Cost Structure – After Hours http://after-hours.org/ Tue, 18 Jan 2022 10:47:49 +0000 en-US hourly 1 https://wordpress.org/?v=5.8.3 https://after-hours.org/wp-content/uploads/2021/07/icon-1-150x150.png Cost Structure – After Hours http://after-hours.org/ 32 32 BlackRock TCP Capital: 9% Dividend Yield, Well Hedged (NASDAQ: TCPC) https://after-hours.org/blackrock-tcp-capital-9-dividend-yield-well-hedged-nasdaq-tcpc/ Tue, 18 Jan 2022 07:46:00 +0000 https://after-hours.org/blackrock-tcp-capital-9-dividend-yield-well-hedged-nasdaq-tcpc/ EvgeniiAnd/iStock via Getty Images There was a psychological test conducted in 1972 called the “marshmallow test”, in which Stanford professor Walter Mischel offered children a choice between one marshmallow now or two marshmallows after a while. The research purports to show that children who chose to wait tended to have higher SAT scores and better […]]]>

EvgeniiAnd/iStock via Getty Images

There was a psychological test conducted in 1972 called the “marshmallow test”, in which Stanford professor Walter Mischel offered children a choice between one marshmallow now or two marshmallows after a while. The research purports to show that children who chose to wait tended to have higher SAT scores and better body mass index as adults.

This study, however, was challenged by a later study that was 10 times the sample size, showing only half the effect of the original study, and even Mischel himself challenged the predictive power of its own study in 2020.

This, of course, has parallels with investing, as investors often have to choose between a higher return now or a lower current return with the “promise” of a higher return on the cost line. Both strategies have their merits, but sometimes it can be a good idea to take the “marshmallow” now. This brings me to BlackRock TCP Capital (TCPC), which may make sense for investors who prefer higher yield today.

TCPC: 9% return, get your marshmallow now

BlackRock TCP Capital is an externally managed BDC that was created after renowned asset manager BlackRock (BLK) acquired Tennenbaum Capital Partners LLC. TCPC is managed by BlackRock, which has $155 billion in assets under management across all credit asset classes globally and 241 global credit investment professionals. As such, TCPC benefits from the credit expertise, brand and global reach of big brother BLK.

TCPC currently has a $1.8 billion fair value portfolio that is diversified across 106 portfolio companies. The investment portfolio is managed prudently with 90% senior secured loans, of which 77% are senior. TCPC also emphasizes investing in non-cyclical industries with strong covenants, helping to give it less downside risk.

The investment portfolio is also well diversified, with more than half of the portfolio companies contributing less than 1% of recurring revenue. As shown below, TCPC’s top industries include the growing or generally stable Internet, Financial/Consumer/Business Services and Software sectors, which together account for 53% of the fair value of the portfolio.

TCP

Composition of the TCPC portfolio

Company Website

TCPC also has a good track record of return on capital. This is reflected in its 10.7% annualized return on invested assets since 2011. As shown below, investors since the IPO have experienced a nearly 100% return in the context of an NAV stable and cumulative dividends paid.

TCP

NAV and dividends of TCPC

Company Website

Notably, TCPC currently earns more than its dividend by generating $0.32 in NII/share in the third quarter, more than covering its quarterly dividend rate of $0.30. Non-accruals remain low, representing only 1.0% of the fair value of the portfolio.

Net asset value per share decreased by $0.12 quarter over quarter to $14.09. I’m not overly concerned though, as this was driven by a loss of $6.2 million, or $0.11 per share, associated with the prepayment charge on the early redemption of the 2022 notes.

This can be seen as a prudent move, as interest rates are expected to rise this year, and TCPC took advantage of rates when they were still low in August by issuing $150 million of 2.85% notes due. in 2026. $175 million notes that TCPC repurchased during the third quarter carried a higher interest rate of 4.125%, thus saving interest on the spread.

Going forward, TCPC is well positioned to take advantage of a rising rate environment, as 94% of its debt investments are floating rate and 90% carry interest rate floors, providing as well as downside protection. TCPC also maintains a well-funded balance sheet with a net regulatory leverage ratio of 1.01x, well below the regulatory limit of 2.0x. The CEO and CFO expressed optimism about current market trends, as I highlighted on the recent conference call:

Direct lending and the broader private capital markets have clearly emerged from the global pandemic as a reliable and well-positioned source of funding for a wide range of businesses. As has generally been the case at times, other avenues of funding have been less accessible, but now it appears to be an even more systemic change as more companies turn towards private credit as the main source of capital.

We continue to work with a wide range of companies looking to finance their growth, make acquisitions or simply refinance existing debt. We also believe that our investors benefit from these efforts, as our direct lending investments continue to provide a reliable and resilient source of income.

Tenure has clearly become a differentiator. And from a risk management perspective, these are companies that we already know and understand very well and so we’re comfortable making these follow-on investments. As we analyze new investment opportunities, we continue to emphasize seniority in capital structure, portfolio diversity and transactions where we can act as lead or co-lead manager. file.

Risks to TCPC include macroeconomic pressures, which could disproportionately impact BDC’s portfolio companies due to their small size (compared to publicly traded companies). In addition, increased competition for transactions could lead to yield compression.

In addition, the external management structure may lead to conflicts of interest. That said, I find the base fee structure to be reasonable at 1.5% of gross assets (less cash). Additionally, the base fee is structured to reduce additional fees when the leverage ratio exceeds the 1.0x threshold, as shown below.

TCPC

TCPC Fee Structure

Company Website

I see value in TCPC at the current price of $13.65 with a price-to-book ratio of 0.97x. Given TCPC’s track record, I would target a valuation between 1.0 and 1.1x. Analysts have a consensus Buy rating with an average price target of $15.18, implying a potential one-year total return of 20%, including dividends.

TCPC

TCPC Price-to-Book

Looking for Alpha

Key takeaway for investors

BlackRock TCP Capital is a well-managed BDC that is externally advised by a highly respected global asset manager. Its net asset value/share has rebounded solidly since the start of the pandemic, and the dividend is covered by NII. Going forward, TCPC should benefit from favorable demand and presence with existing portfolio companies. I see value in TCPC at the current high income price.

