Weekly Observations for 12/15/2017

Happy Friday afternoon — particularly for Star Wars fans.

This is my second brief Friday letter — Weekly Observations — summarizing a few of the more interesting items we have encountered in our reading and research this week. Some items will be planning related, some investment related, along with anything else that informs how we advise and help you build and preserve wealth.

We’ll have an official sign-up on the website shortly. In the meantime, anyone can just shoot me a quick email and we’ll get them added.

Here are a few of the things I encountered this week that I noted as having particular relevance to our financial life. And, yes, let’s talk a little bit about Bitcoin…the question of the week!

–  The tax bill I mentioned last week is now in the process of reconciliation between the House and Senate versions. What the final bill will contain is still very much a moving target, but Moss Adams published a very nice (and succinct) summary of the tax provisions that are at play.

–  I received a number of calls and emails this week about Bitcoin, specifically about buying it. Well, you’re late! A better to time to buy was 2015 or 2016 — when people would have thought you were a little crazy. Good investment opportunities rarely happen at the height of euphoria.

–  That said, I am of the opinion that blockchain technology will be revolutionary over the coming decade — and cryptocurrencies are just one possible application of a blockchain. The internet was also revolutionary in many, many ways. But don’t forget that the internet bubble and dot.com bust was part of the package in the early stages.

–  If you want to buy Bitcoin anyway (or one of the other variations), keep in mind it is an unregulated security. This is the Wild West of capital, so you’re on your own (although you’re welcome to call me with questions). Manage your risks very carefully, and PLEASE PLEASE PLEASE don’t mortgage your house to buy Bitcoin! Here is a friendly public service announcement from the SEC that is worth reading first.

–  I remember in 1999 that companies would change their name to ____.com, and for no other reason, the stock would skyrocket. How quickly we forget… This week, Rich Cigars, Inc. (yes, a cigar company) changed their name and mission to include “cryptocurrency mining”, and the stock promptly increased by over 2,200% in one day! I wish I was kidding. I’ve seen this before, and it does not end well.

Have a great weekend, and may the Force be with you!

Kenneth