Beware of Pranksters Crashing Apple iPhones Using Twitter

If you’re an Apple iPhone user who also enjoys Twitter, listen up.

Pranksters on the social media service have been sharing a character from the Indian Telugu language that causes iPhones to crash, according to Mashable. The offending users have been putting the character into their Twitter usernames and tweets and encouraging people to share them with their friends. If the character lands in a user’s Twitter feed, it will cause the social app to crash. The app will continue to crash after users try to boot it back up, ultimately stopping victims from accessing the service on their iPhones.

Last week, reports surfaced saying that a single Telugu character was enough to wreak havoc on iPhones. When the character is sent via any messaging or social networking app, the affected user’s app will crash. While it’s an obscure bug that only affects Apple’s iOS 11, it’s one that pranksters and those trying to cause harm are exploiting across the Internet. Worst of all, there’s no fix at the moment and unsuspecting victims needn’t do anything to be affected.

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Apple acknowledged the Telugu bug last week and has promised a fix. The company hasn’t yet delivered, though, and it’s impossible to say when it’ll be released.

According to Mashable, which tested the bug on Twitter, the only way for affected users to regain access to the app is to log in via Safari and block the person that shared the character. At that point, the character won’t show up in their feeds and Twitter will be accessible.

Here's Why You Shouldn't Pay $1.10 For A Dollar Of Investment Grade Bond Assets

I’ve received questions from prospective subscribers about the types of trade alerts that we issue to the members section of the Cambridge Income Laboratory. One type of trade is CEF arbitrage, or more specifically a pairs trade, where we simultaneously identify an overvalued CEF and an undervalued CEF in the same sector. The strategy then entails selling or selling short the overvalued fund while simultaneously buying the undervalued fund.

The advantage of a CEF pairs trade is that because both the sold and bought funds are from the same sector, we aren’t making a directional bet on the performance on the underlying assets. Instead, we’re simply relying on the powerful concept of reversion of CEF premium/discount values (see Reflections On Chemist’s CEF Report Pick Performance In 2017 for how this has worked well for us in the Chemist’s monthly CEF picks).

There are two main limitations of the CEF arbitrage strategy. The first is that the magnitude of the gains are unlikely to be very large, simply because it is by nature a hedged strategy. That’s the trade-off for the strategy being relatively low risk. The second limitation is that unless you already own the overvalued CEF identified in the pairs trade, you would have to locate shares of the overvalued CEF to sell short. With some of the smaller, less liquid CEFs, this can range from expensive to downright impossible. The most optimal set-up is therefore already owning the overvalued CEF, and then locking in profits by selling the fund and then replacing it with the undervalued CEF in the same sector.

With the introductory blurb out of the way, let’s see how this has played out for one of the more recent CEF pairs trade that we identified in the members section of the Cambridge Income Laboratory.

About 4.5 months ago (see Sell This Investment Grade Income CEF Now), we noticed the premium of Western Asset Income Fund (PAI), an investment grade bond CEF, suddenly spiking up to +10.16%. The 1-year z-score was +3.6, indicating that this fund was significantly more expensive than its recent history. My comments from the initial article are reproduced below:

I was looking through the CEF database today and noticed the Western Asset Income Fund (PAI) trading at an exceptionally high z-score of +3.6.

Its current premium of +10.16% is at a 5-year high.

(Source: CEFConnect)

A 1-year z-score of +3.6 tells us that the premium/discount is trading 3.6 standard deviations above its 1-year historical value. Statistically speaking, this would be a 0.02% probability of occurrence, assuming that the distribution of values is normally distributed (which it isn’t, but the point is that such a high z-score is a rare occurrence).

The 5-year chart above showed that the fund traded at quite substantial discounts over the past 5 years, sometimes exceeding even -10%. This makes the current premium of +10.16% even more unusual than the 1-year z-score of +3.6 would indicate.

At this juncture, I wanted to look at the entire history of the CEF since inception. Perhaps the past 5 years was just an anomaly, and that the CEF has commanded a consistent premium in the past? It turns out that was not so.

Going back to inception, only during a brief period in 2009 did the fund’s premium exceed 10%. An unusually high premium for an investment grade fund might be understood during the immediate recovery period after the financial crisis…but why now? I can’t think of a fundamental reason why someone would pay $1.10 for a dollar of investment grade debt.

(Source: CEFConnect)

I then check out the premium/discount values of the peer group. Maybe investment grade bond CEFs are for some reason on a tear thus accounting for PAI’s unusual premium? Nope, that’s not it.

The premium of PAI is 3rd-highest out of the 15 CEFs in the “investment grade” category of CEFConnect. But I don’t consider PIMCO Corporate & Income Strategy Fund (PCN) and PIMCO Corporate & Income Opportunity Fund (PTY) to be traditional investment grade income CEFs, so not counting those two funds PAI has the highest premium in the peer group.

(Source: Stanford Chemist, CEFConnect)

OK, so PAI is a pretty good sell or short candidate. What did I pair my short PAI position with?

What did I pair my short PAI position with? I chose the BlackRock Credit Allocation Income Trust (BTZ). I wanted to choose a fund with a negative z-score, but rather amazingly all 15 investment grade CEFs had z-scores 0 or greater. BTZ’s z-score of +0.8 wasn’t the lowest, but its discount of -9.04% was the widest in the peer group, as you can see from the chart above.

Next, I wanted to see compare the price and NAV returns of these two investment grade bond CEFs to check if there were signs of deteriorating portfolio values in the undervalued CEF, which might cause me to consider BTZ as the long partner in this pairs trade.

The opportunity for the pairs trade comes from the fact that PAI’s price return is significantly outpacing its NAV return, whereas that is not the case with BTZ. We can see from the chart below that PAI appears to be blowing BTZ out of the paper with a +19.29% YTD return compared to only +8.94% for BTZ.

Chart

However, their YTD NAV returns are nearly identical.

Chart

No warning signs there. That leads me to the conclusion that:

In summary, if you own PAI, now would be a great time to sell!

Let’s see how the thesis played out 4.5 months later. BTZ had a total return loss of -3.88% over this time frame. That’s bad, of course, but still relatively much better than PAI’s loss of -14.1% over the same period. In other words, BTZ outperformed PAI by 10.22 percentage points in only 4.5 months, or about 27% annualized.

Did PAI’s portfolio do much worse than BTZ’s? No, and in fact the reverse was true. PAI’s net asset value [NAV] fell by -2.10% over this time period, but BTZ’s was even worse at -3.24%.

If BTZ’s portfolio did worse than PAI’s, why was its total return (much) better? My regular readers will have already guessed at the answer: premium/discount mean reversion! Over the last 4.5 months, PAI’s premium of +10.16% has sank to a discount of -4.82%, while BTZ’s discount of -9.04% has widened slightly, to -11.9%. Therefore, the majority of the outperformance of the long BTZ/short PAI pairs trade was due to the contraction of PAI’s discount.

Chart
PAI Discount or Premium to NAV data by YCharts

Summary

This article hopefully conveys our thought process in recommending a pairs trade to our members. Anyone who owned PAI and swapped to BTZ to would have profited to the tune of ~10% in only 4.5 months (~27% annualized), which is equivalent to about 2.5 years worth of distributions from PAI!

Note that I did not need to do a deep dive analysis of either PAI or BTZ to initiate this pairs trade. This was based almost entirely on premium/discount mean reversion, or as my fellow SA author Arbitrage Trader likes to say, “simple statistics”.

Taking stock of the situation today, the long BTZ/short PAI trade has to be considered to be largely completed, as PAI is now trading with a discount of -4.82% and a 1-year z-score of -1.5, indicating that is now cheaper than its historical average. Although BTZ’s z-score of -2.5 is even lower, as is its discount (-11.9%), the gap in valuation is no longer there.

Are there any current opportunities? The following table shows the 12 CEFs in the database that currently have z-scores greater or equal to +2.5. If you own ones of these funds, if might be a good idea to seek out another fund in the same category that is trading with a more attractive valuation, particularly if the fund that you own is also trading at a premium. Don’t let mean reversion catch you out!

Name Ticker Yield Discount z-score
MS Income Securities (ICB) 2.71% -1.47% 3.9
BlackRock Science and Technolo (BST) 5.32% 3.05% 3.2
Tortoise MLP Fund (NTG) 8.61% 9.26% 3.2
ClearBridge Energy MLP (CEM) 8.85% 5.53% 3.1
Gabelli Utility Trust (GUT) 8.50% 44.95% 3.1
Templeton Emerging Mkts Income (TEI) 3.79% -8.17% 3.1
Sprott Focus Trust (FUND) 4.97% -8.86% 3.0
Nuveen S&P Dynamic Overwrite (SPXX) 5.58% 9.54% 2.9
RiverNorth Opportunities Fund (RIV) 12.09% 6.83% 2.7
Deutsche High Income Oppos (DHG) 5.42% -0.60% 2.6
First Trust New Opps MLP & En (FPL) 10.52% 6.67% 2.5

Western/Claymore Infl-Lnk Opps

(WIW) 3.79% -9.71% 2.5

(Source: CEFConnect, Stanford Chemist)

We’re currently offering a limited time only free trial for the Cambridge Income Laboratory. Prices are going up on March 1, 2018, so please join us and lock in a lower rate for life by clicking on the following link: Cambridge Income Laboratory.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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 long the portfolio securities.

Washington, D.C., Has Given the Boring Company a Permit for a Possible Hyperloop Station

Washington, D.C., has issued a permit allowing Elon Musk’s Boring Company to do preparatory and excavation work in what is now a parking lot north of the National Mall. The company says the site could become a Hyperloop station.

The permit, reported Friday by the Washington Post, was issued way back on November 29th of 2017. The permit is part of an exploratory push by the city’s Department of Transportation, which according to a spokesperson is examining the feasibility of digging a Hyperloop network under the city. The Hyperloop is an as-yet theoretical proposal to use depressurized tubes and magnet-levitated pods to move passengers at very high speeds.

A Boring Company spokesperson told the Post that “a New York Avenue location, if constructed, could become a station” in an underground transportation network. The Boring Company last year showcased the possibility of moving cars underground on mag-lev sleds, though that concept wasn’t quite a version of the Hyperloop proper.

The increasing prominence of Musk’s own Boring Company in pushing for Hyperloop construction is a notable reversal of the entrepreneur’s initial plans for the concept. When he unveiled a paper describing the idea in 2013, Musk said he wouldn’t be directly involved with building it. That led several independent startups, including Hyperloop One and Hyperloop Transportation Technologies, to take up the cause.

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But last summer, Musk started touting tentative Hyperloop partnerships between the Boring Company and governments in the Northeast U.S. A few weeks before the D.C. permit was issued, Maryland issued a permit for the Boring Company to build a 10.3-mile tunnel on a route between Baltimore and D.C.

Other Hyperloop projects have made headway in Europe and the American midwest, presenting the possibility of multiple regional Hyperloop systems operated by different companies.

The Hyperloop concept as a whole, though, has come under renewed scrutiny lately. It’s unclear how such a huge project would be paid for — selling Boring Company flamethrowers is unlikely to cover the bill. More fundamentally, urban planners have argued that the Hyperloop, which would use small pods to carry a few riders at a time, can’t scale sufficiently to really address urban transportation needs. Musk, in an unusual fit of pique, recently replied to one such criticism by calling its author an ‘idiot.’

Can Machines Save Us From the the Machines?

