Charles Payne

A performance measure is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio. The return on investment formula is this:

In the above formula, "gains from investment", refers to the proceeds obtained from selling the investment of interest. Return on investment is a very popular metric, because of its versatility and simplicity. That is, if an investment does not have a positive ROI, or if there are other opportunities with a higher ROI, then the investment should not be undertaken.
Source: http://www.investopedia.com/terms/r/returnoninvestment.asp

Spending the Money (Healthcare)

Even as President Obama was hitting the reset button for his signature accomplishment, one couldn't help but think that this thing not only is a dud but also will become another expensive albatross around the neck of the shrinking American taxpayer pool. It's not about the website, but the flaws in the law that will result in exorbitant financial obligations. There is no way that healthcare will improve as a result of the new law. On the contrary, overall healthcare will erode.

The problem with healthcare isn't the lack of insurance-rather, it is fraud, waste, and abuse. In fact, two major issues haunting the nation aren't from a lack of money; they are from unrepentant government spending. Healthcare and education are always used as an excuse to lard government payrolls-even as we water down the product. America already spends more money per capita than any other nation in the world, but our return on investment continues to decline. A lot of the fat marble through these important areas of society is purely the result of political payoffs.

The United States, according to the OECD, spends $8,508 per capita on healthcare-more than $2,800 above the next country on the list.

Our life expectancy has risen to 78.7 years in 2011, up from 70.9 years; but our pace trails other developed nations. Moreover, America now ranks number 26 in the world for life expectancy. It's absolutely astonishing; yet greedy government bureaucrats will blame the lack of funds for education of people stuck in food deserts as the main culprit. It always comes down to blaming others and raising taxes (mostly on those getting blamed). The notion of accountability isn't even broached. Ironically, the poorest Americans have the highest level of obesity and smoking rates, which are the two main drivers of untimely death. I hesitate to say they "suffer" from these problems, since they're self-inflicted.

This new healthcare law is a disaster on so many levels, including the continued effort at redistribution of accountability. The notion of free or cheap healthcare will only embolden people to neglect themselves under the false premise, "the government's got my back." While young healthy people roundly disapprove of the healthcare law (56% when it's called "Affordable Healthcare Act" and 57% when the moniker is "ObamaCare") heavily subsidized and unhealthy folks will think it's a magic elixir.

Why, yes, I will go for round three at the Golden Corral...I've got healthcare insurance.

Spending the Money (Education)

Turns out we're number 26 again ... this time in math among our 34 OECD rival nations. In overall education, America ranked 36 in the most recent PISA testing of 15- year- olds.

America spends more money per student than any in the world, and only a few spend more as a percentage of GDP. The left likes to use these poor numbers to:

Demand more money
Demand smaller classes (more teachers)
Demand easier courses for blacks and Hispanics (less accountability)
Demand an end to standardized tests (less accountability)

The bottom line is that America has a spending problem coupled with the notion that some people shouldn't be held to higher standards because they're disadvantaged. In the process, these policies set those same people even further behind. It's become a death spiral that only gets worse, as we move deeper into a knowledge-based economy.

For now, the return on investment is mediocrity, guilt, anger, and a fast trip to becoming a Banana Republic.

Beige Report (November 2013)

The Fed Beige Report is mostly anecdotal, but it gives a good glimpse of the economy nationwide. Yesterday's release for November reiterated a slow and steady recovery that isn't setting any records but, nevertheless, may be gaining momentum.

Here are some tidbits that stood out for me:

Hiring showed a modest increase or was unchanged across districts. Difficulty with finding qualified workers, especially for high-skilled positions, was frequently reported. Upward pressure on wages and overall price inflation were contained. Contacts in many districts voiced concern about future cost increases attributable to the Affordable Care Act and other types of federal regulations.

Boston
A manufacturer of electrical distribution devices said that the only thing holding back investment is a shortage of "talent" to execute new projects.

Labor supply had thinned out in recent months across all industries, and was particularly tight in the software/IT and engineering sectors. Firm strategies to attract more job candidates included improved marketing tactics, and an exchange program that temporarily recruits IT professionals from abroad.

Philadelphia
In particular, manufacturers and service-sector firms expressed strong confidence in the U.S. economy and in global conditions.

In regard to hiring and capital expenditure plans, firms continued to expand cautiously, as they face ongoing uncertainty due to federal fiscal debates, and implementation of the Affordable Care Act.

Atlanta
Railroad contacts continued to cite significant increases in shipments of petroleum products and nonferrous scrap metals, as well as metallurgical coal; however, rail traffic year-to-date is up only slightly. District port contacts reported record levels of container shipments, bulk cargos, and truck and intermodal freight. Trucking tonnage continued to increase year-over-year; due to heavier freight loads of energy products, housing construction materials, and autos.

Minneapolis
Overall, the partial federal government shutdown had a muted impact on the district economy.

A web technology firm noted that demand was strong, and that profit margins were good. An environmental engineering firm expected its business to continue to grow.

Dallas
Staffing firms said demand was generally flat. One firm noted better retail demand than usual this time of year, and another noted shortages in nursing, and in aerospace engineers. Demand was down more than expected for call center hires, and for workers at warehousing, and distribution companies.

San Francisco
Residential permit issuance expanded in several regions, an encouraging sign for sustained growth next year. Construction activity appeared to increase on net, but was held back by labor shortages in some areas. Several new large construction projects broke ground in parts of Hawaii, California, Washington, Oregon, and Idaho. Technology firms continued to drive demand for commercial real estate in the San Francisco Bay Area and Seattle. High prices for commercial real estate in downtown San Francisco spurred some firms to migrate to more affordable areas of the region.

Tax-Loss Selling


Investors are allowed to use investment losses to offset capital gains made during the year. If your capital losses are more than the gains- they could be used to offset up to $3,000 in other income.

It's important to note that once you close positions for capital losses to offset gains you cannot repurchase that same asset for at least 30-days; this is called the "wash rule."

Note: The above is an outline and we are not certified accountants. Investors are urged to seek professional guidance.

There are positions we are considering for tax-loss selling and we will make determinations over the next ten days.

Third Quarter GDP
According to the Bureau of Economic Analysis, real gross domestic product (GDP) during the third quarter of 2013 increased quarter-over-quarter by 3.6 percent (annualized), better than the Street's consensus estimate calling for a 3.0 percent quarter-over-quarter rise. Concurrently, prices for GDP increased by 2.0 percent (annualized), while economists' average forecast called for a 1.9 percent rise.


Charles Payne

Charles V. Payne is a regular contributor to the Fox Business and Fox News Networks. He is also the Chief Executive Officer and Principle Analyst of Wall Street Strategies, Inc. (WSSI), founded in 1991 which provides subscription analytical services to both individual and institutional investors.
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