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About Jim Walker

Jim Walker has been a member since November 8th 2010, and has created 665 posts from scratch.

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Jim Walker's Recent Articles

Will Bitcoin Survive the Crackdown?

Most of our concern about bitcoin and other cryptocurrencies has been the fact that they have no intrinsic value to fall back on when the bubble pops. Now another factor has been added to the bitcoin equation. Regulators in China and South Korea are talking about shutting down cryptocurrency exchanges. That news threw bitcoin and others into a tailspin as investors pulled their assets from the world of cryptocurrencies. Nations like China are trying to keep wealthy investors from moving assets offshore. Unfortunately for the governments, investors can use bitcoin to move millions without government oversight, taxes or regulations. As bitcoin and others have grown they have become an issue for governments across the globe and regulation of the cryptocurrency world is overdue. For those with investments in this area will bitcoin survive the crackdown?

CNBC notes that bitcoin plunges below $12,000 on the news.

Bitcoin plunged to a six-week low Tuesday after comments from South Korea’s finance minister renewed worries about a crackdown in one of the largest markets for digital currency trading.

On Monday, Bloomberg reported that authorities in China were planning to block domestic access to Chinese and offshore cryptocurrency platforms that allow centralized trading. Regulators will also target people and companies that provide market-making, settlement and clearing services for centralized trading, the publication said, citing unnamed sources.

And on Tuesday, a Chinese central bank official reportedly said that authorities should ban the centralized trading of digital currencies, adding weight to concerns of further suppression of the country’s cryptocurrency market.

People first got into bitcoin because of the argument that it was a new way to move money and hold assets efficiently and privately. Then, as the value bitcoin grew it became a mania as people emptied their bank accounts and put second mortgages on their homes to get in. People who are so desperately leveraged will be the first to bolt for the door when it appears that various crackdowns will drive the price down. That sort of rush for the exits tends to accelerate as the price falls turning the demise of assets like bitcoin into self-fulfilling prophecies.

Will There Really Be a Crackdown on Cryptocurrencies?

A valid question for folks with assets tied up in bitcoin and other cryptocurrencies is if various governments will really close centralized cryptocurrency exchanges. China is likely to take action and the reason will be its concern about capital flight and the damage that loss of investment capital would cause China’s economy.

The business news is full of reports and speculation about capital flight out of China. Foreign investment was essential to China’s rapid growth over the last decades. Foreign investors are pulling money out and wealthy Chinese are moving their money offshore. Will capital flight kill the Chinese economic miracle?

China’s foreign currency reserves have shrunk at the same time that its public and private debts are soaring. Many who made their fortunes on China’s rise as an industrial power are hedging their bets and moving money offshore. This comes at a bad time for China because they need to increase internal investment and liberalize their economy. That will not happen if there is a shortage of cash. One of the routes out of China for capital is the world of bitcoin. Thus it is likely that China will shut down exchanges or at least demand more transparency in order to control capital flight.

Invest in Gene Editing Companies

The world of medicine is about to change. Diseases that had no treatment and conditions that cause lifelong suffering may well be cured at the source. Biotechnology has advanced to the point where the human genome can be edited and fixed! Companies that are on the leading edge of this new technology will not only change the world of medicine and your life. They can be profitable as well. Three gene editing companies in particular are worth your attention as noted in an article in the Motley Fool.

If you’re looking to invest in stocks positioned to benefit from a literally game-changing technology, check out stocks of biotechs that are focused on gene editing. The future of medicine is likely to be radically transformed by therapies that involve the insertion, deletion, or replacement of DNA.

Three of the hottest gene-editing biotech stocks on the market right now are Sangamo Therapeutics (NASDAQ:SGMO), Editas Medicine (NASDAQ:EDIT), and Intellia Therapeutics (NASDAQ:NTLA). But which of these is the best pick for investors? Here’s how these three gene-editing stocks stack up.

As always with new technologies, the issue of profits depends on how well the technology works, how efficiently it can be applied, how large a market its product will have, and whether or not a company will control its market niche or have to compete with other similar technologies. The other issue for medical treatments is passage through the FDA process to demonstrate effectiveness and safety of use.

Here are the three companies highlighted in the article and the diseases their therapies are intended to treat.

