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Rich people are starting to flee America and especially California for tax havens elsewhere. It's not as bad as refugees getting out of North Korea. But it's not good.

The most publicized recent example has been Eduardo Saverin, a co-founder of Facebook, worth approximately $3.8 billion. Thats because Facebooks initial public stock offering hauled in $104 billion Friday.

It recently came out that Mr. Saverin renounced his U.S. citizenship in September and now lives in Singapore. Reported Bloomberg, Besides helping cut tax bills stemming from the Facebook IPO, the move may also help him avoid capital-gains taxes on future investments since Singapore doesnt have a capital-gains tax.

The top U.S. capital-gains tax currently is 15 percent, and could rise to 20 percent next year if President Barack Obama is re-elected and current tax cuts expire. The top California capital-gains tax is 9.3 percent. So, assuming Mr. Saverin lived in California, potentially hes avoiding a 29.3 percent capital-gains tax.

As to income tax, Singapores top rate is 20 percent. By contrast, the top U.S. rate is 35 percent, but could become 39.6 percent if Mr. Obama has his way. Californias top incometax rate is 10.3 percent, but could become 13.3 percent should Gov. Jerry Browns tax increase initiative be passed by voters in November. The possible combined top U.S. and California income tax rate for next year: 52.9 percent. Thats compared with Singapores 20 percent.

And its not exactly like Mr. Saverin or any of us is getting high-quality return on taxes. Especially in California, many roads are crumbling, many schools are poor, the publicemployee pensions are unsustainable, and state and local governments face potential Greecestyle bankruptcies.

People move in and out of countries for reasons other than taxation, Esmael Adibi told us; hes the director of the A. Gary Anderson Center for Economic Research at Chapman University. But there still are two problems, he said. In California especially, the state isnt business-friendly. And its become difficult for people to make a living here.

Unfortunately, Gov. Brown in his tax-increase pitch and Mr. Obama in his campaign of envy of the rich, both are making targets of people like Mr. Saverin.

Sen. Chuck Schumer, D-N.Y., for example, said Thursday that he would push to bar people who give up citizenship to avoid taxes from reentering the U.S.

Contrast that with countries that are flourishing such as Singapore and formerly communist China are more welcoming to those who innovate and invest. If the goose leaves, you dont get the golden eggs.

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Ahead of the tax man

It has been quite a ride for a fund composed of the market's tamest stocks.

But now, just as imitators are proliferating, some experts think this popular exchanged-traded fund could be sinking back to earth.

The ETF, PowerShares S&P 500 Low Volatility, is loaded with stocks any grandparent could love: Kellogg, Coca-Cola (KO) and Procter & Gamble (PG), among others. And this stodgy-seeming play is the hottest ETF to hit the market in the past year.

Since its inception last May, investors have added $1.6 billion to the fund, more than any of the roughly 400 ETFs that debuted since the start of 2011.

The fund is supported by a growing body of academic and industry research that indicates a classic Wall Street paradigm -- that buying safe, well-established companies means sacrificing long-term gains -- is false.

Advocates say the research shows that investors in the least volatile stocks would have fared as well or better than those who put their faith in riskier names, suggesting that many of the market's most gut-wrenching ups and downs are unnecessary punishment.

"You get a win-win" by sticking with safer companies, says Ben Fulton, head of ETFs at Invesco (IVZ)'s PowerShares unit.

There now are 14 different funds that bill themselves as low-volatility or low-beta, an industry term that indicates volatility.

During its short life, the PowerShares fund has handily beaten market benchmarks, returning about 9.5%, versus a 0.7% loss for the Standard & Poor's 500 over the same period.

But there already are signs its luck has turned. Amid this year's rally, the fund's lead over the broader market has shrunk in three of the past four months. That bolsters critics, who worry that although the strategy seems appealing over the last tumultuous decade, the market winds may have shifted already.

Read more from the original source:
The Case for Stodgy Stocks

By Rick Aristotle Munarriz | More Articles May 21, 2012 |

Last week was a lousy one for tech investors, and things didn't get any prettier in China.

However, several of China's publicly traded Internet companies did come through with better-than-expected results.

Sure, a lot of them are still losing money. Investors are also naturally hesitant about buying into a country where the government has made it clear that it doesn't trust cyberspace. No one said that buying into new media in China was going to be a risk-free proposition. However, it's always encouraging to see a niche landing well ahead of the prognosticators.

