Winds of Change

Identity theft is a major problem. If you are not taking it seriously, you should. American adults lost a total of $43 billion to identity fraud in 2023 according to AARP. Approximately 15 million people were affected.

The stock market climbed higher with the prospect of lower corporate taxes and the pro-business administration entering the White House. A particular area of focus looks to be the corporate takeover space. The Federal Trade Commission has made it particularly difficult for many of these deals to occur, and that may be changing.

The U.S. dollar, Bitcoin, and gold all surged to new highs which in some respects is troubling. Are these assets in a bubble? One would think that as the dollar surged, gold and Bitcoin would have retreated.

As we review the profit landscape for 2025, some incredible numbers are forecast. EBITDA forecasts for 2025 are as follows:

• Microsoft $165 Billion
• Apple $150 Billion
• Alphabet $163 Billion
• Amazon $164 Billion
• Nvidia $130 Billion
• Meta $100 Billion
• Tesla $20 Billion

Thus, these “magnificent” seven companies will produce an astounding $900 billion of earnings before interest, taxes, depreciation and amortization. We have never seen this kind of earnings power concentrated in just seven businesses.

The Russian economy is reported to be under pressure. The ruble is falling, and inflation is rising. As Trump takes office more economic penalties on Russia might be proposed further hurting Russia at this critical time in its war with Ukraine.

A recent Wall Street Journal editorial discussed the taxes paid by the top 1% of U.S. taxpayers. In 2022, the top 1% of income tax filers represented 40.4% of the total U.S. tax revenue. In 1984, that same top 1% paid just 19% of the total tax by U.S. taxpayers. Currently, the top 10% of filers represents 72% of the tax levies. These statistics are very interesting and highlight the growing income/wealth gap in the US. These disparities will need to be addressed. Could the decline of the educational system in the U.S be the real cause of the income tax revenue gap?

As we approach 2025, all of us are tuned into the many conflicts around the globe. The older we are, the greater our perspective on world events. We have seen that great businesses have lasted through world wars, famines, inflation, deflation, Democrat and Republican administrations, and so many other challenges.

We are optimistic because America has been tested many times. A great quote about America’s economic resilience is from Warren Buffet: “American magic has always prevailed.” This speaks to the country’s enduring spirit of innovation and adaptability in the face of economic challenges.

While we will continue to remain vigilant about the world and the markets, in many ways, our future has never been brighter.

Thank you for your trust and confidence.

To a healthy, peaceful, and joyous 2025!

Happy Holidays!

As always,

Seymour W. Zises