Is it just me or is the cyber landscape getting more scary? Even as companies and consumers get better at playing defense, a host of new cyber threats is at our doorsteps—and it’s unclear if anyone can keep them out.

My doom-and-gloom stems from the dire predictions of Aviv Ovadya, the technologist who predicted the fake news epidemic, and now fears an “information apocalypse” as the trolls turbo-charge their efforts with AI. He points to the impending arrival of “laser phishing” in which bots will perfectly impersonate people we know by scraping publicly available images and social media data. The result could be the complete demolition of an already-crumbling distinction between fact and fiction.

Meanwhile, the phenomenon of crypto-jacking—in which hackers hijack your computer to mine digital currency—has quickly morphed from a novelty to a big league threat. Last week, for instance, hackers used browser plug-ins to install malignant mining tools on a wide range of court and government websites, which in turn caused site visitors to become part of the mining effort.

The use of browser plug-ins to launch such attacks is part of a familiar strategy by hackers—treating third parties (in this case the plug-ins) as the weakest link in the security chain, and exploiting them. Recall, for instance, how hackers didn’t attack Target’s computer systems directly, but instead wormed their way in through a third party payment provider. The browser-based attacks feel more troubling, though, because they take place right on our home computers.

All of this raises the question of how we’re supposed to defend ourselves against this next generation of threats. One option is to cross our fingers that new technologies—perhaps Microsoft’s blockchain-based ID systems—will help defeat phishing and secure our browsers. But it’s also hard, in an age when our machines have run amok, to believe more machines are the answer.

For a different approach, I suggest putting down your screen for a day and picking up How to Fix the Future. It’s a new book by Andrew Keen, a deep thinker on Silicon Valley culture, that proposes reconstructing our whole approach to the Internet by putting humans back at the center of our technology. Featuring a lot of smart observations by Betaworks founder John Borthwick, the book could help us fight off Ovadya’s information apocalypse.

Have a great weekend.

Jeff John Roberts

@jeffjohnroberts

[email protected]

Welcome to the Cyber Saturday edition of Data Sheet, Fortune’s daily tech newsletter. You may reach Robert Hackett via Twitter, Cryptocat, Jabber (see OTR fingerprint on my about.me), PGP encrypted email (see public key on my Keybase.io), Wickr, Signal, or however you (securely) prefer. Feedback welcome.

The Google Chrome Ad Blocker Has Already Changed the Web

You might see fewer ads on the web from now on. But you probably won’t.

On Thursday, Google Chrome, the most popular browser by a wide margin, began rolling out a feature that will block ads on sites that engage in particularly annoying behavior, such as automatically playing sound, or displaying ads that can’t be dismissed until a certain amount of time has passed. Google is essentially blacklisting sites that violate specific guidelines, and then trying to filter all ads that appear on those sites, not just the particularly annoying ones.

Despite the advance hype, the number of sites Chrome will actually block ads on turns out to be quite small. Of the 100,000 most popular sites in North America and Europe, fewer than one percent violate the guidelines Google uses to decide whether to filter ads on a site, a Google spokesperson tells WIRED.

But even if Chrome never blocks ads on a page you visit, Google’s move has already affected the web. The company notified sites in advance that they would be subject to the filtering, and 42 percent made preemptive changes, the spokesperson says, including Forbes, Los Angeles Times, Chicago Tribune, and In Touch Weekly.

It may seem strange that Google, which still makes most of its revenue from advertising, blocks ads at all, especially since the company says it will even block those served by its own ad networks. But Google hopes ridding the web of its very worst ads might discourage Chrome users from installing more aggressive ad-blocking software that saps revenue universally.

A survey published by the industry group Interactive Advertising Bureau in 2016 found that about 26 percent of web users had installed ad-blockers on their computers, and about 15 percent had ad-blockers on their smartphones. Respondents gave a variety of reasons for blocking ads, including privacy concerns, page load times, and visual clutter.

The new Chrome ad-filtering feature doesn’t directly address privacy or page speed. Instead, it focuses only on blocking ads that violate guidelines published by the Coalition for Better Advertising, a group that includes advertising companies, publishers, and tech companies (WIRED’s publisher, Condé Nast, belongs to coalition member Digital Content Next). The group surveyed 25,000 users in North America and Europe to find out what ads they find most annoying, and used the results to craft a set of guidelines called the Better Ads Standards.

The guidelines identify four specific types of desktop ads and eight types of mobile ads that users find unacceptable, including ads that take up too much screen space, play audio automatically, and obscure the content users are trying to view.

Google has been reviewing the most popular sites in North America and the EU for violations of those standards. “We use a combination of manual and automated methods to review sites,” the Google spokesperson tells WIRED. “Every review is captured in video which is surfaced in the Ad Experience Report.”

The company notifies sites that are in violation of the guidelines before blocking them. Sites have 30 days to resolve the advertising issues Google highlights. If a site doesn’t resolve the issues, Chrome will attempt to filter all ads on those pages. Users will see a brief notification that ads have been blocked on a page. On desktop versions of Chrome, this will look a bit like pop-up blocking notifications, while on mobile it will look more like, well, a pop-up ad.

Chrome joins Apple’s Safari in offering limited ad-blocking features without the need to install third-party apps or plugins. Last year, Apple stepped up a feature of Safari that blocks third-parties from tracking what you do online, and added an option to Safari that allows users to view a stripped down, ad-free “reader view” of webpages by default.

Michael Priem, CEO of the Minneapolis-based advertising firm Modern Impact that works with companies like Samsung and Best Buy, says his clients worry about the impact these changes will have on their ability to reach consumers. But he says companies generally understand that bad advertising practices have a negative impact on their brands. “As long as you’re practicing respect for our audience, you’re OK,” he says.

The big question is how much Google’s moves will actually discourage people from using more aggressive ad-blockers. Yes, it’s already motivated a few sites to make some changes, and others will likely follow. Given that Chrome is used by about 56 percent of web users, according to StatCounter, being filtered could amount to a massive drop in ad revenue for sites that don’t preemptively clean house. But it’s unclear whether disappearing only the most annoying one percent of ads on the web will stop people from installing ad-blockers—let alone win back people who already use them—if other irritating practices continue, and users still worry about privacy and security.

Major web browsers have long blocked ads that open new browser windows. The end of those “pop-up” and “pop-under” ads was a blessing. But it didn’t stop new forms of aggravating ads from proliferating. Getting rid of talking ads and countdowns would be great. Truly cleaning up the advertising ecosystem will take time.

Ad It Up

'Black Panther' Review: All That a Superhero Movie Can Be, and More

What should a superhero movie be? What can it be? With Black Panther, we finally have an answer worthy of our time.

In the last decade alone—where the promise of progress in Hollywood read first as fantasy, then as farce—America’s cathedral of heroes offered little access to depictions that fell outside the mechanisms of the industry. Batman and Iron Man, billionaires. Thor, a Norse god. Spider-Man, a youthful prodigy. Captain America, a World War II recruit, became the literal manifestation of national courage and hope.

Black superheroes were never afforded the same deification. During the tail end of black cinema’s golden age, Wesley Snipes’ early-aughts Blade trilogy flirted with pop immortality, but even that character’s legend faded across the years. I sometimes wondered if black superheroes were ever meant to endure in the mainstream, the truth of America being what it is, or if the recurring image of black valor was too much of an irritant to the illusion Hollywood needed to project, to protect.

As you can imagine, what emerges in the opening tints of Black Panther sets the stage for no ordinary undertaking. Here, the past and present are linked by a shared future. Writer-director Ryan Coogler, raised as he was in Northern California, stays close to home, dropping us in the murk of 1992 Oakland. The occasion—death.

We are first introduced to Prince N’Jobu (played pristinely by Sterling K. Brown), a Wakandan spy who is secretly selling vibranium—the meteoric ore native to Wakanda that is the life source to the nation’s technological prosperity—to Ulysses Klaue, a rogue black market dealer. When N’Jobu’s misdeeds are unearthed, King T’Chaka, his brother, is forced to confront him. Their meeting ends fatally, and the king must bear the weight of his secret: that it was he who murdered his brother to save the life of Zuri (Forest Whitaker), his trusted advisor. And though we don’t know it yet, this is the film’s heart, the moment every subsequent action will flow through.

The ensuing story splits along dueling ideologies. It picks up where Captain America: Civil War drew to a close, with T’Challa (Chadwick Boseman) assuming control of his country’s fate in the wake of his father’s death. For decades, Wakanda’s utopian spirit has thrived under the cloak of East Africa’s ethereal beauty, believing that if world powers discovered its technological and scientific ingenuity, the country would risk constant threat. Old-guard preservationists—among them, T’Challa’s mother Ramonda (Angela Bassett) and Okoye (Danai Gurira), head of the king’s women-only security unit, Dora Milaje—believe the country must continue as it has for centuries, solely nurturing its own people. Others, like W’Kabi (Daniel Kaluuya) and Nakia (Lupita Nyong’o), confidants to T’Challa, subscribe to a more pan-Africanist worldview, believing that Wakandans have a great duty to aid the less fortunate—be they refugees, poor kids in the US, or activists caught in the tempest of protest against unjust state influence. The time comes when Wakanda can remain immune no longer, realizing that it too must yield to the cry of a changing world.

A specter of change arrives in the form of Erik “Killmonger” Stevens (a villainous, power-drunk Michael B. Jordan); he’s a former Black Ops mercenary fueled by blood and vengeance for the death of this father, Prince N’Jobu. His price is T’Challa’s throne and sovereignty over the nation. Killmonger, who finds an ally in W’Kabi, believes Wakanda must position itself as a global wellspring by equipping marginalized factions with its cutting-edge weaponry—a move he’s sure will liberate the country from the shadows and into an international superpower. Coogler and Joe Robert Cole, who co-wrote the script, turn an age-old narrative on its head via Killmonger’s revisionist fury: The colonized as the colonizers.

Lines are drawn, and what transpires is a film of beauty, backbone, and startling discipline. Technically lush, Black Panther infuses itself with diasporic hybridity: Wakandan dress, architecture, and dialect pull from Mali, Nigeria, Kenya, Ethiopia, and Tanzania. Rachel Morrison, the Academy Award-nominated cinematographer attached to the film, delivers shots full of color and pure awe. When T’Challa travels to the ancestral plain to seek advice from his father, its gaping purple skies extend into the theater, as if we are on this dreamlike quest too. As Marvel films go, Black Panther is rife with franchise touchstones: thrilling action scenes—the most daring of which begins in an underground South Korean casino and rockets into a car chase through the frenzied streets of Busan—are undercut with moments of human spirit and levity (Letitia Wright’s Shuri and Winton Duke’s M’Baku offer up well-timed blushes of humor).

Coogler and T’Challa chart a parallel path here, seeking answers to the same question: who are you ultimately responsible to, your people or the people of the world? For his part, Coogler does due diligence by injecting the film with nods to black culture beyond the backdrop of Wakanda and the traditions of its people. I especially loved the moment when Jordan’s Killmonger, revealed to be of royal blood, calls Bassett’s Ramonda “auntie” with a razor-thin smirk. Or when Shuri jokes with T’Challa about the time-honored footwear he wore to impress tribal leaders, laying into him with, “What are thooose?!?!”

Even free of such context, Black Panther is an unmistakable triumph. Delivered through Coogler’s judicious eye, its existence alone generates a counter-history in film and mass media—first by scraping whiteness from its narrative core, then by making black people and black self-determination the default.