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New York lawmakers slam tax breaks for movie, TV and Cuomo companies https://after-hours.org/new-york-lawmakers-slam-tax-breaks-for-movie-tv-and-cuomo-companies/ Sat, 15 Jan 2022 01:06:00 +0000 https://after-hours.org/new-york-lawmakers-slam-tax-breaks-for-movie-tv-and-cuomo-companies/ The $10 billion in annual government grants and tax breaks given to businesses in New York City were branded wasteful and mired in corruption at a state Senate hearing on Friday. Programs that have been particularly cited for not providing the best value for money include the hefty $420 million tax credit for the film […]]]>

The $10 billion in annual government grants and tax breaks given to businesses in New York City were branded wasteful and mired in corruption at a state Senate hearing on Friday.

Programs that have been particularly cited for not providing the best value for money include the hefty $420 million tax credit for the film and television industry to shoot projects in New York – and the economic development of the north of former Governor Andrew Cuomo.

“Study after study has demonstrated that there is a fairly low return from states that offer a tax credit and a movie,” said Sen. James Skoufis, chairman of the inquiry committee.

When asked, Empire State Development officials could not cite any studies that found the film and the tax credit to provide a solid return on investment.

Indeed, it was revealed at the hearing that ESD does not provide a rigorous analysis of companies benefiting from tax subsidies.

The Citizens Budget Commission, among other researchers, has called for the phasing out of the tax credit program.

Senator James Skoufis, chairman of the inquiry committee, noted the low return states receive from a tax credit and a film.
The New York Senate

“Business subsidy programs are politicized, scandal-ridden and at massive and ongoing corruption risk,” testified John Kaehny, director of government watchdog group Reinvent Albany.

“They are a waste of public funds, and every independent analysis has found them a hugely inefficient way for the government to create jobs.”

Corporate welfare, Kaehny added, contributes to Albany’s corrupt culture of pay-to-play between recipients of government largesse who then funnel tens of thousands of dollars into the coffers of elected officials who support the programs. .

Protesters and politicians gather on the steps of New York City Hall to voice their disapproval of Amazon and the deal struck to bring the company to Long Island City, Queens.
Protesters and politicians gather on the steps of New York City Hall to express their disapproval of the agreement of former mayor de Blasio and ex. Gov Cuomo attempted to form with Amazon.
Matthew McDermott

“There’s a reason the grants are at the center of New York’s biggest corruption scandals of the past decade. The wealthy who control corporations that receive billions in state grants are among the biggest contributors to the campaign,” Kaehny said.

Cuomo’s controversial upstate Buffalo Billion business grant schemes have led to massive kickbacks and bid-rigging corruption scandals that have resulted in convictions for felony arm right of then-governor Joe Percoco and architect of state programs Alain Kaloyeros, as well as bidders who were big donors to the former governor.

Sen. John Liu (D-Queens) said tax breaks for a privileged few and not others create an unfair playing field.

“Most of the jobs created in New York are without state subsidies. This puts companies that don’t receive an incentive at a disadvantage,” Liu said.

Even business advocates said the massive handouts to wealthy corporations provoked a backlash – especially when Cuomo and former mayor Bill de Blasio offered $3 billion in tax subsidies as part of a failed attempt to get online retail giant Amazon to build a headquarters along Queens. seafront.

Senator John Liu questions New York City Schools Chancellor Richard A. Carranza during a joint hearing on the elementary and secondary education legislative budget.
Senator John Liu pointed out that state subsidies disadvantage “companies that don’t get an incentive.”
HANS PENNINK

Amazon pulled the project amid fierce opposition.

Kathy Wylde, CEO of the Partnership for New York City, said people find Amazon’s breakup offensive.

The problem, Wylde said, is that the tax incentives are offered to offset the high cost of doing business in New York, including regulatory costs as well as taxes.

“In New York State, the primary role of economic development incentives has been to offset the high costs of doing business in the state. Our experience with the Amazon HQ2 fiasco illustrates how poorly New York’s approach to economic development has worked,” Wylde said.

She said the Amazon debacle was instructive.

“Virginia won HQ2, including the additional 20,000 jobs originally intended for New York, in a bid that did not require tax subsidies because it is a state with competitive tax rates,” Wylde said.

“Instead, their offer was to set up public funding for new public transit, affordable housing, and a huge fund to prepare thousands of local residents for Amazon jobs. With a similar package, New York would have retained those jobs, but we were stuck with the wrong tools and a cost structure that needed to be mitigated to get in the game.”

John Kaehny of Reinvent Albany speaks during a press conference.
John Kaehny criticized the business grant schemes and added that they are “politicized, scandal-ridden and at massive and ongoing risk of corruption”.
Chad Rachman/New York Post

Lawmakers who complained about the subsidies last year raised corporation taxes from 6.5% to 7.25% for companies making more than $5 million in revenue.

Agency spokesman Matt Gorton responded, “Empire State Development is focused on creating jobs and expanding economic opportunity for all New Yorkers, and ESD incentive programs are delivering results: Tesla has exceeded its commitment to jobs and investment, and the film production industry contributes more to the Empire State’s economy – especially small businesses – than any investment in it provided.

“As we rebuild our economy after the pandemic, smart and strategic investments to support growing industries are an important tool in New York’s economic development toolbox.”

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Leading Crypto Exchange BitYard Offers Exchanges In Over 150 Countries https://after-hours.org/leading-crypto-exchange-bityard-offers-exchanges-in-over-150-countries/ Thu, 13 Jan 2022 06:00:10 +0000 https://after-hours.org/leading-crypto-exchange-bityard-offers-exchanges-in-over-150-countries/ sponsored Join us and be a part of BitYard, the leading cryptocurrency exchange that takes cryptocurrency trading to a whole new level and strives to provide users with the best trading experience. With over 500,000 users already trading in over 150 countries, don’t wait, sign up today to get huge benefits and “Develop your future […]]]>

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Where could Amazon’s stock be in 5 years (NASDAQ: AMZN) https://after-hours.org/where-could-amazons-stock-be-in-5-years-nasdaq-amzn/ Sun, 09 Jan 2022 11:00:00 +0000 https://after-hours.org/where-could-amazons-stock-be-in-5-years-nasdaq-amzn/ 4kodiak / iStock Unpublished via Getty Images Investment thesis: Amazon (NASDAQ: AMZN) is a company with many moving parts. The company experiences headwinds in some segments and tailwinds in others. COVID-19 supply chain and mitigation spending have limited e-commerce profitability in recent quarters, while Amazon Web Services (AWS) has thrived. The Federal Trade Commission (FTC) […]]]>

4kodiak / iStock Unpublished via Getty Images

Investment thesis:

Amazon (NASDAQ: AMZN) is a company with many moving parts. The company experiences headwinds in some segments and tailwinds in others. COVID-19 supply chain and mitigation spending have limited e-commerce profitability in recent quarters, while Amazon Web Services (AWS) has thrived. The Federal Trade Commission (FTC) seems ready to take its pound of flesh. On the other hand, the market for cloud services is exploding in size and Amazon dominates the market. Historical activity, aside from short-term headwinds, also appears to have the potential to evolve into healthy earnings. 2021 has been a declining year for the stock relative to the S&P 500. However, 2022 and beyond is still brilliant.