Let's take a quick look at the five market thumpers.

Company

EPS (Estimated)

EPS (Actual)

My Watchlist

Source: Thomson Reuters.

Read more here:
5 Stocks Earning Their Keep in China

NEW YORK, NY--(Marketwire -05/21/12)- Facebook's IPO has brought a lot of attention to social media stocks in recent weeks. With Facebook's IPO being reported as oversubscribed some investors have been hoping to profit from other already-public social media stocks. "I do sense some 'temporary' momentum for these related social media stocks," stated Arvind Bhatia, financial analyst covering Facebook for Sterne Agee. Five Star Equities examines the outlook for companies in the Social Media Sector and provides equity research on Linkedin Corporation (LNKD) and Pandora Media Inc. (P). Access to the full company reports can be found at:

http://www.FiveStarEquities.com/LNKD

http://www.FiveStarEquities.com/P

Social media stocks, which had benefited recently from the interest in Facebook's IPO, suffered on Friday as the Facebook IPO had a rockier start than expected. Investors who are interested in a piece of Facebook may also take a hard look at companies who have the potential to be acquired by the social media giant. "LinkedIn, Zynga, Pandora, Yelp ... these are all potential acquisition bait for Facebook," Ironfire Capital founder Eric Jackson said. "If Facebook is going to trade at a premium -- like $150 billion to $200 billion, why not buy the fish and the bait, too?"

Five Star Equities releases regular market updates on Social Media Sector so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at http://www.FiveStarEquities.com and get exclusive access to our numerous stock reports and industry newsletters.

LinkedIn is a professional network on the Internet with more than 90 million members in over 200 countries and territories. The company reported revenue of $188.5 million for the first quarter ended March 31, 2012, an increase of 101% compared to the first quarter of 2011, and the 7th straight quarter of greater than 100% year-over-year growth.

Pandora Media is an Internet radio in the United States. As of January 31, 2012, it had over 125 million registered users. The Music Genome Project and its playlist generating algorithms predict listener music preferences, play music content suited to the tastes of each individual listener and introduce listeners to music they will love

Five Star Equities provides Market Research focused on equities that offer growth opportunities, value, and strong potential return. We strive to provide the most up-to-date market activities. We constantly create research reports and newsletters for our members. Five Star Equities has not been compensated by any of the above-mentioned companies. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at: http://www.FiveStarEquities.com/disclaimer

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Social Media Stocks Gaining Attention as a Result of Facebook's IPO

Click the chart for more stock market data.

NEW YORK (CNNMoney) -- A plunge in Facebook's stock didn't faze the broader U.S. market Monday. U.S. stocks bounced back from their worst week of the year on renewed optimism that European leaders would find a way out of the sovereign debt crisis.

The Dow posted its biggest gain in over a month, while the S&P 500 delivered its best performance in over two months. The tech-heavy Nasdaq enjoyed its best gains of the year.

"I think it's just more of a relief rally after being down so many sessions in a row," said Dave Rovelli, managing director at Canaccord Adams. "People are looking for stocks that have sold off a bit."

Over the weekend, the Group of Eight nations met and reaffirmed their commitment to keeping Greece in the eurozone. And two opinion polls released in Greece reportedly put the pro-bailout New Democracy party ahead of the anti-austerity Syriza party.

The combination of the G8 and the poll results was enough to boost sentiment across world markets, with European and Asian stocks eking out gains and the euro holding steady at around $1.28 against the U.S. dollar.

Paul Zemsky, head of asset strategies for ING Investment Management, said the rally was the result of "a smidgen of good news in an oversold market."

"You had a tremendous amount of pessimism, but nothing bad came out of Greece this weekend," he said. "There's some optimism that perhaps the Greek people are realizing how damaging it would be for them to leave [the eurozone]."

The Dow Jones industrial average (INDU) rose 135 points, or 1.1%. Blue chips, including Caterpillar (CAT, Fortune 500), Boeing (BA, Fortune 500) and IBM (IBM, Fortune 500) led the gains.

The S&P 500 (SPX) gained 21 points, or 1.6%, and the Nasdaq (COMP) rose 68 points, or 2.5%.

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Stocks rebound on Europe hopes