thanks KDK Options, KDK Fund, Bullied Comics)

Good Morning

On this snowy morning in Chicago, we thought, why not make a donation today to Shriner's Hospital in Chicago? So we did!  We love what they do and work towards providing as much as we can to their cause. This happened because of the hard work at Keane Venture Capital and Consulting (Bullied Comics), KDK Options (trades on the US Dollar, Canadian Dollar, and Bank of America), and KDK Fund (Dividends from Ford). 

Donating to charity is a pillar of the company. It is in our mission. In fact, we will not be taking a deduction of the donation due to our belief that the benefits of charity should not come back in the form of lesser taxes. Charity is a first order action without any return expectations. Besides, we all have family or friends in the military or otherwise who receive federal benefits (social security, medicare, etc.). Taking the deduction takes from them. We are not going to do that in order to increase our profits.

   ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Waymo Alphabet's next Big Thing

by Michael Keane

With the expansion to Atlanta, Waymo is beginning to look like Alphabet's next big revenue generator. They are entering the holy trifecta that search, Android, and YouTube entered; growing customer base, growing partner base, and growing marketplace.

With Atlanta opening up, the number of people using the service is continuing to grow. The more miles that the service goes, the more confidence will grow in the driverless concept.

Waymo has a nice set of known partners on the driverless ride. Having a major motor company like Fiat Chrysler is a big deal. Everyone knows and is comfortable with the vehicle (Caravan) that is used. There is no "what is that" comment when looking at the vehicle, which puts customers at ease. Having Trov on the insurance end is also big, but on a different end. Most major insurance companies are fighting the driverless concept at one level or another. The reason is that the record of safety for these vehicles puts the margins of auto insurance at risk. A previous article on this subject can be found here. Insert Trov, who provides the insurance for not just vehicles, but all items in this sector. The numerous tech partnerships are too many to name. One big one is governmental partnerships. They are growing.

The driverless marketplace grows with almost new news weekly on the topic. Motor companies are investing millions on the concept. Governments are preparing their roads for it. More and more tech companies are spending on this concept.

When you put all of these things together, the likelihood of major success is high. Alphabet has to feel good about the way that John Krafcik and his team are running Waymo. 

** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Waymo expanding to Atlanta

In a partnership with Georgia Tech, Chrysler, and other local businesses, Waymo is expanding into the metro-Atlanta area. A link to the Atlanta Journal Constitution story by Becca J G Godwin can be found here. Some notes on the article and the progress made for driverless vehicles are below:

- Gov Deal mentions likely decrease in auto deaths with the continued expansion of driverless vehicles.

- Increased experience exposure for driverless car industry, and every entity connected to it from tech to insurance


- Starting to see Waymo as Alphabet's next big success joining the ranks of YouTube and Android


** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Here Come the Earnings (Part 3 of Tax Bill Outcomes)

by Michael Keane

This is Part 3 of the "Tax Bill Analysis" series. It will focus on the support it will create for corporations earnings levels and the stock market as a whole. Please read parts 1 (link here) and 2 (link here) if you haven't already.

The recent tax is about to show its true worth to the economy. That is because it is about to show up on the balance sheets of US corporations. The first earnings cycle is going on in report after report, the one common theme is how much better earnings will be because of this new tax bill. From the banks like JP Morgan or Bank of America, to energy companies like BP or Shell, to tech companies like Apple or Microsoft, this bill is one big windfall. This one of the main reasons why corporations spent millions of dollars lobbying for this bill. It literally means billions of dollars for them and their shareholders. Per disclosure, through retirement funds and partners, some of KeaneVCC's money is invested in shares of these corporations.

This buffer or ignitor for earnings also will have an effect on the market as a whole. PE, or Price to Earnings ratios will drop because of the raised earnings. This puts stock prices at a cheaper level in terms of value. It could either send the market higher, or at the very least buffer any normal drops or corrections seen in the market.

 ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Corporate Responses to Tax Bill (AT&T, Wells Fargo)

by Michael Keane

This is part 2 of a series on the Tax Bill Likely Outcomes. A link to Part 1 is here.

When the tax bill was announced, both AT&T and Wells Fargo made announcements of employee bonuses and minimum wage level increases. Slowly but surely, other companies have made similar announcements. While this is good, it isn't a coincidence that AT&T and Wells Fargo were the first to show their support for the tax bill. There are some things missing in these announcements that cloud the meaning of the message and need to be addressed before a conclusion of corporate analysis when it comes to the tax bill.

