Daily Brief - Save your own ideas in TOGGLE! (Dec 3, 2021)

The 10 days ahead: TOGGLE Leading Indicator

The TOGGLE Leading Indicator is the aggregated indicator of all TOGGLE insights for stocks in the US market

Now this is a big one. The TLI last week showed one of the strongest bullish indicators and then…the market definitely went the other way. This is the first major failed signal of the indicator in the last 12 months.

Since the TLI is mostly based on fundamental and valuation indicators, this then opens an interesting conundrum: was the TLI entirely wrong, or is the market offering a stellar entry point?

Guide to reading this dashboard

- Top chart: SPX overimposed over colouring based on the TLI, blue = bullish and red = bearish

- Bottom-left chart: orange area chart is the 2-week change in price of the S&P 500, dark grey line is the TOGGLE leading indicator, shifted to the right by 2 weeks

- Bottom-right chart: same as the bottom left but in scatter format, with the current level of the TLI shown as a dashed orange line

Important disclaimer: you can see for yourself that the correlation between the TLI and SPX was far from 1:1, so use at your own discretion. Past performance is not indicative of future returns!

Upcoming at TOGGLE Every week we’ll be sharing a sneak peek of exciting new feature releases.

Big stuff is coming

We’re preparing a big one for December, stay tuned.

General Interest - Are you raising your Angel round? Move to the UK

Every week we endeavour to bring you one high quality article post from around the internet, of general interest.

In 2010, the White House unveiled the “Qualified Small Business Stock” tax framework, that protected angel investors from capital gains tax if they funded businesses with less than $50m assets for at least five years.

Yours truly are familiar with the scheme as it is fairly standard for early funding rounds. The idea is to encourage investors to fund early innovative companies, and the US is by no means the only proponent.

The UK for example has been running for years the Seed Enterprise Investment Scheme which remains one of the most compelling solutions worldwide at small scale.

Well, it seems the honeymoon period is over. Tucked (very) deep inside the Build Back Better is a clause meant to kill the scheme.

In reality, this is a casualty in the war against carried interest and the low taxation of capital gains - which benefits the wealthy and encourages company buybacks instead of reinvestment and dividends.

In practice the clause would slash the headline QSBS tax break from 100 per cent to 50 per cent. And the fun part is that the carried interest portion has been removed from BBB...but the seed investing portion is still there.

The Angel Investor community obviously had something to say about this - but the jury is still out to see whether the provision will be withdrawn or it will stay.

So if you’re raising your angel round, you might want to let your representative know that those tax savings might make the difference for you.

Read more here: Angels angered as lobbyists shape Biden’s tax reforms