Powerball: To Play or Not to Play

FullSizeRenderSubmitted by George Taylor

Ok, I understand the odds. If you don’t play, you can’t win. If you play, you probably won’t win. For the 5th time in my life, I bought a lottery ticket. About as many cavities as I have had.

I felt very stupid as I have little experience in playing the lottery.  I headed to my dear friend Peter Aziz’s gas station to buy the tickets where I learned that one ticket was $2. The staff was helpful in explaining how this particular game worked. I was told you could buy a multiplier but it doesn’t increase your chances of winning or make the jackpot bigger. Being a former math major, I calculated the odds were in my favor by buying one ticket. By buying one ticket,my odds went from 0 to something like 1 in 292 million. Much better odds!!!!

I have made plans of what I am going to do with the money. Being a financial advisor, I will set up trusts for my kids, make some cool investments, take care of debts, etc. I don’t think I will retire but I will take some cool vacations. I’ll also invest in some of many investments I have access too.

Since I am planner I have to think about what happens if I don’t win. My backup plan is to find the lucky person(s) who did win and convince them that we should be their advisors. Then I would make the recommendations that I have been trained to do as a Sudden Money advisor by the amazing Susan Bradley. Don’t make any big moves while you develop your strategy. Set up a GST trust to hold the money, probably coupled with an LLC. Don’t promise everyone who comes out of the woodwork claiming that they need help or want to borrow a couple thousand dollars or has a great investment idea. Take some time and make careful planned out decisions. Decide who you are going to take care of and who you are not.

Now if I don’t find that person or they don’t find me, I will leave my dreams and go back to my current reality. Just hope that person finds the right advisor so their life does not spin out of control.

I guess that I will go back to figuring out how big of a problem China is in the current market…

Minimum Wage and Warren Buffett

photo credit: '72 via photopin (license)
photo credit: ’72 via photopin (license)


No surprise, the Oracle of Omaha has an opinion. And it makes sense. Not only does he say that raising the minimum wage will actually hurt those the raise would intend to help, he also offers a solution.

Check out this article.

Gilead Watch

photo credit: Pills via photopin (license)
photo credit: Pills via photopin (license)


As we watch the unfolding earnings season, we are anxiously awaiting Gilead (GILD) to report later this month.

The biotech giant has underperformed the Biotech indices thus far this year, but we are encouraged by analysts expectations. Citigroup analysts Yaron Werber and Kumaraguru Raja indicate that the company’s Hep C sales are tracking ahead of schedule for 1Q2015 and they have issued a buy rating with a $120 price target.

We are curious to see how the accounting will be done for discounts on Hep C drugs, this seems to be a point of contention among analysts.

Consensus has Gilead earning $2.16 a share for the quarter with total revenue of $7.9 Billion.

Zappos! and Holacracy: Adopt or Leave

photo credit: Travel Sponsor: Zappos via photopin (license)
photo credit: Travel Sponsor: Zappos via photopin (license)


In her study, Business Intelligence Success Factors: Tools for Aligning Your Business in the Global Economy (John Wiley & Sons, 2009-4-24), Olivia Rudd defines HOLACRACY as a system of organizational governance in which authority and decision-making are distributed throughout a holarchy of self-organizing teams rather than being vested at the top of a hierarchy. Basically, a business is not traditionally managed, its hierarchy is composed of multiple self-regulating units that function as autonomous wholes or independent clusters.

Zappos! CEO, Tony Hsieh, who is known for out of the box management and leadership, in a rather lengthy email to his employees, told them to adopt Holacracy or find another job. He wants them to move quicker towards “self-management, self-organization, and more efficient structures to run our business:”

Hsieh defines holacracy and what it means to Zappos! and how other successful companies have used this tool versus a traditional pyramid management hierarchy for years.

In the email, he also addresses misconceptions of holacracy. He quotes Gary Hamel:

“No one can kill a good idea
Everyone can pitch in
Anyone can lead
No one can dictate
You get to choose your cause
You can easily build on top of what others have done
You don’t have to put up with bullies and tyrants
Agitators don’t get marginalized
Excellence usually wins (and mediocrity doesn’t)
Passion-killing policies get reversed
Great contributions get recognized and celebrated”

We love the idea of holacracy and self-management. What do you think?

