Amazon and Google Are Taking Over Cities. The Smartest Startups Are Going Virtual

In the late winter of 2012, Clark Valberg had what he thought was a pretty good startup idea–an app for collaboration on designs across teams and companies–and a nice chunk of seed funding to get it going.

There was just  one problem. In New York City, where he lived, it had recently become prohibitively expensive to hire software engineers, thanks to Google.

After spending $1.9 billion on a Manhattan office building in 2010, the Silicon Valley giant was doing everything in its considerable power to fill it with coders. “I found myself faced with the existential crisis of having countless coffees and cocktails with engineers who were also interviewing with Google,” Valberg says. After weeks of courtship, he might make an offer, only to find out he’d been outbid by a decimal point or two.

Forced to compete with time and money he didn’t have, Valberg asked himself: “What’s the hack? How do I care less about x so I can care more about y?” At his previous company, a creative agency, he had used freelancers in cities like Austin and Phoenix, where the going rate for their services was cheaper. He decided to try staffing his startup, InVision, on the same basis.

It worked. So well that InVision is now valued at $1 billion. Its workforce of 700, up from 200 a year ago, is still all-virtual, and Valberg has no plans to change that.

This sort of thing feeds an endless stream of speculation about which up-and-coming city with an educated workforce, abundant broadband and cheap commercial rents might be “the next Silicon Valley.” Will it be Austin? Detroit? Kansas City? Toronto?  

But there’s a reason Amazon snubbed the other 235 cities that entered the absurd competition to host “HQ2.” They might have software engineers, but they don’t have vast numbers of software engineers–the kind of talent supply that can feed a company that was adding 5,000 jobs per year in Seattle before looking elsewhere.

For now, then, the biggest tech companies will channel their growth into the handful of cities that can accommodate such numbers. Which means those cities will continue to grow ever more inhospitable for startups. 

Early-stage startups can’t compete with profitable goliaths on salary. Historically, they’ve met that challenge by offering generous equity packages that can make early employees spectacularly wealthy. But even the most risk-tolerant people have to sleep somewhere and feed themselves, and doing that in Mountain View or Manhattan or Seattle without a six-figure salary is almost impossible.

“Equity packages don’t pay the rent,” says Wade Foster, CEO of Zapier. “That’s why you’re seeing so many startups starting to talk about what’s our non-Silicon Valley strategy? Is it a second office? Is it remote?”

For Zapier, which automates inter-app workflows, going remote made sense because, when the company was getting started in 2012, one of its founders was living in Missouri while his then-girlfriend finished law school there. Over time, Foster says, they realized being distributed was allowing them to tap into a broader, richer talent market than they ever could by confining hiring to one locale, even a tech hub. “We realized this could be become an advantage for us,” Foster says.

To play up that advantage, in 2017, Zapier began offering a unique perk: a $10,000 “delocation” package for employees looking to leave the San Francisco Bay Area. It was a clever piece of management–it’s hard to quit the company that let you take your Silicon Valley salary with you to Charleston–and an even more brilliant piece of marketing. Job applications for all types of roles at Zapier went up by 50 percent afterward, Foster says.   

Going all-remote does have its complications. To the degree that hiring and–especially– fundraising run on informal networking, it still helps to make the scene in SoHo or SoMa. But with each new megacampus, the math gets clearer: For startups that can make it work, ditching geography altogether is a way to enjoy the best of both worlds: a deeper and cheaper talent pool.

“Back in 2012, I would get emails from people like, ‘That’s weird, that’s different, that’s kind of crazy,'” Foster says. “Now, the emails I get are from founders and VCs asking ‘How do you pull this off?'”

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5 Lessons Raising Kids Can Teach You About Running Your Company

Your employees need your time and attention as they and the business grow. So why not use the lessons you learn at home with your work family. Here are a few key lessons executives can learn from our kids.

Every moment is a new opportunity.

Kids are fully present, always in the moment. They don’t obsess about the past or worry about the future. Children have what Shunryu Suzuki, the master who brought Zen Buddhism to America, calls “beginner’s mind.” In the book Zen Mind, Beginner’s Mind Suzuki writes, “in the beginner’s mind there are many possibilities, but in the expert’s there are few.” Kids bring creativity, openness, and a natural curiosity to everything. Try bringing this fresh perspective to brainstorming with your teams. Challenge them to channel the unselfconscious, no-idea-is-too-silly energy of childhood.

Negotiating means making things work for everybody.

If you’ve ever seen a group of kids working together to make up their own game with their own rules, you’ll see how important it is for them to create something everyone can play together. One kid might try to boss the rest of them around, but if he can’t hold their interest, they will quit and go home. As a result, kids’ homemade games are naturally diverse and inclusive. Don’t be afraid to let your teams make up some of their own rules and find their own ways to bring everyone together.

Prepare for the unexpected.

Everybody loves a best-case scenario, but as any parent who’s ever tried to get a child out the door in a hurry knows, you need to build in enough time for some worst-case reality too. Just as you wouldn’t assume you’ll only need a minute to pack a diaper bag, you also shouldn’t make your product launch date dependent on everything going right. Smart parents will tell you: someone will get an earache, it will snow, plans will be derailed, stuff will always happen. Stay flexible and, above all, realistic about what you can do and how quickly you can do it.

Change is the only constant, so you better embrace it.

With kids, as soon as you’ve figured out how to handle one milestone, you can be pretty sure they will have moved on to the next one. The tactics that worked for a 3-year-old who won’t go to bed are useless with a 13-year-old who sleeps till noon. Just like what worked for your million-dollar company won’t work when you reach 10 or 20 million. And your junior employee won’t be new forever. If raising kids teaches us anything, it’s that we need to constantly adjust our strategies to suit ever-changing needs. Be willing to continually review and refine your company’s processes, and to make changes that keep up with your growth.

Sometimes everybody just needs a snack or a nap.

To avoid meltdowns with little kids, you have to pay attention to the basics: food, sleep, fresh air. It’s the same with your teams. Sometimes big problems are really small ones, but the team dealing with them is burnt and needs a timeout.  Don’t schedule important meetings when people are likely to be cranky and hungry, or anxious to get somewhere. Help your teams to recharge and reset when they need to. Model your own commitment to work-life balance. Employees who feel cared about will work smarter, not harder, and that’s good for everyone.

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Tencent profit beats estimates as investment gains offset gaming weakness

HONG KONG (Reuters) – Tencent Holdings (0700.HK) said on Wednesday its third-quarter net profit rose 30 percent, beating estimates, as investment gains offset a weak performance in the Chinese company’s core gaming business.

FILE PHOTO: Tencent Holdings Chairman and CEO Pony Ma (C) visits the Tencent booth following the opening ceremony of the fifth World Internet Conference (WIC) in Wuzhen, Zhejiang province, China November 7, 2018. REUTERS/Stringer/File Photo

Net profit at China’s biggest gaming and social media group in the July-September quarter rose to 23.3 billion yuan, compared with an average estimate of 19.32 billion yuan, according to 15 analysts polled by to I/B/E/S data from Refinitiv.

Revenue rose 24 percent to 80.6 billion yuan ($11.59 billion), the slowest quarterly growth in more than three years, in-line with estimates.

China, the world’s biggest gaming market, has been imposing tougher rules on the industry, including a halt to new game approvals since March and calls to tackle young people’s gaming addictions.

This contributed to Tencent reporting its first quarterly profit fall in more than a decade in its April-June quarter. The company also cut its gaming marketing budget.

Tencent shares, which more than doubled in 2017, have dropped by about a third so far this year, wiping about $165 billion in value from the group’s market value.

In the third quarter, Tencent benefited mainly from a more-than-doubling in net gains from its investment activities, including the initial public offering of online food delivery to ticketing services company Meituan Dianping.

Douglas Morton, Head of Research, Asia at Northern Trust Capital Markets, said the result beat was a positive surprise even if not counting the investment income.

“What the real surprise is or the real comfort for the market will be that the mobile gaming data which beat expectations,” he said.

Tencent said smartphone games revenues grew 7 percent year-on-year and 11 percent quarter-on-quarter to 19.5 billion yuan, mainly due to contributions from new games. Despite the new approval freeze, Tencent already had 15 approvals and released 10 titles in the quarter, it said in the filing.

PC games revenue dropped 15 percent year-on-year due to continued user migration to mobile games and high base in the same quarter a year ago.

Advertising revenue, which accounts for 20 percent of the company’s total revenue, rose 47 percent, supported by a 61 percent jump in social and other advertising.

Tencent said its cloud services revenues more than doubled year-on-year in the quarter while the number of paying cloud customers grew at a triple-digit percentage rate year-on-year. Cloud revenues for the first three quarters of the year exceeded 6 billion yuan, it said.

Monthly active user number of WeChat, the most popular social network in China, rose incrementally to 1.08 billion.

($1 = 6.9536 Chinese yuan)

Reporting by Sijia Jiang; Editing by Muralikumar Anantharaman and Jane Merriman

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Rest In Peace, Stan Lee. (Here's the Big Break He Told Inc. About in 2009)

The comics world mourned the death Monday of Stan Lee, the man who dreamed up some of the most iconic characters and superheroes of the last 60 years–including Spider-Man, Hulk, the Avengers, the X-Men, the Fantastic Four, Black Panther, and Daredevil. 

Lee was also a reluctant entrepreneur. His creations became the center of an empire that Disney bought for more than $4 billion. But he told Inc. in 2009 that never loved the business side of his business. 

As he remembered, if you had to point to one big break in his life, it was the advice his wife gave him in the early 1960s when he was about to quit the comics business. His boss was his cousin’s husband, Martin Goodman, and Lee was annoyed that he was being pushed relentlessly to copy the competition, and wanted to go out on his own.

I said to my wife, “I don’t think I’m getting anywhere. I think I’d like to quit.” She gave me the best piece of advice in the world.

She said, “Why not write one book the way you’d like to, instead of the way Martin wants you to? Get it out of your system. The worst thing that will happen is he’ll fire you — but you want to quit anyway.”

So in 1961 we did The Fantastic Four. I tried to make the characters different in the sense that they had real emotions and problems. And it caught on. After that, Martin asked me to come up with some other superheroes. That’s when I did the X-Men and The Hulk. And we stopped being a company that imitated.

Lee’s wife died in 2017. They’d been married for 69 years. He leaves a daughter, and a legacy that people won’t soon forget.

Here’s what else I’m reading today:

Do not hire this 1 person

Seth Godin has a new book out. Like most of what he writes, there are some very interesting takeaways. If you take just one point away as an entrepreneur however, here’s his best advice about the one person no startup should ever hire: a chief marketing officer.

Instead, “go to a shelter and get a German shepherd,” he suggests in an interview with Inc.’s Leigh Buchanan, and train it to bite you every time you think about hiring a CMO. 

That’s because Godin thinks most startups fail because of product problems, or customer service problems that need to be addressed. And the person who is in charge of overseeing product and customer service–and yes, marketing and everything else–is called the CEO. Or maybe the founder. The entrepreneur. In other words, you.

It’s the hardest, best job you’ll ever have, and it’s the one you’ve signed on for. Relish it.

Netflix has some truly eye-opening new technology

Oh, there’s nothing dystopian about this at all: Netflix just unveiled a feature it calls EyeNav, in which its iPhone app tracks your eye movements so you can select shows by simply staring at them, and press stop by sticking out your tongue. Once you get past the inherent creepiness, the entertainment giant says it’s excited about how this could make its app more accessible.
–Bill Murphy Jr., Inc.

The war at 7-Eleven

There’s a war going on inside 7-Eleven, at least according to some franchisees who say the company is tipping off Immigrations and Customs Enforcement (ICE), and resulting in raids on stores owned by it least cooperative store owners.
–Laureen Etter and Michael Smith, Bloomberg

A Black Friday prediction

A new study says Americans plan to spend $520 each on average during Black Friday, with over half of U.S. residents making at least one in-person purchase. It’s not exactly a double blind scientific study–online coupon site Slickdeals surveyed 2,000 people. But it’s good news, so we’ll take it.
SWNS

What on earth was Hasbro thinking?

The game of Monopoly is 83 years old. Hasbro owns the copyright now, and for almost 25 years, they’ve licensed lots of different versions, from Auburn University-themed edition to an X-Men Collector’s Edition. The latest edition to make the rounds, just in time for the holidays: Millennial Monopoly, in which players don’t buy real estate (it’s too expensive), and collect experiences rather than cash.

The rules say the player with the most student loan debt rolls first, and the rules recommend playing in your parents’ basement. Millennials are not amused, which leads to the question: who did they think would buy this?
–Gina Loukareas, Boing-Boing

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Bitcoin: The Calm Before The Storm

Source: CCN.com

Bitcoin: The Calm Before The Storm

Bitcoin (BTC-USD) has been remarkably stable in recent months. In fact, for over two months now Bitcoin has traded in an incredibly narrow range of around $6,000 – $6,800. There doesn’t appear to be much news worthy of moving prices right now. So, Bitcoin remains extremely calm, for now.

Bitcoin 1-Year Chart

Source: BitcoinCharts.com

Nevertheless, despite the tame atmosphere surrounding Bitcoin for the time being, this is predominantly likely just the calm before the storm, a storm that is likely to lift Bitcoin prices substantially higher over the next several years.

This is not the first-time Bitcoin has seen calm waters. We’ve seen similar periods of modest volatility, and humble price swings. Primarily, similar low volatility phenomenon have occurred in the very late stages of Bitcoin bear markets (the opposite of vertical moves and wild price swings we see at the height of Bitcoin bull markets). Everyone seemingly loses interest, volume dries up, news flow quiets down, and then, when you least expect it, the next Bitcoin bull market begins.

I expect the current “quiet period” to lead to a new Bitcoin bull market soon. So, what will be the catalyst to light a match beneath Bitcoin prices? There are several developments that should begin to improve sentiment, and start to move prices substantially higher going forward.

Bitcoin at $250,000 in 4 years?