The 31-year-old writer-director has redefined the possibility of a superhero epic, a credit to his singular vision and belief that black stories matter, and that they imbue relevance on the big screen no matter what narrative shape they take. He proved that with Fruitvale Station, his breakout 2013 film about the killing of Oscar Grant, and again with Creed, the 2015 boxing flick that mined the importance of legacy and family.

Black Panther will manifest as a movement bigger than this moment. It’s more than historic pre-sale records, or box-office predictions. The collective hype that’s followed the film since inception has been absolutely volcanic, like nothing I’ve witnessed before.

It’s not that our need for black superheroes has shifted. Films like The Meteor Man and Steel may not have been commercially vibrant, but their stories and their images remain vital to black communities as what one friend described as “arbiters of hope and virtue in ways that transcend the limitations of our everyday, colonized lives.” Another friend who I spoke to this week shared a comparable sentiment: “we need black superheroes to remind ourselves that inventing yourself is not only possible, but necessary for survival.” I cite them because Black Panther, Coogler’s pièce de résistance, has been a reflection of shared hopes in creative industries where black identity is either undervalued or co-opted for empty laughs. These worlds, these august narratives, have always been viable to us.

So, what can a superhero movie be? It can be truth and fire and love. If we’re lucky, it is all of those things, perhaps more. It’s no mistake that Black Panther overflows with them.

All Hail King T’Challa

Number of crypto hedge funds doubles in four months: Autonomous NEXT data

LONDON (Reuters) – Hedge funds focused on trading cryptocurrencies more than doubled in the four months to Feb. 15, hitting a record high of 226, showed new data from fintech research house Autonomous NEXT on Thursday.

The firm had recorded just 110 global hedge funds with a similar strategy as of Oct. 18, up from 55 funds at Aug. 29 and just 37 at the start of 2017.

Assets under management hit between $3.5 and $5 billion, according to the firm.

Reporting by Maiya Keidan and Jemima Kelly

2 Big Misconceptions About Work-Life Balance That Will Get In Your Way Of Achieving It

I run a small business. I’m also a writer who is married raising four kids of various ages ranging from baby and toddler to teenager and young adult. In it’s most cartoon-like moments, I feel like I’m part of a three-ring circus with everything I’m trying to manage in work and life. Even in the less crazy times, it is still a daily work-life balance challenge.

For the last year, I’ve been trying to get a handle on all of this work-life balance stuff, which has put me on a search for the “holy grail” of sorts of work-life balance.

In that journey, I’ve done a lot of things that have helped a lot. I’ve learned how to create a realistic vision of what I really want my work-life balance to look like. I’ve learned how to define boundaries better, in particular as it pertains to my cell phone. I’ve even learned to prioritize better in both work and life and build in time for a daily regenerative activity.

I’ve also come to realize that some of the problems many of us have with trying to get work-life balance might be coming from a misconceived notion of what it is. That was certainly the case for me.

Here are the two biggest misconceptions I had about work-life balance that stood in my way until I changed my thinking about them.

1. Better work-life balance = more fun

I have to admit that I went into my search for work-life balance with a belief that it was just about trying to put more fun back into my life. Maybe I was just a hopelessly busy entrepreneur and dad who was looking for more vacations, more relaxing at the beach, more sleeping in, and more of all of that kind of stuff.

As I got more into trying to really figure out my work-life balance problem, I realized that whereas most of us that are entrepreneurs and parents certainly would like more of all of those fun and relaxing things, getting work-life balance wasn’t just about that. I started to call this the “Carnival Cruise” version of work-life balance, and I found that many people I talked with about work-life balance had a similar version of it.

As I started to really get into the nuts and bolts of putting together my work-life plan – and allocating real hours and real time to real things on both sides of the work-life equation – I realized that getting true work-life balance might not mean doing all of the fun things but instead was about having the right amount of time to put into the most important things both at work and at home. 

Sometimes these things were not fun at all but were incredibly meaningful and important.

Once I got my work-life balance right, I thought about the fact that I now had the time to spend with our teenager during some crisis times. I now had the time to spend with our two-year old son as he worked through a speech challenge.

Neither of these things would fall into the category of beach relaxation or the world’s best vacations, but I had created work-life balance to allow me to do those things. And that’s what work-life balance might really be about.

2. Work-life balance does not always mean a 50:50 split between work and life activities

Maybe I was being a bit literal, but seemingly every visual depiction of work-life balance (including the one for this article) showed a scale with equal amounts of things on each side of the work-life see-saw.

This kind of made me feel like it had to be a 50:50 split in terms of how much went to each side. What I started to realize on my own journey was that very rarely is it ever 50:50. Maybe more importantly, it is perfectly fine if it isn’t.

For me at this point in my life, my work-life balance scale is skewed to about 65:35 on the “life” side of the equation. If I looked at a scale, that could appear like imbalance and make me feel like I hadn’t succeeded in getting balance. But in reality, it is perfectly balanced for my current wants and needs.

Until I came to terms with this, I kept feeling like I had to eliminate certain elements of the life side of my equation to get it to a perfect 50:50 balance.

If you are on the quest for your own holy grail of work-life balance, try thinking about these two misconceptions and applying different thinking about them to your own situation. I know that I got stuck halfway down the road until I figured them out myself.

The No. 1 Reason Entrepreneurs Fail to Achieve Their Goals

We are officially mid-way through first quarter, 2018. How are you doing on the goals you set at the first of the year?

I can say with a reasonable amount of certainty that the average small business owner won’t complete their goals list, not even by fourth quarter. Why? Because they’re not addressing this goal-crushing problem: an environment that doesn’t support their growth.

You can’t possibly expect more of yourself if you don’t change the environment that consistently prevents you from acting on your growth plans. Things like interruptions, client demands, employee issues, and spending time in the small details may come to mind. Sure, these problems will only continue to block your growth if you don’t address them, but the real problem isn’t around you, it’s inside of you.

While the above examples may exist in your external environment, and they are a problem, it’s also very important to consider your internal environment. What about self-doubt, fear of failure, and belief systems like there’s never enough money. The truth is, money and time blocks are usually more significant in the mind than in reality. There is almost always a work-around for lack of funds and a tight schedule, but entrepreneurs fail to see it. As you address these bigger issues, solutions to the common problems will surface.

Ask this question first. 

As my clients form new goals I ask them this question: “Can you list ten things that may get in the way of achieving this goal?” Usually there aren’t ten things, but it forces them to dig deep. Typically, it’s not until number seven or eight that they reach the golden nugget: the real problem is within them, not outside of them.

Can you list ten things? Name a goal and ask yourself why you haven’t moved the needle on it. Be honest with yourself. Look at the problems on the outside, as well as the inside. If you examine your deeper thoughts, you’ll most likely become aware of the limiting beliefs that contribute to all of the other issues. Beliefs like, no one else can do these things for me, or, I have to be available to my customers and employees round the clock. Neither of which are true.

We unconsciously create excuses such as these because something deeper and more significant is in the way and we don’t know it–or don’t want to admit it. The bigger issue is usually rooted in fear. From fearing failure to lack of self-worth and not believing in one’s self.  What are the odds of getting what you want if you continue to buy into your excuses, or worse–if deep down inside, you don’t believe in yourself?  

This is not an easy exercise to do on your own, so you may wish to work with a coach or design a support system of peers with whom you have a foundation of trust.  As you unearth your blocks, don’t get down on yourself. It’s an exciting time because now you can address them, at last. Eliminating what I call the root cause of your problem will change everything.

But how?

Sometimes, the mere recognition of the problem will push an entrepreneur into action. However, most often it takes a fair amount of work to change and there’s no shame in that. Consider how long the beliefs or fears you’ve listed have been in existence. Five years? A lifetime? How can you expect to change things overnight?

The first thing to abolish is any belief that you can do it alone. Asking for help does not make you weak, it makes you human–and very smart. The most brilliant entrepreneurs surround themselves with advisors, mentors, and coaches.

Name one big step toward changing your belief system that you can take today. A commitment to journaling every day, hiring a coach, or simply taking small steps in spite of your inner beliefs and fears. Base your most immediate goals on changing how you think, rather than business-focused results. Once you do this, there will be no stopping you from building your ideal business.

​The most popular Linux desktop programs are…

Video: Barcelona: Bye Microsoft, hola Linux

LinuxQuestions, one of the largest internet Linux groups with 550,000 members, has just posted the results from its latest survey of desktop Linux users. With approximately 10,000 voters in the survey, the desktop Linux distribution pick was: Ubuntu.

While Ubuntu has long a been popular Linux distro, it hasn’t been flying as high as it once was. Now it seems to be gathering more fans again. For years, people never warmed up to Ubuntu’s default Unity desktop. Then, in April 2017, Ubuntu returned to GNOME for its default desktop. It appears this move has brought back some old friends and added some new ones.

An experienced Linux user who voted for it said, “I had to pick Ubuntu over my oldest favorite, Fedora. [That’s] Simply based on how quick and easy I can get Ubuntu set up after a clean install, so easy with the way they have it set up these days.”

Right behind Ubuntu was Linux Mint. Mint is a favorite for users who want an easy-to-use Linux desktop — or for users who want to switch over from Windows.

http://www.zdnet.com/article/the-most-popular-linux-desktop-programs-are/, followed closely by antiX. With either of these, you can run a high-quality Linux on PCs powered by processors as old as 1999’s Pentium III.

In the always hotly-contested Linux desktop environment survey, the winner was the KDE Plasma Desktop. It was followed by the popular lightweight Xfce, Cinnamon, and GNOME.

If you want to buy a computer with pre-installed Linux, the Linux Questions crew’s favorite vendor by far was System76. Numerous other computer companies offer Linux on their PCs. These include both big names like Dell and dedicated small Linux shops such as ZaReason, Penguin Computing, and Emperor Linux.

Many first choices weren’t too surprising. For example, Linux users have long stayed loyal to the Firefox web browser, and they’re still big fans. Firefox beat out Google Chrome by a five-to-one margin. And, as always, the VLC media player is far more popular than any other Linux media player.

For email clients, Mozilla Thunderbird remains on top. That’s a bit surprising given how Thunderbird’s development has been stuck in neutral for some time now.

When it comes to text editors, I was pleased to see vim — my personal favorite — win out over its perpetual rival, Emacs. In fact, nano and Kate both came ahead of Emacs.

There was, however, one big surprise. For the best video messaging application the winner was… Microsoft Skype. Now, Skype’s been available on Linux for almost a decade, and recently, Canonical made it easier than ever to install Skype on Linux. But, still, Skype on Linux?

Jeremy Garcia, founder of LinuxQuestions, thought the result might have come about because: “Video Messaging Application was a new category this year and participation was extremely low. Additionally, Secure Messaging Application was broken out into a separate category that had higher participation and resulted in a tie between Signal and Telegram.”

Of course, it’s also possible that even passionate Linux people can like a Microsoft product. After all, Microsoft now supports multiple Linux distributions on its Azure cloud.

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Exclusive: Amazon paid $90 million for camera maker's chip technology – sources

SAN FRANCISCO (Reuters) – Amazon.com Inc (AMZN.O) paid about $90 million to acquire the maker of Blink home security cameras late last year, in a secret bet on the startup’s energy-efficient chips, people familiar with the matter told Reuters.

