I just returned from the Global Financial Summit in the Bahamas, where over 200 attendees came from all over the world to learn about new investment opportunities and market solutions to the world’s problems. We were welcomed by the cabinet members of the Bahamian government, who emphasized how the Bahamas is a first-rate financial center and investment paradise. It has no tax on income or investments (but does impose a high 42% import duty). I visited Albany, a new development for the superrich such as Tiger Woods. I am not surprised they are moving there in droves, given the huge tax increases imposed in 2013.
My family and I lived in the Bahamas in the mid-1980s and I saved enough in taxes to buy a flat in London (without giving up my citizenship). My story can be found here.
Here’s a short summary (expect more detail in the March Forecasts & Strategies newsletter):
Jeffrey Saut, the chief economist at Raymond James, is convinced that Wall Street is in a secular bull market and expects the Dow to hit new highs, based on the Dow Theory (where the Dow transportation index and the industrials confirm each other at higher levels).
John Allison, new president of the Cato Institute and former CEO of BB&T, expects only a slow recovery, higher interest rates and higher inflation (gradual). A major crisis is headed our way in 10-15 years with the unfunded liability problem.
Peter Schiff warned that the euro and the dollar will inevitably collapsed and must be replaced by a gold standard.
International tax attorney Jeffrey Verdon said state tax havens like Nevada, Texas and Florida, are booming….and wealthy Americans are moving there or outside the US.
Steve Moore of the Wall Street Journal says that many states, especially in the South, are considering eliminating the state income tax. He felt that the Republicans have the upper hand now in the deficit debate, if they don’t botch it. And we could be energy independent if the radical environmentalists don’t intervene. “How ironic that the most pro-green president in our history may oversee energy independence from the oil & gas boom!”
Moore is traditionally optimistic about the future of the country, but he has turned decidedly pessimistic after the election. He confided in me, “I fear for the future of the Republic.” He wants to put the “Republicans on Trial” at our mock trial this year at FreedomFest. That’s our plan.
Yaron Brook, president of the Ayn Rand Institute, and I clashed on John Mackey’s stakeholder model of “conscious capitalism.” I defended Mackey’s statement that “business is not about making as much money as possible, but creating value for stakeholders.” Brook declared, “We must stop apologizing for capitalism.” Expect a major debate on this subject in July.
After the poolside closing buffet at the Atlantis Resort, two subscribers John Edison and his son Paul took me to the craps tables to educate me on the winning ways of gambling. I guess it was beginner’s luck, because in one hour I had turned $200 into $735. It reminds me of the old saying on Wall Street, “Never make a profit on your first trade, you think it’s easy.”
But I did learn two lessons from the Edison’s: First, manage your risk. Following their advice, I increased my bet when the odds were in my favor. The long-term odds favor the House, but you can reduce your risks and increased potential return with proper management. Second, walk away when you have a big profit.