Amazon’s short-term headwinds

Amazon’s e-commerce business has faced several short-term headwinds.

Labor

The labor market in 2021 was plagued by shortages of available workers. The increased demand for workers and competition among employers has resulted in increased wages and enrollment bonuses for many. This resulted in increased costs for Amazon and a negative short-term effect on the bottom line.

We have incurred billions of dollars in additional costs to keep our employees safe and to support testing and other costs related to COVID. And we’ve grown our global workforce by 628,000 over the past 18 months and are hiring more, including over 150,000 in the US to meet seasonal demand in the fourth quarter. This demand for labor recently coincided with the shortage of available labor, especially in the United States. It started in the second quarter, but it really started to impact our operations and our cost structure in the third quarter.

This has led to salary increases and signing incentives, as companies compete for workers, as well as inconsistent staffing levels in our operations. In addition, the disruption of global supply chains and the inflation of the cost of materials such as steel and services such as trucking have also increased our operating costs. We estimate that the cost of labor, labor-related productivity losses and cost inflation added about $ 2 billion to operating costs in the third quarter, particularly in August and September.

– Brian Olsavsky – Chief Financial Officer

As mentioned in the earnings call, this hit particularly hard in the third quarter as the North America and International segments swung to a combined net operating loss. AWS still made $ 4.88 billion in operating profits.

COVID-19 and the supply chain

Managing hundreds of thousands of employees during a pandemic adds significant costs to the bottom line. Well-known supply chain bottlenecks also drove prices up faster than the company passed them on to consumers.

In addition, we have seen inflationary pressures in commodities and services, as I mentioned, particularly in steel and third party trucking. We have also seen over $ 1 billion in costs related to lost productivity and the disruption of our operations. In the third quarter, labor became our primary capacity constraint, not storage space or fulfillment capacity. As a result, stock placement was frequently redirected to distribution centers in order to have the manpower needed to receive the products.

This resulted in less optimal placement, leading to longer and more expensive transport routes. In short, our operations are normally well staffed and optimized to be in stock and deliver to customers within one to two days. Labor shortages in supply chain disruptions have upset this balance and have resulted in additional costs to ensure that we continue to maintain our levels of service to customers.

– Brian Olsavsky – Chief Financial Officer

From these comments, it is clear to see where the operating profits of the North America and International segments have gone. In the first quarter of 2021, the segments accounted for $ 4.7 billion in operating profit and in the third quarter of 2021, the segments showed a combined loss due to the above. There is, however, a silver lining here. All of these problems are temporary. Even in the first quarter, when segments were profitable, COVID-19 mitigation efforts added costs. As these headwinds recede, the segments should quickly return to profitability.

Amazon operates in three segments; North America, International and AWS. For the first nine months of 2021, AWS generated 13% of revenue and over 60% of operating profit. This was even more pronounced in the third quarter and is expected given the narrow margin nature of retail.

Amazon Net Sales and Operating Profit

Graph created by the author with data from SEC filings.

AMZN – Long term opportunity

According to the cited study, the global cloud computing market could be worth nearly $ 1 trillion by 2026. AWS is the world’s largest vendor with over 30% market share. This opportunity is huge and growing. In the first three quarters of 2021, AWS generated operating income of $ 13.2 billion on revenue of $ 44.4 billion. This operating margin, 30%, is very impressive. The segment is also growing – fast. Q3 2021 revenue is 39% higher than Q3 2020.

Extrapolating these figures over five years requires certain assumptions. As mentioned earlier, AWS revenue was 39% higher in Q3 2021 than Q3 2020. I assumed AWS revenue for fiscal 2021 would increase 37% from 2020 and reach over $ 62 billion. From there, I took a compound annual growth rate (CAGR) in revenue of 25% for three years, followed by two years at 20%. I assumed the operating margin would stay at 30%.

Amazon AWS RevenueGraph created by the author with data from SEC filings and author’s calculations.

As noted above, AWS revenue could increase by $ 175 billion by 2026, based on these assumptions, and generate operating income of over $ 52 billion.

To extrapolate the North America and International segments, I assumed two more years at 20% CAGR, followed by three years at 10%. I’m assuming an operating margin of 3.0% as these segments have historically struggled with profitability. In 2019, the operating margin was only 2.2% for these segments combined, followed by 2.7% in 2020. The resulting operating profit in 2026 would reach $ 23.5 billion out of $ 782 billion. revenue dollars for these segments.

The combination of all segments generates nearly $ 76 billion in operating profits on $ 957 billion in revenue by 2026, as shown below.

Amazon Revenue Trend

Evolution of Amazon's operating profitCharts created by the author with data from SEC filings and author’s calculations.

Amazon typically doesn’t buy back shares or significantly dilute shareholders. Since 2018, on average, the average number of diluted shares outstanding has increased by approximately 1% each year. I assumed that the dilution of equities would continue at this rate. Based on this calculation, Amazon could earn $ 140 per diluted share in operating income, or $ 110.60 per diluted share after tax, assuming a 21% tax burden, in 2026.

From there, the stock price projections are straightforward:

Conservative Midrange Optimistic
EPS $ 110.60 $ 110.60 $ 110.60
PER 40 50 65
Share price $ 4,424 $ 5,530 $ 7,189

According to YCharts, Amazon’s P / E ratios at the end of 2021, 2020, and 2019 were 65.23, 77.97, and 80.31, respectively.

The company is expected to earn $ 41.73 per share in this fiscal year and $ 53.25 in 2022. The projection I made would create estimated after-tax EPS of $ 53.98 in 2022, in line with analyst expectations.

These results would generate enormous cash flow. Amazon may be using some of it to buy back shares, pushing EPS even higher. Indeed, if the cash flow is maintained at the current rate, share buybacks are likely in the years to come. Amazon had nearly 5% of the market cap in cash and short-term investments at the last report, totaling $ 79 billion.

In many ways, extrapolating the revenue and earnings of a company like Amazon is a futile exercise. There are so many moving parts and unforeseen events on the horizon. Nonetheless, I think the exercise is worth it, fun, and hopefully provide an interesting conversation starter.