The deal’s rationale and price tag, previously unreported, underscore how Amazon aims to do more than sell another popular camera, as analysts had thought. The online retailer is exploring chips exclusive to Blink that could lower production costs and lengthen the battery life of other gadgets, starting with Amazon’s Cloud Cam and potentially extending to its family of Echo speakers, one of the people said.

Amazon views its in-house devices as key to deepening its relationship with shoppers. The Cloud Cam and Echo currently need a plug-in power source to operate. Blink, which says its cameras can last two years on a single pair of AA lithium batteries, could change that.

Amazon declined to comment on the acquisition’s terms or strategy.

The deal so far has drawn little attention. The camera maker announced its takeover by Amazon with scant details in a Dec. 21 blog post. Analysts have viewed Blink as part of the retailer’s strategy for Amazon Key, a new program where shoppers can set up a smart lock and surveillance camera so delivery personnel can slip packages inside their homes when they are away. Amazon also sees opportunity in the security camera market as smart-home technology expands.

But Blink was not merely a camera business. Its little-known owner, Immedia Semiconductor, was started in Massachusetts by old hands from the chip industry. Chief Executive Peter Besen and two of his co-founders came from Sand Video, which had designed chips in the early 2000s that decoded a new and improved video standard.

In 2004 they sold Sand Video to Broadcom Ltd (AVGO.O) and remained there as executives, according to an Immedia website. The group left in 2008 to create Immedia, aiming to design chips for video conferencing, and later targeting laptop makers as potential customers.

Dan Grunberg, a co-founder who left Immedia in 2016, said that plan fell through. Laptop makers were unwilling to pay $1 per chip when cheaper options were on the market. So Immedia pivoted.

“If we make our own camera, we don’t have to sell a hundred million” chips, he said. Grunberg declined to discuss Immedia’s sale to Amazon.

The Blink security camera, which hit the market in 2016, did not require a power cable like many rival products, making it easier to place around users’ properties. It was cheaper, too, starting at $99. Amazon’s wired Cloud Cam launched at $119.99, while Netgear Inc’s (NTGR.O) wire-free Arlo cost more still. Netgear said last week it plans to spin off its Arlo business.

“Battery life is a big issue in connected devices,” said Scott Jacobson, a former Amazon devices manager and now managing director of Madrona Venture Group. “Always-on cameras that last for months and don’t require a wired connection or an electrician to install could be game-changing.”

As Blink’s sales rose on Amazon’s website, the retailer took notice, sources said, leading to talks with the camera maker about a deal.

Flybridge Capital Partners, Comcast Ventures, Baker Capital, Dot Capital and some suppliers were investors in the company.

Amazon’s regulatory filings show it spent $78 million on acquisition activity in the quarter ended Dec. 31. Sources said the bid was competitive, and that compensation and incentives offered by Amazon pushed the deal’s value to about $90 million.

Madrona’s Jacobson, who had no knowledge of the acquisition’s details, speculated that Amazon might apply the Blink team’s expertise to cameras in drones or in its new checkout-free stores.

The chips could give Amazon other advantages, too.

The proprietary chip design will make it harder for rival retailers to copy Amazon’s devices, said Matt Crowley, chief executive of Vesper, a sensor and semiconductor company that makes microphones.

And now that Amazon owns its own chips, it can go straight to the manufacturers, cutting out middlemen chip designers such as Ambarella Inc (AMBA.O), which has powered GoPro Inc (GPRO.O) products. Amazon has a division called Annapurna Labs that makes an unrelated kind of chip, and it was not clear which supplier it uses for chips that primarily process video.

“Vertical integration reduces cost,” Crowley said. Digital video chips “are one of the more expensive components” in a camera.

Reporting By Jeffrey Dastin in San Francisco; Additional reporting by Stephen Nellis and Liana Baker; Editing by Marla Dickerson

Dunkin' Donuts Has a Stunningly Simple New Trick So You'll Get Your Coffee Faster

In New England, people love their Dunkin’ Donuts.

Heck, I was in a Dunkin’ Donuts in Massachusetts once, and a guy showed me how you could actually see two other Dunkin’ Donuts from the parking lot of the first Dunkin’ Donuts.

But for all of Dunkin’ Donuts regional ties, the company has its sights set on world domination. And as corporate leaders explained this week, they’re using some surprising tricks–some of them so simple you’ll wonder why nobody else is doing them–in order to get there.

A lot of this comes down to how fast Dunkin’ Donuts can get a cup of coffee into your hands, so it can turn around put another cup of coffee in somebody else’s hands. (Maybe an egg sandwich, too.)

The more quickly they move you through, the more customers they can serve, and the more money they make. Basic math. 

So, they’ve got a couple of short, simple words for you: “drive-thru,” and “mobile app.” 

It’s all on display now at the company’s new “next generation concept store” in Massachusetts. Pull up to the drive-thru there, and you’ve got a choice of two lanes.

There’s the regular drive through, where cars line up, order, wait their turn, and pick up their coffee and food–pretty much like every other drive-thru lane in the world.

But, there’s also an “exclusive On-the-Go drive-thru lane,” as Dunkin’ Donuts calls it in a press release, that lets you skip ahead of all the other customers, and go right to the front of the line. Think of it as first class for coffee.

What do you have to do in order to fly first class at Dunks? Join their “DD Perks” rewards program, and place your order via your phone on the Dunkin’s Mobile App.

It’s a pretty simple concept, and if you’re from New England like me, it might even strike you as “wicked smart.”

Dunkin’ Donuts certainly isn’t the first restaurant to try to push people to order via an app–but they claim to be the first national restaurant to combine it with the drive-thru.

In retrospect, it’s almost obvious, given that industry wide, between 30 and 70 percent of customers reportedly use drive-thrus. (The wide range has a lot to do with individual restaurants’ focuses, and the times of the day that customers visit.)

Now, it will probably tick some people off in the short term, at least the first few times they show up and realize that they have to wait longer than other customers because they’re paying in cash or with a credit card.

A lot of them will convert, though, because if you grab a coffee on the way to work each day, and if using the “On-the-Go” lane saves you 90 seconds each time because you’re not stuck behind somebody else putting in their order–that could add up to six hours a year.

There are some other smaller changes being tested in the new “next generation store,” (which happens to be about a mile from the original Dunkin’ Donuts location from 1950). Among them: a tap system for cold beverages, electronic order kiosks, and greater energy efficiency.

They also want to convince you that Dunks is a place to visit in the afternoon, and open hundreds more stores outside of the northeast. And they’re getting rid of their foam cups.

But I’m going to put my money on the “mobile-preferred” drive-thru ordering experiment as the smartest, simplest innovation. 

There’s some history, too: This is the company whose lineage includes the entire concept of franchising restaurants in the United States–years before McDonald’s started doing it–and leveraged it to build Dunkin’ Donuts into a national name.

Oh, right. The name. I almost forgot. They’re dropping the “Donuts” part of it soon. They should just go with Dunks, since that’s what everyone calls them in New England anyway, but apparently they want to change to just “Dunkin’.”

Alibaba kicks off sponsor deal in Pyeongchang

PYEONGCHANG (Reuters) – Alibaba Group Holding Ltd (BABA.N) is launching a project that will create a “smarter” and more connected athletes’ village and stadia and make all Olympics stakeholders “more money”, its executives said on Saturday.

Many of Alibaba’s plans are still concepts since it has not had enough time to implement its technology after signing a deal last year worth hundreds of millions of dollars as a cloud and e-commerce partner with the International Olympic Committee.

But IOC president Thomas Bach said some of Alibaba’s plans “can become operational pretty soon” while Alibaba founder Jack Ma said they expected to be realized at the next Winter Games in Beijing in 2022.

“We want to make the Olympic Games so everyone can make more money,” Ma said, adding that “everyone” meant groups such as host cities’ organizing committees, athletes and sponsors.

Alibaba is one of the few top Olympics sponsors signed with the IOC until 2028.

It has said it wants to upgrade the technology that keeps the Games running.

It also unveiled its “sports brain,” on Saturday, a suite of software products designed to improve the back office of how sports events are run.

Ma, who appeared onstage with Bach, said he was moved by North Korea and South Korea marching together in the opening ceremony on Friday since it reflected “peace and prosperity”.

Former NBA player Yao Ming was in the audience at the media conference, which featured an interpretive dancer and a magician pulling a bird out of a hat.

Alibaba has about 200 to 300 employees on the ground in Pyeongchang to study how the games run and help find ways to save future host countries money.

Alibaba’s Tmall and Taobao shopping platforms dominate online retail in China. But it is not well known in many parts of the world, including in the United States where Amazon.com Inc is the e-commerce leader.

It is using an international branding campaign focused on the Olympics to help introduce it to markets such as the United States and Great Britain.

Editing by Greg Stutchbury

Nvidia's upbeat forecast powered by data center, cryptocurrency demand

(Reuters) – Nvidia Corp’s (NVDA.O) upbeat current-quarter revenue forecast on Thursday underscored surging demand for its graphics chips used in data centers, gaming devices and cryptocurrency mining, sending its shares up as much as 12 percent in extended trading.

The company, which also reported better-than-expected quarterly results, is reaping the benefits from the launch of its Volta chip architecture last year. Volta help build processors that power a range of technologies such as artificial intelligence and driverless cars.

“Virtually every internet and cloud service provider has embraced our Volta GPUs,” Nvidia’s Chief Executive Officer Jensen Huang said in a statement. (bit.ly/2iJPeNN)

Revenue from Nvidia’s widely watched data center business, which counts Amazon.com Inc’s (AMZN.O) Amazon Web Services and Microsoft Corp’s (MSFT.O) Azure cloud business among its customers, more than doubled to $606 million.

That trounced analysts’ average estimate of $541.1 million.

Data center should continue to grow pretty nicely into calendar 2018 and beyond, Morningstar analyst Abhinav Davuluri said.

The boom in cryptocurrencies is also powering demand for chips from Nvidia and rival AMD (AMD.O) as they provide the high computing ability required for cryptocurrency “mining.”

“Strong demand in the cryptocurrency market exceeded our expectations,” Chief Financial Officer Colette Kress said on a conference call.

“While the overall contribution of cryptocurrency to our business remains difficult to quantify, we believe it was a higher percentage of revenue than the prior quarter.”

The company said inventory levels of its gaming GPUs throughout the quarter was lower than historical channel inventory levels due to surging demand from cryptocurrency miners.

The price of Bitcoin, the most popular cryptocurrency, rose more than 1,300 percent in 2017. Prices have, however, dropped about 40 percent this year.

Nvidia’s revenue from gaming, for which it is best known, rose 29 percent to $1.74 billion, accounting for a more than half of its total revenue in the fourth quarter, and also beating analysts’ estimate of $1.59 billion.

The company forecast current-quarter revenue of $2.90 billion, plus or minus 2 percent, well above the analysts’ average estimate of $2.47 billion, according to Thomson Reuters I/B/E/S.

Net income rose to $1.12 billion, or $1.78 per share, in the fourth quarter ended Jan. 28 from $655 million, or 99 cents per share, a year earlier.

Results include a $133 million gain related to the new U.S. tax law.

Total revenue rose 34 percent to $2.91 billion, topping estimate of $2.69 billion.

Excluding items, the company said it earned $1.72 per share.

Nvidia earned $1.57 per share, excluding the tax benefit, according to Thomson Reuters I/B/E/S, beating estimate of $1.17.

The company’s shares were trading at $233 in extended trading. They have surged about 83 percent in the past 12 months.

