Cheat Sheet Q&A:
Topic: Corporate cash that’s overseas
I have read that there are trillions in US corporate offshore cash that they are afraid to bring back. Closer examination shows a lot of the cash flush companies have debt on their balance sheet that evens it out. I don’t have time to review every unaudited 10-Q/K and I am not even sure if it is true. Isn’t it time to repatriate the money with tax incentives? Every time I see a merger/acquisition like Pfizer/Astra with a possible reorganization in another western economy it burns my butt.
Bottom Line: I hear you loud and clear and bonus points for your expression. I agree that’s it extremely frustrating to see US companies make significant decisions that aren’t in the best interest of the companies or our country due to tax policy. So first how much cash is on the balance sheets of US multinationals overseas?
- As of the end of the 1st quarter of 2014: $1.95 trillion
So would a change in tax policy bring that money back to the United States? It’s unclear how much of the nearly $2 trillion would return to the US but it’s clear that much of it would at a minimum in the form of dividends and stock buybacks which would benefit shareholders of these companies. The reason that nearly no companies repatriate funds earned in other countries (EBay is the only S&P 500 company that has so far in 2014), is that we impose tax to repatriate money earned in other countries. The US imposes double taxation as American multi-national companies are subject to the 35% US corporate tax rate to bring the money back to the US after having already paid the going tax rate in countries in which the money was earned.
In my view the repatriation tax is the most draconian of all corporate taxes and should be eliminated. Doing so would also mitigate the desire by some American multinationals to relocate overseas for lower taxes (a la Pfizer cited above – though it is worth noting that the Pfizer merger/relocation was scrapped yesterday).
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Apple's plan to live with you:
Bottom Line: If you’re a fan of Apple products and you’re potentially interested in embracing the smart home concept – you’re going to like what Apple has been working on.
The Financial Times is reporting that indeed Apple is going to release a smart home system – likely sometime this fall. It was widely believed that Apple would bring a smart home system to market in the future after being granted a home automation patent last November. The functionality is believed to include:
- Tying all of your personal devices together
- Home security
No word on pricing at this point. I’ll keep you updated as we know more. It’s clear that the second half of 2014 will include the most significant product rollouts in the post Jobs era at Apple.
Proof that attitude and outcome are linked:
Bottom Line: Career coach and author Thomas Corley studied both ends of the socioeconomic spectrum for his book “Rich Habits – The Daily Success Habits of Wealthy Individuals”. Thomas surveyed hundreds of wealthy and poor people and asked many questions to build psychological profiles. Among the questions asked:
- Daily habits are critical to financial success in life:
- Rich people who agree: 52%
Poor people who agree: 3%
- The American dream is no longer possible:
Rich people who agree: 2%
Poor people who agree: 87%
- Relationships are critical to financial success:
Rich people who agree: 88%
Poor people who agree: 17%
- I believe in fate:
Rich people who agree: 10%
Poor people who agree: 90%
There were several other questions all with the same theme. A dramatic divide in the world view of those who have been financially successful and those who live in poverty. When Thomas had finished his profiles it was clear that wealthy individuals are overwhelmingly positive/optimistic people and the poor are largely eternal pessimists.
Your attitude is clearly a critical component of your financial lot in life. What’s the one way to guarantee that you’ll never better your lot in life? To believe it and unfortunately the solid majority of the poor do. So embrace the positivity where possible and success is much more likely to follow.
What's most important on your website?:
Bottom Line: Interesting research from BrightLocal has demonstrated that there are significant differences between what we (consumers) want from local company websites vs. large companies. Here are some of the key findings by BrightLocal.
Priority of items on a local company’s website:
- Easy to identify list of products and services
- Phone Number
- Hours of operation
Compare that to contact information and quality of the site for major companies. So our expectations are tailored to the size and scale of the company. Only 7% of consumers identify the attractiveness and images on the website as being keenly important. It’s clear that with national companies we already know what to expect and we want it easy to buy from the site or to contact the company. With local businesses we want to be able to easily be able to see if the company has what we need and be able to easily gain access to how much the products or services will cost.
So give your customers what they want. The good news is that the less important bells and whistles are often the most expensive to create for websites. So you may be able to save some money and provide a more effective site for what your customers really want and expect.
Avoid this if you see it on Craigslist:
Bottom Line: Craigslist is likely the most widely used resource for yard sales. Fast, free and easy resource to spread the word about the stuff you’re looking to sell. It’s also an environment ripe for scam artists. Unfortunately the yard sale is a current target of a wide spread and highly successful scam around the country.
The Better Business Bureau has put out a warning that if you come across the “Easy Yard Sale” service on Craigslist – avoid it. The BBB says that the service is a scam that will collect money for services and products never produced.
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WJNO Financial Analyst & Co-Host for The Palm Beaches’ Morning Rush
I work every day to keep you ahead of the curve on the crazy state of the economy, business, investments and technology.
My motto: Passion plus talent is unstoppable.
My faith: Don’t worry I don’t use the mic to preach but… I firmly believe that without God in our lives happiness will never be found. I believe that many of our societal failures have resulted from a general willingness to distance ourselves from our founding values while embracing political correctness.
I'm in my 19th year with iHeartMedia and 11th in South Florida. With my father as inspiration, I started investing in the stock market when I was 11 and co-founded a smoothie company at 18. The highlights of my radio career have been serving as a fill-in for Sean Hannity.
I've made my share of mistakes along the way as well. I shape my perspective from success and failure to provide you with a truly objective picture of business and money in your world. Business and investing are passions of mine. Some read Dean Koontz... I read financial reports.