Other possibilities

The FTC

As mentioned earlier, the FTC is going after Amazon for its retail business, and now, possibly AWS as well. At the heart of every problem is whether Amazon uses anti-competitive practices to stifle competition. I have written about this in much more detail here. Three scenarios could arise. First, the FTC’s efforts may fail and business continues as usual. I consider it a tie bet. The second scenario is that Amazon agrees to voluntarily make some concessions and perhaps pay a hefty fine. Scenario two is the most likely outcome, in my opinion. In the third scenario, Amazon splits into three companies, either by force or voluntarily. Many investors would like to see this. However, the company never gave any indication that this was even a consideration.

New sources of income

On a more positive note, Amazon could also uncover another viable and lucrative source of income in the next few years. The company is looking to expand its physical presence in retail. This will also serve to provide logistics mini-hubs in strategic locations. Payment processing software that would support PayPal (NASDAQ: PYPL) and Shopify (NYSE: SHOP) would be under development. The technology would make use of inventory tracking and other benefits and fit right into Amazon’s ecosystem. The global Internet connectivity market is estimated to be worth up to $ 1 trillion per year. Amazon’s Kuiper project is currently competing with SpaceX (SPACE) to capture this market by installing a field of orbiting satellites. Adding any of these revenues could further fuel EPS growth.

Conclusion

Amazon’s stock took a hiatus in 2021 after a tremendous run. Headwinds that started in 2021 and persist in 2022 are expected to ease in the second half of this year. AWS continues to operate at full capacity, showing tremendous growth and profits. Investments in labor and logistics will pay off as headwinds in the supply chain subside. There are excellent opportunities for growth, profits and new businesses over the next several years, and shareholders will likely be rewarded with the above-market returns they expect.


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Senator Zaffirini announces two bills coming into force on January 1 https://after-hours.org/senator-zaffirini-announces-two-bills-coming-into-force-on-january-1/ Wed, 05 Jan 2022 18:17:34 +0000 https://after-hours.org/senator-zaffirini-announces-two-bills-coming-into-force-on-january-1/ AUSTIN – Two bills passed in the 87th Legislative Session by Senator Judith Zaffirini, D-Laredo, consolidating civil court filing fees and banning predatory mortgage lending practices, came into force on January 1. This legislation aims to simplify legal costs and protect homebuyers. . Texas’ civil court system is difficult enough to navigate without the added […]]]>

AUSTIN – Two bills passed in the 87th Legislative Session by Senator Judith Zaffirini, D-Laredo, consolidating civil court filing fees and banning predatory mortgage lending practices, came into force on January 1. This legislation aims to simplify legal costs and protect homebuyers. .

Texas’ civil court system is difficult enough to navigate without the added burden of a complicated fee system, according to Zaffirini. Under the previous law, the Courts Administration Office (OCA) reported 223 different filing fees in civil courts and identified potential constitutional issues regarding filing fees not collected for legitimate judicial purposes. Senate Bill (SB) 41 addresses these concerns by simplifying the cost structure of the courts and redirecting money to fund the administration of our courts.

“In 2019 my SB 346 completely overhauled the criminal justice fee system and in 2021 my SB 41 did the same for civil courts,” Zaffirini said. “I am delighted that our collaboration with the OCA has resulted in this meaningful legislation that will improve the justice system for so many people. She undertook this task at the behest of Senator Joan Huffman, R-Houston, then chair of the Senate Committee on State Affairs on which Zaffirini has served since 2015.

The bill simplifies the administration system for local officials without increasing costs for local or state governments. By making the process more efficient and less complicated, state staff will have an easier time verifying court costs, and Texans will have an easier time understanding what filing fees to pay.

Starting January 1, not only will civil court filing fees be consolidated, but predatory mortgages will also be illegal, extending protections to homebuyers against fraudulent lending practices.

In 2016, a comprehensive mortgage financing program affecting voters in Senate District 21 revealed a complex web of illegal mortgage activity that was difficult to prevent, detect or prosecute at the time.

“My staff and I were concerned about this insidious form of predatory lending and its detrimental financial impact on voters,” Zaffirini said. “Soon, however, we realized that the problem was statewide and that homebuyers needed protection from threats to the safety and well-being of their families.

Block financing is a type of mortgage in which a seller finances the sale of a residential property that is already the subject of an outstanding lien, often without notifying the buyer of the previous lien or the holder of the existing lien. the sale. If the seller does not pay the senior mortgagee, the mortgagee can foreclose on the property, and the buyer, who often lives on the property, is foreclosed without ever having missed a payment to the wrap seller.

After many residents were victims of this fraud, Zaffirini introduced bills in 2017 and 2019 banning the practice. They were passed easily by the Senate, but died in the House of Representatives both years. In 2021, the legislature finally passed SB 43, which eliminates legal ambiguities and loopholes that have allowed predatory mortgage lenders to operate illegally without repercussions.

“Our success began with an issue originally identified in Southeast Austin and culminated with the collaboration of affected Texans statewide,” Zaffirini said. “Thank you to the many voters, stakeholders and advocates who have helped ensure that homebuyers in Texas are no longer harmed by global mortgages. “

Zaffirini and his team are already drafting bills for the next legislative session to be held on January 10, 2023.


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We make our first new purchase of 2022 https://after-hours.org/we-make-our-first-new-purchase-of-2022/ Mon, 03 Jan 2022 20:59:01 +0000 https://after-hours.org/we-make-our-first-new-purchase-of-2022/ Jim Cramer on CNBC’s Halftime Report. Scott Mlyn | CNBC (This article was first sent to CNBC Investing Club members with Jim Cramer. To get real-time updates delivered to your inbox, subscribe here.) After receiving this email, we will initiate a position in Danaher (DHR), buying 100 shares at around $ 312.60. Following the transaction, […]]]>

Jim Cramer on CNBC’s Halftime Report.

Scott Mlyn | CNBC

(This article was first sent to CNBC Investing Club members with Jim Cramer. To get real-time updates delivered to your inbox, subscribe here.)

After receiving this email, we will initiate a position in Danaher (DHR), buying 100 shares at around $ 312.60. Following the transaction, the charitable trust will own 100 shares of Danaher. The position will represent approximately 0.75% of the portfolio.

The healthcare sector enters the first trading day of the year down and is one of the worst performing sectors despite the positive start to the wider market. Today’s weakness follows a period of strength with health taking center stage throughout a volatile December thanks to the group’s defensive qualities. When investors worry about an economic slowdown or uncertainties in the supply chain, they often turn to healthcare because the sector does not need a fast growing economy to increase profits and achieve its goals.

