It’s Not the Money, It’s What You Do With It

  • Tim Sykes: Despite appearances, it’s NOT “all about the Benjamins”
  • Disciplined penny-stock trading… huh?
  • Trump launches China trade war, with a surprise twist
  • MSM gets mixed up early in earnings season
  • Bougie cocktails get a tax break
  • Life after the shutdown (until the next one)… “What’s the deal with Hashgraph?”… how pot can thrive in spite of Jeff Sessions… and more!

“If you’ve spent any time at all searching for finance-related content, you’ve most likely come across something written by Timothy Sykes,” says an article at Forbes.

Tim Sykes — our latest Agora Financial contributor — is on a mission.

While 57% of Americans have less than $1,000 in their savings accounts — according to a 2017 GOBankingRates survey — Tim turned his bar mitzvah money into a $2 million fortune by the time he graduated from college… and he wants to teach others the lessons he learned along the way.

His methods might surprise you: Tim trades penny stocks. Risky? Extremely, if not done right. But his approach to tempering risk is disciplined, informed trading.

“People think it’s all about the money…” Tim says.

“It’s next to impossible for me to try to show what I do on social media without mentioning money — when really what I want to teach people has far more to do with discipline, patience and setting rules for yourself that will move you forward financially.”

Not that Tim’s allergic to money.


“I wouldn’t be able to travel without wealth,” he says. “I wouldn’t be able to donate to charities I care about or start new initiatives. But money does not buy happiness.”

Pretty wise for a guy born in ’81….

“With this sort of well-rounded approach to the goal of financial freedom, it’s no wonder that Sykes has thousands of students all over the world,” the Forbes profile continues.

“I say this to my students all the time,” say Tim, “Come up with something that’s going to take you forever. And then, every day, work toward that.

“This is why I post pictures of stacks of a million dollars in cash on social media. You don’t need to make a million dollars to be happy.

“But by asking yourself what you have to do to get to a million dollars — that’s what forces you to have good habits, which is what I’m really trying to teach.

“So what you need to figure out is what you love — and be willing to adapt over and over again.” Tim says.

“If I had always just been a [penny stock] trader, I wouldn’t have branched out and found other things I love… I love teaching. I love working with charities.

“But a big part of that journey of self-discovery is having financial control over your life.

“So wherever you have to start, start there,” Tim says, “and then be willing to adapt.”

Now that you understand Tim’s philosophy, what about penny stocks?

“While they trade for small amounts per share,” says Tim, “penny stocks can reap you big rewards when you learn the right trading techniques.”

Tim’s done exceptionally well for himself — about $4.7 million on penny-stock trades so far… and he’s teaching thousands of students how to do the same.

“Penny stocks are the one investment class that lets regular Americans get rich,” Tim says. “That’s because Wall Street can’t touch them — they’re too small for huge institutional investors to get involved with.”

Tim’s got exciting news: For the first time ever, he’s hosting a Penny Stock Summit tomorrow at 1:00 p.m. EST. “I’ll bust all the penny stocks myths and show you how you can become wealthy trading penny stocks,” he says.

“I’ll show you how anyone with the right motivation, discipline and training can make $3,791… $20,072… and even as much as $69,962 in a matter of days… simply by trading penny stocks.

“And I’m inviting you to join me.” Go here now to sign up while spaces are still available.

To the markets, where stocks are experiencing a bit of “post-shutdown letdown.”

The Dow has lost a bit of ground from yesterday’s record close. But the Nasdaq — helped by monster fourth-quarter signups at Netflix — is powering higher into record territory. At last check it’s up 40 points. Only 53 more and it’ll top 7,500.

Crude is making another run at $65, a barrel of West Texas Intermediate now $64.43. Gold is looking spiffy at $1,337 as the dollar keeps sinking. Bitcoin is back above $11,000.

So yes, the partial government shutdown is over — at least until the next deadline of Feb. 8.