Billionaire investor Tim Draper recently reiterated his $250,000 Bitcoin price target by 2022. Draper believes that many of us will be using cryptocurrencies to buy coffee and other everyday things 5 years from now instead of implementing fiats everywhere. Naturally, Draper is not alone in his bullish analysis on Bitcoin. Fundstrat’s Tom Lee, and many other prominent Wall St and non-Wall St figures believe Bitcoin will be worth much more in the future.

Source: CreditCards.com

Tom Lee even predicted that Bitcoin would be at $25K by the end of this year. Well, that does not appear very likely now, nevertheless, Bitcoin could be worth much more several years from now. The problem with Bitcoin price targets is that they are extremely difficult to pin down, but due to the fundamental factors surrounding Bitcoin the overall trajectory should remain higher long-term.

Jamie Dimon Does Not Care Much for Bitcoin

On the flipside of the bull argument many Wall St insiders like JPMorgan’s (JPM) CEO Jamie Dimon, and even revered investor Warren Buffet have become avid skeptics of Bitcoin. In fact, in a recent interview Mr. Dimon shared just how much he does not care for Bitcoin.

I never changed what I said, I just regret having said it. I didn’t want to be the spokesman against Bitcoin. I don’t really give a sh*t, that’s the point. Blockchainis real, it’s technology, but Bitcoin is not the same as a fiat currency.

Great insight from Jamie right there, which may accurately represent the viewpoint of many longtime banking and Wall St insiders. So, why should Mr. Dimon care about Bitcoin, or like it or dislike it at all?

Source: imgflip.com

Well, Mr. Dimon is the head of one of the wealthiest and most powerful banking institutions in the world. Incidentally, JPMorgan, like every other major bank in the U.S. owns part of the Federal Reserve through stock. Additionally, member banks like JPMorgan get to assign 6 of the 9 board members at every regional Federal Reserve Bank.

Some readers may think the Federal Reserve is part of the U.S. government but it is not. It is sanctioned by the U.S. Congress through the Federal Reserve Act, but is ultimately a private enterprise owned by member banks like JPMorgan, Citi (C), Bank of America (BAC) and others. Therefore, it is logical to presume that the same entities who own majority stakes in major U.S. banking institutions by default own and through the appointment of most directors control the Federal Reserve.

It seems convenient that a private organization like the Fed has a monopoly on dollar creation. The organization creates all the dollars “it sees fit”, then lends out these dollars to member banks like JPMorgan at a very low rate, the member banks then create all the credit they want through fractional reserve banking (typically at a rate of 10-1, credit – reserve), and then lend it to the population, small businesses, etc. at a substantially higher interest rate.

This is the system that we live in, the fiat reality. Who do you think a system such as this favors and benefits, the people making the rules, or the general public?

So, of course Jamie Dimon does not care much for Bitcoin. In fact, he should probably fear and despise it, because Bitcoin and cryptocurrencies in general represent a real alternative and thus a true threat to the current status quo fiat finical order.

The Bitcoin/blockchain system essentially assumes control over currency from big banks like JPMorgan, and returns the power over currency into the hands of the population, essentially leveling the financial field for all participants in the market. This takes the potential for predatory manipulation, devaluation, inflation, and other unpleasant factors essentially out of the financial equation.

Don’t Mind the 2,000 Plus Cryptocurrencies

Critics often point to the fact that there are now over 2,000 cryptocurrencies in circulation. Some skeptics claim that the continuous creation of new digital assets delegitimizes the entire space, and will ultimately render most or all cryptocurrencies close to worthless.

However, the cryptocurrency complex has maintained a relatively stable market cap of roughly $200 billion for months now, despite the creation of new coins. This implies that new coins coming online may enjoy very limited success going forward, and the prominent coins of today will likely turn out to be the widely-used coins of tomorrow.

Source: ViceNews.com

As the segment matures barriers to entry will become higher as there are a number of dominant cryptocurrencies that are likely to retain their leading market positions indefinitely. Aside from specifically designed coins to handle certain functions like Ripple (XRP-USD) Ethereum (ETH-USD) and others, prominent transactional coins like Bitcoin Cash (BCH-USD), Litecoin (LTC-USD), and others will very likely retain extremely high portions of the transactional market.

This suggests that while these coins will increase in value substantially over time, newer coins coming online with similar functions will likely remain largely irrelevant due to the recognition and widespread use of current digital assets, and higher barriers to entry going forward.

Still Waiting on a True Bitcoin ETF

The SEC continues to stall on a Bitcoin ETF. In September, the ruling on 9 Bitcoin ETFs got postponed, but a decision is expected in the near future. The introduction of Bitcoin ETFs will likely open floodgates into the Bitcoin market, and will propel Bitcoin into the main stream as far as conventional investible assets are concerned. This will very likely help ignite the next bull phase in the bitcoin era.

Right now, investors have very limited access to Bitcoin. They can either buy Bitcoin directly through a cryptocurrency exchange, they can trade Bitcoin futures contracts, or they can buy the Grayscale Bitcoin Investment Trust (OTCQX:GBTC), none of which are ideal options for the vast majority of retail and institutional investors. Much easier access will be granted via multiple mainstream Bitcoin ETFs.

Furthermore, even if the SEC postpones its decision again or does not approve an ETF at this time, the path is already set for Bitcoin to be accepted into the investment world on a mass scale. Bitcoin futures already exist and trade freely on the biggest exchanges in the U.S. Furthermore, Bitcoin has been officially classified as a commodity, is receiving increased regulation, and the next logical step is to introduce ETFs. Also, there are many prominent companies now pushing for Bitcoin backed ETFs to be approved.

Institutions Likely to Move In Soon

One very atypical factor about the Bitcoin phenomenon is the extremely limited role traditional investment houses and Wall St in general has played in it. Aside from shorting Bitcoin from the highs, it appears that institutional investors have made very little money in Bitcoin, thus far. This is precisely why the next wave of capital capable of taking Bitcoin substantially higher will likely come from big institutional investors. This could include the creation of Bitcoin backed ETF’s and other asset classes, infrastructure projects, development and funding of supporting companies, direct investment, and so on.

Opportunities in the digital asset space for investment companies are essentially limitless, and this is precisely why Goldman Sachs (GS), and others are starting to venture into the crypto space. I expect that when the next Bitcoin bull market arrives, Wall St will not be sitting it out this time. There is simply too much money to be made, and the space has reached scale capable of attracting many billions in institutional dollars. So, expect prices to go especially high next time around due to excess speculation from the guys on Wall St.

Improving Functionality

Another factor that is likely to propel prices higher is the continuously improving functionality of digital assets. Whether it’s the Lightning Network, transactional coins like Dash (DASH-USD), ZCash (ZEC-USD) and others, big multinational corporations starting to accept Bitcoin, or other developments, it appears that the trend is leading to one outcome, much wider use of digital assets in the future.

The Lightning Network is optimizing Bitcoin’s functionality, alt coins provide safer, or more anonymous modes of conducting commerce, and more and more companies are openly beginning to accept Bitcoin seemingly every day. Moreover, Bitcoin returns the control over money back to the people where it ultimately belongs. I agree with Mr. Draper, 5 years from now we are likely to be using Bitcoin and alt coins much more readily than most people expect, and because of this Bitcoin’s price is likely to be much higher in 2022.

The Bottom Line: The Calm Before The Storm

Bitcoin’s price is extremely calm right now, but we have seen such calm periods before. Most notably, Bitcoin’s price action flattened out in 2012 before a bull run, in 2013, prior to an ascend, and throughout periods in 2015, and 2016, prior to the most recent bull market. One thing that all these calm periods have in common is that they occurred after substantial declines had taken place, and they all preceded significant rallies. I don’t expect this time to be any different.

Bitcoin: Long-Term Logarithmic Chart

Moreover, there are plenty of potential catalysts capable of sparking an explosive rally in Bitcoin as well as in other digital assets. The approval of Bitcoin backed ETFs, increased institutional participation, improved functionality, as well as other bullish elements will likely play an instrumental role in driving the next Bitcoin wave significantly higher. Prices in this wave should go substantially higher from current levels, and could eclipse the prior top of roughly $20K by several factors. So, essentially I am looking for Bitcoin to be at around $50,000 – $100,000 in 3 – 5 years.

Risks Do Exist

Detrimental Government Regulation

In my view, the number one long-term threat Bitcoin faces is detrimental government regulation or an all out Bitcoin ban. If major Bitcoin friendly governments like the U.S., E.U., Japan, South Korea, and others follow the footsteps of China and essentially make Bitcoin use and trading illegal, it could have catastrophic consequences for Bitcoin’s price. Demand would likely plummet and when demand for a commodity decreases so does its price, drastically at times. This seems unlikely due to the progressive steps taken in the U.S., E.U. and other areas concerning Bitcoin, but the threat does exist, especially if Bitcoin ever starts to seriously challenge the current fiat financial status quo.

Continued Functionality Issues

Another risk factor is the concern that Bitcoin may never become a widely used transactional currency due to its issues with speed and scale. Yes, the Lightning Network promises to solve many of the issues associated with speed, cost, and scale, but there is no guarantee that the LN will become widely adopted, even over time.

Therefore, there is the risk that newer and more efficient digital currencies like LiteCoin, Bitcoin Cash and others will make Bitcoin somewhat obsolete as an actual medium of exchange for the masses.

Continued Security Breaches and Fraudulent Activity

Continued security breaches in the Bitcoin world concerning exchanges and individual wallets is a constant concern. If significant breaches continue, investors and users may start to lose confidence in the system and demand could decrease as a result.

Likewise for fraud cases. In an industry that is relatively loosely regulated, substantial fraudulent activity is a persistent risk. Just like with security breaches, when people get ripped off, it reflects poorly on the entire industry and demand along with prices can suffer.

One Million and One Cryptocurrencies

Another concern is the seemingly endless supply of new cryptocurrencies. There are now over 2,000 different cryptocurrencies listed on CoinMarketcap.com. The risk is that the market may become oversaturated with digital assets which could lead to a crash, or to a devaluation of many digital assets, including Bitcoin.

Loss of Interest Amongst the Masses

There is always the simple risk of loss of interest amongst the masses. There is a chance that Bitcoin will forever remain a niche phenomenon, a novelty, as JPMorgan’s Jamie Dimon puts it. In this case, Bitcoin may not experience substantial demand, and the price would very likely cascade much lower over time.

Bitcoin is Not for Everyone

The bottom line is that Bitcoin is not for everyone. I view it as an investment for people with a relatively high risk tolerance, and even then, maybe only 5-10% of a portfolio’s holdings should be allocated to digital assets.

Bitcoin is still a relatively new phenomenon and no one truly knows exactly how it is going to play out over the long term. The truth is that 10 years from now one Bitcoin could be worth $1 million, or it could be worthless, and given the number of uncertainties, neither outcome should really shock people.

Thank you for taking the time to read my article. If you enjoyed reading my work please hit the “Like” button, and if you’d like to be notified about my future ideas, hit that “Follow” link.

Disclaimer: This article expresses solely my opinions, is produced for informational purposes only, and is not a recommendation to buy or sell any securities. Investing comes with substantial risk to loss of principal. Please conduct your own research, consult a professional, and consider your investment decisions very carefully before putting any capital at risk.

Disclosure: I am/we are long BTC-USD, BCH-USD, LTC-USD, XRP-USD, DASH-USD, ZEC-USD.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Cyber Saturday—Coinbase Loves Hackers, Facebook Election Win, White House Video Fake Out

You’re outta here! Facebook said it removed 115 accounts suspected of engaging in “coordinated inauthentic behavior” from its flagship site as well as Instagram in the lead-up to the midterm elections in the U.S. Nathaniel Gleicher, Facebook’s cybersecurity policy leader, said the company had been tipped off about the allegedly bogus accounts by law enforcement last weekend. Meanwhile, trolls have been struggling to spread their misinformation on Twitter, NBC News reports.

Doctor, doctor, give me the news. The White House appeared to share a doctored video as justification for its ban of CNN reporter Jim Acosta. The video in question, which sped up Acosta’s arm movement to make it appear as though he were karate chopping a White House intern, was first shared online by a known conspiracy theorist.

Iran so far away. Banks are on high alert for attacks by Iranian hackers in the wake of the U.S.’s reinstatement of economic sanctions on Iran. The middle eastern nation “might lash out,” as one top cybersecurity executive put it to CNN, which got a glimpse of a major bank’s cybersecurity defense center.

Cylance of the lambs. BlackBerry is reportedly in talks to gobble up cybersecurity firm Cylance for as much as $1.5 billion, Business Insider reported. The business news site’s sources said the deal could happen as soon as next week—although it could just as easily fall apart.

Fun in the sun. U.S. Cyber Command, a hacking-focused division of the military, began releasing unclassified malware samples to the public as part of a cybersecurity information sharing initiative on Friday. The command posted two code samples to the Google-owned malware research repository VirusTotal, including one sample that it said originated from the suspected Russian espionage group nicknamed “fancy bear,” which was best known for digitally infiltrating the Democratic National Committee in 2016.

Naynay on those n00bes.”

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http://fortune.com/newsletter/cybersaturday/

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The Afrotech Conference Captured in One Powerful Quote

One of the biggest discussions came from a Grammy-award winning panel featuring rapper Common, producer Karriem Riggins and musician Robert Glasper, collaborators in the new supergroup August Greene. All of them had outgrown their defining monikers, expanding into acting, music scoring, and so on. Glasper shared his own key to success:

Other people don’t know what your lane is, so they can’t tell you what your lane isn’t.

Sure, it’s about defining yourself and not relying on the acceptance of others. It also means not being afraid to fail until you get it right – even while others are watching. This challenge becomes more important for minority entrepreneurs who may have a vision less understood by the mainstream public.

What is uniquely yours?

I recently interviewed TED Speaker and RETI founder DeAndrea Salvador. She wasn’t focused on engineering, but she saw a need in her community for fair energy use and distribution. That desire planted the seed for RETI, the energy equity company that now educates and spreads insight into low-income communities.