Reporting by Arjun Panchadar and Supantha Mukherjee in Bengaluru; Editing by Anil D’Silva and Sriraj Kalluvila

Hackers Could Crack Millions of Samsung and Roku Smart TVs

Millions of so-called smart TVs have security vulnerabilities that hackers could exploit.

That’s according to Consumer Reports, which released results on Wednesday of a security review of certain smart TVs, the name given to Internet-connected televisions. They included models sold by Samsung as well as Chinese-TV maker TCL that use a particular feature by the streaming media device company Roku.

Although hackers are unable to steal sensitive data like credit card numbers through the security holes, they could use it to manipulate people’s televisions and play offensive videos, install unwanted apps, or suddenly scroll through channels.

“The process was crude, like someone using a remote control with their eyes closed,” Consumer Reports said. “But to a television viewer who didn’t know what was happening, it might feel creepy, as though an intruder were lurking nearby or spying on you through the set.”

The Consumer Reports study highlights the growing popularity of web-connected televisions that make it easy for people to watch streaming video services like Netflix on their TVs. But being connected online puts these televisions at risk of potential hacking if they have bugs that hackers can exploit.

In 2012, for example, security researchers showed that they could hack and gain control of certain Samsung Smart TVs, according to a report by tech news site Ars Technica.

Consumer Reports tested a TCL Smart TV that came installed with a version of Roku’s streaming media software that it said included a security bug. Other TV makers using Roku’s software include Hisense, Hitachi, Insignia, Philips, RCA, and Sharp, all of which could be affected in addition to some of Roku’s streaming media devices, the publication said.

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Roku’s streaming video software contains a so-called application programming interface, or API, that third-party developers can use to build their own smartphone apps that act like television remote controls. However, hackers could potentially exploit this API, which Consumer Reports said is “unsecured.”

To get hacked, people would have to be using their smartphones or personal computers on the same Wi-Fi network to which their Smart TVs are connected, and then visit a malicious website or download an app that contains software code that would let hackers take over, the report said.

Roku, however disputes Consumer Reports’ claims and said in a blog post that it presented a “mischaracterization of a feature.”

“There is no security risk to our customers’ accounts or the Roku platform with the use of this API,” Roku said, adding that customers could turn off this particular remote control feature.

Asked about a similar bug found in Samsung Smart TVs that doesn’t use Roku’s software, a Samsung spokesperson told Consumer Reports that it’s investigating the problem and that it would release software update this year that would presumably fix other related errors.

Snap Touts Snapchat Redesign as Revenue, User Growth Send Shares Soaring

Less than a year after Snapchat’s parent company went public with a flop, Snap Inc. is finally hinting at the possibility of a rosier future after posting surprising quarterly revenue- and user-growth that beat Wall Street’s expectations for the first time ever.

On Tuesday afternoon, Snap said fourth-quarter revenue jumped 72% year-over-year, to $285.7 million, along with adjusted loss of 13 cents per share, compared to analysts’ revenue forecasts of $253 million and a 16 cent per share loss. Meanwhile, ephemeral messaging service Snapchat also saw its user base grow faster than expected, adding 8.9 million daily active users to reach 187 million, the biggest quarter-to-quarter jump since the third quarter of 2016.

The positive news sent shares of Snap soaring more than 23% in after-hours trading on Tuesday to $17.32, as investors showed renewed confidence in Snapchat’s ability to add new users to help it compete with larger social media rivals like Facebook and Facebook-owned Instagram. Investors had been concerned that Snapchat’s user growth rate would continue to slow amid mounting competition from Facebook and its subsidiary, especially since Instagram’s 2016 launch of its Snapchat-copying Stories feature.

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While Snapchat has long been considered popular among younger users, the service must prove it can also appeal to users in older demographics in order to drive further growth and appease advertisers looking to reach users with more spending power. To that end, Snapchat has been teasing a redesign of its mobile app aimed at attracting older users by making it easier to use.

News of the redesign initially spooked investors, and the changes have only trickled out to small test groups, so far. But CEO Evan Spiegel offered reassurances in a letter to investors on Tuesday in which he said that tests of the redesign led to users watching more Stories from media companies and spending more time viewing ads.

“We believe that the redesign has also made our application simpler and easier to use, especially for older users,” Spiegel wrote. “Compared to the old design, core metrics around content consumption and time spent in the redesigned application are disproportionately higher for users over the age of 35, which bodes well for increasing engagement among older users as we continue to grow our business.”

While reports last month suggested that users were responding negatively to Snapchat’s redesign, Spiegel expressed confidence today that the changes will help the company continue to build on its most recent quarter of user growth, and thus boost revenue.

Capacity alone won't assure good cloud performance

Many people believe that workloads in the cloud always perform better because public clouds have access to an almost unlimited amount of resources. Although you can provision the resources you need—and even use serverless computing so the allocation of resources is done for you—the fact is that having the right amount of resources is only half the battle.

To get good cloud performance means you have to be proactive in testing for performance, not be reactive and wait for an issue to arrive in production. After all, performance depends on much more than raw capacity.

I strongly encourage testing. If you’re using devops to build and deploy your cloud application workloads, your testing for security, stability, and so on are typically done withcontinuous testing tools as part of the devops process.

But what about performance testing?

Truth be told, performance testing is often an afterthought that typically comes up only when there is a performance problem that the users see and report. Moreover, performance usually becomes an issue when the user loads surpass a certain level, which can be anywhere from 5,000 to 100,0000 concurrent sessions, depending on the application. So you discover a problem only when you’re got high usage. At which point you can’t escape the blame.

An emerging best practice is to build in performance testing into your devops or cloud migration process. This means adding performance tests to the testing mix and look at how the application workload and connected database deals with loads well beyond what you would expect.      

This means looking for a performance testing tool that is compatible with your application, the other devops tools you have, and the target cloud platform where the application is to be deployed. Of course, a “cool tool” itself is not the complete answer; you need testing engineers to design the right set of testing processes in the first place.      

Ironically, although devops itself ( as both a process and tool set) is all about being proactive in terms of testing, most devops processes that I’ve seen don’t do much performance testing, if any at all.     

Withouth that testing, you can’t answer the question “When will my cloud workload hit the performance wall?” Instead, your users find out for you, and you may discover it’s time to look for a new job.         

Apple and Cisco Team Up on Cybersecurity Insurance

Apple and Cisco are now offering insurance policies to companies to protect them financially against cyber attacks.

The insurance policies are part of a broader package that also includes corporate security reviews. As part of the package, professional services firm Aon will perform security consulting for companies, while insurance firm Allianz will provide discounted cyber security insurance coverage as long as the customers use certain Apple devices and Cisco security products.

“We’re thrilled that insurance industry leaders recognize that Apple (aapl) products provide superior cyber protection, and that we have the opportunity to help make enhanced cyber insurance more accessible to our customers,” Apple CEO Tim Cook said in a statement.

Cook and Cisco (csco) CEO Chuck Robbins said in June that the two companies were exploring a joint-insurance policy program for corporate customers that use their two products, but they didn’t reveal their insurance company partners at the time.

The move highlights Apple’s desire to become a big business technology provider that sells its flagship iPhones, iPad, and Mac computers to corporate offices.

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Apple formed a partnership with Cisco in 2015 in which the two companies share engineering teams that make their respective technologies more compatible with each other. At the time, the two companies were working to make Cisco’s networking and video and web conferencing services work better with Apple’s iOS and MacOS devices, but it appears they have since expanded it to include Cisco’s security services.

In August, insurance giant American Insurance Group said it would start selling cyber security insurance plans to U.S. consumers who fear that their sensitive data like social security or credit card numbers could get exposed to hackers online.

Clarification: This article was updated to make clearer that Cisco and Apple are not directly selling insurance.

Seattle finds Facebook in violation of city campaign finance law

SAN FRANCISCO (Reuters) – Seattle’s election authority said on Monday that Facebook Inc is in violation of a city law that requires disclosure of who buys election ads, the first attempt of its kind to regulate U.S. political ads on the internet.

Facebook must disclose details about spending in last year’s Seattle city elections or face penalties, Wayne Barnett, executive director of the Seattle Ethics and Elections Commission, said in a statement.

The penalties could be up to $5,000 per advertising buy, Barnett said, adding that he would discuss next steps this week with Seattle’s city attorney.

It was not immediately clear how Facebook would respond if penalized. Facebook said in a statement it had sent the commission some data.

“Facebook is a strong supporter of transparency in political advertising. In response to a request from the Seattle Ethics and Elections Commission we were able to provide relevant information,” said Will Castleberry, a Facebook vice president.

Barnett said Facebook’s response “doesn’t come close to meeting their public obligation.” The company provided partial spending numbers, but not copies of ads or data about whom they targeted.

The unregulated nature of U.S. online political ads drew attention last year after Facebook said Russians using fake names bought ads on the social network to try to sway voters ahead of the 2016 presidential election. Moscow denies trying to meddle in the election.

Buying online election ads requires little more than a credit card. Federal law does not currently force online ad sellers such as Facebook or Alphabet Inc’s Google and YouTube to disclose the identity of the buyers.

Legislation is pending to extend federal rules governing political advertising on television and radio to also cover internet ads, and tech firms have announced plans to voluntarily disclose some data.

Facebook Chief Executive Mark Zuckerberg said in September that his company would “create a new standard for transparency in online political ads.”

At the center of the Seattle dispute is a 1977 law that requires companies that sell election advertising, such as radio stations, to maintain public books showing the names of who bought ads, the payments and the “exact nature and extent of the advertising services rendered.”

The law went unenforced against tech companies until a local newspaper, The Stranger, published a story in December in the wake of the Russia allegations asking why.

Seattle sent letters to Facebook and Google asking them to provide data. The sides have been in talks, and last month Facebook employees met in person with commission staff.

“We gave Facebook ample time to comply with the law,” Barnett said.

Google has asked for more time to comply, and that request is pending, Barnett said.

Legal experts said they were unaware of any similar regulation attempts by other U.S. localities or states.

“Given the negative publicity around Facebook’s failure to provide adequate transparency in the 2016 elections, I would be surprised if they tried to challenge this law,” said Brendan Fischer of the Campaign Legal Center, a nonprofit that favors campaign finance regulation.

Reporting by David Ingram; Editing by Leslie Adler and James Dalgleish

Major Banks Ban Buying Bitcoin With Your Credit Card

Most major U.S. credit card issuers have now banned the use of their cards to buy Bitcoin or other digital currencies, in a move intended to decrease both financial and legal risk.

Bank of America began blocking cryptocurrency purchases on Friday, according to Bloomberg. JPMorgan did the same on Saturday.

Citigroup also says it is halting cryptocurrency purchases on credit, and Capital One and Discover had already enacted their own bans. That means all of the top five credit card issuers have announced or implemented bans.

The moves are above all in the banks’ self-interest. As Fortune previously reported, the mania surrounding cryptocurrency late last year appears to have motivated many retail investors to use credit cards as leveraging tools, buying more cryptocurrency than they could afford. With Bitcoin down roughly 50% from December highs, many of those investors are likely underwater right now, and may not be able to pay off their initial Bitcoin purchases soon, if ever.

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Further, as Bloomberg points out, banks may be responsible for monitoring customers’ behavior to prevent money laundering after they make a credit-backed Bitcoin purchase, a tough standard for them to comply with.

The bans — or more to the point, the news of the bans — may exacerbate ongoing declines in cryptocurrency prices. After a hefty bounce Saturday morning, crypto markets broadly retreated on Sunday. Bitcoin is now trading at around $8,500 from a December high near $20,000.