We took profit in a few health care names last week, slashing AbbVie (ABBV) (as it hit a new high of 52 weeks day in and day out) and some shares of Abbott Laboratories (ABT) in its recent run. But with declining healthcare today and our positive outlook for the industry still intact, we see today’s weakness as an opportunity to redeploy the cash we have raised from our other names in healthcare and business. ‘buy stocks in one of the highest quality names in the entire group: Danaher.

Breaking down Danaher’s businesses

Danaher operates in three main segments: life sciences, diagnostics, and environmental and applied solutions. While Danaher can be seen as a multi-industry name, some of the themes common to Danaher’s entire portfolio focus on high-value, mission-critical applications, consumable revenue streams from a large installed base (75 % of Danaher’s portfolio is recurring), and exposure to secular long-term growth trends.

By segment, Life Sciences is the largest, accounting for approximately 52% of the company’s total estimated revenue in 2021. Danaher’s Life Sciences platform had a very strong 2021, with revenue growth of base which is expected to exceed 20% and operating margins above 25%. The global growth engines behind strong trends in the life sciences are the shift to biologics, increased attention to genomic medicine and vaccines, therapies and research in response to COVID-19.

Danaher’s Life Science business has been boosted in recent years through several acquisitions, including Cytiva (which was purchased cheaply from General Electric) and the recent deal with Aldevron. Cytiva has given Danaher leadership in the rapidly growing bioprocessing market, and Aldevron is a leading producer of high quality plasmid DNA, mRNA and proteins with exposure to the genomic medicine industry. in full growth.

Next is Diagnostics, which is expected to account for around 32% of Danaher’s revenue in 2021. Danaher’s portfolio holds a strong position across the diagnostics landscape, whether in molecular domains through Cepheid, “niche” areas. of Leica and Radiometer, or a lab presence with Beckman Coulter. Cepheid is the company we want to focus on. He’s perhaps best known for his COVID-19 tests (and they’ll ship 55 million tests in 2021 alone), but the longer-term story here is how COVID-19 has accelerated the decentralization of care. health services to settings closer to the patient at the point of care because it is faster and more accessible. This has created a growth catalyst for the molecular diagnostics industry as a whole, but Cepheid is in the best position to be the winner as it has the largest installed base and the most comprehensive menu in all molecular diagnostics.

Finally, Environmental & Applied Solutions, which is expected to represent around 16% of Danaher’s 2021 revenue. This segment is divided between a portfolio that focuses on water quality and one that specializes in product identification. Both are quality assets that are growing faster than their industry peers.

Why we love Danaher

In addition to its exposure to secular growing end markets, what makes Danaher such a quality name is the executive track record of execution. Management is constantly making operational improvements through the application of the Danaher trading system. This playbook is Danaher’s competitive advantage, and it has become a powerful source of business improvement. Across the portfolio, Danaher is focused on improving the cost structure, reinvesting for growth and accelerating margins and core growth across its various businesses. It’s continuous improvement, but where it goes best is with mergers and acquisitions, which are Danaher’s bread and butter. Danaher is so good at buying companies and then accelerating growth while improving margins. If you take a look at Danaher’s DBS 2018 preview slideshow at the link here, you’ll see DBS in action.

Danaher’s sustainable and recurring revenue streams, exposure to secular growth end markets, M&A execution, and constant operational improvements have created an attractive long-term growth model. On Danaher Analyst Day in September, management provided long-term guidance on mid single-digit core revenue growth (accelerating 5-6% before 2019), operating margin expansion 50 to 75 basis points, strong free cash flow with conversion (FCF divided by profit or loss) above 100% plus other acquisitions. Putting it all together, Danaher believes he will achieve double-digit earnings per share growth over the long term. Danaher’s continuous operational improvements of a portfolio based on recurring revenue streams have made this company a true profit generator.

We initiate Danaher with a Price target of $ 360, which is roughly 35 times FactSet’s consensus estimate for 2022 earnings per share. The stock isn’t cheap, but Danaher consistently trades at a premium due to its business model quality, management’s track record of mergers and acquisitions and a long history of continuous operational improvements through the Danaher business system. In addition, we believe that this bonus will be justified if basic income growth accelerates from its pre-2019 level, as expected by management. And the current estimate of income for 2022 may be conservative, as favorable winds from COVID-19 (from tests, vaccines and treatments) are proving to be longer lasting than previously thought.

As always, we never like to buy suddenly when we put a new position in stocks for the Charitable Trust. We prefer to move deeper in time, explaining why we are starting relatively small this morning with a choke position. But with stocks down around 5% today and slightly down from their high of around $ 333, we believe that decline has created an attractive entry point.

The CNBC Investing Club is now the official headquarters of my charity. This is the place where you can see every move we make for the portfolio and get my market snapshot before anyone else. The Charitable Trust and my writings are no longer affiliated with Action Alerts Plus in any way.

As a CNBC Investing Club Subscriber with Jim Cramer, you will receive a Trade Alert before Jim completes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling any stock in his charitable trust portfolio. If Jim has mentioned a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. See here for investment disclaimer.

(Jim Cramer’s Charitable Trust is long DHR, ABBV, ABT.)


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3 missing, 991 structures lost in the Marshall fire; tips lead to search warrant https://after-hours.org/3-missing-991-structures-lost-in-the-marshall-fire-tips-lead-to-search-warrant/ Sat, 01 Jan 2022 22:01:00 +0000 https://after-hours.org/3-missing-991-structures-lost-in-the-marshall-fire-tips-lead-to-search-warrant/ BOULDER COUNTY, Colorado – Three people have been reported missing and death feared after the wind-blown Marshall fire ravaged Superior, Louisville and parts of unincorporated Boulder County on Thursday, destroying a updated total of 991 structures. Boulder County Sheriff Joe Pelle confirmed the latest details on the missing persons and the loss of structure at […]]]>

BOULDER COUNTY, Colorado – Three people have been reported missing and death feared after the wind-blown Marshall fire ravaged Superior, Louisville and parts of unincorporated Boulder County on Thursday, destroying a updated total of 991 structures.

Boulder County Sheriff Joe Pelle confirmed the latest details on the missing persons and the loss of structure at a press conference on Saturday afternoon. Pelle also said several clues led to a search warrant as part of the investigation into the cause of the fire, but declined to give further details on that investigation.

The three missing, whose identity has not been released, were inside houses destroyed by the fire, Pelle said. The sheriff said he expects the missing people – two people in Superior and one in the Marshall area – to be the only victims of the blaze. Corpse dogs will be at all three homes on Sunday to help with recovery efforts.