Get comfortable with being a fool

As Glasper mentions, your lane is only defined by you – and, often, is defined by only your own insecurities.  So, the ability to be comfortable with being uncomfortable directly dictates your ability to grow.

Serial entrepreneur Naveen Jain said it recently: When you don’t know, you can ask dumb questions.” And dumb questions allow true breakthroughs. Sitting with Glasper and Riggins, Common shared how coming from a hip-hop background actually helped him make an impact on Hollywood, as he didn’t automatically follow the traditional Hollywood rules or pathway. Instead, he questioned long-held beliefs and was able to bypass the classic barriers to success.

So pay attention when a new arena is calling you. It may not be your lane, but it may be the area where you can make an even deeper impact.

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Apple finds quality problems in some iPhone X and MacBook models

The new Apple iPhone X are seen on display at the Apple Store in Manhattan, New York, U.S., September 21, 2018. REUTERS/Shannon Stapleton

(Reuters) – Apple Inc said on Friday it had found some issues affecting some of its iPhone X and 13-inch MacBook pro products and said the company would fix them free of charge.

The repair offers are the latest in a string of product quality problems over the past year even as Apple has raised prices for most of its laptops, tablets and phones to new heights. Its top-end iPhones now sell for as much as $1,449 and its best iPad goes for as much as $1,899.

Apple said displays on iPhone X, which came out in 2017 with a starting price of $999, may experience touch issues due to a component failure, adding it would replace those parts for free. The company said it only affects the original iPhone X, which has been superseded by the iPhone XS and XR released this autumn.

The screens on affected phones may not respond correctly to touch or it could react even without being touched, the Cupertino, California-based company said.

For the 13-inch MacBook Pro computers, it said an issue may result in data loss and failure of the storage drive. Apple said it would service those affected drives.

Only a limited number of 128GB and 256GB solid-state drives in 13-inch MacBook Pro units sold between June 2017 and June 2018 were affected, Apple said apple.co/2AXkeEw on its website.

Last year, Apple began a massive battery replacement program after it conceded that a software update intended to help some iPhone models deal with aging batteries slowed down the performance of the phones. The battery imbroglio resulted in inquires from U.S. lawmakers.

In June, Apple said it would offer free replacements for the keyboards in some MacBook and MacBook Pro models. The keyboards, which Apple introduced in laptops starting in 2015, had generated complaints on social media for how much noise they made while typing and for malfunctioning unexpectedly. Apple changed the design of the keyboard this year, adding a layer of silicone underneath the keys.

Reporting by Ismail Shakil in Bengaluru and Stephen Nellis in San Francisco

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Tesla names director Denholm to replace Musk as board chair

(Reuters) – Tesla Inc has named director Robyn Denholm as board chair, fulfilling a demand by the U.S. Securities and Exchange Commission to strip the job from Elon Musk, the electric car maker’s wayward chief executive who has dragged the company through months of turbulence.

The appointment was required as part of a September deal Tesla struck with the securities regulator to settle fraud charges against Musk and Tesla. Legal experts said it was unclear if Denholm, who has been on Tesla’s board for four years, was independent enough for Tesla to comply with the court-approved settlement.

Denholm, 55, joined Tesla as an independent director in 2014 and is the head of its audit committee. She was paid almost $5 million, mainly in stock options, by the company last year, making her the highest remunerated of its board members.

She is finance chief at Australian telecoms firm Telstra Corp Ltd and previously worked for Toyota in Australia, according to her LinkedIn profile. She will resign from Telstra to take the Tesla role full-time.

Whether she is independent enough to rein in public outbursts by Musk – who mocked the SEC as the “Shortseller Enrichment Commission” on Twitter after the fraud charge settlement – is an open question.

Denholm sat on the board when Musk set production targets for the Model 3 car that were not met, and also when the chief executive tweeted that he had secured funding to take Tesla private, which prompted the SEC to file fraud charges against him.

The court-approved settlement of those charges requires Tesla to certify in writing that it has appointed an “independent” chairman and to provide evidence and exhibits to make its case.

While the definition of “independent” is typically broad, legal experts suggested the court could ultimately conclude Tesla was not in compliance with the letter of the settlement.

“It does violate the spirit of the settlement, which was to change the culture of the board so there was a check on Musk’s worst instincts,” said Stephen Diamond, a professor of corporate governance at Santa Clara University.

The SEC declined to comment beyond the court judgment.

Musk, who remains Tesla’s biggest shareholder and the driving force behind its ambitious plans to reshape electric battery technology and car transport, tweeted here his approval of the appointment.

“Musk, I believe, has a ton to do with the selection and he wants to be sure that they can see eye-to-eye,” said Elazar Capital analyst Chaim Siegel.

Top proxy advisers Institutional Shareholder Services and Glass, Lewis & Co had each classified Denholm as an “independent” director of Tesla in reports to the carmaker’s investors earlier this year.

HUMBLE BEGINNINGS

Denholm pumped petrol at her parents’ filling station before going on to study at Sydney University and joining accounting firm Arthur Andersen.

Since then, she has worked at Swiss power grid maker ABB Ltd, network gear firm Juniper Networks and computing firm Sun Microsystems. She has also been national manager of finance for Toyota Australia.

Telstra CEO Andy Penn said when he appointed her: “Robyn has a proven track record as a global COO in a business focused on telecommunications networks.”

Executive recruiter Patricia Lenkov, however, said that Denholm likely was not the right pick for the job, arguing Tesla needed a figure with more experience dealing with strong founders.

“There might be an element of risk here. She’s not a proven entity in this kind of work,” she said.

While Tesla is finally starting to make good on Musk’s promises on production of the Model 3 sedan, seen as crucial to the company’s future, it has lost senior executives for sales, human resources, manufacturing and finance in recent months.

Its vice president for manufacturing Gilbert Passin was reported last month to have left.

“We view the fact that Denholm has prior industry experience with Toyota positively,” said CFRA Research analyst Garrett Nelson, adding it made sense that Tesla should seek to avoid the risk of a genuine outsider clashing with Musk.

The Silicon Valley billionaire’s gift for self-promotion has made Tesla one of the world’s most talked-about businesses but also caused public spats with journalists, analysts, Wall Street investors and even rapper Azealia Banks.

He is being sued for calling one of the divers behind this year’s Thai cave rescue a “pedo”.

Robyn Denholm and Elon Musk. REUTERS/Files

According to The Australian newspaper, Denholm said the only things that really disappoint her are rudeness and waste.

“Politeness costs you absolutely nothing. It doesn’t matter whether you are the most senior person in the room, or the most junior,” she told the paper in an interview a few years ago.

Tesla shares closed up about 1 percent at $351.40.

Additional reporting by Akanksha Rana and Philip George in Bengaluru, Melanie Burton in Melbourne, Michelle Price and Jan Wolfe in Washington, and Ross Kerber in Boston; Editing by Patrick Graham and Bill Rigby

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Google 'Arbitration Optional' Harassment Plan Limits Groups

Google announced changes to how it will handle claims of sexual harassment among employees, including making arbitration optional for individual harassment and sexual assault claims. While additional transparency and protection for workers is a sign of progress, the change is incremental rather than transformative, because Google’s arbitration provision still prohibits collective action. Harassment claims will no longer be forced into private arbitration, but only individuals can now bring their claims before a jury.

It’s unclear whether Google, which has a history of confusing its employees around confidentiality, will make the process of opting out clear or easy. Google has become quicker and more responsive to employee concerns. Nonetheless, a publicized email from CEO Sundar Pichai and an accompanying interview in *The New York Times* still seem like the kind of gauzy public relations efforts that motivated 20,000 employees to join a protest last week to demand transparency and meaningful change. *The Times* reported last month that Google executives were allowed to leave with multimillion-dollar exit packages following credible claims of harassment against them.

Arbitration agreements can be used to obscure harassment allegations and protect serial abusers because employees are required to resolve disputes privately with an arbiter, who is typically paid by the company, rather than in open court. In Silicon Valley, forced arbitration agreements, nondisclosure agreements, and confidentiality clauses are routinely included in employment contracts, just as nondisparagement agreements are tied to severance packages and private settlements.

Organizers of last week’s walkout are disappointed with Google’s response, which they found defensive and dismissive toward their demands for equity. The changes signal the power of collective action, but organizers said they were not consulted ahead of the announcement. They said Google ignored concerns about discrimination and the rights of contract workers, indicating the company wants to continue operating as it has in the past, with transparency stressed in name rather than action. An internal Google website is tracking worker sentiment about whether demands—such as employee representation on the company’s board, which Pichai seemed to brush off—were met.

Google held a company-wide meeting for employees following the announcement. “Overall I felt the town hall was primarily the leadership team centering their own feelings as a performative show of appearing to listen, while substantively ignoring” concerns about gender and racial discrimination, and instead focusing only on harassment, says software engineer Irene Knapp, who participated in the walkout, and also introduced a shareholder proposal to tie executive pay to diversity goals at Google’s last shareholder meeting.

Knapp says it’s unclear whether Google can effectively fulfill the changes it promised. “The leadership team is congratulating itself already, before anything they’ve announced has even been launched—they wouldn’t let any of us get away with that.”

Last week’s walkout was unprecedented in terms of support from Google’s 94,000 employes. Although a wave of worker dissent has been rolling through Silicon Valley’s corporate campuses, it has been difficult to gauge what portion of the workforce shares those concerns.

Pichai’s announcement was delivered in a company-wide email. “We recognize that we have not always gotten everything right in the past and we are sincerely sorry for that. It’s clear we need to make some changes,” he wrote alongside a rough outline of plans, such as providing a transparency report “around sexual harassment investigations and outcomes.”

In the same paragraph outlining the arbitration change, Pichai stressed existing worker protections. “Google has never required confidentiality in the arbitration process and arbitration still may be the best path for a number of reasons (e.g. personal privacy) but, we recognize that choice should be up to you,” he wrote.

But over the past couple of years, both employees and enforcement officials from the Department of Labor have questioned Google’s confidentiality policies, including a lawsuit that alleges the company’s internal process for investigating leaks is illegal. “This change looks like a step in the right direction,” says James Finberg, an attorney with Altshuler Berzon pressing a class-action lawsuit alleging gender bias in pay and promotion.

“Mandatory confidential arbitration can protect repeat sexual harassers, and result in more women becoming the victims of those harassers. Permitting women to file public lawsuits lets people in the company know about the bad behavior. Lawsuits, as opposed to individual arbitration proceedings, also permit women to band together, share resources, and bring about system change,” Finberg wrote in an email to WIRED.

He says the experience of one of the named plaintiffs in his suit, Kelly Ellis, is consistent with the report in The Times. “[Ellis] ended up changing departments, and eventually leaving Google, because a senior manager had been harassing her, and the company’s response was not to move him but to move her. Many women’s careers have been harmed by management not taking such complaints seriously and saying that it was their problem, not the problem of their accuser.”

The change to its arbitration policy brings Google in line with other influential tech companies like Uber and Microsoft, which have altered their binding arbitration policies in the past couple of years in response to disturbing revelations about sexual harassment from women and, in particular, women of color.

At Uber, too, changes came only as a result of internal protest from employees like former engineer Susan Fowler, attempts to sue the company, and public scrutiny over the abhorrent behavior of Uber executives.


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Black Friday Is Dead. Long Live the Holiday Video

Yesterday I took down my Halloween decorations. Partly because I travel and partly because I’m lazy. But mostly it was because everyone else on my block had already shifted to holiday decorations. Holiday campaigns are crucial for retail and any B2C business. And they are starting earlier and earlier. 

Black Friday is in decline. And Gen Z is already changing how we look at reaching consumers. Ten years ago people went urban camping outside of a Circuit City for a deal on a flat-screen TV. Now people don’t even necessarily want another large television. They can watch things from anywhere. And they are.

With a shift in both shopping habits (how and where to find deals) and how people consume content (on their phone), this is changing how businesses big and small are and should view the holiday season. 

But this season there are three things a business of any size can and should leverage. 

Owned media should be your initial focus. 

You should focus on earned and owned media just as much as paid. Cultivating an audience that you can activate during the holiday season is a 12-month process but if you have it, use it. 

And again-this creates the ability and necessity for longer lead times. So when you see a holiday campaign launch before Halloween, know that there is a reasoning behind it. With owned channels, you have the flexibility to start previewing your holiday campaigns earlier. Most businesses, especially small businesses, aren’t going to spend on holiday advertising for three months. But if you have the audience and don’t have to spend, it makes logical sense to start teeing up these campaigns earlier. 

Why? Trial and error. You need to know what resonates. A/B testing campaigns is one of the easiest and smartest things to do digitally. Make small steps, see what works and then be able to fully launch with confidence in mid to late November. 

What if you don’t have a large enough audience for owned media and it’s already November? Test the campaigns through influencers or partner with a business that has a complimentary product to yours and a stronger audience. Ideally, you want your own audience but they can be found. 

Small businesses have to use video.

I don’t want to be the millionth person to talk about why video is important. You’ve read that article. 77 percent of marketers will be using video this year to drive their holiday campaigns according to a Promo study. The more interesting stat is that 49 percent of those using video started doing so within the last year. 

“We know video is an essential marketing tool and wondered why more SMBs weren’t utilizing it. As we received our survey responses we noticed a huge trend, that a tipping point was at hand,” said Hila Shitrit Nissim, VP of communications at Slidely. 

The why to that tipping point makes complete sense. Video is cheaper and cheaper, it’s easy to track, easy to quantify and most importantly it’s how people want to consume content. The fact that you are even reading this article and not watching a YouTube video about this topic is breaking from the norm (but greatly appreciated).  

Here’s how to create compelling video.

The bigger issue is how and where.

The video has to entertain first and foremost. Never forget that. Using the right channel (video) does not guarantee success. You have to pay close attention to what your competition is doing and make a unique and different appeal in your market. 

Start by identifying the profile of your audience. Who are they? Give them a name. Identify with them. Focus on their wants, needs, interests. 

