🚀💸 Elon Doing Elon Things
Last week was jam-packed! Elon Musk left 10% of his Tesla stock in the hands of his Twitter audience, crypto markets hit all time highs (again), and the House passed a $1 trillion infrastructure bill that is waiting on Biden’s desk as of the weekend.
The bill would put $550 billion in new money into transportation projects, the utility grid and broadband. The package includes $110 billion for roads, bridges and other major projects, along with $66 billion for passenger and freight rail and $39 billion for public transit. $65 billion would go into broadband, and $55 billion into water systems.
Biden has said that the bill won't raise taxes on people making less than $400,000 a year and does not include a gas tax increase or fee on electric vehicles. It also won’t include the “billionaire tax” on unrealized gains that’s been in the news as of recent (more on that below).
Besides having market news and updates, we may have some analysis in the future on certain stocks and cryptocurrency investments in our newsletter.
I hope you enjoy the week, and in the future this newsletter will be consistently delivered on Sunday mornings, and possibly adding a second, mid-week update on Wednesdays.
- Humphrey & Rickie
In the Markets
Tweet of the Week
RH: Elon Musk is truly a genius marketer. He knows exactly what buttons to push to make sure his personal brand as well as Tesla stay relevant. Last week it was ending world hunger, this week it’s tax avoidance. It’s quite the rollercoaster if you own Tesla stock however because his tweets can easily move billions of dollars (re: “Tesla stock is too high”). The results of the poll ended with 58% of voters saying Yes to Musk selling 10% of his stock so we will see what the impact is come market open.
HY: If he’s to sell 10% of his stock all at once it would have a huge price impact on $TSLA, but if he sells it over time then the impact might not be as felt.
On the issue of taxing unrealized gains: nothing has been decided yet. There’s a current proposal by democrats to tax billionaires and people that make more than $100 million dollars for three years in a row on their unrealized gains - or gains on an asset BEFORE any liquidation event. This “billionaire” tax might have public support, but it creates a slippery slope - at what point with the government start to come after your unrealized gains if this were to pass? Good food for thought.
Weekly News Roundup
Bloomberg Wealth: Where to Earn 7.12% on Your Savings (BBG)
The U.S. government announced that a new rate for Series I savings bonds will be 7.12% now through April 2022. There are some catches however, one of them being that the rate is only guaranteed for the first 6 months and afterwards, is adjusted based on inflation
RH: 7.12% is a significant step up from the typical 0.5% you get from your bank.
HY: The maximum you can invest in a calendar year is $15,000, and the bonds aren’t tradeable. You can buy them on TreasuryDirect (the govt’ treasury website)
Zillow Seeks to Sell 7,000 Homes for $2.8 Billion After Flipping Halt (Yahoo)
Zillow is looking to sell around 7,000 homes to institutional investors in an attempt to recover from an operational stumble that saw Zillow buy too many houses, with many now being listed for less than it paid.
RH: The little guy (us) loses as below market value homes are being sold to institutional investors while first time home buyers continue to struggle with finding a place to live within their budget.
AT&T, Verizon to Delay 5G Rollout Over FAA’s Airplane Safety Concerns (WSJ)
Big telecom providers AT&T and Verizon agreed to delay their planned Dec. 5 rollout of a new 5G band in order to work with the Federal Aviation Administration over concerns of interference with cockpit safety systems.