In the longer term, however, tighter cryptocurrency investment controls, whether from regulators or lenders, seem likely to help mitigate the consequences of both hype and scams. For much of 2017, those threatened to overshadow the underlying promise of blockchain technology, which is still in the very early stages of evolution.

Lomography Lomo'Instant Square Review: Great For Square Photo Lovers

One of my favorite cameras ever is the original Polaroid SX-70. This marvel of engineering, chemistry, and industrial design introduced the world to fully integral instant photography—before the SX, instant photography wasn’t quite instant, requiring a peel-apart film that relied on some pretty gnarly chemicals.

The SX-70 was like the iPod of its time. With a sleek metallic and leather exterior, the device popped up, transforming a jacket-pocketable slab into a sophisticated SLR camera. It was an expensive, high-tech imaging solution the likes of which the world had never seen in the early ’70s.

Perhaps most importantly, the SX-70 was the first Polaroid camera with the iconic, instantly-recognizable square photos that define that photo format. Until recently, the only way to get that iconic square instant photo was by shooting imperfect, Dutch-made Polaroid Originals film in a compatible (vintage or modern) camera. But you Huey Lewis-types now have another photographic option: last year, Fujifilm developed a square version of its awesome Instax film. Unfortunately, Fuji then proceeded to hamper it with an expensive hybrid digital/analog camera.

Enter the Lomography Lomo’Instant Square. It’s the first analog camera to shoot square Instax film. Like the SX-70, this camera is compact, and folds up when not in use. So far, so good…

The design and build quality of this camera is impressive. Lomo didn’t always make great-feeling, tightly-assembled cameras but since the Automat series began, it’s clear that these areas have been vastly improved. My review unit was a creamy white hue with color-matched faux leather on it.

Opening the camera takes a bit of force, which means it’s unlikely it’ll spring open in your bag. That’s reassuring to me, since the camera uses rubber for a bellows assembly behind the lens, a potential point of failure if debris falls inside the camera’s body. When closed, it vaguely resembles a pair of electrobinoculars from Star Wars.

The camera also protects its own front lens, opening and closing shutters that cover the glass as it unfolds. I was annoyed by how the camera’s lens mechanism resets its focus every time the camera is closed, so you’ll need to remember to check it each time you take the camera out.

Speaking of focus, the Lomo’Instant Square has a fairly forgiving range of zones to choose from. That said, I recommend you splurge and get the combo version of this camera, since it includes a much-needed portrait attachment. Though the Lomo’Instant Square features a tiny selfie mirror, at arms’ length, you’d be hard-pressed to take a portrait that’s not out of focus. Screw the 0.5m attachment onto the camera and your selfies will look so, so, so much better.

Photo modes are plentiful since this shares its exposure system with Lomo’s other recent instant cameras. Multiple exposures, 1 stop +/- compensation, and even a bulb mode are all standard features. I’d say that’s just enough control to help steer the otherwise-automatic exposure system into giving you the results you want, and certainly enough to let you experiment.

One pain point for me was the viewfinder. Unlike the magical, complicated SLR setup inside the SX-70, the Lomo’Instant Square has an off-center viewfinder that’s far, far away from the long lens. It’s tricky to frame shots up just right, and you’ll need to mentally compensate for parallax to make sure your subject is where you want it.

There are a few things you should know before you take the plunge and pick the Square. First, it’s expensive at more than $200. For the sake of comparison, the newest Polaroid Originals-branded model, the OneStep 2 sells for about half that, and gives you true Polaroid-sized pictures.

If that doesn’t dissuade you, grab the combo option that includes the Splitzer, a must-have portrait lens attachment, and an adapter back that’ll let you use Instax Mini film. That last piece is super cool—Instax Square film isn’t cheap at around $1.30 per shot, so you’ll probably get more use out of your camera if you can also shoot the cheaper, easier-to-find Mini-sized film.

Taken on its own, I’m impressed with what Lomo’s done here. Do I love it as much as my SX-70? No. But the square prints, fabulous design, and reliable Instax chemistry make this a far more approachable experience.

The Sound of a Cyber Bubble Popping

The cryptocurrency market is in a meltdown. Bitcoin prices are down nearly 60% from their December highs, and major banks are cutting off credit card access to crypto exchanges—no surprise in the wake of a mania that saw everyone and their dog sharing hot crypto tips.

Meanwhile, the cyber-security industry is experiencing its own bubble bursting, albeit in much less dramatic fashion. As Reuters reported last month, investors are at last acknowledging the obvious: There are too many VC-bloated start-ups chasing too few clients, while unicorns are morphing into zombies struggling to find an IPO or other exit.

This situation may explain a recent flurry of press releases from cyber firms like Tenable, Cylance and Duo. The releases tout revenue growth and appear intended to assure anyone who will listen that “hey, we’re surviving the cyber shake-out just fine thank you very much.”

It’s hard to say for now which firms will be left standing at the end of 2018 but, for now, it’s clear the peak of the cyber-boom, when VCs would shower money on any company with blinky lights, is over. The investor uncertainty, though, is just one part of the cyber story. There’s also the more important question of whether all these companies have helped harden the country against hacking, and the answer appears to be yes.

Based on recent conversations with ordinary executives, I’ve found cyber-literary has shot up. While hackers are still getting through (they always will), managers and general counsels are finally attuned to the threat and doing something about it.

This change is also trickling down to more humble enterprises. I met a company this week called CyberSight, which offers free and low-cost ransomware protection to the likes of small businesses and county governments, and many of them are actually implementing it. This is a welcome change from a year ago when too many companies blew off cyber defense as an exotic affair they didn’t need.

So let’s celebrate cyber victories where we can find them. Finally, returning to crypto, don’t forget it’s tax time—if you bought or sold, here’s a plain English Q&A to get you through. Have a great weekend.

Jeff John Roberts

@jeffjohnroberts

[email protected]

Welcome to the Cyber Saturday edition of Data Sheet, Fortune’s daily tech newsletter. You may reach Robert Hackett via Twitter, Cryptocat, Jabber (see OTR fingerprint on my about.me), PGP encrypted email (see public key on my Keybase.io), Wickr, Signal, or however you (securely) prefer. Feedback welcome.

THREATS

Bye-bye little bots: Twitter users are losing tens of thousands of followers in the wake of a searing report about a “follower factory” that let people inflate their social media popularity with the help of bots, many of which were crafted by means of identity theft. A Twitter board member was among those who lost followers in the purge.

Apple and the FBI, it’s complicated: In the wake of a 2016 terrorist attack, media outlets (including Fortune) reported on bad blood between Apple and law enforcement over the iPhone maker’s encryption polices. Today, the two sides still don’t see eye-to-eye but are in many ways more friendly than you think.

Looming specter of Spectre: Sure enough, those scary Spectre and Meltdown viruses may be coming to a chip near you. Researchers have already found 130 malware samples that appear to have been built in order to exploit the worldwide chip vulnerabilities disclosed in January.

Netflix and Phish: When you have 118 million subscribers, many of them addicted to binge-watching, your service will be a popular target for scammers. A fake Netflix subscription email is making the rounds (again), threatening to cancel Netflix customers’ accounts if they don’t supply their credit card number. One guess what happens if you click.

Hey Hawaii, good call on canning that button pusher who kept confusing drills with real life. 

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ACCESS GRANTED

The robbery caper began in a Ruby Tuesday’s restaurant in Times Square, where Meza met his victim, who had earlier disclosed he was an early investor in Ethereum. The cryptocurrency was once worth pennies but last year soared to over $1,000.

— If you’re going to rob someone at gunpoint for their crypto-currency, for heaven’s sake, don’t transfer the funds to a popular exchange in your own name. Fortune obtained exclusive details about a crazy crypto heist in New York.

ONE MORE THING

Obligatory SuperBowl tidbit: Jeopardy host Alex Trebek chided his contestants over their complete and utter ignorance of football, a topic that regularly pops up in the weeks before the gig game. The show then trolled the players with a tweet, saying “Our contestants answered as many clues in this category as the @Browns had wins this season.”

Tencent-led group to invest $1.6 billion in menswear firm Heilan: sources

HONG KONG (Reuters) – Tencent Holdings Ltd is leading a deal to invest 10 billion yuan ($1.59 billion) in Chinese menswear group Heilan Home Co Ltd, upping a retail rivalry with fellow internet giant Alibaba Group Holding Ltd, sources with knowledge of the matter said.

China’s second-largest e-commerce company JD.com Inc and online clothing platform Vipshop Holdings Ltd will also be among the group that plans to acquire less than 10 percent of the company for 5 billion yuan, one source said.

Another 5 billion yuan would help set up an industrial investment fund to focus on deals that fit with Heilan’s business, the person said, requesting anonymity because they were not authorized to speak to the media.

Heilan had a market value of about $8.13 billion as of Monday, when it halted shares from trading, pending deal announcements.

Tencent, JD.com and Vipshop declined to comment. A Heilan spokesman was not immediately available to comment.

The proposed deal, which could be announced as early as Friday, extends a recent push by Tencent, China’s biggest social network and gaming company, into bricks-and-mortar retail to further compete with Alibaba.

Heilan which has clothing brands such as HLA and SANCANAL, has been a long-time partner of Alibaba’s online marketplace Tmall.

But last month Tencent, which has a market capitalization of $563 billion, said it would invest 4.2 billion yuan for a stake in Yonghui Superstores. It is also looking to take a stake in the China business of French supermarket retailer Carrefour.

The recent moves reflect a wider, long-running stand-off between Tencent and Alibaba, which have made competing investments in areas as diverse as bike-sharing apps, food delivery and gaming.

JD.com, in which Tencent is a top-10 investor, traditionally leads against Alibaba in online retail sales of electronics and home appliance products, but lags behind in the fashion business.

Tencent and JD.com last month jointly made an $863 million investment in Vipshop, in a bid to tap the country’s young female shoppers and gain access to consumer and transaction data to help them compete with Alibaba’s online payment platform Alipay.

Jiangsu-based Heilan was set up by Zhou Jianping, one of the richest people in China’s fashion industry, in 1997. It runs more than 5,000 stores, mostly in China, and recorded 12.5 billion yuan in operating income in the first three quarters last year, its website showed.

Reporting by Julie Zhu; Editing by Stephen Coates

The #1 Lesson Cryptocurrency Investors Can Learn from the Dot-com Bubble

Life as we once knew it drastically changed in the mid-90s. The Internet’s popularity was on the rise, and many savvy businesses and companies saw the potential of a hyper-connected, digital world. This lead to the dot-com bubble–a sharp rise, and fall, in stock prices that was fueled by investments in Internet-based companies.

With experts predicting we are now in a cryptocurrency bubble, it seems as if history is at risk of repeating itself.  

While we’ve moved far past the early stages of Internet start-ups and e-commerce companies, digital is continuing to change our everyday lives–from how we work, live, and play to the future of money itself. Interest in cryptocurrency, similar to the frenzy we saw in the early days of the dot-com bubble, is reaching a crescendo–yet many experts are already predicting its demise.

Warren Buffet has gone on the record saying that crypto will come to a bad ending. Jamie Dimon, J.P. Morgan’s CEO, called Bitcoin a fraud before later admitting that he regretted making that statement.

Meanwhile, other big-name investors and companies are going out of their way to invest in crypto–from Richard Branson to Microsoft .

