Because of the great trading results from KDK Options, we are happy to announce that another donation to Northeastern Illinois University's College of Business is being made. This is the second donation of the year. We look forward to continuing our philanthropic adventure. Some of our philosophy is below if interested
KeaneVCC's philanthropic mission is to provide resources (financial, human, etc.) to worthy causes that advance the progress of the human experience. We donate a percentage of all revenue generated (not just profits). We do not report them on our tax donations as we feel strongly about giving these resources without receiving tax benefits in return.
Wednesday, March 27, 2019
Wednesday, March 6, 2019
What Corporations Did With Their Tax Cuts
There were a few major topics identified when we first set out to analyze the effects of the 2018 tax bill. The link to the original post can be found (here).
One major topic was how corporations would handle the extra cash coming their way. One year out, we have some evidence as to know their behavior. A recent Bloomberg story identified analysis by Citigroup that showed corporations have spent more on stock buybacks than on capital expenditures (story here). This is the first year since 2007 that this has happened.
We mentioned in our original post how wages, stock buybacks, dividends, and capital expenditures would show the intentions of the executives of US corporations. Here is some data
- Wages grew 3.2% in 2018. That is the highest annual gain in a decade. CNBC story here.
- Stock buybacks increased to over $800 billion. That is an increase of 60% over the 2017 total of $500 billion. This happened with a stock market that ended the year 5% to the downside. (Bloomberg)
- Capital Expenditures increased $100 billion from $600 billion to $700 billion. (Bloomberg)
- Dividends increased 10% to $450 billion from $400 billion in 2017 (Bloomberg)
These numbers tell a strong story about how corporations used the extra revenue from the tax cut. It is not a healthy story. A higher than normal percentage was dedicated to buybacks. On the one hand, having that as the reason for rising earnings and stock prices is not a long term recipe for success for investors. Corporate America used the tax cut to buyback stock to boost earnings per share that inflated bonuses while wage growth was a paltry 3%. On the other hand, it is positive news for all those execs whose bonuses are tied to earnings. It also stemmed the slide in the stock market.
Corporate America needs to take the infrastructure opportunity coming and invest those tax dollars in its employees and products.
** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**
One major topic was how corporations would handle the extra cash coming their way. One year out, we have some evidence as to know their behavior. A recent Bloomberg story identified analysis by Citigroup that showed corporations have spent more on stock buybacks than on capital expenditures (story here). This is the first year since 2007 that this has happened.
We mentioned in our original post how wages, stock buybacks, dividends, and capital expenditures would show the intentions of the executives of US corporations. Here is some data
- Wages grew 3.2% in 2018. That is the highest annual gain in a decade. CNBC story here.
- Stock buybacks increased to over $800 billion. That is an increase of 60% over the 2017 total of $500 billion. This happened with a stock market that ended the year 5% to the downside. (Bloomberg)
- Capital Expenditures increased $100 billion from $600 billion to $700 billion. (Bloomberg)
- Dividends increased 10% to $450 billion from $400 billion in 2017 (Bloomberg)
These numbers tell a strong story about how corporations used the extra revenue from the tax cut. It is not a healthy story. A higher than normal percentage was dedicated to buybacks. On the one hand, having that as the reason for rising earnings and stock prices is not a long term recipe for success for investors. Corporate America used the tax cut to buyback stock to boost earnings per share that inflated bonuses while wage growth was a paltry 3%. On the other hand, it is positive news for all those execs whose bonuses are tied to earnings. It also stemmed the slide in the stock market.
Corporate America needs to take the infrastructure opportunity coming and invest those tax dollars in its employees and products.
** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**
Friday, February 22, 2019
Blockchain Gets Major Endorsement
by Michael Keane
Last week, JP Morgan announced that it has created its own cryptocoin, the JPM Coin. Given what has been said before by the company, this was a major shift and endorsement not only for cryptocurrencies, but also a big endorsement of the blockchain technology behind it.
While Blockchain technology is absolutely still in its infancy, the announcement can be looked on as a game changer when it comes what the true perception of the technology by the big players. It harkens back to the infancy of the housing crisis, when at first the banks laughed at people like Dr. Michael Burry and Mark Baum, but then joined them in a big way while using deception announcements to keep the public at bay. Last week's announcement by JP Morgan would not have come without some testing of the technology's utility to the bank's mission and profit model. Jamie Dimon calling cryptocurrencies a "fraud" 18 months ago now looks like a delay tactic.
This announcement is also a very good indicator that average consumer uses are now ready to had in the marketplace.
The following outlets have caught the sea change in JP Morgan. Enjoy!
Cnbc article-Hugh Son
CNN Article- Matt Egen
Forbes Article - Michael del Castillo
** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**
Friday, January 18, 2019
Donation Made to Shriner's Hospital of Chicago
Because of some great trading by KDK Options, we are able to make our first donation to Shriner's Hospital Chicago!We look forward to continuing our burgeoning charitable arm in 2019.
Keane Venture Capital and Consulting donates a portion of all revenue to charity. This is part of our ethos and work process. Previous donations have also included Northeastern Illinois University.
** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**
Keane Venture Capital and Consulting donates a portion of all revenue to charity. This is part of our ethos and work process. Previous donations have also included Northeastern Illinois University.
** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**
Tuesday, December 4, 2018
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.**
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.**
Thursday, October 11, 2018
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.**
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.**
Friday, September 21, 2018
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.**
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.**
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