Then look at successful content in industries other than your own. See what worked and what you can bring from that in to your industry. The best way to determine success is seeing something already work with your audience somewhere else. Your audience buys things from all kinds of industries but they remain the same. Remember that. 

Once you have the how figured out then determine where to go with your content. Some of this will already be figured out for you based on audience. Gen Z and Boomers will require different channels. If you’re wondering why most political ads were still TV and direct mail this year it’s because campaigns always assume that the voting public skews older. 

Finally-and this is important-your holiday video has to drive to an action. That’s the point. The other nine to ten months out of the year can be spent on brand building for owned channels but remember subtly or directly to make sure you are motivating people to purchase with your holiday video. 

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Roku forecasts surprise loss for holiday quarter, shares fall

(Reuters) – Roku Inc forecast a surprise holiday-quarter loss and missed third-quarter revenue estimates for its high margin video streaming platform, sending its shares down nearly 13 percent in after-market trading on Wednesday.

FILE PHOTO A video sign displays the logo for Roku Inc, a Fox-backed video streaming firm, in Times Square after the company’s IPO at the Nasdaq Market in New York, U.S., September 28, 2017. REUTERS/Brendan McDermid/File Photo

The outlook overshadowed third-quarter revenue, which beat analysts’ estimates, and a loss that was smaller than expected.

Revenue from Roku’s streaming platform is a closely watched metric and the company has pinned hopes on the segment, which generates profit margins well above 70 percent.

Roku reported revenue of $100.1 million from the streaming platform unit, missing estimates of $103.2 million, according to FactSet data.

DA Davidson analyst Tom Forte said the pullback in shares was also a reflection of expectations being “too high” for the company’s third-quarter results.

STRATEGY CHANGE

Roku’s streaming devices have been facing intense competition from the likes of Apple TV and Google Chromecast.

This led the company to tap other revenue sources, including licensing its technology to television makers and earning a share of the advertising revenue from media companies on its platform.

The company is investing more on content for its recently launched Roku channel and is expanding it to more geographies, Chief Executive Officer Anthony Wood told Reuters.

“We added several news providers in anticipation of the mid-term elections and it was one of our best news days ever.”

Net loss attributable to shareholders narrowed to $9.5 million, or 9 cents per share, in the third quarter ended Sept. 30, from $46.2 million, or $8.79 per share, a year earlier. (bit.ly/2qz97eX)

On an adjusted basis, the company lost 9 cents per share. Revenue rose 39 percent to $173.4 million.

Analysts on average had expected a loss of 12 cents per share on revenue of $169.1 million, according to IBES data from Refinitiv.

The company’s shares were down 12.6 percent at $51.41 after the bell.

Reporting by Munsif Vengattil in Bengaluru and Ken Li in New York; Editing by Maju Samuel and Shounak Dasgupta

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Judges named to hear government's appeal of AT&T Time Warner deal approval

Coaxial TV Cables are seen in front of AT&T and Time Warner logos in this picture illustration taken June 13, 2018. REUTERS/Dado Ruvic/Illustration

WASHINGTON (Reuters) – A panel of three federal appeals court judges named by former Presidents Ronald Reagan, Bill Clinton and Barack Obama will hear the Justice Department’s appeal of a ruling allowing AT&T Inc to acquire Time Warner, court records show.

Judges Judith W. Rogers, Robert L. Wilkins and David B. Sentelle will hear arguments on Dec. 6.

The government argues that AT&T’s $85.4 billion acquisition will lead to higher prices for consumers and was illegal under antitrust law, while AT&T says the government offered no basis for second guessing key conclusions of a lower-court ruling allowing the transaction to proceed.

Sentelle, a Reagan appointee, and Rogers, who was named to the bench by Clinton, were among seven appeals court judges in June 2001 that issued an opinion tossing out an order that Microsoft Corp should be broken up but found that the company possessed monopoly power and agreed that the company had behaved anticompetively.

The company ultimately agreed to a settlement with the Justice Department and an agreement to end retaliation against computer makers who use non-Microsoft software.

Wilkins, who joined the appeals court in 2014 as an Obama appointee, ruled on some antitrust matters as a judge on the U.S. District Court in Washington, including approving a consent decree that allowed Google, now known as Alphabet Inc, to acquire ITA Software in 2011.

AT&T agreed in June to temporarily manage Time Warner’s Turner networks separately from DirecTV, including setting prices and managing personnel, until any appeals were resolved.

Reporting by David Shepardson; Editing by Susan thomas

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257B Ads, 58M Installs Say The Mobile Subscription Economy Is Booming As Costs Drop 50%

It’s getting easier and cheaper to acquire new customers to your mobile subscription-based apps, according to a new study by Liftoff and Leanplum.

How much cheaper?

Think half price. And it’s not even a Black Friday sale.

Last year the average cost of acquiring a new paying subscriber for your mobile-app-driven service was $162.22. Now it’s just $86.99, according to the study, which looked at 257 billion ad impressions, 58.4 million app installs, and 47.4 million post-install events.

“The year-over-year data showcases major momentum for subscriptions,” says Mark Ellis, Liftoff co-founder and CEO. “Now pair that with Apple’s recent report that revenue from subscription-monetized apps is up 95 percent since 2017 … there’s no question that the long-term benefits of the subscription model, in the form of loyal users and stable cash flow, are worth the investment in service quality and marketing spend.”

The biggest opportunity? 

Marketing to women.

While female customers cost 10 percent more to acquire in categories like bookings and reservations, they convert 40 percent more often than men. In apps that offer in-app purchases, women are even harder to attract, but they offer twice the conversion rate of men: 3.8 percent to 1.8 percent.

Bad news for gaming; good news for mobile
There is one caveat to this report: gaming customers are actually getting more expensive: they’re up 56% compared to last year. Adding to the bad news: in-app purchase rates dropped by nearly half as only 2.9 percent of gamers bought something.

That’s actually a sign of mobile maturity, however. 

The “real” economy of actual goods and services is becoming mobile-enabled and mobile-driven. The virtual economy may slow as a percentage of overall activity, but is likely to keep growing as well.

In both, the same is true: Customer relationships matter more than acquisition.

“To be successful on mobile, you need to understand that mobile user acquisition and retention go hand-in-hand,” says Joyce Solano, SVP of Global Marketing at Leanplum. “The best way to protect your acquisition investment and retain customers throughout their lifecycle is by forming a relationship.”

Relationships, of course, are built on communication.

Leanplus, which offers mobile engagement services, says that contextual mobile messaging can increase customer retention by 62 percent.

One challenge: scammers
Scammers have noticed the massive opportunities in the subscription app market as well, and they haven’t missed them. The result is that sneaky subscription apps are stealing up to $4,700/year from unsuspecting consumers. 

Still, reading the fine print is a good idea.

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Q3: Chevron Beats Exxon (Again)

Today, I am going to compare the recently released Q3 earnings reports from Exxon (XOM) and Chevron (CVX). The chart below summarizes several important operational and financial metrics in order to compare the relative performance of the two companies:

EXXON CHEVRON
Total Production (millions of boe) 3.79 2.96
% change qoq +3.8% +4.6%
% change yoy -2.4% +8.8%
Permian Production (boe/d) 170,000 338,000
% change qoq +17% +25%
% change yoy +57% +80%
Free Cash Flow (billions) $7.2 $5.6
Net Income (billions) $6.24 $4.05
% change qoq +58% +19%
% change yoy +57% +107%
Shares Outstanding (billions) 4.271 1.917
Production/share 0.89 boe 1.54 boe
FCF/Share $1.69 $2.92
Net Income/Share $1.46 $2.11

Source: Exxon Q3 Supplemental; Chevron Q3 EPS Supplemental

Production

From a production standpoint, Chevron continues to significantly outperform Exxon on both a qoq and yoy basis. On a yoy basis, Exxon’s production actually fell 2.4% while Chevron’s grew 8.8%. That is primarily because of Exxon’s relatively weak new project production profile as compared to Chevron’s LNG mega projects Gorgon and Wheatstone.

In the Permian Basin, Chevron is also outperforming. This is not surprising considering Chevron’s long-held leasehold advantage and Exxon having to make a relatively recent major acquisition in the Basin just to catch-up. As a result, Chevron is producing roughly 2x the production of Exxon in the Permian. But what is interesting is that during last quarter’s Q2 conference call, Exxon reported it was running 34 rigs in the Permian, and 38 at the end of Q3. Compare that to Chevron – which was running 19 rigs in Q2 and is still running 19 rigs. Point being, Chevron certainly seems to be getting much more production out of each rig operating in the Permian as compared to Exxon. That is, Chevron not only grew qoq production at a faster pace, but off of a significantly higher starting point as well. Note that Chevron’s performance in the Permian is significantly exceeding even the company’s own expectations:

Source: Q3 Presentation

Free Cash Flow & Net Income

Both companies – helped by higher realized prices – recorded excellent free cash flow during Q3. On a net income basis, Chevron’s earnings more than doubled on a yoy basis and grew 19% sequentially. Exxon’s earnings grew only 57% yoy, and their sequential performance had more to do with a very lackluster Q2 performance than it did with anything related to operations (but note that production did grow 3.8% qoq). The relative performance shows that Chevron is more highly levered to the price of oil as compared to Exxon, which has the advantage in downstream refining and chemicals.

Per Share Metrics

The primary reason that Chevron’s shares closed today at $114.73 (up $3.56/share), much higher than Exxon’s stock – $81.95 (up $1.28), is because Chevron has less than half (55% fewer) the total number of fully diluted outstanding shares as compared to Exxon. This is why all the per share metrics are so much higher for Chevron.

This may seem like a crude analysis (pun intended), but if we take the per share quarterly production/FCF/net income metrics of Chevron, and divide them by Exxon’s, we get 1.7, 1.7, and 1.4, respectively. Taking the average (1.6) and multiplying it by the price of Exxon’s stock at today’s close ($81.95) would imply Chevron should be priced closer to $131/share than to $114, all else being equal.

Summary & Conclusion

The battle between the top two U.S. majors continues, with Chevron continuing to outperform. But neither company is getting much love from a market that watched the price of oil fall drastically in October and has a ton of economic and geopolitical concerns to worry about. But as I said in my full-year 2017 comparison of the two companies (see 2017: Chevron Outperforms Exxon (Again)), why would an investor ever buy Exxon when it could buy Chevron instead?

Yet, the big wildcard for Exxon is the world-class oil discoveries the company has made in Guyana (see Why is Nobody Talking About Exxon’s Massive Guyana Discoveries) – which the company is “fast-tracking” into production. Just a couple months ago Exxon announced yet another discovery in Guyana (its ninth) and said the estimated resource is now more than 4 billion barrels. Exxon says production in Guyana could reach 750,000 bod by 2025. So there is no doubt that Guyana will have a significant impact on Exxon’s production growth profile going forward. The question then becomes: can it actually help move the stock? I say this because Exxon’s stock has gone practically nowhere over the past 10 years and is actually down over the past 5 years:

Source: Yahoo Finance

As a result, investors have been left with a 4% yield and not much else. That said, I did notice a different tone on today’s quarterly conference call. The arrogance that the company previously displayed on the conference calls appears to be a thing of the past. I never understood where it come from in the first place considering the company had become such an underperformer. As a decades long investor in Exxon, I’m glad to see there is a much more free-flowing feeling to the Q&A session and, just maybe, a bit more transparency at Exxon. Hopefully, this means that the current management team is recognizing the significant lack of total returns Exxon has generated over the past decade as the stock market itself has zoomed higher. Better yet, perhaps they are taking pragmatic action to correct the problems that led to such a severe lack of total returns as compared to the company’s past.

While Chevron’s stock is also down over the past 5 years, at least it is up roughly 50% over the past 10 years. Like Exxon, Chevron also pays a healthy 4% dividend and appears to be the more undervalued of the two companies. As I said, when judging in comparison to Exxon, Chervon’s fair price appears to be closer to $135 than $114. If I didn’t own either (full-disclosure – I own both), I’d certainly buy Chevron over Exxon.

Source: Yahoo Finance

Disclosure: I am/we are long CVX, XOM.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am an engineer, not a CFA. The information and data presented in this article were obtained from company documents and/or sources believed to be reliable, but have not been independently verified. Therefore, the author cannot guarantee their accuracy. Please do your own research and contact a qualified investment advisor. I am not responsible for investment decisions you make.

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'Red Dead Redemption 2': Reaching for Magic on the Shoulders of Indie Games

Red Dead Redemption 2 begins in the harsh dead of winter. As roaming outlaw Arthur Morgan, you accompany your half-extinct gang into a barn, barely making it out of the terrible blizzard before hypothermia sets in. It’s a slow, miserable trudge, and the first few hours of the game are equally slow and miserable. You linger in this frozen waste, barely alive, for days, learning to hunt, fetching a friend from the mountains, and moving at a crawl as the snow clings to your horse’s hooves.

For people who pick up the game expecting the brisk, freeform playfulness of most other Rockstar games, this might be too much to handle. As its early priorities, Red Dead Redemption 2 demonstrates less an interest in the freedom and expansiveness of its world–though it gets there, eventually–but an interest in forcing you to take your time. Look at the snow, it insists. Feel the weight of each weary step you take. Listen to the long, meandering conversations between these faux cowboy criminals and try to sympathize with terrible men. There’s no rush.

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Even once the game moves beyond this opening chapter, into the freedom more familiar to the Rockstar open-world formula first established by Grand Theft Auto 3 18 years ago, that emphasis on slowness remains. Red Dead Redemption 2 goes out of its way to complicate simple things. Horses have limited stamina, and require food and upkeep, which forces journeys to go slower than they would otherwise. Fast travel is inconvenient, and gated behind limited early-game resources, to force the player to get accustomed to lengthy travel time before doing anything else.