But are the naysayers right? Are we headed toward a catastrophic implosion of dot-com level proportions?

Yes, the crypto market is volatile. There are too many unknowns to be certain, but if we look at the histories of companies like Amazon, eBay, Priceline, and Shutterfly, then maybe we can gain some clarity.

These e-commerce companies were born during the dot-com era, and they weathered the storm and emerged as some of the most successful and stable companies in history. The dot-com crash didn’t destroy the concept of e-commerce or the fact that consumers want to buy airline tickets, antiques, or pet food online–there was simply a gold rush in the early development stages. Once the dust settled, however, the strong survived.  

Don’t call it a comeback

In the end, the dot-com bubble was a movement. Smart investors saw the future of digital-based commerce and, as they invested, the movement snowballed into madness. Many of the companies that popped up during that time were run by people who were in over their heads, or they didn’t have the technology to keep up with the demand. When the crash happened, it thinned the herd.

Mona El Isa, the chief executive and co-founder of Melonport, summed this notion up at a recent TechCrunch conference when she said, “The dot-com bubble was messy, but if we look at some of the largest companies that exist today they are a result of the dot-com bubble and they are part of our everyday lives.”

Which leads us back to what we’re seeing with cryptocurrency today. Even if this bubble bursts, the concept of digital currency will not go away. It may wipe out 90% of today’s existing startup currencies, but the strong will survive. Companies, like Kodak, who try to create a currency without providing real customer value may see efforts go to waste. And this will pave the way for the Amazon of cryptocurrency to make its mark on the world.

To further the power of this movement, it’s important to remember that cryptocurrency isn’t a company. It doesn’t have shareholders. It isn’t VC-backed. Which means this movement extends beyond any other economic bubble we’ve seen–it’s happening in an arena that’s removed from the stock markets. So, when, and if, the bubble bursts, it won’t go quietly into that good night. The parameters may change drastically from what we are seeing today, but digital currency–in one form or another–is the future.

How to invest in a movement

So, if cryptocurrency is the future–how do you invest? From a business standpoint, it’s important to look at crypto through a risk-management lens. Business leaders and board members should be learning everything they can about this new trend so they can determine how, where, and why it might affect or fit into the business. Is there a way to offer customers value through cryptocurrency? Is the time right to execute? Is there a long-term strategy in place that will take advantage of the crypto movement when the stormy waters calm down?

These are the types of questions you need to consider. Do what’s best for your business and what’s best for your customer. As with any digital movement, you need to be aware of the trends and aware of how it could change your business. This is the only way to defend your company from possible disruption.

Final word

For anyone who is considering investing in cryptocurrency, it’s important to remember that this is a long-term movement. Our world is becoming increasingly smaller and more reliant on digital means–currency transformation is inevitable.

It’s the smart investors who understand that this isn’t a fragile economic trend. Digital currency will continue to adapt and change over the next few years–and the companies and entrepreneurs who pay close attention now will have the best chance at deftly navigating the troubled waters.

Amazon.com opens its own rainforest in Seattle

SEATTLE (Reuters) – Amazon.com Inc on Monday opens a rainforest-like office space in Seattle that it hopes will spark new ideas for employees.

While cities across North America are seeking to host Seattle-based Amazon’s second headquarters, the world’s largest online retailer is still expanding its main campus. Company office towers and high-end eateries have taken the place of warehouses and parking lots in Seattle’s South Lake Union district. The Spheres complex, officially open to workers on Tuesday, is the pinnacle of a decade of development here.

The Spheres’ three glass domes house some 40,000 plants of 400 species. Amazon, famous for its demanding work culture, hopes the Spheres’ lush environs will let employees reflect and have chance encounters, spawning new products or plans.

The space is more like a greenhouse than a typical office. Instead of enclosed conference rooms or desks, there are walkways and unconventional meeting spaces with chairs.

Amazon has invested $3.7 billion on buildings and infrastructure in Seattle from 2010 to summer 2017, a figure that has public officials competing for its “HQ2” salivating. Amazon has said it expects to invest more than $5 billion in construction of HQ2 and to create as many as 50,000 jobs.

Earlier this month, the online retailer narrowed 238 applications for its second headquarters to 20. The finalists, from Boston and New York to Austin, Texas, largely fit the bill of being big metropolises that can attract highly educated tech talent.

Amazon started the frenzied HQ2 contest last summer and plans to pick a winner later this year.

Seattle’s mayor, the governor of Washington and Amazon’s top real estate executive were expected to speak during the Spheres’ opening ceremony. The Spheres will become part of Amazon’s guided campus tours, and members of the public can also visit an exhibit at the Spheres by appointment starting Tuesday.

Reporting By Jeffrey Dastin in Seattle, editing by Peter Henderson and Cynthia Osterman

This Oil Dividend Stock Has A 3.3% Yield And Just Raised Its Dividend By 14%

By Bob Ciura

Valero Energy Corporation (VLO) is on a tear—including dividends, it has returned nearly 50% in the past one year. With oil prices trending higher, Valero’s margins are improving, and it is rewarding shareholders with huge cash returns. On January 23rd, Valero increased its dividend by 14%, and also announced a $2.5 billion share buyback.

With the dividend increase, Valero now has a 3.3% dividend yield. This is significantly above the S&P 500 Index dividend yield of 2%. Valero is one of 294 dividend stocks in the energy sector. You can see all 294 energy dividend stocks here.

Valero’s fundamentals are improving, and the stock has an appealing mix of dividend yield and dividend growth. After such an impressive rally in the share price over the past year, today might not be the best time to buy, but Valero remains a high-quality holding for dividend growth investors.

Business Overview

Valero Energy is an oil refiner. It manufactures and markets transportation fuels and other petrochemical products. It an independent petroleum refiner and ethanol producer. The company’s assets include 15 petroleum refineries, with total capacity of approximately 3.1 million barrels per day, along with 11 ethanol plants, with production capacity of 1.4 billion gallons per year. Valero’s petroleum refineries are spread across the U.S., Canada, and the U.K., while the ethanol plants are located in the Mid-Continent region of the U.S.

In addition, Valero owns the 2% General Partner interest, and a majority limited partner interest, in Valero Energy Partners LP (VLP) a midstream MLP. Refining represents about 90% of Valero’s operating income. The company has an impressive network of assets.

Source: January 2018 Investor Presentation, page 4

Valero had an impressive performance to start 2017. The company beat analyst earnings expectations, for both revenue and earnings-per-share, in each of the first three quarters. In the third quarter, revenue of $23.6 billion increased 20% year-over-year, and beat expectations by $4.57 billion. Earnings-per-share of $1.91 beat by $0.08 per share.

Throughput volumes and yields both increased 2% over the first three quarters of 2017. Valero’s adjusted refining operating margin increased 21% in that time, to $3.86 per barrel. The U.S. Mid-Continent region performed exceptionally well, with 92% operating income growth in the first three quarters. Meanwhile, the U.S. Gulf region grew operating income by 5.8% in that period. Valero’s adjusted earnings-per-share increased 31% over the first three quarters of 2017. Going forward, Valero has multiple catalysts for continued growth.

Growth Prospects

The fundamental backdrop remains positive for Valero. Supplies of domestic crude oil and natural gas are abundant, with production growth across several premier U.S. fields, such as the Permian Basin. At the same time, there is limited spare global refining capacity, which helps keep margins high. Global economic growth continues to support demand, which according to Valero, continues to outpace capacity additions. Valero is seeing improved refining availability, combined with lower operating expenses over the past five years.

Source: January 2018 Investor Presentation, page 8

New projects will fuel growth for the company. Valero maintains a strict 25% internal rate of return hurdle rate, in order to move forward with new refining projects. Valero expects to spend $2.7 billion on capital expenditures in 2018, $1 billion of which will be reserved for growth expenditures. It also expects to continue utilizing $1 billion annually for growth investments, through 2021. Approximately half of growth capital expenditures will be spent on refining projects, with the remaining half on logistics.

Recent project completions include the Diamond Pipeline and Wilmington cogeneration unit, which was completed in November 2017. Other near-term projects currently in development, include the Diamond Green Diesel expansion project, set for completion in the third quarter of 2018. Projects set for completion next year include the Houston alkylation unit, and the Central Texas pipelines and terminals project.

Exports are an additional catalyst for Valero, particularly to Mexico, where the company has had a presence for over 10 years.

Source: January 2018 Investor Presentation, page 10

In the third quarter, Valero announced it had signed long-term agreements with IEnova to use terminals to be constructed at the Port of Veracruz, near Puebla and Mexico City. This will import refined products into Mexico beginning in late 2018.

Dividend Analysis

After the recent 14% dividend increase, Valero’s new quarterly dividend rate is $0.80 per share, or $3.20 per share annualized. The stock has a forward dividend yield of 3.3%. It also added $2.5 billion to its existing share repurchase program, resulting in a total of $3.7 billion left in its repurchase authorization. This which represents approximately 9% of the current market cap.

The company has reduced its share count by over 20% since 2011. In that time, it has also increased its annual dividend from $0.30 per share, to $3.20 per share.

Source: January 2018 Investor Presentation, page 13

Valero’s disciplined capital structure allows the company to continue returning cash to shareholders, in good operating climates and bad. Valero has a target payout ratio in a range of 40% to 50% of cash provided by operating activities for 2018. It also maintains a strong balance sheet, with an investment-grade credit rating, and a target debt-to-capital ratio of 20% to 30%. A healthy balance sheet helps Valero keep its cost of capital down, which leaves more cash flow available for dividends and share repurchases.

The only potential problem with buying Valero stock today, is the valuation. On a trailing basis, Valero stock trades for a price-to-earnings ratio of 21.3. This does not seem alarmingly high, since the broader S&P 500 Index trades for an average price-to-earnings ratio of 26.8. However, Valero typically does not trade for a price-to-earnings ratio above 20. According to ValueLine, Valero held an average price-to-earnings ratio of just 8.4, in the past 10 years.

Valero’s earnings growth soared last year, and its stock price followed suit. Investors interested in buying the stock now, have to pay a relatively high price for the company’s strong growth and improved outlook. As a result, this may not be a good time to initiate a new position, or add to an existing position.

Final Thoughts

Refining can be a volatile business. This is certainly a good time to be in the industry. Valero is coming off a great year, and new projects and exports should help continue growth. However, investors should wait for a better buying opportunity. For existing investors however, the stock remains a hold, due to its solid 3.3% dividend yield, and strong dividend growth.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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.

The Universe At The Edge Of The Restaurant

We sit here. Whether it be the early morning coffee, or the late night Grand Marnier, we all sit here and ponder the markets’ universe. Our chairs are comfortable enough, but the swirling mass of data, and projections, that surround us, is anything but that. “It’s all going to Hell in a handbasket” or “Equities are headed to the Moon” and the Sayers of Sooth seems to be staring at parallel universes.

There is a theory which states that if ever anyone discovers exactly what the Universe is for and why it is here, it will instantly disappear and be replaced by something even more bizarre and inexplicable. There is another theory which states that this has already happened.

– Douglas Adams

The total size of the assets of the world’s central banks are now 21.7 trillion, and they are growing by approximately $300 billion per month, according to Bloomberg data. Yardeni Research has updated its last report and now pegs the assets of the PBOC at $5.5 trillion, the assets of the ECB at $5.3 trillion, the assets of the BOJ at 4.6 trillion and, in fourth place, the assets of the Fed at $4.4 trillion. This totals $19.8 trillion for the world’s “major” central banks and, make note, this number is not decreasing or Flatlining but “Growing.” The assets of the major central banks were up 5% in December alone, according to Yardeni Research.