“The structures where these people are said to be are completely destroyed and covered with about eight inches of snow right now,” Pelle said. “Our ability to attempt to search and recover from these structures is therefore severely hampered at this time, but hopefully in the next few days we can help the families and possibly recover the remains.”

Local news

Help Your Boulder County Neighbors | Donate to Denver7

2:53 am, Dec 31 2021

Authorities have located hundreds of people who were initially missing. One person was reported missing on Friday, but has since been found, Pelle said.

Pelle has also released what he believes are final, or near-final, numbers for the total number of structures lost. He said 553 homes were destroyed and 45 homes damaged in the city of Louisville; 332 houses were destroyed and 60 houses damaged in the town of Superior; and 106 homes destroyed and 22 homes damaged in unincorporated Boulder County, making a total of 991 structures lost and 106 homes damaged in the fire.

Authorities previously estimated that at least 500 homes had been destroyed.

A preliminary list of lost structures can be found here. The sheriff’s office said it was continuing to assess the damage, but winter conditions are impacting that work. The full cost of the devastation is not yet known.

The City of Louisville is in the process of creating a map of destroyed or damaged homes. The map will be available here. To report a damaged or destroyed structure yourself that is not on the preliminary list, go to boco.org/MarshallFireSelfReport.

The Marshall Fire began around S. Cherryvale Road and Marshall Drive around 11 a.m. Thursday. Thousands of residents were evacuated as gusts of up to 105 mph lashed fire and smoke towards homes of businesses in the area on Thursday afternoon.

Firefighters continued to work through the night to attack the blaze which reached 6,000 acres on Friday morning. Overnight snowfall and freezing temperatures left the fire smoldering in places on Saturday.

Some residents were allowed to return home on Saturday, but access is only available to residents who can show proof of residency. The areas subject to “soft closure” are the only areas open to re-entry, officials said.

Coming Home: Some Marshall Fire Evacuees Allowed Return

Areas of the Louisville area moving to a soft closing the statutes are:

  • Bezel circle
  • Saint Andrews Lane north of West Dillon Road
  • Augusta promenade
  • Pinehurst Court
  • Club circle and location

Areas of the city of Louisville still under a hard closing:

  • McCaslin Boulevard from South Boulder Road to Cherrywood Lane
  • Via Appia in West Pine to McCaslin Boulevard, no north-west turns
  • PineHillside Lane and Hillside Court
  • Fillmore Court
  • West Sandbank Circle
  • Pinyon West Way
  • Western Hemlock Circle
  • Lane Saint Andrews south of West Dillon Road to south 88e Street
  • South 88e West Dillon Road Street in Saint Andrews Lane
  • Court of Troon
  • Muirfield Court and Circle
  • Circle of Turnberry
  • Aulne Street West
  • Kennedy Avenue to West Tamaris Street South
  • Harper Lake Drive and Court
  • Washington Avenue from Grove Drive to McCaslin Boulevard
  • Willow Square
  • Honeysuckle Alley
  • Tournesol Street
  • Arapahoe Circle
  • Eldorado Way
  • Larkspur Lane and Court
  • Arapahoe Court
  • Trail ridge road
  • Chemin d’Estes
  • Harper Lake Boardwalk
  • Grove courtyard
  • Prairie Court
  • Owl Drive at West Pine Street west to Polk Avenue

Evacuees can visit this site and enter their address in a search field to see the closed status of their area.

The aforementioned investigation into the cause of the fire is continuing. Sheriff Pelle said reports of power lines falling near the source of the blaze were more than likely telephone wires and that was not what started the blaze.

“We found evidence of downed telecommunications lines in this area, which could have caused reports of downed lines, but which would not have caused a fire,” Pelle said.

Resources for those affected by the fire

FEMA announced on Saturday that disaster assistance had been made available to victims of Thursday’s blaze. Residents and business owners who have experienced losses in designated areas can begin seeking assistance by registering online at www.DisasterAssistance.gov or by calling 1-800-621-3362.

As the state and federal government scramble to find options, some companies are stepping up to help displaced people better navigate their next steps. Brian Sanchez, owner and founder of Denver Apartment Finders and founder of the Faith Association in Denver, helps those affected by the fire find affordable housing.

MORE | How to help those affected by the Marshall fire

Other resources for emergency food and other aid are available through the Boulder County Community Foundation, Jewish Community Center, Mental Health Partners, Sister Carmen, EFAA, and the OUR Center.


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Exponentially Growing Forage Seed Market by Manufacturers, Demand, Application and Region – Industrial IT https://after-hours.org/exponentially-growing-forage-seed-market-by-manufacturers-demand-application-and-region-industrial-it/ Fri, 31 Dec 2021 10:12:34 +0000 https://after-hours.org/exponentially-growing-forage-seed-market-by-manufacturers-demand-application-and-region-industrial-it/ “ The research on the Global Forage Seed Market 2021 provides a basic overview of the industry including definitions, classifications, applications, and industry chain structure. The global Forage Seeds market report is provided for the international markets as well as development trends, competitive landscape analysis, and key regions development status. Development policies and plans are […]]]>

The research on the Global Forage Seed Market 2021 provides a basic overview of the industry including definitions, classifications, applications, and industry chain structure. The global Forage Seeds market report is provided for the international markets as well as development trends, competitive landscape analysis, and key regions development status. Development policies and plans are discussed as well as manufacturing processes and cost structures are also analyzed. This report further shows the import / export consumption, supply and demand figures, costs, prices, revenues and gross margins. The study also talks about crucial pockets of the industry such as products or services offered, downstream areas, end customers, historical data regarding revenue and sales, market background etc.

Request for a sample full PDF report, to know the impact of COVID-19 on this industry @ https://www.globalmarketvision.com/sample_request/13494

Profiles of the best companies:

Allied Seed, Forage Genetics, Dow AgroSciences, S&W, PGG Wrightson, Grassland Oregon, DLF, DSV, Smith Seed Services, RAGT, Semences De France, Germinal Holdings, Cropmark, OreGro Seeds, SeedForce, JR Simplot Company, Takii, Snow Brand, Semillas Fito, La Crosse Seed, Dairyland Seed, Barenbrug

Global segmentation of the forage seeds market:

The types covered in this report are:

Alfalfa, Clovers, Ryegrass, Fescue

Based on the application:

Farm, Meadow

The report, with the help of detailed business profiles, project feasibility analysis, SWOT review and few different insights of key organizations working in the 2019 Forage Seed Market Survey by Manufacturers , regions, types and applications, forecast to 2028 Market, presents a point-by-point scientific brief of the competitive scenario of the market. The report also presents a review of the effect of recent market developments on the future development prospects of the market.

