US citizenship is arguably more of a liability than asset these days. 43% cap gains tax and that's on nominal gains. With the Fed determined to raise inflation to 2%, the real effective capital gains tax rate on a portfolio that generates 6% would be 76%.
The US is one of the only countries in the world that taxes by citizenship rather than residence & source. If you live & work overseas you still pay US taxes. And if you want to renounce your citizenship there are exit taxes and they ping you for another circa 10yrs I believe.
I would not accept US citizenship if you paid me US$5m to accept it.
People need to have the right & freedom to leave a country if they are not getting value for money, otherwise there is nothing to stop rates going forever higher. It's outrageous that the cost of govt admin & waste can get so high they will take more than 50% of your income.
This would never happen in a competitive market where countries and states need to compete to attract citizens. The lack of competition allows a monopoly state to bloat & fleece it's citizenry to fund all manner of largesse, waste, political favours, and other handouts.
I am willing to pay up to about 25%. I don't mind a little bit of redistribution & contributing to public services. But more than 25% is overreach and I will leave the country if politicians try to take more.

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More from @LT3000Lyall

23 Apr
There are typically four phases to thematic growth stock cycles (thread):

1. Demand (D) > Supply (S). Top line growth strong; margins expand; stocks soar & multiples go to moon.

2. D=S. Competition rises but demand growth remains strong. Top line robust but margins plateau.
During 2, stocks will either plateau or drift slowly up, or during bubbles keep spiraling higher on flows/narrative.

3. S>D. Supply overtakes demand. Top line growth slows and margins suddenly weaken. Profits unexpectedly drop 50% or more, even with top line still growing.
Phase 3 can go on for many years. You'll start to see stocks drop 10-20% on profit warnings. They tentatively recover on buy the dip, but then give it back, and then derate another 20% on the next warning. They'll often end up down about 25-50% about 12 months into downturn.
Read 10 tweets
23 Apr
Redbubble's share price reaction yesterday shows investors may be starting to understand that "investing more through the P&L to drive growth" is in most instances the same thing as "margin compression due to growing competitive intensity forcing more investment/spending". (cont)
There is a time early in a company's life where more investment & temporary sacrificing margin to accelerate growth is justified. But there is also a time in a company's life where the returns & economies of scale should be starting to sustainably come through.
At this stage of the tech/software cycle, where software & platforms are already exiting the high growth phase and starting to mature, w growth set to slow down fairly dramatically from 2021, if you're still needing to cut margins, that's a profit downgrade, not "investment".
Read 5 tweets
21 Apr
If you can get pasted the shameless plug at 0.20 and an almost comical sprinkling of unnecessary arrogance, there are some useful insights here.

In my view, software (w exceptions) is going to become increasingly commoditized & deflationary this decade.

People are always paddling towards waves that are already breaking. They are too late, and the marketplace is crowded. Money is actually made by developing real competencies, being fortunate enough to be in the right place at the right time, and having a wave catch you.
The commoditization of software development skillsets also implies the commoditization of the value of software. Software gets easier to write every day, and thus easier to replicate and displace, while competing sources for our attention & entertainment will keep mushrooming.
Read 7 tweets
20 Apr
More than a little amusing - and perhaps an interesting cultural marker - to see side-by-side headlines about regulators continuing to roll out red carpet for a stupefying drug, while simultaneously pushing toward prohibition for a productivity-enhancing one/cognitive stimulant.
Disclosure - I am a smoker, though I of course often try not to be. Bad for my health, yes. But some of my best blog articles have also been written high on nicotine. With it I can write for 10 hours+ straight without breaks, as well work 16-18hr days with absolute focus.
I have "successfully" quit several times and can, of course, function perfectly adequately without it, but I have found that without it I lose some of my creative edge and have to settle for a lower level of productivity & creativity - well past the point withdrawal ends.
Read 5 tweets
20 Apr
Next time someone argues that something must be true because its published in a "peer reviewed academic journal", bear in mind the substantial academic fraud that has been uncovered in the social sciences where many famed studies have comprehensively failed to replicate.
Academic peer review is not thesis confirming, nor does it prove the presence of rigor or a lack of bias. It does not prevent academics from inventing/embellishing conclusions for fame/recognition, succumbing to confirmation bias, or targeting politically convenient conclusions.
The way peer review often functions in practice is to entrench an elite clique who get to define what is true in a way that suits their own interests, & prevent outside scrutiny from other disciplines. A good analogy would be Catholic priests being such guardians in prior eras.
Read 11 tweets
16 Apr
There is a common tendency for pharma companies to back out amortization of acquired intangibles from "adjusted earnings", and investors/analysts to quote the lower P/E multiples resulting therefrom, but this is a highly questionable practice (thread).
Unlike staples companies (like KO & PG), pharma companies' earnings lack very long term earnings duration. After LOE patent expiries, their earnings typically drop precipitously, and so they need to continuously replenish the pipeline & launch new drugs to offset the impact.
Ideally, they would do this purely through internal R&D, and some companies succeed at that. But in many cases, internal efforts are insufficient, as it is getting harder and harder to discover new novel & genuinely differentiated/innovative therapies.
Read 9 tweets

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