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Don here...
Blake asked a question yesterday that changed how I think about fundamental analysis.
Who benefits most from the tax code?
Corporations. Obviously. They have armies of accountants finding every possible deduction. Offshore structures. Transfer pricing. Depreciation schedules. Everything designed to minimize what they owe.
So here's Blake's insight. If a publicly traded company exhausted every tax advantage and still pays a 10% rate, what does that reveal?
They're making so much money they can't hide it anymore.
In today's free session replay, you'll discover:
- Why companies paying higher taxes are actually safer investments than those paying zero. The tax code heavily favors corporations. When a company with professional accountants and legal teams can't reduce their rate below 10%, it means profitability overwhelmed their ability to create deductions. That's the opposite of a problem. That's a cash machine that can't be turned off.
- The dividend aristocrat pattern that beats the market by 4x over long periods. These companies increased dividend payments for 25+ consecutive years. Not yield percentages but actual dollar amounts paid. Stock price rises don't matter. What matters is the quarterly check getting bigger every single year regardless of market conditions. Blake filters for this reliability first before considering any other metrics.
- How 30% annual returns come from stocks that don't have to move. Traditional investing requires price appreciation. Blake's framework profits three different ways. Sell puts below current price collecting 2.5% monthly. After assignment, collect the dividend yield between 5-7% annually. Then sell calls above your cost basis adding another 16% from premium. Price stays flat and you're making 50%+ total return.
- The UPS example showing why patience pays better than perfect timing. Stock trades at $95. Sell the $94 put for $1.80. Assignment requires the stock falling to $92.20. That's 3% downside before you lose anything. Meanwhile you collect premium for December, January, and February. By the time you get assigned before the dividend, your cost basis dropped to low 90s. Now the 7% dividend yield calculates on that lower entry instead of current market price.
- What Best Buy's post-earnings chart reveals about entry timing versus premium collection. Stock gapped up yesterday after reporting. Most traders think they missed the move. Blake says sell the put anyway. The 7.9% margin of safety means Best Buy crashes back below earnings levels and you still don't lose money. You're getting paid $2 for willingness to own at $77 when the stock trades at $81.
Blake spent decades preparing corporate tax returns. He knows exactly what companies do to minimize obligations. Offshore entities with zero percent rates. Monaco structures. Depreciation schedules that make profitable companies look unprofitable on paper.
When those tricks stop working and taxes still get paid, that company is printing money faster than accountants can hide it. That's not a red flag. That's confirmation you found real profitability that survives accounting manipulation.
The scan Blake shared filters 500 stocks down to 42 names meeting all criteria. Dividend yield above 2%. Current ratio above 1.0 confirming debt coverage. Tax rate above 10% proving genuine earnings. Every single name on that list tried reducing their obligations and failed because profits were too large.
→ Watch Blake explain the complete tax rate methodology, dividend capture timing, and why companies paying Uncle Sam are actually the safest plays in the market
To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE
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