Every interaction is suffused with this sort of depth, which doubles as a slowing complication. You have to clean your guns. Hunted animals need to be carried back to camp on the back of your horse. Keeping Arthur clean requires retiring to a hotel for a bath, wherein you have to scrub each individual body part in turn. And the distance between locations, the swaths of open wilderness separating townships and mission areas, is, by videogame standards, astounding. For long stretches, Red Dead Redemption 2 is spent in busywork and quietude.

This is not a bad thing. It might, in fact, be a very good thing, and one of the big points one would lean on if recommending this game. By creating frustration and imposing slowness, it allows a type of involvement with the world unattainable in more straightforward games. It forces you to pay attention, to learn and follow its rules, to shaped yourself in such a way as to successfully inhabit its world. The degree of involvement required by the game’s slowness forces a strange, added identification with Arthur Morgan and the petty frustrations that make up his outlaw life. It’s a novel means of player engagement.

Or, it would be, if it was new.

It’s easy to imagine that Rockstar came upon these ideas naturally. It would be in keeping with the ambitions of previous games in the series to imagine that the creators simply pushed for as much detail and care as possible, creating deeper and deeper levels of interaction until those interactions became complicated to the point of significantly altering the way the game feels, until they reshaped the entire tone and tenor of the experience. But even so, the idea of using deliberate slowness, clumsiness, or flat-out inaccessibility bears a powerful resemblance to other corners of the gaming world.

Red Dead Redemption 2‘s exploration is like Proteus, with its emphasis on dreamy, carefully paced exploration. Its love of mundane interactions is like Quadrilateral Cowboy and other works by Blendo Games. Not to say that only independent games do these things, but that the broader ethos at play here–an intentional or accidental focus on distancing the player, as a paradoxical means of deepening engagement or as an end to itself–owes a significant debt to independent and alternative games.

It’s a common belief, among these games, that while games are by nature objects to be played and experienced, that they don’t necessarily exist for the personal satisfaction of the player. That good games can be obstinate, or uneasy, or unpolished to the point of being near breaking. Critics like Aevee Bee and Lana Polansky, as well as countless others, have shaped the theoretical framework of this movement to create games that deliberately push against players—games that unwelcome them, that create friction to express something messier than simple joy.

Which is to say that, Red Dead Redemption 2, while massive, and involving, and willing to do things rarely seen in triple-A videogames, might still not be worth recommending on those merits. I ended my last piece on this game with ambiguity, an uncertainty about how to comfortably reckon with both the game’s power and the circumstances that helped create it. I’m still uncertain, on that front. The more I play it, the more I find myself enjoying significant parts of the way it has shaped itself as a messy, anxious, tragic thing.

Yet, I also I find myself thinking that, maybe, its best tricks are already found elsewhere. In games made by people using those tricks to advocate for the oppressed, or to create a depth they thought was lacking in games, or just to express something true. Even though Red Dead Redemption 2 is a good game, I’m not sure if it’s a game worth playing. And if I’m going to recommend something, perhaps I should be recommending those other games, instead.


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Space Photos of the Week: Ghost Nebula, Prepare to Die

There’s something haunting the Ghost Nebula, located just 1,500 light years from Earth. It’s being driven to extinction by a star called Gamma Cassiopeiae, several light years away. Ultraviolet radiation from that powerful star actually makes the Ghost Nebula emit hydrogen-alpha radiation, which appears in red. The result is that the nebula is being destroyed, and the nebula killer’s lust for dust isn’t done: Several other nebulas in the area are slowly being wiped out by Gamma Cassiopeiae.

The European Space Agency’s Mars Express orbiter photographed this region of the red planet called Greeley Crater, combining data collected over 16 Mars orbits. The tan flat surface seen here, scarred with so many craters of different sizes, indicates this Martian area has seen a lot of meteorite impacts.

Galaxy NGC 5033, some 40 million light years away, seems similar to our own Milky Way in shape and size (about 100 million light years across), but differs in a few major ways. It has a very active galactic core, fueled by a supermassive black hole. This active nucleus means it’s classified as a Seyfert galaxy, and what we are seeing is the black hole devouring all the stars around it, causing the center to radiate in different wavelengths of the electromagnetic spectrum. Sadly, there’s nothing we can do for these stars; they’ve certainly been gobbled up by now, because their light took 40 million years to get to Hubble’s camera.

Before we mosey from Mars, check out this false color mound captured by the ExoMars Trace Gas Orbiter’s Colour and Stereo Surface Imaging System, called CaSSIS. This mound is located in an area called Juventae Chasma—just north of Valles Marineris, also known as the Martian Grand Canyon. Scientists study mounds like these to learn how the sediment was laid down over time. If we can figure out the composition of the layers and how they are formed, then we’ll gain greater understanding about ancient activity in this region.

Eat your heart out, Weather Channel: What we’re seeing is a cold front in space, in the galaxy cluster Perseus. This dance of galactic gas was caused by two galaxy clusters colliding with each other; the younger, colder region lies on the right, while the older gas departs the region on the left. When these astral bodies clash, their inner gas is shaken loose and expelled out into space. It is usually much colder than the rest of the galaxy, so the gas creates a cosmic cold front of galactic proportions. This incredible image was captured using three different x-ray observatories: NASA’s Chandra, ESA’s XMM-Newton, and the German Aerospace Centre-led ROSAT satellite.

This swirling tempest was captured by NASA’s Juno spacecraftNASA some 32,000 miles above Jupiter’s clouds, and for astronomers, this type of clarity is like candy. No more hazy bands of atmosphere! Rich details like the anticyclone known as White Oval A5 are yet another testimonial to how Juno, now in its 15th science orbit of the gas giant, has revolutionized research on the gas giant.

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'Homecoming' Creator Sam Esmail On Podcasts, Paranoia, and Julia Roberts

Homecoming, the latest series with prestige TV bona fides to come to Amazon, is about as subtle and mysterious as a thriller can get. Based on the podcast of same name, it is, on the surface, about a group of soldiers returned from combat and the facility—called Homecoming—that seeks to treat their PTSD. However, as seen in flash-forwards and tiny cracks in the veneer of each person’s story, none of that is what it seems, and everyone’s motives and actions are suspect.

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If you know the work of Homecoming showrunner Sam Esmail, this comes as no surprise. His last big hit, Mr. Robot, steeps itself in questions about mental health, paranoia, and discomfort with government rule. The similarities, however, end there. (Well, there’s some surveillance, too. But we’ll get to that later.) Unlike Mr. Robot, with its steely futuristic hacker veneer, Homecoming has the worn edges of a 1970s mystery thriller, with just a bit of old-school gumshoe TV and Hitchcock thrown in.

It also, notably, has an onion-like story that gets a little more involved, a little more potent, as each layer is pulled back. It focuses on therapist Heidi Bergman (Julia Roberts) and her efforts to treat returning soldiers—particularly Walter Cruz (Stephan James)—but as we learn, she is often thwarted by her absentee boss Colin Belfast (Bobby Cannavale), and eventually leaves Homecoming with little to no memory of what she did there.

It is, as you might expect, a head-scratcher. In the best way. To find out how he plotted his latest artfully-drawn TV thriller, WIRED sat down with Esmail to pick his (very deep, very meticulous) brain about creating suspense, making TV out of audio, and convincing Julia Roberts to make her episodic television debut.

When Adapting a Podcast, It’s Essential to Do Something Audio Can’t

Sam Esmail loved the podcast from the moment his agent sent it along to him—but it took him a while to figure out what he could do with the story that Gimlet hadn’t already done in their audio series. “I just remember thinking, ‘Well if it’s great, why are we talking about adapting it?’ It’s already in the medium it should be,” he says. “I binged it, back-to-back. I loved it, and then I binged it again. As I started listening to it that second time, I realized that there could be things in the visual medium that could really open up a lot of the storylines in the podcast. So that’s when I knew that this could be something really special.”

It’s Also Uncharted Territory

Adapting podcasts, as opposed to books or plays or previously-released movies, is relatively new. Which sounds like a challenge, but Homecoming has an advantage: It was already scripted. (Esmail also worked with the podcast’s creators, Eli Horowitz and Micah Bloomberg, to develop the show.) “I was a huge fan of Serial and S-Town, and this was the first one that, at least from my experience, was purely scripted, from beginning to end. It’s another avenue to find great stories to tell.”

Homecoming Still Needed to Turn Conversation Into Drama

Just because it was scripted didn’t mean Esmail didn’t still have to turn an audible story into a visual one. Most of Homecoming was like found audio, overheard phone conversations or recorded therapy sessions. Before bringing his show to Amazon, Esmail had to figure out ways to fill out that dialogue. “The limitations of [of audio] are where I think it gets really exciting, when you can translate that to television,” he says. “I’ll give you an example. There’s a story one of the characters tells about an incident that happened that actually, as you listen to the story, it’s really tense and suspenseful. But because the story is being told to you, you know the outcome is that he obviously is fine and gets away with it. So for me that was an example of like, well, if you could be with the characters as they go through that experience, there is suspense as to what will be the outcome. That was just a way of saying, ‘OK, well there’s a barrier, there’s a limitation in the podcast that I think you can really kind of break out more in television.'”

If You Want to Sell a Show to Amazon, It Helps to Have Julia Roberts

So, how did Esmail sell Amazon on the idea of adapting a podcast many people had already heard? He brought a secret weapon. “We wrote the first script and we sort of broke out what the first season really be about,” he says. “Then Julia [Roberts] became involved which was just like being on cloud nine, it was insane. Then we approached Amazon and they were obviously into it.”

But First, You Have to Get Her

Homecoming is Julia Roberts’ episodic TV debut. (One-offs on Friends and Law & Order don’t count.) So how’d Esmail get her? Turns out, she’s an audio junkie like the rest of us. “She’s a huge fan of the podcast. So she came to us, we sent her the script, and she was also a fan of Mr. Robot, which again, mind blown, right?” Esmail says. “I’m a huge fan of hers and the fact that she watched anything that I did was totally flattering. So I think we just lucked out.”

Meanwhile, Mr. Robot Is Still Happening

When you’re in demand like Esmail, it helps to be a multitasker—and he is. “Before we started shooting Homecoming we were in the writer’s room for Mr. Robot,” he says. “I was also editing Season 3 of Mr. Robot while I was prepping for the Homecoming shoot. So yeah, it’s a lot of hats.”

Not That He’s Going to Give any Robot Hints

Try asking anything about Mr. Robot‘s Season 4, though, and you’ll get stonewalled. “Well, I’m obviously not going to answer any of those questions,” Esmail says, smiling, “but this is what I’ve been saying: It’s going to be a great season.”

If You Wanted, You Could Live on Homecoming‘s Set

During prep for his new series, Universal—which is co-producing the show under the Universal Cable banner—was constructing a new soundstage on their Southern California lot. Esmail decided to take advantage. “Because I’m a crazy person, I wanted to build this two-story facility that’s the centerpiece of the Homecoming story on that soundstage and we just lucked out that the minute they finished construction we were able to move in,” he says, referring to the massive Homecoming transitional facility where much of the show takes place. “Anastasia White, my production designer, built this crazy, very detailed set, down to the door handles. The reason why I wanted that was I really wanted to control how we can place the camera, move the camera around, because it becomes a huge character in the whole story. Most of the time when you go to a sound stage or a set like that, you know, you turn a corner and if nothing’s there you open the door, it’s not a room, it’s empty. But we really went all went all for it. I remember thinking, I think the crew even said this, we could all just crash there because there are bedrooms and running water.”

Esmail (left) on the set of Homecoming with Bobby Cannavale.

Jessica Brooks/Amazon

Sam Esmail Is No Longer Listening to Homecoming

It’s hard, when adapting something, to find the balance between remaining steadfast to the source material and creating something fresh. So after he set about making Homecoming, Esmail stopped playing Homecoming. “Honestly, only the first season of the podcast had been out when we were adapting it to TV,” he says. “I didn’t even listen to the second season because I wanted to stay focused on our characters and our world in the first season and that’s where we kind of diverged from the podcast and really created our own sort of story that kind of completes Heidi’s journey for the first season.”

Listen Closely to Homecoming and It Feels Like Eavesdropping

Esmail may have had a whole screen to work with, but he still wants the sound of his TV show to have that sense that you’ve tapped into a call. “Even though we’re in the visual medium, it was interesting to continue to play with sound design,” he says. “One thing that we do, I wanted to keep the phone calls between Heidi and Colin, but I wanted that kind of feeling of surveillance the way they had in the podcast. Now when you watch those scenes, even though you may see Heidi and Colin, you’ll always hear it filtered as if someone’s eavesdropping. That’s something I borrowed from one of my favorite films from the ’70s: The Conversation.”


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Vizio P-Series 4K TV Review (2018): Top Quality, Palatable Price

For years, my living room TV has held its place at the top of my home’s video food chain. It’s an old 60-inch plasma HDTV with a thick black frame that can’t help but take over the room’s decor. Other TVs come in and out of the house, but the plasma has never lost its spot as the most popular big screen around. Recently, that has changed. My office has become the top draw in the house, and that’s thanks to the new 55-inch Vizio P Series.

The P Series stands for Performance in Vizio’s mind. Starting at $800 for the 55-inch (P55-F1), it’s a very reasonably priced high-resolution 4K Ultra HD TV when compared to offerings from Samsung, Sony, and LG. Yet, for the ever budget-conscious Vizio, it’s pretty much the top of the line (with the exception of the P Quantum for $2,100+). That’s good news—because it puts out a mighty good picture for less than a grand.

Pitch Black

Vizio

I was most impressed by the inky blacks. The P Series can’t compare to the blacks you’ll see on LG’s surreal OLED TVs, but it’s damn close at times, and that’s impressive. After many months of hearing me rave about it, my wife started watching The Expanse last week, and the P Series has become the TV we watch it on. It’s a treat to watch the Rocinante torpedo through space and zip around Earther stealth ships in near pitch-black.