Our aim is to provide our readers with a report on the Forage Seed Market, which examines the industry during the period 2021 – 2028. One of the aims is to present a more in-depth overview of this industry in this document. The first part of the report focuses on defining the product or service industry targeted in the Forage Seeds Market report. Next, the paper will study the factors responsible for hampering and enhancing the growth of the industry. After covering various areas of industry interest, the report aims to explain the growth of the Forage Seeds market during the forecast period.

Objectives of the report

  • Define, describe and forecast the 2028 market by segments and by region
  • To provide detailed information on the major factors (drivers, restraints, opportunities, and challenges) influencing the growth of the market
  • To analyze the sub-segments with respect to individual growth trends, prospects, and contributions to the total market
  • To analyze the market opportunities for stakeholders and to provide the competitive landscape for the market
  • Forecast the revenue of market segments relative to major regions, such as North America, Europe, Asia-Pacific (APAC), Middle East & Africa, and South America
  • To profile the main players and to analyze in depth their recent developments and their positioning in the virtual sensors market
  • To analyze competitive developments, such as mergers and acquisitions, new business developments, and research and development (R&D) activities, in the market

Table of Contents (TOC):

Chapter 1 Introduction and overview

Chapter 2 Industry cost structure and economic impact

chapter 3 Rising trends and new technologies with the main key players

Chapter 4 Global Forage Seeds Market Analysis, Trends, Growth Factor

Chapter 5 Fodder Seed Market Application and Activity with Potential Analysis

Chapter 6 Global Forage Seeds Market Segment, Type, Application

Chapter 7 Global Forage Seed Market Analysis (by Application, Type, End User)

Chapter 8 Analysis of the major key suppliers of the forage seed market

Chapter 9 Trend of analysis development

Chapter 10 Conclusion

Get a research report within 48 hours @ https://www.globalmarketvision.com/checkout/?currency=USD&type=single_user_license&report_id=13494

If you have any special requirement, please let us know and we will offer the report to you at a custom price.

About Global Market Vision

Global Market Vision is made up of an ambitious team of young, experienced people who focus on the details and deliver the information according to the client’s needs. Information is vital in the business world and we specialize in disseminating it. Our experts not only have in-depth expertise, but can also create a comprehensive report to help you grow your own business.

With our reports, you can make important tactical business decisions with the confidence that they are based on accurate and well-founded information. Our experts can allay any concerns or doubts about our accuracy and help you tell the difference between reliable and less reliable reports, reducing the risk of making decisions. We can make your decision-making process more precise and increase the likelihood of your goals succeeding.

Contact us

Sarah Ivans | Business development

Phone: + 1-3105055739

E-mail: [email protected]

Global market vision

Website: www.globalmarketvision.com


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Are you charging enough? | Wealth management https://after-hours.org/are-you-charging-enough-wealth-management/ Wed, 29 Dec 2021 17:12:49 +0000 https://after-hours.org/are-you-charging-enough-wealth-management/ When you’ve just started a RIA, one of the hardest questions to answer is, “What should I charge?” As we are often asked at Advyzon, I wanted to create a guide to help businesses just starting out with pricing and to help established businesses assess whether they are charging enough. How much does it cost […]]]>

When you’ve just started a RIA, one of the hardest questions to answer is, “What should I charge?” As we are often asked at Advyzon, I wanted to create a guide to help businesses just starting out with pricing and to help established businesses assess whether they are charging enough.

How much does it cost to run my business?

Much public debate around pricing structures centers on whether to use paid or asset-under-management pricing, which billing frequency to use, the best tier structure, and other technical details. But when trying to figure out prices or re-evaluating whether your current pricing structure is working, start with spending.

This is the same advice you would give to your customers. You know the expenses you need to cover, both professionally and personally, with your business income. Pricing for your services should meet this revenue target. This is the most important number to keep in mind.

Start with time

Think about the time you spend on each client you work with. Evaluate both new and existing customers, and be sure to consider developing their financial plan, annual meetings, quarterly reports and invoicing, and unscheduled calls throughout the year. How many hours do you spend per client?

This should give you an idea of ​​how many clients you can serve per year, both existing and new. (While you are thinking about this, be sure to set aside time to handle any non-client tasks that you are not outsourcing.)

Once you have an idea of ​​how many clients you can handle, as well as your target revenue, you can start figuring out what you need to charge per client to run your business successfully.

Start running the numbers

If you are just starting out, the most important thing is to come up with a pricing plan, period. According to XYPN, 100% of new advisors update their pricing structure after launch. So don’t expect everything to be perfect on your first turn. (It should be noted that the majority of new advisors increased their fees after a year of activity.)

Still, there are some things you can do to improve your chances of success. If you know your target income and how many clients you can take on, the next thing you need to think about is what type of client you are working with.

If you’re starting out with a volume of business, you can experiment with different pricing approaches using your typical customer as a model. Would 1% AUM work? What about a tiered approach, starting with 2% and working your way down to 1%? Or maybe you could stick with 1% and supplement your investment management services with a flat, service-based planning fee.

If you’re starting from scratch and need to build a portfolio of activities, these numbers can help you find your niche. If you know that you have to charge each customer $ X per year for a living, you can determine what type of customer you want to target. It can also help you say no to wrong customers, which is easier than having to fire them later.

Think beyond the amount

It’s not only How many you charge customers, but How? ‘Or’ What you load them. If you are starting a RIA after working at a larger company, you are probably used to a monthly salary. This schedule tends to work well for cash flow, as most expenses are monthly.

If you start your own RIA and bill clients quarterly, it can be difficult to plan a monthly salary. This is especially difficult if your quarterly income fluctuates significantly with the market, as it can be if you charge a percentage of assets under management. (Using the average daily balance instead of a starting or ending balance can help.)

On the other hand, monthly customer billing can seem unusual, especially if you have older customers who are used to the status quo.

You should also consider how you talk about your fees and services. Or, to put it better, how you talk about your worth. If your services seem essential to a customer, the numbers start to matter less. Think about how you will discuss your offerings in a way that resonates with customers, and how you will continue to demonstrate and market that value on an ongoing basis.

Don’t be afraid to adjust

I often speak to advisors who are afraid to change their pricing model because they don’t want to offend clients’ pens. But working for a price that doesn’t seem right or serves you and your business is recipe for disaster.