Yardeni Research also shows that BOJ’s assets are 92.9% of their nominal GDP while the ECB’s assets are 38.0% of their nominal GDP and the Fed’s assets are 22.4% of our nominal GDP. This should give you a comparative landscape for judgment. What we are actually looking at here, in my view, is money created from nothing but “Pixie Dust.”

The economists call it “Quantitative Easing” but it is actually a parallel universe where money is digitally concocted from nothing and tossed out to be spent. at will, on the markets. You see, it is money for the markets alone, because there are no goods or services or virtually any costs, in this newly created central bank economic universe.

There comes a point. I’m afraid, where you begin to suspect that if there’s any real truth, it’s that the entire multidimensional infinity of the Universe is almost certainly being run by a bunch of maniacs.

– Douglas Adams

Oh no!

The significance of all of this newly created money is beyond compare when considering the debt and equity markets, in my estimation. This $21.7 trillion, in newly minted assets, is larger than any economy on Earth, according to data provided by the IMF. The central banks have created a whole new nation, if you will, out of “Pixie Dust,” without any government, without any voting and without any representation.

You may say that each central bank reports to a specific government, but the money that they have created and provided to all of the world’s economies now reports to no one. It has already been tossed out of the various vaults and is useable just like the old, created by some country, money. We once thought all of this impossible. We have learned otherwise. It is Bitcoin, nationalized.

The impossible often has a kind of integrity to it which the merely improbable lacks.

– Douglas Adams

This 21.7 trillion is actually a “free cash flow.” It is unencumbered by wages, or cost of goods sold, or any other data attributed to arriving at the “free cash flow” of a corporation or a government. It is just money, after all, and the cost to make it was almost NOTHING. There are no capital expenditures.

Investopedia states,

Free cash flow (FCF) is a measure of a company’s financial performance, calculated as operating cash flow minus capital expenditures. FCF represents the cash that a company is able to generate after spending the money required to maintain or expand its asset base.

Let us then turn to data provided by the St. Louis Fed. They stipulate that the Corporate Cash Flow of the United States was $2.231 trillion at the end of the 3rd quarter of 2017. This data may be found here.

This is at a time when the GDP of the U.S. was $19.74 trillion, according to the Bureau of Economic Analysis. This means that America’s “Free Cash Flow” was 11.30% of our total GDP. Consequently, since the central banks’ creation of money is not encumbered by any capital expenditures, at all, no cost of goods or services, zero, this means that the “real value” of the $21.7 trillion is 8.87 times its stated value if compared with the United States in terms of the “actual” effect on both the debt and equity markets.

In other words, the comparison of the central banks’ $21.7 trillion in assets is most accurately compared to the “free cash flows” of a government. This pegs its “actual” significance at a whopping $175.094 trillion, if considered, again, utilizing the “free cash flow” of the United States. Consider that for a moment. Where did this unnamed country come from?

There is no problem so complicated that you can’t find a very simple answer to it if you look at it right.

– Douglas Adams

Given this massive and unprecedented “Free Cash Flow” I state, with a good deal of certainty, that it is the money the money and the money that is driving equity prices higher, keeping yields relatively low and compressing all risk assets in upon their benchmarks. The economists may call it Quantitative Easing, but I say that the central banks used “Pixie Dust” and poured it into the markets and that we have entered a sort of financial Wonderland where every day is “Happily Ever After.”

The markets are flying!

There is an art … or rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss.

– Douglas Adams

Dollar Falls After Mixed Signals From Trump Administration

Disappointing US GDP and contradictory comments on currency strength at Davos burden dollar

The USD depreciated against majors as soft Q4 GDP numbers on Friday and mixed comments on the desired strength and weakness of the currency made at the World Economic Forum in Davos put downward pressure on the greenback. The Trump administration is pushing its tough stance on trade, but tried to soften the tone in an effort to be more inclusive. Economic fundamentals and monetary policy have been supportive of the currency, but political lack of stability has hurt the buck. Next week the market will focus on the U.S. Federal Reserve and the U.S. non farm payrolls (NFP).

  • US President Trump to deliver his first State of the Union Address
  • Fed anticipated to keep rates on hold at 1.25-1.50 percent
  • US forecasted to have added 184,000 jobs in January

Dollar Confused Ahead of US Jobs Report and Fed Statement

The EUR/USD gained 1.73 percent in the last five days. The single currency is trading at 1.2426 after contradictory statements from the Trump administration confused markets. Secretary of the Treasury Steve Mnuchin said on Wednesday that the weaker dollar was good for the US in relation to trade. The USD retreated and the EUR touched three year highs. Next day President Trump said the he ultimately wants to see a strong dollar as the currency is a reflection of the strength of the economy. The USD recovered some ground versus the EUR, but the damage had already been done and the EUR advanced 0.27 percent on Friday.

The first estimate for US GDP for the fourth quarter was released and it was short of expectations at 2.6 percent. The forecast the market was looking for was 3.0 percent, but given its the advanced estimate there will be two more released that could see the final GDP figure higher in the following months.

The EUR has been rising despite the words from European Central Bank (ECB) President Mario Draghi. The central bank kept its rate and massive quantitative easing program untouched. Draghi made sure to mention that stimulus would remain for as long as needed, but had to concede there were few chances it will change interest rates. The ECB President made a comment warning about using verbal intervention to talk down a currency when asked about the Davos statement from Mnuchin.

US President Trump will deliver its first Sate of the Union address on Tuesday, January 30, at 9:00 pm EST. Failing to avoid a government shutdown Trump will focus on the positives during his first year. His achievements in passing legislation came late in 2017 but he is sure to mention the tax reform bill. The stock market record breaking pace and overall strength of the economy while inherited will also be mentioned with the infrastructure plan something to look for in the immediate future. The USD got a Trump bump in late 2016 when just after winning the elections

The U.S. non farm payrolls (NFP) will be published on Friday, February 2 at 8:30 am EST. Economists are expecting the US to add 184,000 positions in January. Last month’s report came in lower than expected but the saving grace for the USD was that hourly wages grew 0.3 percent as expected. There are similar gains forecasted for January wages with a special emphasis on inflationary data as the Fed ponders what to do with stagnant wages despite a strong job component.

The USD/CAD lost 1.38 percent during the week. The currency pair is trading at 1.2323 with a weaker greenback sliding against a stronger loonie. The Bank of Canada (BoC) lifted its benchmark rate 25 basis points earlier in the month and Friday’s release of Canadian inflation coming in even lower than expected at -0.4 percent and validates the slowing inflationary rise view from the central bank.

The uncertain future of NAFTA had previously sapped the loonie from any positive impact from the interest rate hike, but comments this week about the importance trade by the Trump administration have lessened the anxiety about the trade deal. While the US representatives were sure to mention America first, even Trump conceded that America is not alone. The March deadline is fast approaching and negotiations have little to show for it. Elections in Mexico and the United States will make the trade deal a heavy politicized item in 2018. The biggest surprise at Davos from the White House was the apparent softening of their hard line on the Trans Pacific Pact (TPP). The now 11 nation deal was one of the first casualties of the administration and the remaining members agreed to go ahead without the US this week.

Oil prices have been boosted by the weak US dollar and encouraging signs that the global demand for energy is on the rise. The Organization of the Petroleum Exporting Countries (OPEC) production cut agreement was instrumental in stopping the free fall of crude. US shale producers were predicted to have ramped up their supply by now, but weather and other factors have stood in their way. The main risk for crude is a sudden revival of the US dollar that could trigger a sell-off in commodities with investors looking to book profits at current three level highs.

Market events to watch this week:

Tuesday, January 30
10:00am USD CB Consumer Confidence
10:30am GBP BOE Gov Carney Speaks
7:30pm AUD CPI q/q
9:00pm USD President Trump Speaks
Wednesday, January 31
8:15am USD ADP Non-Farm Employment Change
8:30am CAD GDP m/m
10:30am USD Crude Oil Inventories
2:00pm USD FOMC Statement
2:00pm USD Federal Funds Rate
Thursday, February 1
4:30am GBP Manufacturing PMI
10:00am USD ISM Manufacturing PMI
Friday, February 2
4:30am GBP Construction PMI

*All times EST

Fujitsu in talks to sell mobile phone unit, highlighting fading Japanese presence

(Reuters) – Japan’s Fujitsu Ltd said on Friday it was in talks about selling its mobile phone business to investment fund Polaris Capital Group, becoming the latest Japanese electronics maker to withdraw from the sector.

The sale, if realized, would leave just three Japanese electronics makers – Sony Corp, Sharp Corp and Kyocera Corp – in a global market dominated by Apple Inc, Samsung Electronic Co Ltd and cheaper Chinese rivals.

The potential deal calls for Tokyo-based Polaris Capital to take a majority stake in Fujitsu’s mobile phone unit, which is valued at around 40 billion yen to 50 billion yen ($365 million to $456 million), a source familiar with the situation said.

The size of the stake is still under negotiation, said the person, who asked not to be identified as the discussions were confidential.

An official agreement is expected by the end of the month, the Nikkei newspaper said.

Polaris will aim to list the business in several years, the Yomiuri newspaper reported.

Fujitsu said in a statement that no decision has been made and a representative declined to comment on how large a stake is being negotiated.

Around the year 2000, there were more than 10 major Japanese handset firms producing traditional flip phones, including NEC Corp and Toshiba Corp.

But most have since withdrawn from the business, caught out by the meteoric rise of Apple and Samsung.

Domestic makers failed to gain a global presence by being overly reliant on the lucrative domestic market, which gave them little incentive to change their Japan-specific mobile phone formats and expand overseas.

The rise of low-cost component producers such as Taiwan’s MediaTek Inc also have made it easier for price-competitive Chinese rivals to enter the market.

Fujitsu, whose shares were up 1.0 percent in a flat broader market, has been unloading other non-core businesses as well.

Last year, Lenovo Group agreed to buy a majority stake in Fujitsu’s personal computer unit for up to $269 million in a bid to capture a larger share of a market that is battling weak sales as more people switch to mobile devices.

The Nikkei added that retaining the mobile division’s staff and factories will likely be a condition of the deal. Fujitsu, which wants to focus on its core information technology services business, is also expected to continue operating its Arrows brand under Polaris, the source said.

Fujitsu, which spun off its mobile phone operations into a separate company in 2016, had drawn interest from other investment funds such as Britain’s CVC Capital Partners Ltd and Chinese personal computer maker Lenovo Group Ltd, the Nikkei reported last year.

Reporting by Minami Funakoshi and Junko Fujita in Tokyo, writing by Makiko Yamazaki in Tokyo, with additional reporting by Rushil Dutta in Bengaluru; Editing by Shri Navaratnam and Malcolm Foster

Software AG fourth-quarter margins hit record; IoT business may double in 2018

FRANKFURT (Reuters) – Software AG reported record margins in the fourth quarter on Thursday and forecast that its new business line serving the industrial internet could as much as double in size in 2018.

Germany’s No.2 business software maker after SAP said its adjusted earnings before interest, tax and amortization (EBITA) rose by 9 percent to 98.4 million euros ($122.4 million), in line with a Reuters poll of analysts.

Reporting by Douglas Busvine; Editing by Maria Sheahan