Both AT&T and Wells Fargo currently have direct interests in the government. AT&T is going through a monster merger. Wells Fargo is currently going through legal troubles with the government. For both companies to get announcements out to show their favor of the government's new tax bill is not surprising. Both companies have also spent a lot of money (like other companies) on lobbying for the tax bill. With the way that this administration works, having these companies make these announcements right after the bill passes was not coincidence at all. It was likely a calculated decision in order to curry favor with the administration so that the government will be influenced in their decision making. The companies already had the amount of cash needed to cover the bonuses and the higher minimum wage.

Another area of compensation that has not been addressed publicly by the companies is executive bonuses. Because of the tax bill, earnings will likely be higher. Because executive bonuses can be tied to earnings and stock prices, the likelihood that executive bonuses will be at the highest level of the expected range is very strong. These bonuses will probably dwarf those actions the companies have made for the rank and file. But you won't see voluntary press releases for this. When you combine that the lower personal tax rates, you can get a decent idea as to why so much money went into lobbying for this bill.

As time progresses, take a look at executive bonuses, corporate infrastructure spending, and labor wages through earnings reports. This will tell you if the companies are reflecting their true intentions in terms of their tax bill promises. Only then can we fully understand what the true position of the companies in regards to the tax bill actually are and act accordingly.

**Disclosure - Both KDK Fund and KDK Options (partners of KeaneVCC) have had stock or options positions in AT&T and Wells Fargo in the past. There are no current holdings of either company.** 

 ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Week Ending 1/27 (New T-Shirts for Bullied Comics, Profitable Trades, more)

This was a busy and exciting week for KeaneVCC. There was activity on the consulting side and through our Options trading partner KDK Options.

On the consulting side, Bullied Comics relaeased a set of new t-shirts. Proceeds will be going to anti-bullying charities I'm Bully Free, Pacer's Bullying Prevention Center, or any other anti-bullying organization of the buyer's like.

On the trading side, a profitable trade for KDK Options on the US Dollar ETF UUP has closed out. The trade made 86% before commissions and fees. The link to the details of the trade is here. Research on new trades is going on now. There were also 11 new likes on KDK Options Facebook page (link here) bringing the total to 180+. Thank you for your support!

Part 2 of the Series on Likely Outcomes of the Tax Bill has been published. The focus of the article is on how corporations act now that the bill has passed. AT&T and Wells Fargo are mentioned in the article. The link to the article is here. 

 ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Tax Bill Likely Outcomes

by Michael Keane

Now that some of the dust has settled on the new tax bill, one outcome that existed before the bill looks to be at least the same if not expanded because of the bill. Due to behavioral habits of compensation and spending, the ability to move up economically has probably been weakened by the bill. The disparity of the economic classes will likely be more apparent and more difficult to traverse. This is part 1 of a series and will provide a general outline of the forthcoming posts to support this view on the subject.

Forthcoming posts include:

1)  What was and was not included in the press briefings by AT&T and Wells Fargo after the tax bill was announced; specifically their government interests

2) How both cash and debt levels for corporations and individuals that were already at historic levels will likely continue to grow;

3) How the stock market will now be cheaper on a EPS PE basis due to the tax bill which could propel it even higher; creating higher bonuses for executives.

4) How the debt of this bill will likely go unpaid by the increase in GDP and current young generations will have to pay it back while current adult affluent groups enjoy the benefits.

Examples and data will be presented in each of the following posts.

Only time will tell if this analysis has any level of correctness.  This troublesome bill feels like a quick thank you to the president and not a bill born and solidly made through careful analysis and thoughtful integration. The bumps for labor cannot be one-offs. Otherwise the legacy of this bill will not shine down favorably.

Competition Growing in Driverless Space With VW and Hyundai

by Michael Keane

VW and Hyundai are in a venture to compete with Waymo in the driverless space. In an article (link here) written by Tim Higgins of the Wall Street Journal, the companies have partnered with Aurora Innovation to get driverless vehicles to market by 2021.

The competition seems to be heating up as just last week this blog reported (link here) on Waymo's partnership with Fiat Chrysler and Phoenix putting driverless cars on the road.

KeaneVCC believes that this level of commitment to compete puts another step forward into the mainstreaming of driverless vehicles. 

 ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Phoenix Becomes Disruptor with Partnership with Waymo

by Michael Keane

Waymo, Alphabet's self driving vehicle company, and the City of Phoenix, have been executing and delivering on their plan to bring driverless vehicles to the mainstream. We hope that there is plenty of press on experiences and process!

The Bloomberg article is below.


Waymo Partnership article

A previous blogpost on the use of Trov for the insurance of the program is here.

   ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**