Sangamo Therapeutics: Hemophilia A, amyotrophic lateral sclerosis, beta-thalassemia
Editas Medicine: Sickle cell disease, beta-thalassemia, cystic fibrosis, Duchenne muscular dystrophy, and editing of T-cells in treating cancer.
Intellia Therapeutics: gene-editing therapies to target treatment of up to 10 indications and using gene editing in hematopoietic stem cells and chimeric antigen receptor T-cells

The company with the most solid results so far is Sangamo. In order to invest in gene editing companies and make a profit you may want to pick the most likely winner with a treatment that is far along the FDA pipeline. However, the stock will have a higher price the closer its treatment is to going on the market. If you are going to invest in gene editing companies in the search of the highest profit you need to get in early and consider investing in several or order to catch the eventual winners when their share prices are cheap. The current state of the art technology that is driving the world is gene editing as called CRISPR-Cas9.

CRISPR-Cas9

According to New England Biolabs CRISPR-Cas9 is the newest and best tool that has opened the door to effective gene editing.

The development of efficient and reliable ways to make precise, targeted changes to the genome of living cells is a long-standing goal for biomedical researchers. Recently, a new tool based on a bacterial CRISPR-associated protein-9 nuclease (Cas9) from Streptococcus pyogenes has generated considerable excitement.

This was first noted in the 1980s but not confirmed until the last decade. Using this tool from nature will allow bio tech companies to design treatments for wide range of genetically based diseases. One issue is patent rights to use the treatment and in that regard Editas has won court battles for patent rights which opens the door for them to develop and sell gene therapies based on the CRISPR technology.

Why Apple Will Not Be Hurt in a Crash

As the stock market moves higher, more and more analysts are predicting a correction if not a stock market crash. If you have made money in this bull market is it time to make some adjustments just in case? Last year we wrote about how to prepare for the next stock market crash. Tech has been the leader in driving the market. Consumer stocks are the traditional refuge when the market tanks. If tech has been the leader then we might expect tech stocks to take the biggest hit with a correction or a crash. One of the tech leaders is Apple, AAPL. Its share price has gone up nearly fifty percent in the last twelve months. One might expect AAPL to take a big hit during a market correction. But, unlike other tech leaders, Apple does not have a stratospheric P/E ratio. In fact, Apple’s P/E ratio of 18 is amazingly tame in comparison to Netflix at 193 or Amazon.com at 511! Another reason to trust that Apple will not correct significantly if the market falls is the company’s cash hoard offshore of more than $200 billion. But, the biggest reason that Apple will not tank in a market correction is that Apple is not just a tech stock but a consumer stock as well.

People Cannot Live Without Apple Products

Warren Buffet generally avoids tech stocks because he says he cannot predict how much they will worth 5 and 10 years in the future. Unlike a tech product, a Snicker’s bar or bottle of Coca Cola, is predictable. So, why does the Oracle of Omaha own so much Apple stock? He says the stock is more of a consumer stock than a tech stock. Apple has amazingly strong brand name and extremely strong customer loyalty. This is because the company has focused on the customer and ease of use of its products. And it has built a range of interlocking products and services such as ITunes and various useful apps. Many people cannot live without their iPhone and other Apple devices and services. This brand loyalty to a wide range of products and services is what will help Apple retain earnings even if the wider market crashes. And those earnings, as well as repatriated offshore cash, are why Apple will not be hurt in a stock market crash.

Will Apple Be the First Trillion Dollar Company?

At its current rate of growth Apple will pass the trillion dollar mark in market cap in 2018. In fact, if more people buy Apple due to its consumer stock aspects, it could still pass a trillion dollars even if the market crashes.

What Could Go Wrong?

There is speculation that Apple could buy Netflix according to Investor’s Business Daily.

Analysts at Citi said there is a 40% likelihood that Apple (AAPL) will buy Netflix. Apple is expected to repatriate $220 billion in cash under the new tax laws. The Citi analysts said Apple has more than enough cash to buy Netflix.

On one hand this would make sense as an addition to Apple’s range of services. On the other hand it could raise Apple’s P/E ratio (Netflix=193 vs Apple=18). We asked if the new tax code would help with your investments. Here is an example of how Apple’s offshore cash could fund an outright purchase of Netflix with no other cost to AAPL.

Hackers Create Fake Bitcoin Wallets

Our attention to the current bitcoin feeding frenzy has been focused on how closely it resembles previous boom and bust cycles. (Could You Be a Bitcoin Billionaire, What Should Bitcoin Be Worth?) But there is another concern as more and more investors pile into cryptocurrencies. Hackers create fake bitcoin wallets to steal your money. How does this work?

