QE: Quantitative Election

 

After tonight’s “debate,” I offer a brain re-set.  You’re welcome:

 

[youtube:http://www.youtube.com/watch?v=kpZhZAr1cQU&feature=related 450 300]

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Look you, I don’t want to hear any shit.  Do you know what it’s like to have every client you’ve worked with over the last 36 months wanting to get out the door by Christmas? No, of course you don’t, because we’ve never had a bizarre set of economic circumstances like this before, where the difference between getting a deal done in this tax year and the next are approaching 30% of the value of a transaction.

Let me explain…  A lot of people don’t understand that, Fiscal Cliff aside, there’s already an additional 4% Obamacare tax  that’s going to be added to capital gains on any deal that has the misfortune of closing in 2013 instead of 2012.  Then there’s the possibility of the Bush-era tax cuts lapsing, and you add another nickel, minimum.  That’s nine percent more than what you’d be paying on this side of 2012, or a 60% increase in your gains tax burden.  And most of my clients are people who have close to zero basis, since they tend to be folks who started their companies, or took them over from pop at some pocket change transfer price.  So if we are talking about a $100 million dollar sale price, that’s $9 million extra you have to pay Uncle Barack next year if things stay where they are right now.

I don’t care how freaking rich you are, a nine million dollar delta is a ball sweat inducing bill that you’d want to avoid.  And that’s been the consensus of everyone I’m talking to right now.

The other problem with rising capital gains rates is they depress valuations by cutting into after tax returns on capital.  That means not only does one’s purchase price get taxed at an increasing rate, but the multiple paid on a business will be lower also.  Can you say “double whammy?”  (That’s why the public markets will get rocked if Obama wins as well. )

As a result, my life has been a nightmare as of late.  If I’m not on the road doing management meetings (with dinners, lunches, breakfasts, etc) , I’m doing back-to-back-to-back conference calls.   I’m just hoping I can get some of these guys through the funnel.  I already know they all can’t fit.  Such is life.

So I’m sick of apologizing, but please do know I’m keeping an eye on the market enough to signal to you when I think it might be time to get in or out.  Despite the fluctuations and the newest Romney Ryan positivity, I don’t think it’s time to get back into the precious in a giant way.  I think there’s gonna be a nice scare here before Turkey Day to shake some folks out, and then it’ll be time to pounce for the Santa Claus Cokefest and a Smile.

I liked TC’s move today, as I have twelve boatloads of that radioactive shit, having ingested a tonne when it dropped to the $2 level (averaging down, don’t cha know?).  I remain solid in my thinking that miner will become trade bait for some large, cash-rich insitution.  Also, RGLD just did a 5 million share offering with Goldman at $91.  I think this will knock the price down over the next couple of days, maybe even below $90.  If so, that is a huge gift, of which you should take full  advantage…

Best to you all.

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