At a 45-degree angle, I noticed some ‘blooming,’ or light halos, around bright objects in space—nothing too bad, though. Blooming is a small, common side effect of ‘full array’ local dimming tech. To improve picture performance over edge-lit TVs, which light up from the sides, and other types of lighting tech, Vizio places a grid of bright LED lights behind the LCD display of its TVs. Using smart programming, that grid of lights is chopped up into smaller ‘zones’ that the TV will jack up the brightness in areas of the screen that demand it, and darken other areas.

My 55-inch model had 56 of these dimming zones. The larger 65-inch model has 100. More zones usually means less bloom because they’re able to deliver more precise lighting, so if you buy the larger model, you may notice this even less. As it stands, if I’m looking for it, I do notice that bright ships in deep space—like in any Star Wars or, yes, The Expanse (seriously, watch it)—do have a small halo around them, like a street lamp on a mildly foggy night.

Chances are high you may never notice it, so keep that in mind. Blooming is a small price to pay for better contrast overall.

Thanks in part to those deep blacks, colors are vibrant and accurate. The P Series supports a few of the new, competing HDR (high-dynamic range) formats like HDR10, HLG, and Dolby Vision. You don’t need to know what all those formats mean; just know that HDR support means that when you see a sunset onscreen in Westworld, the sunlight glimmering onto the robotronic theme park looks extra orange, bold, and bright, and all those shadows and details in the rest of the scene—like the subtle color of a darkened tree—stands out more.

Response time has also been quick enough that I haven’t noticed any lag while playing games like Fortnite.

Not So Smartcast

Like many LED TVs, the P Series is all screen, with less than half-inch plastic bezels around the edges and a flat caboose that extends about 3 inches. Some TVs are thinner, but a little heft is worth it. The extra junk in the trunk helps fit the full array (grid) of local dimming LEDs. A set of fairly standard metal feet at each end hold up the 40-pound display and Vizio made the plastic on the bottom of the TV silver to match. Vizio’s TVs seem to look classier every season.

Around back there are five HDMI ports, one USB, component cables for old accessories, an optical port for soundbars, and an Ethernet jack. It’s a little tough to feel out all the HDMI ports in the dark, but that’s pretty common. I got used to it after a couple days. The TV can also connect directly to Wi-Fi (AC) and comes with Chromecast built in, so you can cast videos or music from your phone. Casting is especially handy if you want to show someone a photo on your phone or quickly play a particular YouTube video.

Vizio’s onboard “Smartcast” app interface is less ideal, like most TV-maker made interfaces. It has many of the big apps, and they’re all sluggish. Netflix and Amazon are present, along with Hulu (though with an out of date interface) and tons of others. Still, apps like HBO and Showtime are absent. My favorite app is Xumo, which has MSNBC and a number of other live TV channels in it for free. If you cut cable years ago like me, free channels are always appreciated. Unlike many Vizio TVs in recent years, including the E Series, this TV also has a built-in TV tuner so you can plug a digital antenna directly to it. It’s nice to see Vizio put TV tuners back in their TVs, which technically actually had to be advertised as “Displays” for a couple years because they lacked a tuner.

As always, I recommend you buy a Roku to get your streaming apps. A good streaming device is a far simpler way to get digital content on your TV, and it has a much simpler remote control. While you’re at it, consider buying a good soundbar. Vizio’s in-TV speakers are decent for a TV, but that’s hardly a compliment.

The Price is (Almost) Right

If you’re counting your Benjamins, TCL’s 6-Series has Roku in the box, more dimming zones, and a gorgeous screen for $650, though the P Series may edge it out in overall picture quality, depending on what you’re watching. Vizio’s mid-range M Series also impresses and starts at $700.

TV pricing varies by the week. Vizio’s P Series may or may not be the top bargain whatever day you’re hunting for a television, but it should be on your list. For less than $1,000, this 4K HDR TV has deep blacks and vibrant color that rival high-end TVs twice its price. And more important than that, it’s a great excuse to finally see Solo: A Star Wars Story. Everything looks vivid on this Vizio.

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Carl Icahn sues Dell over plans to go public

FILE PHOTO — Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network’s Neil Cavuto show in New York, U.S. on February 11, 2014. REUTERS/Brendan McDermid/File Photo

(Reuters) – Activist investor Carl Icahn sued Dell Technologies on Thursday, alleging that the computer maker did not disclose financial information related to its plans to go public by buying back its tracking stock (DVMT.N).

Icahn, who owns 9.3 percent of Dell, called the proposed deal a “conflicted transaction that benefits the controlling stockholders, at the expense of the DVMT stockholders”.

Dell in July said it would pay $21.7 billion in cash and stock to buy back shares tied to its interest in software company VMware Inc (VMW.N), returning the company to the stock market without an initial public offering.

Icahn and other hedge fund investors have resisted the plan, saying the proposed deal massively undervalues the tracking stock.

“We believe this is a threat blatantly deployed in an attempt to coerce DVMT stockholders to vote in favor of the merger, or else risk the unknown consequences of the forced IPO conversion,” Icahn said on Thursday.

Both Dell and Icahn were not immediately available for comment.

Reporting by Vibhuti Sharma in Bengaluru; Editing by Saumyadeb Chakrabarty

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Tencent to shift focus to industry for future growth

HONG KONG (Reuters) – Chinese internet group Tencent Holdings plans to expand into providing services to industries such as healthcare and connected cars in a move to promote growth beyond its mainstay consumer business.

FILE PHOTO: A screen featuring Tencent Miying, an AI-powered medical imaging service, is seen next to visitors at the fourth World Internet Conference in Wuzhen, Zhejiang province, China, December 3, 2017. REUTERS/Aly Song/File Photo

Tencent, China’s largest social media and gaming company that operates the WeChat messenger app, in September announced a major restructuring aimed at moving from being a consumer business toward one catering to industry too.

Dowson Tong, president of Tencent’s newly formed Cloud and Smart Industries Group, told the company’s annual global partners conference that the new group would focus on artificial intelligence, cloud services, big data and security.

“If the development of internet is said to have centered on consumers over the past 20 years, it will probably focus on business and industry over the next 20 years,” Tong said at the livecast event in Nanjing.

Tencent’s restructuring comes as the company’s main business of gaming and online services grew at a slower pace, hit by regulatory hurdles this year.

The restructuring created the industry-facing group led by Tong, who had spearheaded Tencent’s cloud business. The company also consolidated three content-related businesses into one.

Tong said Tencent planned to continue to improve its traditional stronghold of consumer internet services, while developing new industry-facing services focusing on sectors such as healthcare, transportation, education, and retail.

Tencent vice-president Zhong Xiangping said at the conference that the company’s autonomous driving business was a software and services provider. It also provides cloud services to business partners in connected cars, an area where Tencent has obtained road testing licenses in Shenzhen and Beijing, Zhong said.

Lin Songtao, vice president in charge of Tencent’s content platforms, said the company had set aside a 5 billion yuan ($720.13 million) fund to encourage creative content for Tencent’s various platforms that include WeChat and Spotify-like music apps.

Lin also said launched Yoo, a new short-form video app that will focus on content of 1-3 minutes, which he said is increasingly the most popular format of media consumption.

Reporting by Sijia Jiang. Editing by Jane Merriman

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The Chan Zuckerberg Initiative and Others Just Put Millions Into Student Recruitment Startup Handshake

The Chan Zuckerberg Initiative, the philanthropic arm of Facebook CEO Mark Zuckerberg and his wife Priscilla Chan, has invested in Handshake, a fast-growing startup focused on job recruitment for college students.

The organization joined the Omidyar Network, Reach Capital, and previous investors in the $40 million funding. EQT Ventures led the round and EQT partner Alastair Mitchell joined the startup’s board of directors.

Although The Chan Zuckerberg Initiative may be known for philanthropic efforts that focus on healthcare and other sectors, it also invests in startups. Vivian Wu, the organization’s managing partner for venture investments, said it looks to invest in companies with sustainable business plans that are “driving social change.”

In Handshake’s case, the startup sells software to universities that lets them more efficiently manage student career services and job placement. Students can create LinkedIn-like profiles that they can fill with relevant coursework or extra-curricular activities to make them more attractive work candidates for businesses.

The startup also sells software to companies for searching for prospective candidates.

Tim Streeter, the global head of recruitment for home appliance giant Whirlpool, is testing Handshake’s service. It can be difficult to find students outside of Midwest universities who are willing to move to the company’s headquarters in southeast Michigan, he said.

With Handshake, Streeter said that Whirlpool can more easily scout students nationwide without having to attend school “career days,” where they may end up courting students who have no intention of ever moving.

“If there are people on the East and West Coast that want to relocate, we can find them,” Streeter said about using Handshake’s software.

Lord hopes that the software will lead to students from outside the most prestigious universities having a better chance of getting jobs at top companies.

Handshake is not profitable and it currently gets most of its sales from universities, Handshake CEO Garrett Lord said. The plan is to significantly grow its corporate sales business in 2019 so that it eventually accounts for more revenue than universities.

Over 700 universities and 300,000 companies use Handshake’s software. Wu said that she’s working with Lord to create programs to help companies recruit more diverse candidates, but declined to elaborate.

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As for the employee-centered websites like LinkedIn or Indeed, Streeter said that he’s found those services lacking when it comes to college students and university career services.

“They haven’t cracked the nut yet,” he said.

But, that doesn’t mean that those job websites are ignoring Handshake.

“Maybe LinkedIn and Indeed are sitting back and hoping for an acquisition opportunity in the future,” Streeter said, explaining why they haven’t concentrated on students.

With its latest funding, which closed in mid-October, Handshake has raised a total of $74 million. Lord declined to disclose the company’s valuation.

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Lime Is Shutting Down Some of Its Scooters Because They May Catch Fire

Lithium powers everything from the smartphone revolution to your city’s new e-mobility vehicles. But lithium batteries are subject to the occasional fire and Lime, the e-scooter startup, said Tuesday that one model of its scooters appeared to light up from time to time.

The model in question is made by Segway Ninebot—Lime uses several different models in its fast-growing fleet—and Lime says that only 0.01% of its overall fleet is affected by the problem. Lime and Segway Ninebot wrote software patches to prevent riders from using 2,000 at-risk scooters until the company could pick them up and repair them. Most of the scooters were in Los Angeles, San Diego, or Lake Tahoe, Calif.

The fire department responded to an e-scooter fire at Lime’s facilities in Lake Tahoe this August, the Washington Post reports, and a Lime mechanic told the Post that mechanics were concerned about the device’s safety.

Lime also preventing its charging contractors, known as “Juicers”, from recharging that model until further notice. Juicers earn fees for collecting scooters in the evening, charging them, and returning them in the morning to points designated by Lime.

E-scooter rental companies are also facing a new class action lawsuit in a Los Angeles court over injuries to users (which include fatalities), pedestrians and public nuisance claims.

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Sony hikes annual profit outlook to record after second-quarter profit jump

A logo of Sony Corp is seen at an electronics store in Narita International airport in Narita, Japan, November 1, 2016. REUTERS/Toru Hanai

TOKYO (Reuters) – Sony Corp on Tuesday reported a 17 percent increase in second-quarter operating profit thanks to a strong performance from its gaming business and lifted its full-year earnings outlook to a record level.

Operating income for the Japanese entertainment and electronics firm came in at 239.5 billion yen ($2.1 billion) for the July-September quarter, above the 204.2 billion yen in the same period a year earlier.

Expectations for a strong result climbed after the Nikkei business daily reported on Saturday that Sony would log record first-half operating profit for a second year in a row.

Sony raised its annual profit forecast to 870 billion yen from an earlier estimate of 670 billion yen. That compares with a consensus of 796.4 billion yen from 25 analysts, according to data from Refinitiv.

Reporting by Makiko Yamazaki; Editing by Edwina Gibbs

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Baillie Gifford willing to invest more in Tesla: the Times

A man walks near a logo of Tesla outside its China headquarters at China Central Mall in Beijing, China July 11, 2018. REUTERS/Jason Lee

(Reuters) – Baillie Gifford & Co, one of the top shareholders of Tesla Inc, has said it would be willing to inject more cash into the electric carmaker, the Times reported bit.ly/2PwSpuu on Monday.

“If he (Tesla CEO Elon Musk) needs more capital we would be willing to back him,” the Times quoted Nick Thomas, a partner at Edinburgh-based Baillie Gifford, as saying.

Baillie Gifford is Tesla’s third-largest shareholder with a 7.72 percent stake. Elon Musk tops the list with about 20 percent ownership of the electric carmaker followed by T.Rowe Price Associates Inc, which owns about 10 percent, according to Refinitiv data.

The backing from Baillie Gifford comes days after Tesla reported a net profit of $311.5 million in the third quarter.

Tesla and Baillie Gifford did not immediately respond to requests seeking comments.

Reporting by Philip George in Bengaluru; Editing by Gopakumar Warrier

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Buy The Dip With 10.5% Yield And 141% Coverage, Conviction Buy

Co-produced with Philip Mause and Julian Lin for High Dividend Opportunities.

Source note: All tables and images from Global Partners L.P.’s website, unless otherwise stated.

Global Partners L.P. (GLP) is a master limited partnership which has re-transformed itself toward a more defensive business model. Management have done a remarkable job by positioning their portfolio and expanding retail operations. Despite this, the stock remains under the radar with double-digit yield with no credit given to the recent transformation. Coupled with a huge coverage of 141% this is one of the safest 10% yielders out there. For income investors, the shares are a strong buy.

Note that GLP issues K-1 tax forms.

In The Family

GLP was founded in 1933 as a single truck heating oil distributor. Since then, it has grown through the acquisitions of gasoline stations, convenience stores, pipelines, and storage terminals. The company is still being run by the same family, with CEO Eric Slifka leading the company founded by his grandfather 83 years ago. Let’s now look at what the company looks like today.

Boston Globe: Eric Slifka heads up the company founded by his grandfather in 1933 with one oil truck

Business Overview

GLP is an MLP which engages in midstream logistics and marketing. This is one of the nation’s leading wholesale distributors of petroleum products. GLP also is one of the largest independent owners, suppliers and operators of gasoline stations and convenience stores in the Northeast. It also is one of the largest terminal networks of petroleum products and renewable fuels in the area.