Instead, consider changing your fees, but plan ahead to do so so that you feel like you’re helping customers instead of bothering them. Start several months by emphasizing your value in a way that sets up your new pricing model. For example, if you want to start calculating your fees using an average daily balance, you can start talking about how you deal with volatility in your practice.

Next, explain the new fees and why you are applying them. People know that companies have to adjust their prices, and transparency often goes a long way. Plus, doing it before the change gives the client time to get used to the idea and to ask questions or voice concerns.

If customers To do have concerns, be sure to listen and take notes. Thinking about reviews can help you in conversations with other clients and can help you better position the way you present your services in the future.

An open mind can in fact be the most important thing when it comes to determining your prices as an advisor. After all, your business is built on income and profit, but it is also built on people.

It’s also important to remember that you don’t have to set your price in isolation. Organizations like XYPN, the National Association of Personal Financial Advisors (NAPFA), and the Financial Planning Association (FPA) are all resources to consider if you need help with pricing. Your custodian may also have ideas.

Andrew Ladwig is Vice President of Business Development at Advyzon.


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How staying confident in stocks in 2021 helped the Goels https://after-hours.org/how-staying-confident-in-stocks-in-2021-helped-the-goels/ Mon, 27 Dec 2021 16:48:37 +0000 https://after-hours.org/how-staying-confident-in-stocks-in-2021-helped-the-goels/ Then the pandemic struck, upsetting their financial calculations. Their equity investments were hit hard, and even their children’s higher education mutual fund investments fell sharply. The most affected were mutual funds for their eldest son’s college education. The couple had launched systematic investment plans (SIPs) of ??10,000 each in two multi-capitalization equity funds in 2016, […]]]>

Then the pandemic struck, upsetting their financial calculations. Their equity investments were hit hard, and even their children’s higher education mutual fund investments fell sharply. The most affected were mutual funds for their eldest son’s college education.

The couple had launched systematic investment plans (SIPs) of ??10,000 each in two multi-capitalization equity funds in 2016, with a target of ??30 lakh in 2024. “The stock market crash of March 2020 reduced the accumulated corpus by almost half. I didn’t know what to do, ”Saurabh said.

The accident was a wake-up call for the couple. They realized that they had not taken sufficient precautions or protected their investment portfolio against volatility. On the one hand, they did not have emergency funds.

Saurabh was prompted into action by stories of people having difficulty raising funds for the treatment of sick relatives. He immediately put away ??1 lakh in a liquid fund for contingencies and added ??20,000 to the fund each month. The contingency fund has now almost ??5 lakh, which is enough to meet the expenses of the family for five to six months.

When the Covid crash happened, the only saving grace for Saurabh was that his home loan was almost paid off. The last of these IMEs at 10 years of ??35,900 were reimbursed in October 2020, which took a heavy toll on Saurabh. “I can’t imagine how things would have been if I had also had to pay off the EMI home loan,” he said.

More importantly, they realized they needed professional financial advice to navigate the ups and downs of the investing landscape.

“I discussed my financial portfolio with my friend, and he advised me to contact a financial planner who would charge a fixed fee and earn no commission on the products I invest in,” he said. .

After that, financial expert Raj Khosla, managing director of MyMoneyMantra.com, looked at their portfolio and convinced the couple that the crisis was an overreaction.

“Lucky for the Goels, they didn’t lose their temper when there was blood on Dalal Street,” Khosla said.

Markets eventually recovered and their stocks and mutual funds regained their lost value. Saurabh continues to put ??10,000 per month in two of the three equity funds.

Parag Parikh Flexicap has performed particularly well during this period, thanks to the global equities lining its portfolio. The corpus has become ??14 lakh, generating SIP returns of 21.5%. The Canara Robeco Flexi Cap Fund corpus has grown ??12 lakh, with SIP returns of 16.15%. The market has hit new highs again, but Saurabh is now wiser.

In early 2021, markets were taking a break after a strong rally in December 2020. Khosla said, “They stayed in the range for four to five months before resuming their ascent.”

Given his age and his (moderately aggressive) risk profile, Khosla advised Saurabh to keep a balanced 50:50 allocation to debt and stocks.

Saurabh was reluctant to pursue SIPs after markets limited to the fork when the second wave of covid hit India. But the planner advised him to continue SIPs as it would allow him to buy more at lower prices. Khosla advised him to periodically rebalance his portfolio if the allocation deviated too much from the predetermined ratio of 50:50.

Khosla said: “By rebalancing the portfolio, this will ensure that any decline in the stock markets does not affect it as badly as it did at the start of 2020.”

The planner also advised Saurabh to reduce the risk in the portfolio as the goal gets closer. “My oldest son is 15, so we’re going to need the money in about three years. Therefore, I started to systematically switch from equity funds to a borrowing program to record profits and protect capital, ”he said.

Khosla said that since the Aditya Birla Sun Life Flexicap has not performed well, with the corpus at ??10 lakh and yields of 12.7%, Saurabh began to gradually move the corpus to the Aditya Birla Sun Life short-term fund with a systematic transfer plan of ??50,000 per month.

However, the strategy for medium and long term goals is different.

Saurabh’s twin sons are 12 years old, so their college education is still six years away. Given the longer time horizon, the planner advised Saurabh to pursue SIPs in the three equity funds chosen for this purpose.

After three or four years, when the target is two or three years away, it should gradually shift from equity funds to a borrowing program to protect capital, Khosla said.

On the advice of the financial planner, Saurabh also purchased a ??Floating health insurance plan of 5 lakhs for his family in addition to the collective coverage of his employer. He already had two life insurance policies, but they were traditional plans with very little coverage.

The financial planner urged him to buy a term insurance plan of ??1 crore, for which he pays an annual premium of ??13,600.

The other goal of Saurabh is planning for his retirement. He put an additional amount in the voluntary provident fund, but reduced it after the interest on contributions exceeding ??2.5 lakh in one year became taxable.

The financial planner also advised Saurabh to focus on equity funds that could earn him better long-term returns.

“My retirement is still 18 years away, so equity funds make sense. Either way, my contingency fund is already taking care of the bond part of the portfolio, ”Saurabh said.

Khosla also advised Saurabh to invest in the National Pension System (NPS) for his retirement. The low cost structure of the NPS makes it an ideal investment for long term goals.

In addition, it also offers tax advantages that are not available on any other instrument.

Thus, in the 30% bracket, Saurabh can reduce his tax by more than ??15,000 if he invests ??50,000 in the NPS under section 80CCD (1b). This saving is greater than the overall fiscal investment provided for in Article 80C of the Income Tax Law.

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