Gray Divorce and Social Security

photo credit: Question of money via photopin (license)
photo credit: Question of money via photopin (license)


Gray divorce is a term that describes couples who split up later in life.  It is not uncommon and it presents some challenging questions for financial planning professionals.

This article from Investment News answers some very common questions like “How much are spousal benefits worth?” and “Can divorced spouses who remarry collect survivor benefits if their ex spouse dies?”

Take a look and, as always, let us know if you have any questions about your situation.

Apple Watch

photo credit: mac via photopin (license)
photo credit: mac via photopin (license)


All eyes were on Apple yesterday.  CEO Tim Cook announced details of the first “Apple Watch” release.

The watch, which tethers to your iPhone, is set to price around $349 for entry level and we have read up to $10,000 for a fancy gold version.  The question that we all have?  Is Apple going to transform (or, really, define) the wearable computing market?  Samsung, Apple’s nemesis, has watches on the market, as do other smartphone makers, but no one has yet to definitively set the standard for this market.

Alas, Apple has an opportunity to make us all think we all need one. The current “smart watch” market is around 4.6 million sold in 2014. Projections for Apple alone are around 10 to 30 million this year.

We are excited to hear about the new watch and see how the market reacts.

Fiduciary Standard

photo credit: Fiduciary via photopin (license)
photo credit: Fiduciary via photopin (license)


Today, the White House is encouraging the brokerage world to “act in the best interest of the client.” Which brings us to point out the difference between a brokerage firm and an advisory firm.

As investment advisors, we have an ongoing duty to act in our clients’ best interest, so this development from the White House is not news to our world. The investment advisor is always held to this fiduciary standard.

The big deal is to brokerage firms. They would have to disclose conflicts of interest and compensation, etc. Wall Street is expected to push back on this. Not sure why.

We invite you to look at the RIA stands for you website. This website does a good job in explaining the benefits of using a registered investment advisor.

You will also find a great reprint from the Wall Street Journal that outlines how to select a Registered Investment Advisory firm.

As always, ask us if we can help in any way.

An Apple a Day

photo credit: Iphone 4 via photopin (license)

photo credit: Iphone 4 via photopin (license)


The big headline “APPLE GRABS 93% of the Handset Industry’s Profit” was somewhat of a surprise. You would expect them to get the majority of the profits, but 93% is, again, staggering.

Last quarter (Q42014), Apple brought in $18 billion in earnings, so we knew they would have the lion’s share, but what happened to Samsung? It looks like the race for smartphone dominance is all but won.

We continue to own Apple and are excited to see what comes next. The buzz is Tim Cook wants to give Elon Musk a run for his money.

Gilead Beats 4Q, but suffers…for now

photo credit: Prescription Prices Ver5 via photopin (license)
photo credit: Prescription Prices Ver5 via photopin (license)


Gilead surprised us. A Dividend. $2.43 a share earnings on $6.67 billion revenue. Net sales between $26-$27 billion. And a $15 billion share repurchase program.

All of this is good news.

But, they also announced that they were severely discounting Harvoni, their miraculous Hep C drug, by as much as 50%.

Although it is a pricey, but effective drug, we remain positive that this discount will open up more doors. Making it cheaper and more available, we feel, will make it accessible to more people.

Interest Rate Outlook for 2015

photo credit: bhautikjoshi via photopin cc
photo credit: bhautikjoshi via photopin cc


We get two big questions every year: 1) What do you think the market is going to do? 2) What are interest rates going to do?

One is easier to predict than the other. Long term, both go up from here. Though historically, rates had been falling for 30 years and can only go up and the market goes down for short periods but has always recovered.

Back to question #2. What are interest rates going to do? Kathy Jones, a fixed income specialist at Charles Schwab, sees rocky times ahead in the fixed income markets. Tighter fed policy implies that real and inflation-adjusted rates will rise.

“The liquidity party of the last 6 years appears to be coming to an end.”

Give us a call to discuss how this might impact your planning.

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