Hmmm… The IRS starts accepting tax returns this coming Monday, Jan. 29. Assuming your employer, brokerage, mortgage lender, etc. have already furnished the forms you need by that time… you can, in theory, file electronically that day and you’ll stand a modest chance of having your refund direct deposited by the deadline 10 days later.

Because if the deadline’s blown and there’s another shutdown… the IRS won’t be processing refunds. Consider yourself warned…

So the Trump administration did launch a trade war with China yesterday — just not the way we expected.

A decision on aluminum tariffs has been put off till April. Steel tariffs, too. But tariffs on Chinese solar panels are now in place. For good measure, the White House also imposed tariffs on washing machines made in South Korea and Mexico — mostly LG and Samsung — because Whirlpool can’t compete. Expect some fire-and-fury trade rhetoric in the president’s State of the Union address a week from tonight, too.

The duties on Chinese solar panels are a real head-scratcher. Yes, they’ll protect the two little solar manufacturers who were demanding them — Suniva and SolarWorld Americas. But higher costs for panels mean fewer people and businesses are likely to go solar. That’s bad news for solar installers — who employ more than three times as many Americans as solar manufacturers. The Solar Energy Industries Association figures the tariffs will cost 23,000 jobs this year.

Whelp, we told you in early November that if you were thinking about going solar your time was limited. As we anticipated then, the tariffs allow the president to thump his chest about how he stuck it to the Chinese and saved American jobs and no one will call him out for the other jobs that are lost.

The financial industry often sets the tone for the rest of earnings season. And if this is the case for 2018, we’re in for some exciting company reports!” says income expert Zach Scheidt.

“But even with the bank earnings reports from last week, there was a tendency to report the negatives instead of looking at the whole picture.”

Zach notes this item in The Wall Street Journal: “American Express recorded its first quarterly loss in a quarter-century because of a change related to the new tax law.”

Zach’s rejoinder: “If you’ve been reading headlines like this and you think that the tax law is causing big problems for corporations like American Express — think again!”

In theory, the new tax code is contributing to some losses for corporations holding money overseas or deferred assets. “But what is really happening,” says Zach, “is that these companies are gaining access to cash that was stranded overseas, or they’re writing down deferred tax assets in favor of lower taxes for years and years to come.”

So the bigger reality is AMEX reported outstanding metrics: “higher loan balances, larger core earnings and strong guidance for future quarters.”

“The same story was repeated across the board for big financial banks that reported last week,” Zach says. “And as we expected, investors cheered the news, sending stock prices higher.”

As earnings announcements roll out, Zach’s keeping an eye on stocks that will rally from spending on infrastructure, technology and medical equipment. “I expect investors to continue to read between the lines and respond positively to the company reports as tax savings work their way through the U.S. economy.”

Craft brewers and distillers will get big benefits from new tax law… And the more “micro” and “niche” the better!

“The Craft Beverage Modernization and Tax Reform Act” (ahh, bureaucracy), “part of last year’s broader tax-reform legislation, reduces the federal taxes paid by beer, liquor and wine makers for their initial volumes each year,” says an article at Quartz.

Come tax time, the smallest “craft” companies will get the biggest breaks. “Taxes on beer and wine will be reduced by half for their initial volumes. Small distilleries are the biggest winners, though, as their taxes will be reduced by 80%.

“How would that change the price of your cocktail?” asks Quartz.

Craft Cocktails

“The tax bill could drop the cost of a negroni by more than a dollar. But a martini could drop by $1.50. Perhaps most importantly, the martini could make it on the menu as a premium cocktail at $15 (assuming standard drink pricing of five times the pour cost),” says Quartz.

“That means a small distiller could compete with the likes of Bombay Sapphire in a gin lover’s high-end martini.”

What micro brewers and distillers choose to do with their tax savings is anyone’s guess but increasing gross revenue, upping the ante on marketing or — our favorite option — reducing the cost to consumers are some viable alternatives.

So bottoms up on that craft cocktail… Cheers!