By the numbers, the scale of GLP is seen below:

Understanding The Business Model

GLP has three notable business segments: Wholesale, commercial, and retail.

Their wholesale business involves purchasing, transporting, and reselling gasoline, crude oil, and other related products to customers such as gasoline distributors, home heating oil retailers, and refiners. GLP has huge market share with 9.8 million barrels of capacity in the Northeast:

We can see that in many of their markets, GLP has acquired a market leader position:

Their next segment is their commercial business. Here they sell and deliver unbranded gasoline, heating oils, and kerosene to customers such as government agencies, large commercial clients, and shipping companies. These contracts are acquired through aggressive bidding and GLP’s massive scale allows them to win better terms over lesser scale competitors.

GLP’s final and most important business segment is the gasoline distribution and station operations (retail). This is their most important segment which has been a source of large growth, and is the reason we previously mentioned that they have made a strong move toward acquiring a defensive business model. Revenues include retail gasoline sales, rental income, and convenience store sales. One can say that customers range from station operators, gasoline jobbers, and retail customers.

You might be wondering why is the retail gas station and convenience store model so appealing? The reason is simple: Consistency. As we can see below, their product margin has been consistently rising the past decade:

Their large scale is evidenced by their 1,500 stores based spread across 11 states:

GLP’s sites operate with a variety of brand names:

GLP’s retail business has clear strategic advantages:

  • They have stable, recurring income from their rental agreements with dealer leased and commissioned agents.
  • They are vertically integrated between supply, terminating, and gas station sites.

  • They own “best of breed” locations in the Northeast.

  • They are diversified across brands, site geography, and mode of operation.

In order to accelerate growth through acquiring more retail locations, GLP has been optimizing their real estate portfolio. Because they are mainly interested in simply operating gas stations and convenience stores, GLP has engaged in sale and lease back transactions with real estate investment trusts like Getty Realty (GTY), which transfer ownership of the underlying real estate in exchange for capital which can be used to accelerate growth. As we can see below, GLP has been very aggressive in growing their retail segment through M&A:

We can see below how their three segments stack up in contributing to the latest quarter’s product margins:

Transformation of the Company

GLP has dramatically evolved their business model to have more exposure to defensive sectors which are stable regardless of economic conditions:

The above chart is very impressive! The management of GLP has re-positioned the portfolio pretty well:

  1. Eight years ago, GLP had 50% of their margins based on wholesale distribution of distillates (of which is heating oil). This portion of revenues was very seasonal and can see fluctuations based on the weather. Now this percentage has gone down significantly – only to 10%! A significant improvement.

  2. Management has re-positioned itself into Gasoline Distribution – mainly gas stations – which make up today 49% of gross margins and Convenience Stores, which make up 26% of gross margins. These businesses tend to be more stable and recession resilient and less price sensitive to the price of crude oil and heating oil. Gasoline is necessary, even during periods of economic weakness – consumers still need to drive and fill up the tank.

  3. The end result of management’s efforts is that this is now a company with a vertically integrated refined products distribution system made up of their terminal network, wholesale market, and retail gasoline stations. Why is this important? This integrated model allows them to control the product margin at each step of the value chain.

Recent Financial Results

GLP had a very solid second quarter:

  • Earnings before interest, taxes, depreciation, and amortization (‘EBITDA’) was $53.1 million compared to $51.3 million last year.

  • Distributable cash flow (‘DCF’) was $21.0 million versus $21.8 million.

  • Adjusted EBITDA was $56.1 million vs. $53.7 million.

  • Gross profit was $149.3 million compared to $135.4 million, due to improved product margins in gasoline in the Wholesale segment and station operations.

GLP also continued their strategy to expand their retail gasoline business through their acquisitions of Champlain and Cheshire. These acquisitions added 136 sites including 62 owned properties consisting of gas stations and convenience stores.

Even more good news!

  1. GLP raised its full-year 2018 guidance with EBITDA to a range of $190 to $215 million compared with a prior range of $180 – $210 million – or by 3.4%.
  2. GLP also hiked the quarterly distribution in July from $0.4625 to $0.4750 per unit, or $1.90 per unit on an annualized basis – or by 2.7%.

A Solid Balance Sheet

First, we would like to point out that the balance sheet of GLP is unique and particularly solid. It consists mostly of real estate assets (gas stations and convenience stores), in addition to inventories. The breakdown in percentages is as follows:

  1. 44% of total assets consist of conservatively valued fixed assets (strategically located, non-replicable terminals and gas stations). This gives the company property REIT-like features.
  2. 38% of other assets are “current assets” consisting of cash, inventory, receivables, deposits and prepaid items.

About leverage, debt/EBITDA was approximately 4.1 times, which is considered on the lower side in the MLP space, especially if we factor in that a big portion of borrowing relates to financing inventories. Based on their latest 10-Q, they are able to borrow at relatively competitive rates at 4.1% for their secured loans and 6.7% for their un-secured loans.

One of the safest dividends is the one that has just been raised.

As discussed earlier, GLP just raised their quarterly distribution from $0.4625 to $0.4750 per share or by 2.6%. This is the first dividend raise since 2015. Note that in 2015, GLP had to reduce the dividend following the crash in oil prices. Today, the situation has changed as the company’s profitability does not rely much on the price of oil anymore. In fact, when oil price declines, this tends to increase demand for gasoline as people are willing to drive and travel more. This also tends to generate more convenience store sales as drivers have more money in their pockets. The re-positioning of the company by management was remarkable.

Big Distribution Coverage

GLP hiked its distribution by 2.7% in August 2018 because they are seeing strong financial results, but what is the actual coverage?

Trailing twelve month (‘TTM’) DCF is $143 million. Adjusted for the non-cash tax credit, TTM DCF is $90.5 million. Based on 33.8 million shares, this works out to $2.68 in DCF per share. This suggests that the current distribution is covered at 141%. This is very strong coverage considering that other MLPs frequently see coverage much lower, between 100% to 120% times.

IDR Structure

GLP has a general partner (‘GP’) which has ownership of incentive distribution rights (‘IDRs’). These basically mean that the GP is entitled to a portion of cash flows depending on the size of GLP’s distribution. We can see how the math works below:

Based on the current quarterly distribution of $0.475, we can compute the projected IDR payments as follows.

  1. For the first $0.4625 in distributions per share, the GP gets a 0.67% cut.
  2. For the next $0.015 in distributions per share up to $0.5375, the GP gets 13.67%. This comes out to about $0.005 per share or $169,000.

In other words, buyers of the common stock at this time would not really be impacted much by the IDRs despite the huge distribution payout. The distributions have to increase significantly to a level of $0.6625 per quarter for a yield of 14.6% based on the current price for the IDR payments to become significant.

Another way to look at it is that for a purchaser at this price, GLP has to pay more than 10% yield before any IDR kicks in. Therefore the GP has every incentive to keep increasing distributions in the future to be able to meaningfully share in the profits.

High Insider Ownership 22%

The General Partner, which holds a 0.67% general partner interest in the Partnership, is owned by affiliates of the Slifka family. As of June 30, 2018, affiliates of the General Partner, including its directors and executive officers and their affiliates, owned 7,377,738 common units, representing a 21.7% interest in the company.

The Chairman Eric Slifka himself owns 1.22 million shares (directly and indirectly) representing about 4% of the company’s shares.

This is a true family business that seems to be strongly aligned with the shareholders.

Valuation

Management has given guidance for full-year 2018 EBITDA of $190 million to $215 million. We have excluded from the calculations a $52.6 million tax credit which is a one-time non-recurrent income. We did valuations using two different methods:

  1. Price / “distributable cash flow” (or DCF) valuation: Based on our adjusted DCF of $2.68 per share, GLP trades at 6.8 times DCF. This is very cheap.
  2. EV/EBITDA valuation: With $613.8 million in common market cap (based on 33.8 million shares and $18.16 share price), and $66.8 million in preferred stocks, GLP trades at a EV/EBITDA multiple of 7.8. Note the EV/EBITDA ratio is a unique and important valuation ratio that takes “debt levels” into account. Again, the valuation in this case is particularly low and attractive.

Compared to Competitors

The main comparables to GLP are CrossAmerica Partners (CAPL) and Sunoco LP (SUN). As we can see below: GLP offers the best combination of valuation and distributable cash flow coverage:

(Chart by Authors)

Don’t just look at the yields! The valuation and dividend coverage are the most important metrics. GLP is much more attractively priced than both of its competitors. It’s 12% cheaper than CAPL, and 22% cheaper than SUN by looking at the DCF metric. Furthermore, the distribution has a significantly higher coverage of 141%. GLP is attractively priced with its high yield and high dividend coverage.

12-Month Price Target

GLP is very cheap here. Our conservative price target is at 7.8 times DCF, which works out to $20.7 per share and a 9.2% yield. This is roughly 15% upside for the stock price from here.

Risks

  • GLP has a defensive business model due to its retail operations of gasoline stations and convenience stores. Still, the business has some sensitivity to the price of crude and heating oils, which is due to its wholesale distribution of distillates. If oil prices were to drastically drop, GLP may see decreasing demand for this segment. On the positive side, this segment only contributes 6% of gross margins. Furthermore, a decline in oil prices should lead to greater business in their convenience stores and gas station segments.

  • GLP has little geographic diversification as its assets are mainly in the northeast. This makes them more exposed to dangers from natural disasters or regional government regulation. That said, their business has stood the test of time and we do not expect anything to change that.
  • GLP owns a large inventory of gasoline and refined products. In case of a fluctuation in price, this can result in losses. Having said that, management has a lot of experience in handling inventory and also has hedging in place. We do not believe this is a significant risk.
  • GLP is run by the family that founded the company, so it is a “family like” business. This has both advantages and risks. The advantage is that this family has a substantial ownership in the company which usually means that they will do their best to protect the business, their reputation, and their own money. On the negative side (and based on my experience with family run businesses), families tend to make more management mistakes than non-family run businesses. This is due to several reasons including the fact that the family member taking the decisions may not be necessarily the most qualified person to make these decisions, and/or may not always listen to advice. In the case of GLP, the current CEO has done a tremendous job re-organizing the company, and I believe that he has reached a point whereby he is not only highly knowledgeable of the business, but also a very well seasoned CEO.

Recent Pullback Creates a Buying Opportunity

GLP has hiked its distribution in August 2018 by 2.6%. Despite this, the stock has pulled back along with the general markets by over 13% creating a unique buying opportunity:

Bottom Line

Global Partners LP runs a highly profitable operation. It has a unique business model and benefits from its vertically integrated assets. This also is a defensive business model that can do well in good and in bad times.

I have always admired this company’s resilience and its generous dividend distributions. Today dividend investors have the chance to buy into this great company at incredibly low valuations. Not only the price has recently pulled back, but it also does not reflect either the magnificent transformation that management did or the resulting stronger outlook and guidance, offering a unique opportunity.

This is possibly one of the safest 10% yielders out there because of its high coverage of 141%. This could very well be one of the biggest winners in your high-yield portfolio.

Note: The common shares should go ex-dividend around the 8th of November or in less than two weeks.

Another High Conviction Buy: The Preferred Stocks

GLP recently issued approximately $66.8 million in 9.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, which they used to reduce their debt levels.

We view GLP as a relatively defensive stock. However for income investors who are extra conservative, we recommend another Conviction Buy, the preferred stock of GLP:

Global Partners, L.P., 9.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (GLP.PA)

  • GLP-A has a par value of $25 per unit. It currently trades at $25.30/share.
  • The coupon is at 9.75% per annum.
  • It’s redeemable at the issuer’s option on or after 8/15/2023 at $25 per unit plus accrued dividends.
  • This is a perpetual Preferred Share with no stated maturity.
  • The shares are cumulative, and therefore, if for any reason they are suspended, the unpaid preferred dividends “accumulate” perpetually. This adds another layer of protection to preferred shareholders because this means that before the common dividends can be once again resumed, all accumulated preferred dividends must first be paid out.
  • The amount of the dividend is $2.4375 per annum or $0.609375 per quarter. It’s paid quarterly on the 1st of February, May, August and November each year. The ex-dividend is on the last business day of the previous month. So the next ex-dividend will be next Wednesday on October 31.
  • The most important feature: On and after 8/15/2023, the dividend will become based on a floating rate, calculated based on three-month LIBOR plus a spread of 6.774% per annum. This adds a big protection against rising interest rates. In today’s terms, with Libor being around 3%, the yield should be at 9.77% even if interest rates do not rise further.

GLP-A was trading at $26.30 a share just three months ago. Today it’s trading at around $25.50 for a yield of 9.7% creating a unique buying opportunity!

Global Partners (NYSE:<a href=


Source: Yahoo Finance

We believe this is one of the best preferred stocks in the market today to invest for the long term. The dividend is enormous compared to the relative lower risk level it carries. Plus because of its floating rate, it carries some protection against rising interest rates. The recent pullback has created an opportunity.

  • Advantage of the Common to the Preferred: More upside potential, and a great yield.
  • Advantage of the Preferred over the Common: Less upside potential, but less price volatility and still a huge dividend that is even safer than the common. Conservative investors are advised to buy this issue for the juicy yield and also for some upside potential.

Great stock! Great investing!

A note about diversification: To achieve an overall yield of 9% and optimal level of diversification, at High Dividend Opportunities, we always recommend a maximum allocation of 2% to 3% of the portfolio to individual high-yield stocks like GLP, and 5% allocation to high-yield exchange traded products (such as ETF, ETNs and CEFs), which are products that hold a large basket of stocks or bonds. As part of a risk management strategy, we do not recommend exceeding this allocation no matter how good the opportunity is.

If you enjoyed this article and wish to receive updates on our latest research, click “Follow” next to my name at the top of this article.

