We ask for Tom’s Thoughts on the Biden Administration’s Infrastructure Plan.
Transcript:
Katie Nealis: Great. Love that visual, Tom. Thank you. Um, yes, we have another one from the question bank, “What do you think about the new infrastructure plan?”
Tom Vaughan: Okay. So obviously, the infrastructure plan was announced a couple of weeks ago now. And it was a couple of things. Number one, one of the things that I always look at is after the announcement, how does the market react? So if you go back to when they announced the stimulus plan, the $1.9 trillion dollar stimulus that was put out the last one that passed, the market went down right away, right after it was announced. And we’ve seen some softness in the market, as it’s been coming out, there’s some concern with the inflationary environment that’s happening. And then before the announcement for the infrastructure plan, the market kept kind of coming down every time it was talked about. But then once it was announced, and Biden did his presentation, the market went up pretty heavily.
Matter of fact, it has been going up pretty well, ever since then. So I think one of the things personally, that I believe that that the market really liked was that it was going to be spread out over an eight year period. And so that just tends to be less of an inflationary push, there’s less treasury bonds, that need to be sold, which, you know, can help the bond market as far as that goes. I think overall, that is a win for the country. We’ll have to see what happens with the taxation portion, because they’re talking about increasing corporate taxes, from 21% to 28%, closing some loopholes on international money. And so, how’s that going to impact I’ve seen, like, projections from 5 to 9% reduction in earnings. And of course, earnings is one of the main drivers in the stock market as a whole. So we’ll have to wait and see what happens there. As far as that goes. But, we might see an earnings hit. But if the economy gets rolling the way it seems to be rolling right now, it might get kind of buried in the gains that are coming into the economy also. So we’ll have to see, but I think it’s a positive situation altogether, after, looking at everything, and, and the market seems to agree with me.
Katie Nealis: Well, we do have a question coming in from Woody. Oh, yeah. Um, “What sort of succession plan does RCS have for it’s management if you win the lottery? Is there another Tom waiting in the wings?”
Tom Vaughan: If I win the lottery? I, you know, I actually, I’ve had several different people approach me and kind of pester me about trying to buy the business. And the last time I had that I had a gentleman he just kept talking to me. And I said, “Look, if I was given $15 million tomorrow, I’d still come in and do the same thing.” This was originally my hobby that turned into my business. And I plan on going until I’m 75, I’m 56. So health and whatnot, and mental well being hopefully, is there for that entire timeframe. But yeah, we already have, there’s nine of us at RCS, my other partner, Mike is an advisor also. So he is kind of ready to step in if need be. We have a new advisor Easan, who is being trained in all of the things that I’m doing. And over a period of time, we’ll continue to build out that advisory practice. And, you know, Cam, a lot of you know, Cam Neri. So, you know, she and I merged together, and that was her succession plan. So that’s another possibility, also, at some point, is to merge with another practice and kind of get them together. Just a matter of finding the right fit as far as that goes. Good.
Katie Nealis: Great, thank you. We have another question from Taylor. “How do you see the rollout of the vaccine affecting the market? Is there something we should do to prepare for market changes that come up as things open up more?”
Tom Vaughan: Yeah, the vaccine is actually the story for the most part. I mean, if you take a look at what’s happening in Europe, for example, they’re way behind the US and the UK, in rolling out the vaccine. And now they’ve got these new variants, which are more contagious and they keep closing down. So we saw closed downs, all over Europe, France has been closed down and what have you, so that that has impacted the market negatively even here, because it is a global picture. Having said that, in my opinion, you know, all of that stuff is going to be worked out. And we’re going to see a reopening like nothing probably we’ve ever seen before.