“What’s the deal with Hashgraph?” says a very short inquiry in the mailbag.

It’s not the first time we’ve been asked. “They are saying it will take the place of blockchain,” someone wrote in over the holidays.

There are some people who believe that, yes. Hashgraph has been on our radar since late last fall. It’s a type of DLT, or distributed ledger technology, that its advocates say solves the major problems with the blockchain, namely 1) it’s slow and 2) it consumes godawful amounts of electricity.

Way we understand it, the promise is immense, but the people working on it still have a lot of logistical issues to thrash through before it’s ready for prime time. Anyway, rest assured we’re on the case.

“Marijuana doesn’t have friends in high places on the federal level. Therefore it will NOT be legalized anytime soon on the federal level,” a reader asserts in our ongoing cannabis discussion.

“It is up against Big Booze, Big Pharma and Big Crime Fighters. Reminds me of online poker prohibition. It was almost seven years ago the FBI shut down the two biggest online poker sites. Everyone seemed to think the feds would then legalize it, regulate it and tax it. A few states have. But it is no closer to being legalized now than seven years ago. And at least 1 billionaire casino owner is on record stating he will spend whatever it takes to keep it that way.

“The big money right now and the foreseeable future is on marijuana prohibition. After all, it has lasted since 1971, when Tricky Dick declared a war on drugs. And Carter was elected on a campaign to decriminalize marijuana use in 1976 and it still didn’t get done. The Democrats and especially the black politicians should be outraged over marijuana prohibition and they just don’t seem to care.”

The 5: For many years, we were down on pot stocks for the very reasons you cite. Five years ago in the now-defunct Apogee Advisory, we said the police unions, private prison companies, liquor distributors and Big Pharma were forces too powerful to overcome, and the feds would bigfoot legalization in Colorado and Washington state.

But the Big Federal Crackdown never came, and we daresay it still won’t come despite Attorney General Jeff Sessions rescinding the “Cole memo” this month, giving prosecutors more discretion in how aggressively they pursue cannabis cases.

Don’t take our word for it: Reason writer Jacob Sullum has performed a thorough analysis of the policies set out since that decision by the 13 U.S. attorneys in the nine states where recreational cannabis is legal.

“Oregon’s Billy Williams is the only U.S. attorney in these nine states who has indicated he might be contemplating a cannabis crackdown, a decision he said would depend on how well the state controls the problems that concern him [mostly a continued black-market pot trade]. Four U.S. attorneys, two in California and one each in Nevada and Vermont, have not said anything about Sessions’ memo. The remaining eight have indicated that it will not affect their prosecutorial practices.”

So there. When Carter was campaigning in 1976, Gallup pollsters found maybe 25% support for legalization. Now it’s 64%. So a crackdown might very well bring on acts of resistance. Do the feds want to risk that? As we’ve said in the context of the feds’ outrages at the airport, the government is usually pretty good at gauging how far they can go without losing the consent of the governed…

“I intend to remind you about something you said last week,” writes our final correspondent — about Apple’s repatriation of a lot of money, but there was a (catch), or something sneakier than that you may have implied?

“That you were still investigating and didn’t want to let the cat out of the bag. And that you would keep us posted on it. My mouth is watering.”

The 5: We’ll get to it later in the week. There’s still ample time before Apple issues its earnings numbers a week from Thursday.

Best regards,

David Gonigam

Dave Gonigam
The 5 Min. Forecast

P.S. If you’re intrigued by Tim Sykes’ penny-stock trading strategy, you don’t want to miss the first-ever Penny Stock Summit. Nothing to lose… and did we mention one viewer will win a prize worth $70,000?

Will you be on board tomorrow at 1:00 p.m. EST? Sign up here while space is still available.

Dave Gonigam

Dave Gonigam

Dave Gonigam has been managing editor of The 5 Min. Forecast since September 2010. Before joining the research and writing team at Agora Financial in 2007, he worked for 20 years as an Emmy award-winning television news producer.

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