Disclosure: I am/we are long GLP, GLP.PA.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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5 Strategies to Help Direct a Passive-Aggressive Boss

You’ve probably met a person in your life who constantly gave you the cold shoulder, indirectly insulted you, or frequently avoided important events. Interactions can leave you feeling overwhelmed and even unsure of how to manage your relationship with them. If you have, then you’ve experienced someone who displays passive-aggressive behaviors.

A passive-aggressive person is generally someone who expresses their dislike or anger towards something in an indirect manner. They may not say exactly how they feel directly to you, but often times you can feel the negative energy they’re releasing. While it’s frustrating to deal with a family member who acts this way, it’s even harder to deal with your boss who does the same.

Here are a few ways to manage a passive-agressive boss or manager. 

Don’t retaliate.

It’s a natural reaction to strike back when you feel threatened. We oftentimes want to show them how it feels and hopefully, they’ll see how they’ve been treating us and stop. However, trying to get even won’t make them respect and appreciate you more as a person.

If anything, they’ll do it more because they believe that’s how you want to communicate.

Instead, continue to display emotional control and only display behaviors that you want to see around you, even if temptation feels hard to resist. I’ve found that counting for a few seconds while focusing on my breath helps to regain my thoughts.

Be compassionate.

Passive-aggressive behavior stems from a person not knowing how to properly address conflict and concerns. Although it usually isn’t done purposely, that doesn’t mean you should pretend it’s not happening. This sort of behavior will eat away at your mental and emotional wellbeing.

It can lead to your own depression if the situation doesn’t digress. So, when feeling compassionate for them because they lack emotional maturity, make sure to always be aware and attentive to your own mental needs.

Confront them in a nonjudgmental way.

If one of your concerns with them is that they’re always withholding information and trying to remain elusive, then it’s likely they’re struggling with being an effective leader. You may have to address them. Know that they likely won’t conclude that they’re the problem.

When you’re confronting them, make sure you’re in a private place and you approach delicately. I’ve found that asking about a specific incident and going from there helps. For instance, saying something like, “I have been struggling with ___ and would like to fix this. What can we do to get there?”

I know it doesn’t seem fair that you have to hold your boss’s hand through their journey, but they’re a person too. You want them to trust you so they will find it easier to communicate with you.

Set clear expectations.

If your boss acts passive-aggressively when it comes to giving feedback, you’ll have to the lead. First, you’ll need to talk to them by referring to a specific situation where you would’ve really valued their honest feedback. Then set bi-weekly meetings to discuss your progress on projects and ways to improve.

Even if they haven’t given you clear feedback throughout the week, they know they’re accountable for giving it to you during your meetings.

Start looking for new opportunities.

If you’ve tried all of the above and nothing seems to be working, consider looking for new opportunities. If you love the company you’re at and don’t want to leave, see if you can get transferred to a new team for a lateral career move.

However, if you’ve noticed that all the leaders at your job seem to display the same behaviors, then it’s time you start looking for a new job at a different company. There comes a time where you have to accept that you did your best and it’s time to move on, not only for your professional life but also for your mental and emotional health.

I know it’s frustrating to feel like you have to walk on eggshells with a grown-up, but not everyone you’ll cross paths with in life will have the same emotional maturity as you, even if that person is professionally above you. Try to help them like you would a family member. If all else fails, it might be time to dust off your resume.

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3 Reasons Why Los Angeles Could Become the Nation's Next Tech Hub

Los Angeles, a city known for its glitz, glam and its title as the undisputed entertainment capital of the world, has another industry hidden up its sleeve: a thriving, rapidly growing tech ecosystem.

At a time when startups, prominent tech figures from Tim Ferriss to Peter Thiel, and employees alike are all beginning to find homes outside the Silicon Valley, the race for becoming the next tech hub in the United States is on. For a variety of reasons, Los Angeles is well-positioned to take that crown.

Here are a handful of reasons why.

1. Los Angeles is the manufacturing capital of the United States.

Believe it or not, the manufacturing capital of the USA isn’t Pittsburgh or Cleveland or Philadelphia?–?it’s actually L.A. In fact, the Bureau of Labor Statistics estimates there are around half a million manufacturing jobs in Los Angeles alone.

Because of its manufacturing capacity and access to resources, L.A. is positioned particularly well to become the go-to hot-spot for hardware startups in the United States. There are already organizations in place that have capitalized on this opportunity.

One example is Make in L.A. Located in San Fernando Valley, Make in L.A. is a private accelerator and venture capital fund focused on bringing hardware startups to market all under one roof. The program is all housed within southern California’s largest coworking space and partner organization, Toolbox LA, where members of the program can refine prototypes in the makerspace, clarify go-to-market strategies, sharpen their value propositions and network with fellow founders without ever having to leave the building. Specifically, Toolbox LA is a community-driven workspace that includes an event space and a biotech incubator in addition to the makerspace and hardware accelerator provided by Make in L.A. 

Lastly, with hardware companies like Google Hardware, Ring and uBeam leading the charge, aerospace giants like SpaceX and JPL putting down roots in LA, along with innovative startup models like the one implemented at Make In LA, the hardware startup scene in southern California looks more than promising.

2. The city has full support from its mayor.

In early October, the Mayor of Los Angeles, Eric Garcetti officially kicked off the start of Manufacturing Week.

With over 400 Los Angeles techies, entrepreneurs and social workers in attendance, the event was just one of many measures Garcetti is backing to promote a healthy tech ecosystem. Make It in L.A., a non-profit dedicated to helping hardware entrepreneurs make their products a reality, and Grid110.org, an incubator and accelerator for startups in downtown Los Angeles, are a couple other examples.

3. There’s a $155 billion valuation in Silicon Beach.

According to a recent study conducted by MediaKix, the Silicon Beach?–?the name given to the startup scene in Santa Monica, Venice, Playa Del Rey and Culver City?–?alone is now valued at $155 billion. This is largely thanks to companies like Dollar Shave Club, Headspace, Hulu, and Snap setting up shop in the area.

Additionally, it’s no surprise that the beach lifestyle of the Silicon Beach is appealing to younger workers, making it easy to “snipe” young talent from slower, arguably less exciting areas such as the suburbs in Cupertino and Mountain View. With a favorable climate and ocean view, it won’t be difficult for companies to sway talent to relocate to the Silicon Beach upon their college graduation.

4. There’s a wide variety of entrepreneurs.

Because L.A. is the world’s epicenter of entertainment, it’s comprised of everyone from filmmakers to musicians to stand-up comedians, resulting in a unique blend of creatives and entrepreneurs in Los Angeles that isn’t as prevalent in other areas of the country. Now, with the proliferation of the L.A. startup ecosystem, these same individuals have the potential to bring their creativity to the tech world.

I’ve experienced this first hand upon moving down from the Bay Area to L.A. Having lived in five states and over 20 cities, there truly is a unique sense of grit and hustle embedded in people’s DNA down here. A hustle that has, more than likely, culminated as a result of waitresses anxiously waiting for their next audition or an aspiring musician working night shifts until they get their big break–and it’s exciting to see that same tenacity bleeding over into the startup world.

While the Silicon Valley still remains the icon of the startup world, which city will house the next wave of tech entrepreneurship still remains up in the air. With its manufacturing capacity, immense funding, support of its mayor and culture of grit and hustle, LA seems like it could very well be the front-runner.

A very special thanks to Raychel Espiritu for providing insight and research for this article.

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A Massive New Study of 38,000 Workers Says This 1 Thing Makes Employees Much Happier (and Probably More Loyal)

Want happier employees? A big new study by four economics professors has some surprising findings on how to make it happen. And, it becomes clear pretty quickly as you read through the results that happier employees are likely to be more loyal employees. 

This isn’t a small, “improve happiness by 5 percent” finding. In fact, the employees who reported better life satisfaction displayed a similar increase in reported happiness to what they would have if they’d doubled their household income, according to the study.

Here’s the study, the overall finding on how to improve employees’ happiness and loyalty, along with some practical strategies for making it happen.

Two questions, 38,000 workers

Writing for the National Bureau of Economic Research in Cambridge, Massachusetts, four economics professors–three from colleges in Canada and one from South Korea– analyzed the responses of 38,000 workers to the Gallup-Healthways Daily Poll, which is a daily survey of hundreds of adults on many different topics.

Among the questions in the daily poll are two that are relevant here: one has to do with people’s general overall life satisfaction, and another has to do with their relationships with their supervisor at work.

By combining the answers that thousands of people gave to both of those questions, and correlating them with millions of other data points that allowed them to control for respondents’ personalities and even the days of the week on which they answered the questions, the researchers came up with a surprising but compelling conclusion.

Across the board, people who said they felt like their relationship with their work supervisor was more like that of partners, as opposed to one in which they felt like their supervisor was more of a traditional boss, were likely to report much greater life satisfaction. 

Prime working years

The findings go deeper, of course. Researchers found for one thing that the effect was greatest when employees were in their 40s and early 50s. That’s intriguing for two reasons. 

First for most people, if you were to chart their life satisfaction, you’d see it forms a rough “U” shape.

They have relatively high life satisfaction up until their 20s and 30s, and then it drops during middle age as they are likely to be dealing with competing demands between work and family. Then, it rises again as children grow up and they can start to see a future beyond work.

Second, workers are largely at the apex of their productivity and expertise at right around this stage. That means they can benefit most from this “boss as partner” paradigm right at the point when they have the most to offer at work. 

Prime loyalty

Another compelling finding within this part of the report: Fully two-thirds of workers reported that they worked for partners, rather than bosses

Now, one explanation might just be that two-thirds of bosses already follow this “partner” paradigm. But another explanation makes more sense. It’s that workers gravitated toward the work situations and bosses that had the most positive effect on their overall life satisfaction.

Put differently, if they had partner bosses, they stayed. But if they had boss bosses, they didn’t just suffer in silence.

Instead, they tried to move on. And by and large, you can imagine that it was the most successful and useful employees who found it easiest to find new homes.

Partner strategies

The paper, by economists John F. Helliwell and Max B. Norton of the University of British Columbia, Haifang Huang of the University of Alberta, and Shun Wang of KDI School of Public Policy and Management in Korea, doesn’t offer prescriptions.

But, it’s fairly easy to determine whether a boss is likely to be perceived as a partner or a traditional boss.

Of course, employee satisfaction isn’t the only goal at a company. The trick here is to act authentically in such a way that drives home appreciation for employees’ contributions, and frankly the sense that their satisfaction is at least one thing that bosses are striving for.

Here are 11 of the key areas. Partner bosses, who are nevertheless effective leaders, are more likely to:

1. Share their vision, and ensure that workers understand how their daily work fits into an overall plan. This also means celebrating wins.

2. Respect other people’s time. For starters, no needless meetings without agendas.

3. Set priorities and make decisions. Because if everything is a priority, nothing is.

4. Share information liberally. Yes, there are times when a boss has to keep confidences. But the bias should be toward sharing.

5. Demonstrate empathy. This includes offering sincere thanks.

6. Accept blame and sharing credit.

7. Model ethical behavior. Clearly.

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SK Hynix warns of more chip price falls, capex cut as trade tensions bite

SEOUL (Reuters) – SK Hynix offered a downbeat outlook for semiconductors on Thursday, warning prices of flash memory chips will fall further until early next year from over two-year lows, hit by waning smartphone sales and weaker Chinese demand.

FILE PHOTO: The logo of SK Hynix is seen at its headquarters in Seongnam, South Korea, April 25, 2016. REUTERS/Kim Hong-Ji/File Photo/File Photo

The South Korean firm, a key Apple Inc supplier and the world’s No.2 memory chipmaker by sales, also forecast lower capital spending for next year, as escalating Sino-U.S. trade tensions make it tough to predict demand.

SK Hynix shares fell as much as 5.2 percent on Thursday to their lowest level since August 2017 despite the company posting record quarterly operating profit and sales. The shares pared losses to trade 3.0 percent lower by 0410 GMT.

“Given global economic uncertainties and under the assumption that we will keep working on the inventories, we expect that investment will be adjusted to a lower level than this year,” Myoung Young Lee, SK Hynix’s executive vice president, told analysts.

Lee did not elaborate on the size of its 2019 investment saying the company’s business plans are not complete, but added that it would set up quarterly investment plans instead of an annual budget to better respond to demand uncertainty.

Hynix, which spent around 10 trillion won ($8.8 billion) as capex in 2017, has planned to invest at least 30 percent more this year to boost output, hoping to ride on the coattails of the industry’s two-year supercycle of tight supply and soaring prices.

FILE PHOTO – SK Hynix Inc’s DRAM modules are seen in this picture illustration taken at the company’s main office building in Seoul October 24, 2012. REUTERS/Kim Hong-Ji/File Photo

But some chip prices have already started falling and are set to end the unprecedented industry boom and soaring profits for chipmakers around the world, analysts say.

SK Hynix joined a growing list of chipmakers sounding caution on the industry outlook, as they wrestle with excess inventory due to weakening demand for smartphones, cryptocurrency mining devices and consumer electronics.

Chipmakers including Texas Instruments Inc and STMicroelectronics offered disappointing forecasts this week, hammering tech sector shares and roiling global stock markets.

“Tough times are ahead until roughly the first half of next year, but we will have a clearer picture early next year when chipmakers lay out their investment plans,” said Lee Wang-jin, analyst at Taurus Investment and Securities.

Average prices of NAND flash memory chips, used in smartphones and memory cards to store data, are down sharply to levels seen in early 2016, and expected to continue to slide until the first quarter of 2019, SK Hynix said.

It expected DRAM price increases would slow through the first quarter of next year and then remain flat or rebound afterwards. DRAM memory chips are used in servers, gaming PCs and cryptocurrency mining devices to process large amounts of data.

SK Hynix said its July-September operating profit rose 73 percent to a record 6.5 trillion won, beating a 6.3 trillion won average forecast from 19 analysts, according to Refinitiv data.

Sales rose 41 percent to a record high of 11.4 trillion won compared to the same period a year ago.

Reporting by Ju-min Park and Heekyong Yang; Writing by Miyoung Kim; Editing by Stephen Coates and Muralikumar Anantharaman

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