A Virtual Currency

If you have money deposited in a bank in the USA your money is backed by the full faith and trust of the US government. Your deposits are insured by the FDIC (Federal Deposit Insurance Corporation) up to $250,000. And, instead of depositing your money in the bank you can receive paper currency and coins and hold your money in your hand. In the case of a virtual currency like bitcoin and others neither of these is the case. If someone hacks the computers of your bank you can still get your money back via the FDIC. If hackers hit your virtual currency you are toast.

Hacking of Cryptocurrencies

Every year there are several hacks of cryptocurrency operations ranging from a few million to hundreds of million worth of value. For this to happen, the cryptocurrency company has to have neglected its security and a hacker has to have had the skillset to get into their system and transfer currency out of wallets into another wallet under their name. But there is a simpler way for hackers to steal your bitcoins. They can set up a fake wallet. How does that work?

Folders, Wallets and Virtual Compartments

When you save a document on your computer you put it in a folder. There is no physical folder but rather computer code that designates where the computer can find and retrieve your document. And, of course, there is no document but rather computer bits and bits that when retrieved look like a real document on your computer screen. In a similar fashion there is no real bitcoin or other cryptocurrency wallet but rather computer code that allows the system to keep track of how much cryptocurrency value is yours.

Fake Bitcoin Wallets

CNN Tech has a good article about how hackers take advantage of Bitcoin.

“Whenever something gets this much publicity and popularity and there’s a potential to make what appears to be free and easy money, the criminal aspects of the world are going to take advantage of it,” said Mike Murray, vice president of security intelligence at mobile security firm Lookout.

In order to use bitcoin, you need a digital wallet to receive, send, and store cryptocurrencies. By creating fake wallets, hackers can take advantage of people new to bitcoin and other digital currencies who might not realize the difference between legitimate companies and fake apps.

Unsuspecting people hear about the bitcoin feeding frenzy and decide to get in. They find an app on Google Play or somewhere else, download it, and send money. Unfortunately, these apps are set up by hackers who have nothing to do with cryptocurrencies and are simply stealing your money. To the fact that bitcoin is due for a crash please add the fact that hackers create fake bitcoin wallets to your list of concerns when investing in cryptocurrencies.

Will The Tax Code Overhaul Really Help Your Investments?

As Congress votes on the first major tax code overhaul in three decades, stock markets across the globe are in rally mode. After details of the final product came out it is clear that pass through tax benefits to real estate investors, like Mr. Trump, may be substantial. But will the tax code overhaul really help your investments? Apple may get a downgrade because analysists think the iPhone product cycle may be getting old. And, do all stocks benefit from changes in the tax code? The New York Times tallies up the winners and losers of the tax bill.

President Trump has called the $1.5 trillion tax cut that Republican lawmakers are on the verge of passing a Christmas present for the entire nation.

But the fine print reveals that some will get a much nicer gift than others, the benefits will change over time, and some will be left out in the cold. Real estate developers and technology companies could see big tax cuts, while low-income households and people buying health insurance could lose out.

With the bill finally headed to a vote this coming week, taxpayers are scrambling to determine whether the legislation renders them winners or losers.

If their analysis is correct real estate developers like the family of the president will make out well and perhaps the likes of Apple will get help in the event of a fading product cycle. Important parts of the tax code overhaul are the reduction of the corporate tax rate and the significant reduction of the tax on repatriated corporate profits. Shareholders of companies with billions of dollars stashed offshore my see increased dividends and soaring share prices as corporations take advantage of the new tax code and bring money back home to the USA. Who has the most offshore?

APPL: $216 Billion
MSFT: $128 Billion
CSCO: $68 Billion
QCOM: $30 Billion
AMGN: $36 Billion
ORCL: $48 Billion
GE: $35 Billion

Business Insider provided these numbers and writes that the tax plan could bring $250 Billion into the USA.

The repatriation tax holiday outlined in the plan, for which details were released on Thursday, is designed to incentivize US-based companies that do big business overseas to bring those profits back home.

By Goldman Sachs’ calculation, S&P 500 companies hold $920 billion of untaxed overseas cash, and the firm estimates that $250 billion of that would be repatriated. Looking at all US-based companies, Citigroup says there’s a whopping $2.5 trillion of capital stashed internationally.

Not all offshore cash will ever be repatriated because US multinationals have expenses in their offshore operations and it makes no sense to send money back to the USA to get taxed and then send it back offshore to pay wages or build new manufacturing and shipping facilities. And, while companies like Apple have huge stores of offshore cash there are smaller companies with only a billion or so for whom repatriation will be a much bigger deal for their investors.


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